EurActiv, 09 September 2011
The euro zone needs to get ahead of the curve in tackling its sovereign debt crisis, preventing it from infecting Italy, or else face disaster, the finance minister of Poland, the current holder of the EU's rotating presidency, said yesterday (8 September) at an economic forum in Krynica. Poland, the largest of the European Union's new member states, does not belong to the euro zone but says it still hopes to join the common currency once the crisis has been resolved. "There is no way the euro zone will survive a sovereign debt crisis in Italy," Jacek Rostowski told the economic forum in Krynica, southern Poland. "If a large eurozone country gets embroiled in the crisis, we would have an extremely dangerous situation." The European Central Bank last month began buying the debt of Italy and Spain – respectively the third and fourth-largest economies in the euro zone – after a big jump in their bond yields. With that decision, Rostowski said, European Central Bank governor Jean-Claude Trichet had "saved the euro zone" and possibly the EU. "The ECB has bought us some time but this is a temporary solution," said Rostowski, who told Reuters in an interview last month he believed the euro zone was moving towards a fiscal union. Squabbling over the size of the euro zone's new rescue fund, the European Financial Stability Facility (EFSF), exemplifies the weakness of its approach, he said. "We are always behind the curve [...] If we had created an EFSF with firepower totalling 450 billion euros of real disbursable funds, not 250 billion euros, we would not have had the problems we have had," he said. European leaders agreed in the summer to boost the size of the EFSF, whose "effective lending capacity" is now around 250 billion euros, to 440 billion, but this must be approved by national parliaments in the 17-nation euro zone. Economists say rich eurozone countries may eventually have to override opposition from their taxpayers and pledge to contribute to a drastic expansion of the EFSF – possibly doubling or trebling it – to end the crisis. Rostowski, a British-educated economist, also took a swipe at those who suggest that surplus countries such as Germany, one of the world's biggest exporters, might consider quitting the euro and forging a new strong currency. "Do the surplus countries really want to create their own currency and see it appreciate like the Swiss franc?" he said, referring to the Swiss Central Bank's decision this week to set a ceiling on the value of its currency versus the euro. EurActiv with Reuters
POSITIONS:
Nations that have joined the European Union since 2004 must get a fair hearing as the bloc strives to solve a string of crises, Polish Prime Minister Donald Tusk said at the opening ceremony of the Krynica forum on Wednesday, quoted by AFP.
"When we look at those who joined recently, they are now doing their homework much better than their teachers," he said in a keynote address to the three-day annual gathering dubbed the 'Davos of the East'.
"That's why our voice should be heard when we are defending Schengen, Maastricht and the idea of an integrated Europe," he added.
Mercedes Bresso, chair of the EU's Committee of the Regions, said at a panel of the Krynica summit organised by Polish daily Rzeczpospolita that solidarity among European countries is possible on the condition that joint system solutions are implemented.
"The suggestion of [German] Chancellor [Angela] Merkel and [French] President [Nicolas] Sarkozy regarding the joint economic government for the euro zone is good and of key importance," Bresso explained. "However, we have to think through the model of a common Europe in terms of strengthening its structures, because the future exists but only as long as we act together," she added.
According to Paweł Lisicki, chief editor of Rzeczpospolita, it might be true that actions have to be realised in a joint manner. However, he questioned what role was reserved for countries like Poland, which do not belong to the euro zone.
Grzegorz Schetyna, speaker of the Polish Sejm, stated that the most important thing was to look for experts in the debate about solidarity. "The economies of European countries are different and the people in charge of them have to feel responsible," Schetyna said.
"The first thing we should take care of is equalling the disproportions and the countries which cannot manage in a given situation should feel support but also control so that a joint policy can bring the best possible results," the Polish MP said.
"It is the countries themselves that need to be reformed in the first place. Support will be given but it has to be clearly communicated to people that they will have to repay these debts one day," stated German MEP Elmar Brok (European People's Party).
Michael Barrington, managing partner for Central and Eastern Europe at Deloitte, admitted that decisive measures had to be undertaken on all the levels as otherwise Europe would depart from the road to more competitiveness and stronger economies.
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