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Spain offered to bear the burden of that share of the debts which had not served Cuba and asked the United States to take responsibility for the other part or transfer it to the new independent Cuban State. The American negotiators telegraphed President McKinley to ask his opinion. He responded by making it clear that the United States would not agree to take on any Cuban debt and would not encourage Cuba to agree to do so.

In conclusion, the United States purely and simply repudiated the debt claimed by Spain from Cuba. Unsurprisingly, Cuba refused, arguing that the Treaty of Paris of December , which ended the conflict between Spain and the United States, had cancelled all debts. From that point, Spain was forced to negotiate with her French and British creditors. Further, it needs to be stressed, on the one hand, that at no time did the United States invite the Cubans to send delegates to participate in the negotiations held in Paris; and on the other hand that the United States made use of the argument relating to the despotic nature of the colonial regime only secondarily.

They concentrated on the use that Spain had made of the so-called Cuban loans to demonstrate that it was Spain first and foremost that benefited from them. They also showed that Spain, and not Cuba, was the actual borrower. The comparison with the Washington-Madrid-Havana conflict in is of capital importance if we study the situation of Greece and other countries such as Cyprus or Portugal in the s. After , many recent studies demonstrate that the amounts Greece is being held responsible for were never transferred to the Greek authorities.

They served mainly to repay private foreign banks, in particular French and German ones. Its first mission was to support the new system of standard exchange rates. When the Bretton Wood fixed rates system came to an end in , the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments. As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state.

The other member countries are divided into groups led by one country. In , it replaced the European Financial Stability Facility and the European Financial Stabilisation Mechanism, which had been implemented in response to the public-debt crisis in the Eurozone. It concerns only EU member States that are part of the Eurozone. There are strict conditions to this assistance.

Thus the loans are in fact borrowed by third parties and then imposed on Greece under extremely harsh conditions. The borrowers mentioned above get financing from private European banks and then use their credit to repay them without the borrowed amounts ever actually going to the Greek treasury. It is often said that the Commission needs to be more proactive. I too am of that opinion. However, the fact is that the proposal relating to project bonds is already on the table. Here in Parliament we already have the proposal to increase the flexibility of funds to countries that are the subject of intervention, whether they are members of the euro or are outside the euro area, which will enable the allocation of resources to these countries, in order that there may be growth whilst austerity programmes are ongoing.

We have also had the news here today that there will be a properly balanced proposal to bring in Eurobonds, either in a form compatible with the current Treaties, or in a form which may mean institutional reform. We have also had this news here. Of course, we also know that this proposal has to be balanced, because it is not enough simply to introduce Eurobonds. That is only one possible variable in solving the problem. What I mean by this is that we now have an array of solutions which have already been identified by the Commission, and all that is needed is our enthusiastic backing in the week of the State of the Union Address, in order to support the Commission as it puts forward a solution to the crisis.

You have a skill for tailoring your views extraordinarily well to your audience. You have shown it again today. As the enforcer of the Community method, which we defend tirelessly in this Parliament, what are you doing to help the Union exercise this power to negotiate with Switzerland? What are you doing while a number of the most powerful Member States, in exercising their power to negotiate with Switzerland, are discrediting the Union as a whole by negotiating on a bilateral basis?

Are you able to negotiate as earnestly as the Americans, in order to allow the Greeks to recover the money which the Germans are criticising them about for not knowing how to recover? Finally, with regard to Eurobonds, we are not expecting you to ultimately agree to this proposal, which we have been advocating for so many years and which is the reverse side of joint and several liability.

A measure of democracy and social progress must be added to it. Marietta Giannakou PPE. The euro and the steps taken in Europe were political decisions.

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They were taken by our leaders. They were not random developments and it is only with political decisions that we can respond to the crisis. Therefore, yes, we must abide by the Community method. Support from the Union is a political decision and we condemn any speculators ready to take advantage of unfortunate and inaccurate statements. We have instruments to deal with the crisis and we can create more. Therefore, no one is asking for powers to be taken away from governments; however, the three institutions must work together on this question. As far as Greece is concerned, it is not the only problem in the euro area.

I should like to say to everyone who has said that Greece will default that our country will not default. It will not default because the Greek people are prepared to make sacrifices, not only for their own sake, but for the sake of their obligations within the European Union. Marianne Thyssen PPE. All these proposals, issuing from all quarters, are causing confusion and creating an image of a Europe which is rudderless.

If we want to succeed, then we need a single scenario, we need to be unanimous and discreet in our communication and we must now make it our priority to carry out the plans we have already agreed on, instead of putting forward new plans all the time. This means that we first have to solve the acute problem and do everything possible to help Greece out of the morass. This also means that all politicians should summon the courage to explain to their citizens that solidarity with other countries of the euro area will be the best deal for everyone in the long term.

