07 September 2011

Commissioner Olli Rehn: Overcoming the economic crisis in Greece and Europe

In a speech given at the ALDE Seminar "Reset Greece", Rehn made reference to the currently rather high expectations on how eurobonds could help solve the debt crisis by pooling the debt issuance of euro area Member States.

He went on to say: "However, it is clear that eurobonds, in whatever form they were to be introduced, would have to be accompanied by a substantially reinforced fiscal surveillance and policy coordination as an essential counterpart, so as to avoid moral hazard and ensure sustainable public finances. This would have unavoidable implications for fiscal sovereignty, which calls for a substantive debate in euro area Member States."

A Treaty amendment to allow for the establishment of the ESM is now being ratified. Should future moves to deepen economic integration require a new legal basis, the Member States would need to consider further Treaty change. At this stage this is a hypothetical question.

In the very short term, the adoption of the legislative package on EU governance will be a crucial step forward in strengthening fiscal surveillance and formalising the surveillance of macro-economic imbalances. In his forthcoming State-of-the-Union speech, President Barroso will outline the Commission's proposals on how economic governance of the euro area can be further developed.

In conclusion, Rehn commented that the light at the end of the tunnel does not necessarily have to be the oncoming train, unlike many doomsayers would quickly point out. "As the euro-area struggles with the current crisis, I call for the spirit of responsibility across Europe and across political spectrum to reach sensible and forward-looking decisions to restore confidence into the European economy, for the benefit of our citizens. Time is of the essence now."

Full speech

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