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07 June 2011

ECON committee: Juncker and Rehn discussed today's and tomorrow's eurozone


In a particularly frank discussion, Rehn and Juncker called on the EP to keep the flag of ambition flying in what Mr Rehn dubbed a "crucial month for the eurozone on a number of fronts". At the same time, both called for a dose of realism in the face of what is often a difficult balancing act.

On the eve of three days of crucial negotiations between MEPs and Member States on economic governance legislation, Commissioner Olli Rehn and Eurogroup President Jean-Claude Juncker briefed the Economic and Monetary Affairs Committee Monday on the latest Eurozone developments. MEPs focused on the need for high-quality economic governance legislation, the plight of Greece and the latest comments from ECB President Jean-Claude Trichet.

Building the six-pack

In his opening remarks, Mr Juncker urged MEPs to maintain the high standard they had already set in shaping the economic governance legislative package. "Despite the fact that some Member States are reluctant to sign up to these standards, you must know that there are others who are close to the position adopted in the Parliament's Economic and Monetary Affairs Committee", he told MEPs.

Mr Juncker agreed with MEPs' contention that more transparency must go hand in hand with increased "automaticity" of sanctions. Mr Rehn also backed these calls, saying he hoped that more Member States would come round to recognising that openness was needed. On MEPs' demand that ministers be invited to Parliament for a hearing, Mr Rehn observed that Parliament had "an obvious right" to be able to invite ministers for such discussions.

Various Socialist MEPs asked when the growth dimension would be factored into the economic governance "six-pack", arguing that in its absence, the whole exercise would fail, because struggling economies would be unable to recover. However, Messrs Juncker and Rehn both repeatedly reiterated their arguments that without spending cuts, there could be no growth and that the new rules had to be mainly about fiscal prudence.

The Greek case

Much discussion was devoted to Greece, with Messrs Rehn and Juncker both repeatedly voicing their frustration at the lack of consensus between the country's political parties as to the road ahead, in contrast to the situation in Ireland and Portugal. Fielding a question about the need for more credibility as regards the actions to be taken, both clearly told MEPs that debt rescheduling or "re-profiling" was on the cards but that this excluded the harder option of debt restructuring. It was nonetheless a sign that private investors would be brought into the picture when reconsidering Greece's debt situation.

Trichet - Streets ahead?

The ECB President's now-infamous "Aachen" speech calling for an EU finance ministry also had an impact on this discussion. Asked by MEPs to respond to Mr Trichet's views, Mr Juncker said that due to the stances being taken currently by Member States, the comments were not realistic. "We must first successfully complete the six-pack and then start to think of how to go further", added Mr Rehn.

Press release


© European Parliament


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