In addition, we have to carry out structural changes, which, in other words, means that at the end of September we need to approve a robust six-pack in this House. These and other financial and economic measures are incredibly important, not only to recovering the confidence of the markets, but also to boosting our self-confidence as Europeans. Finally, what this means is that, in the long term, we will also have to address other system errors, even if that means amending treaties. More calls for more Europe do not solve the real problems we are facing today.

These real problems — deficits and the lack of growth — are obstacles for the future. We need more decisions in the Europe we have today in order to make real changes. We must emphasise that Member States are responsible, but we must never forget our own responsibility. The Commission, the Council and Parliament must use all of their powers. I think one of the most important things is to use the opportunity we have. The European Union is the biggest economy in the world, but we are not making use of that because we are not the biggest market. That is why I call on the Commission to put forward proposals to make the European Union a totally internal market that can compete with the US and China and that can allow for the growth that we will need in order to deal with a debt crisis.

We need a Stability Pact, which will be put in place, but we need growth and the Commission has a responsibility to provide a proposal for us to act immediately. It seems to me that when things were good in Europe — or we thought they were good — everybody was in agreement. We are being tested politically because of the crisis. While much of this debate has focused on the economic crisis and the problems in Greece, I think the problems are much closer to home. They concern the profession that I am involved in, as these are problems with the profession of politics.

How do we, as elected representatives, deliver better for our citizens? How do we tell them the harsh messages that they may not want to hear, but which we need to deliver to them in order to make progress? We need to look at ourselves to find those answers.

What spurs me to keep going is the messages from the extreme right and the extreme left.


Let the centre prevail and make progress. Moreover, there is much more capital which, benefiting from the fun and games of tax rivalry within the European Union itself, has taken refuge in the Netherlands, Luxembourg, Belgium, the City of London or Ireland, eschewing investment in the countries which generated it. How can the economic governance proposed by the Commission and the Council have any credibility or effect when they have done nothing to control tax havens and recover the funds lodged there, and when they are doing nothing to achieve tax harmonisation within the euro area?

Bankruptcy is therefore not an option, and it must be stated clearly here. The only solution is to help Greece: firstly by honouring our commitments; secondly by giving the country time; thirdly by helping it to conduct and successfully carry through the structural reforms it requires; and finally, by providing its people with prospects and guaranteeing those prospects.

Only if we do that will Greece get back on its feet, in my view. However, the crisis of confidence in the euro has reached such a level that we obviously cannot stop there. We have heard today from the Commission that it is going to table a proposal for Eurobonds that will entail no amendment to the Treaty.

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Moreover, we can and should design Eurobonds in such a way that they increase the budgetary discipline of all the Member States and at the same time represent a step closer to financial solidarity. I would therefore call on the Commission to table this proposal as soon as possible. Such a proposal could ease the current situation if it is put together wisely. Do not just carry out a study; propose legislation that provides an incentive to the Member States to actually take a step in this direction. The absence here of the German Free Democratic Party and the blockade in Germany on this point are irresponsible.

Lajos Bokros ECR. It does the job of the Finance Ministers. Instead of restricting itself to monetary policy, it finances sovereign debt. That is a distortion; it is a confusion of roads in economic policy, and it cannot be successful because it will really create inflation and it will really put more debt on those countries which are now saved, apparently, from this debt crisis.

I think we have to realise that the Finance Ministers have to do their job and the sooner they do it, the better for the eurozone. We are therefore expressing our most strident protest and indignation at these antisocial policies, which systematically ignore the public and are indifferent to the exacerbation of divergence, inequality, unemployment, poverty and social exclusion that they are creating.

It is unacceptable that what was once called the European social model is being destroyed in most Member States, while the principle of economic and social cohesion is being hidden away and the top EU leaders are even being seen to publicly humiliate the Member States and their peoples, who are suffering severely from the consequences of their neoliberal and antisocial courses. What will it take for them to review their positions and policies? Will it take an increase in social tension and the struggles of the workers and the people, who despair of these policies?

Bastiaan Belder EFD. Through spending cuts and reform. Both are painful, but essential for healthy finances, better competitiveness and sufficient earning power. However, something further is needed in order to reach a genuine solution. Several euro area countries have a high level of foreign debt. This is down to the trade balance and the balance of payments not being in equilibrium. Do the Commission and the Council view this as a good proposal for reducing this structural imbalance? I would also like to ask a second question, very briefly: what does the Council make of the Dutch proposal for strengthening budgetary discipline?

Interest rates are too high for southern European countries that are in recession, because they have been raised to curb inflationary pressures in Germany. This has exacerbated the recession and led to falling government revenues and increased government debt. Furthermore, the percentage return, or coupon, on sovereign bonds has had to be higher because of diminished confidence and fear of default. While this might postpone the crisis, there is a real danger that the ECB will purchase bonds the market value of which will eventually fall, as has occurred with the bonds from Greece, Ireland and Portugal.

