Juncker: "The euro area is ready to act with the ECB"
Sunday, July 29th, 2012
In Luxembourg
LE FIGARO. – The resolutions of the last summit fizzled, Spain and Italy border on the financial strangulation, the Euro back into turmoil. You chairing the Eurogroup until the end of the year. Five crucial months?
Jean-Claude Juncker. – The coming months will be tense. We live under the dictatorship of the short-sighted. Leaders are forced to react to everything, all the time, in a firework that has nothing to do with the thickness of the real issues. It does give more time to think. I submit that the markets are wrong today, as they have always deceived: heavily. For ten years they have been led to believe that Greece was financially as well as Germany! The crisis will prove that those who reacted in a calm and serenity, not to those who followed the follies and heresies of the time
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What are the decisions?
The euro area is at this point where she must prove by all means its resolve to ensure stability. The world speaks of the common currency as if it had more than a few months. In Europe, we have the euro! No one should doubt the collective will of the seventeen countries. Nobody should think that politics is a hollow word.
It will save there in Greece?
Those who believe that an outflow of Greece solve the problem are wrong. They do not understand the root causes of the crisis. Greece must surely improve his report card. But nobody can ignore the enormity of the cost of exclusion for the rest of the class, whether the shock wave or the discredit that follows. Everything else is playing politics.
Spain is for emergencies. The Eurogroup there a solution?
We have already addressed the problem, quickly and well. Spain to consolidate its public finances and reform, all the European leaders will tell you. Our aim is now to separate state and risk of bank risk. Up to 100 billion euros set aside to bring the Spanish banks in calmer waters. The matter will be resolved. We're not going to kneel before the fake doctors markets. This also applies to Italy.
The Spanish treasure runs asphyxia: 7%, the interest charge neutralizes the effect of budget savings. What is the remedy?
Rates subside since the ECB president, Mario Draghi, said, wisely, that everything will be done to protect the euro. In terms of acting, we decide to examine the markets in the next few days. There is more time to lose.
The summit of the euro on 29 June wrote the prescription: purchases of government bonds by the bailout fund on the secondary market, in conjunction with the ECB. Is it true that Germany and France resisted getting impatient?
I have no doubt that decisions taken at the summit will be applied. We arrived at a crucial point. But it remains to specify the rate and extent. We will act together with the ECB, without affecting its independence. When I say "we", it is the EFSF bailout fund, that is to say, seventeen governments. I do not whet the appetite of the markets, but as was said Mario Draghi, this will translate into results.
Relieving rate is a third attempt, after plans Greek, Irish and Portuguese, and Spanish bank bailouts. Treatment changes, nothing arranges?
We respond to contagion. Investors and rating agencies should stop thinking that there is a series of short-term problems. All countries in the euro area are now cutting their deficits and consolidate their finances. This is exactly what the markets wanted a few months ago, but they apparently forgot!
Why markets do they have more confidence in the ECB only seventeen governments of the euro?
The credibility of the ECB is surely higher than that of the European political class. This is not the problem of the bank, but the politicians. The ECB is independent, it does not take its instructions from the governments and it did not reconcile their views. If the bank is expressed and that markets react well, it suits me perfectly. And believe me, the Chairman Draghi said aloud that government leaders are thinking.
Spain pays Does the cacophony of the countries of the euro?
After each summit, the presidents, ministers and other worship explanations of domestic policy decisions that transcend borders. So, they end up betraying the spirit of Europe. This is often silly and sometimes downright harmful. A question among others: how can Germany afford to domestic politics on the backs of the euro? If the sixteen other countries did the same, what would remain of the joint? The euro area is it more a branch of the Federal Republic?
Is this true also for France?
In Germany, opinion has spread that President Francois Hollande is a spender and indecisive, a denial of recovery in some way. In France, it's Angela Merkel passes for a "Euro-individualistic." I know them both, I talk all the time. These simple ideas can strike in domestic politics. But they are false.
Next year, Wolfgang Schäuble will he your successor as head of the Eurogroup?
The German minister seems to have all the qualities required. It is not the only, but could do so without problem. We need a real European finance minister, has a veto power over national budgets
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And who will control the keeper?
This is a serious problem of national sovereignty and democratic accountability. I find it hard to imagine the French National Assembly accepts unquestioningly edicts of a pharmacy in Brussels. We must think about a real process of legitimation of the head of the Eurogroup. Nobody knows the answer and the question remains in the plan.
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