14 September 2011

Plenary session: MEPs call for unified EU response to debt crisis

MEPs emphasised the need for a unified European response to stabilise the situation. The adoption of a legislative package on economic governance would be a big step in the right direction, MEPs agreed, while warning that ordinary people cannot be expected to bear the whole cost of the crisis.

Polish Finance Minister, Jan Vincent Rostowski, painted a bleak picture of the EU situation. "There is no doubt that we are in danger, that Europe is in danger", he said, praising ECB intervention to stabilise markets and warning that governments must find ways to avoid the break-up of the eurozone. "If the eurozone breaks up, the EU won't survive for much longer." He called on the Parliament to adopt as soon as possible the legislative package on economic governance that is currently being negotiated with the Council.

Mr Rostowski cited a recent study by Swiss Bank UBS that showed an exit from the eurozone would cost weaker countries 40-50 per cent of GDP in the first year and 10-20 per cent in following years, while richer countries would take a hit a 10-25 per cent the first year and would face lower economic growth and higher unemployment later.

European Commission President, José Manuel Barroso, said the most important steps to solving the euro crisis are the fulfilment of the Greek reform programme and adoption of the economic governance package. Markets are impatient so "we need to act fast". He said the Commission will soon present proposals on eurobonds and a financial transaction tax. The EU will have to act as one, he said, agreements between governments will not suffice.

For the EPP group, Joseph Daul said European citizens are concerned as they are continuously asked to make sacrifices while governments have not managed to put an end to the crisis. If the EU adopts the economic governance package, this will show that the EU can work for the long-term, he said, underlining the need for "the big bang", a clear commitment by EU governments to European integration, at whose heart is the eurozone. 

Socialist leader, Martin Schulz, warned that the crisis is straining European unity. "We thought that the measures agreed on to save the euro on 21 July were appropriate. But the leaders who decided on them are trying to save their skins as politicians in their Member States. We are at crossroads. Only if we act together will we have a chance to save the euro", he said. "Budget discipline has to be just. Ordinary people alone cannot pay the bill."

"Let's not make the mistake of calling this a Greek crisis", Liberal leader, Guy Verhofstadt, said. "Greece may have been the trigger but this is a deep crisis for the eurozone itself because of the absence of economic and fiscal union alongside monetary union and the lack of true economic governance", he said. "We need proposals on true governance, eurobonds, a growth and jobs pact and a far stronger governance role for the Commission as opposed to the Member States."

"We are pushing Greece into a hole from which she will not emerge without devaluation, a Greek default is a matter of time", Derk Jan Eppink said for the ECR group. On the call for eurobonds, he noted that Germany would have to foot the bill, an idea which is opposed by the liberal FDP in Germany but favoured by their political group leader in the EP.

EFD leader, Nigel Farage, also expects Greece to default and warned that there will be a revolution if Greece isn't allowed to exit the eurozone. "Help Greece get her currency back and reschedule her debt", he said to Mr Barroso.

Greens co-leader, Rebecca Harms, said the common man is paying the cost of the crisis, not the rich. However, she says the EU remains one of the more successful areas in the world and should opt for more integration, as the markets will use any weakness to speculate against the euro.

Lothar Bisky for the GUE/NGL group said the crisis is hitting the population, weakening investment and social cohesion, and leaving citizens in doubt about the competence of governments and EU institutions on economic policy. He added that the EU must maintain funding for cohesion, education, culture and other "EU added value" sectors.

Press release

View video

© European Parliament