Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-11-16-Speech-3-017-000"
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"en.20111116.5.3-017-000"2
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"Mr President, let us come back to reality. Yesterday interest rates in the bond market rose to 7.05% for Italy. Yesterday the interest rates for Spain were 6.27% and 3.6% for France.
Finally, a word on the question of whether we need a Treaty change. I think many things are possible without a Treaty change. Many things can be done with today’s existing Treaty. But if we are to have Treaty change, then we also need a convention before this Parliament.
France has triple-A status – exactly the same as Germany – but the reality in the markets is that France has to pay double the interest rates of Germany. As I am always saying, I do not know what these ratings from the rating agencies mean, but they certainly have no effect on interest rates, because today France has double that of Germany.
It is obvious that the euro crisis has reached a very dangerous point, a decisive point where everything is possible, even the most dramatic scenario. We are at a point where countries which are Europe’s third and fourth economies have interest rates of nearly 7% – which is not sustainable – and where the second biggest economy is paying double that of the benchmark, Germany.
We first have to recognise that we have to go beyond the decisions of 21 July and 26 October 2011 if we want to deal with this crisis. It is very good, Joseph, that France and Germany meet each other from time to time – they do it every two weeks – but it is not sustainable and it is not convincing for the markets. Their decisions only calm the markets for 24 hours. After 24 hours everything starts again.
What we need is not the combining of two important countries in the euro area, but to stand behind the global approach of the Commission. My message today is that we must ask the Commission to formalise this package as fast as possible. Maybe a number of new elements are needed, but what the Commission must do is put an act formalising an economic and fiscal union on the table for the Council and the Parliament: we are not only talking about the package, we should formalise and legalise this economic and fiscal union.
That is the only way we can end the euro crisis of today. Do not think that a new two-day summit or a new combined effort by the two big countries can stop it. We need other more formalised, legalised initiatives.
What we need is economic governance based on the European Commission. I propose that we should end this discussion of who should chair the Euro Group and so on. If we are to have a Vice-President who is responsible for the euro, let him also share the Euro Group. Let us not continue to multiply functions inside the European Union and inside the euro area. That is the first thing.
Let us have a convergence code. Let us have this Green Paper and decisions on the Green Paper. I hope that the Green Paper on stability bonds can be put before Parliament in the coming days. Let us also look into the very important proposal made two days ago by the five wise economists of the German Council of Economic Experts. What they have proposed, in a paper directly addressed to Ms Merkel and the German Government, is to create what could be called a European collective redemption fund to neutralise debts of above 60% in the euro area, combined with a bold debt reduction scheme, for countries who are not using the EFSF.
That is a fund of EUR 2.3 trillion to stabilise the euro crisis. Together with the EFSF that means that you have firepower of EUR 3.3 trillion, based on eurobonds. Was it the federalists who proposed that to the Parliament? No, it was the five wise economists who are the direct advisors of Ms Merkel and of the German Government. Now is the time to do something about that. Beyond the 60% threshold, there is only one solution to this crisis, and it is the eurobond market."@en1
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