Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-03-24-Speech-3-028"
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"en.20100324.12.3-028"2
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"Mr President, the European summit must and will deal with the crisis in Greece; that much is obvious. The International Herald Tribune writes something interesting in its leading article today: ‘Greece has promised to do its homework and to balance its budget’. The Member States belonging to the euro area made their solidarity conditional upon Greece’s compliance with their demands in this respect.
Moreover, I am astonished that Chancellor Merkel is bringing the International Monetary Fund into play. The German Bundesbank – which to German conservatives is as the Vatican is to Catholics – writes in its monthly report for March: ‘However, financial contributions from the International Monetary Fund to resolve structural problems – such as to directly finance a budget deficit or to finance a bank recapitalisation – are incompatible with its monetary mandate’. That is a quote from the German Bundesbank. Contrary to the statements of her Minister for Finance, the German Chancellor says that the International Monetary Fund should solve the problem. That is not the right way to go.
What we need now is to send a signal to the international markets: you can speculate all you like, but you will not drive the euro area apart. The speculation will not cease until such a signal has been given. To make it clear what kind of speculation we are talking about, we need to draw attention once again to Credit Default Swaps, or CDSs. This is nothing more than a game: I will insure myself against my neighbour’s house burning down. Should my neighbour’s house burn down, I get the insurance money. If I were to do that, then I would have a vested interest in seeing his house burn down.
We cannot apply the Florian principle – ‘Holy Saint Florian, spare my house, burn the others’ – in the European Union. That is why solidarity with Greece is an act to stabilise the euro in the euro area. In the end, you have to decide whether you want to have European solidarity or whether you want to give in to armchair politics. I do not want to make it my own, but I would urge you all to listen carefully to the following quote from Wolfgang Münchau in the Financial Times Deutschland – which is not a Socialist journal, and this man is not a Social Democrat: ‘In a situation in which European necessities come up against German populism, let us choose European necessities’.
Greece has delivered, writes the International Herald Tribune. It is the Member States of the euro area that have not delivered – and particularly the Federal Republic of Germany, which is refusing to keep its promise. That is the first point.
The President of the Commission has quite rightly spoken of a safety net. It is not about transferring money from taxpayers in Germany, France, Italy or any other country into Greece’s coffers. That is not the objective. It is about enabling Greece to borrow money on the international markets at the same interest rates as are available to the other countries. Interest rates are usually 2.5 to 3%. As a result of the speculation caused by the failure to demonstrate solidarity with Greece, that country is paying 6%. To put it plainly, Greece’s attempts to balance its budget are lining the pockets of speculators on the international financial markets.
This means the people there are being robbed. It is foolish, because if this sets a precedent – if the failure to demonstrate solidarity enables people to speculate against a euro area country that is in deficit to the extent that eventually, internal solidarity is unsustainable and the International Monetary Fund has to step in, then Greece will be merely a prologue. The speculators will then turn their attention to Italy, to the UK and to Spain. If we do not want to see a large-scale conflagration, we need now to demonstrate solidarity with Greece.
Solidarity with Greece – and this is a message that we need to get through to the German Chancellor in particular – therefore makes economic sense. It is not a matter of giving aid for the sake of it.
Consequently, we cannot release Mr Barroso from this obligation by saying the International Monetary Fund should now sort it out. It is the Commission that must propose how we can achieve a sensible stabilisation within the euro area. The Commission has made good proposals and I believe that the Council should go along with them. These do not include calling on the International Monetary Fund. Why not? We are in a position to resolve the problem within the euro area ourselves."@en1
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