Lucke: Commission capitulates before the economic problems of the Eurozone
The European Commission’s reflection paper on the future of the Euro and monetary union is hugely flawed argued ECR MEPs after its publication today. They argue that the paper shows a capitulation on the part of the commission given the huge economic problems confronting the Eurozone – the deficiencies in the construction of the Euro are too complex to make them manageable by means of financial acrobatics.
Bernd Lucke said: “The response of the European Commission once again reflects a capitulation in the face of the economic problems within the Eurozone. Instead of carrying out political reforms, this measure once again aims to breach the non-aid clause in the European Treaties. In fact, the proposed European Safe Assets are a new edition of the Eurobonds, which are intended to mutualise the Eurozone debt.”
Joachim Starbatty who is a professor of economics, like Lucke, added: “If tranched EU government bonds actually generated demand then investment banks would have established them long ago. Since the so-called sub-prime crisis in the US, such credit tranches are known for their catastrophic consequences.”
ECR MEP Ulrike Trebesius added: “The proposed bonds are meant to bring relief to the south of Europe by means of mutualisation and to protect Germany from mutualisation. This is illogical and does not work. I am anxious to see how the Commission intends to make its ideas understandable to the citizens of Greece and of Germany. The new proposals will further extend the Eurozone’s agony.”
Lucke asked the Commission not to put the same proposals under discussion again and again using different names. Alternatively, the Commission should at last declare that sharing state debts in Europe cannot be considered under any circumstances.
MEP Hans-Olaf Henkel wants to go further: “The Commission is proposing various variants for the further development of the monetary union. An important option is missing: the dissolution of the euro and the return to flexible, national currencies. As a first step, Greece should be offered a generous debt cut in return for leaving the Eurozone. This allows the Greeks to regain economic growth, saves the so-called donor countries the financing of future rescue packages, and it does not cost the creditors anything, because the money is irrevocably lost anyway.”