ECON Committee: Debate with Commissioner Olli Rehn
29 August 2011
Commissioner Rehn announced that the Commission is committed to presenting a report in the near future on the alternatives and technical issues for the design of eurobonds. On this basis, broad consultation will be required to identify possible common ground and a sensible way forward.
Commissioner Rehn presented the following key points:
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Structural reforms must be an integral part of the EU comprehensive crisis response. Several Member States have taken significant decisions, especially as to fiscal reforms, but more effective structural measures with substantial impact on enhancing sustainable growth are urgently needed. Given the need to continue fiscal consolidation, reforms with no or little negative implications for the budget should be prioritised.
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To safeguard the conditions of sustained recovery, it is essential to complete the ongoing financial repair. EU banks are significantly better capitalised now than they were one year ago. This has been confirmed by the stress tests in July. In the run-up of the tests, European banks increased their capital by some €50 billion.
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Those banks whose capital positions were found to be too weak by the stress tests were required to take appropriate action within six to nine months. Private sector solutions – rights issues, sale of assets, mergers etc. – are preferred. However, public-sector intervention is required, if such private sector solutions were unavailable. This process is now moving forward.
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The implementation of 21/7 decisions is essential. They agreed on a new EU/IMF programme for Greece, which ensures the financing of the Greek state in the medium-to-long-term. Unlike earlier, private sector creditors contribute to the solution through voluntary debt roll-overs and buy-backs.
MEP Jean-Paul Gauzès (FR, EPP) criticised that MEPs learn more from reading the media than from European Union leaders. To reach an agreement in the economic package is essential. Gauzès also mentioned that policymakers should show speculators that there are limits where they cannot go beyond.
Udo Bullmann (DE, S&D) warned that the “intergovernmental way” of leading with the crisis is not efficient and will not solve the current crisis.
Vicky Ford (UK, ECR) stressed that policymakers should care about what financial markets think.
Full speech
Watch video (ECON committee 29 August 2011)
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