And even an institution like the ECB cannot survive a massive fall in the assets on its balance sheet without huge recapitalisation at the expense of taxpayers in the eurozone and outside it. Olli Rehn, Member of the Commission. What we are seeing is that the real economy, growth and employment are now under extreme pressure from the negative ramifications stemming from the continued market turbulence related to the sovereign debt crisis.

Therefore, the necessary condition to protect economic growth and job creation — economic recovery — is to contain the turbulence and reinforce our economic governance, to create solid foundations for the continuation of the recovery, sustainable growth and job creation. Frankly, that misses the target For instance, when we talk about eurobonds, already at the critical meeting of 9 and 10 May we proposed the European Financial Stability Mechanism that would be operated by joint and several guarantees.

However, this was rejected by Member States in the Council because for them they resembled eurobonds too much. President Barroso reinforced the message and called for the conclusion of that work by the summit in early February. And where are we now? We are, I trust, finally carrying out this operation, getting the reformed, reinforced and more flexible EFSF operational as of October onwards. So, it is the excess of intergovernmentalism and the deficit of the Community method that is hampering our actions, and that is the real problem in terms of EU economic governance.

Let us be honest about this; let us be frank and open about this.

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Therefore, I agree with all those of you who have said that deeper economic integration and policy coordination is one key remedy to the crisis. Certainly not the only one — no silver bullet — but a necessary condition for the solution of the crisis. We must be able to decide more quickly and more effectively and we must be much better in the implementation of our decisions in the European Union. The current institutional structures are not sufficient to tackle the challenges we are currently facing. This calls for a very thorough public debate in our Member States and in this context I dare to say that the European Parliament is the institution and you, as representatives of our citizens as Members of the European Parliament, are the representatives who have a major responsibility and a major opportunity to pursue this debate, stimulate this debate and participate in this debate, as you have a very special democratic interface with the European citizens.

In the immediate short term let me underline the importance of implementation of the decisions of the eurozone summit. I cannot stress enough the importance of swift implementation of the decisions taken. Especially by increasing the flexibility and effectiveness of the EFSF and the ESM, we can act earlier and more effectively to ensure financial stability in Europe. Moreover, rapid implementation of the decisions is essential for addressing the debt crisis and restoring confidence in our economies and therefore I expect that the Euro Group meeting this Friday in Wroclaw will overcome the remaining hurdles and get the job finally done.

On Greece, let me say a word to those suggesting that Greece would be better off outside the Europe. I very strongly disagree. Neither Greece nor the eurozone would be better off. There is an active debate on EU economic governance and there definitely is a need to rethink our institutional structures. There are also currently high expectations of how eurobonds could help solve the debt crisis by pooling the debt issuance of euro area Member States. To my mind it is clear that eurobonds, in whatever form they might be introduced, would have to be accompanied by substantially reinforced fiscal surveillance and economic policy coordination as an essential counterpart, so as to avoid moral hazard and to ensure sustainable public finances.

Of course this would have implications for the fiscal sovereignty of Member States, which calls for a substantive debate in the euro area Member States to see if they would be ready to accept this. Finally, in the very short term, yet another plea and I trust this is the very final plea on this issue. In the very short term, the conclusion of the legislative package on EU economic governance is the crucial step forward in strengthening fiscal surveillance and reinforcing the surveillance of macroeconomic imbalances, and here I look both to the Council and to Parliament.

We need urgent approval of the six-pack by the end of this month; let us vote on 28 September please. I mean you vote; I witness and I endorse with all my spirit and sympathy. Urgent approval of the six-pack is not only important in its own right; it is a necessary foundation for any further progress in economic governance. So to conclude: what we need now is to implement the decisions to reinforce economic governance and our instruments for ensuring financial stability in order to safeguard financial stability and economic growth and job creation, to consistently continue to improve public finances and undertake reforms that can boost economic growth and job creation, and to conclude the six-pack in order to create the foundations for a real economic union and thus move to the next stage in economic integration towards a deeper economic and political integration.

It is obvious that finance ministers have to do their job, but to do this they need time, because economies, too, have to have the opportunity to adjust to the steps we take. Today, however, in the short time horizon, we are seeing panic in the treasury markets of some countries. The European Central Bank cannot allow any of these countries to become insolvent, because this would lead to the complete collapse of the banking system of the entire euro area and the entire European Union.

We know, too, that we would not then have any monetary policy at all, just monetary chaos. Therefore I think the measures taken by the European Central Bank were most certainly justified, appropriate, necessary and courageous. I must admit that in our part of Europe, history — including the worst periods of history — is perhaps a little more recent than the history of Western Europe. For us, the end of history was a great liberation. I appeal to the whole House: we must not allow history, in the bad sense of those words, to return. It is clear we have to save Europe.

If we do not do so, who will? If we do not do so now, when will we? He said he has the impression he is attending a funeral but does not know whose. I will answer him in English: Do not ask for whom the bell tolls, it tolls for you. Written statements Rule Europe has also been shaken by a deep crisis of political confidence, and to overcome this we will require a much greater concentration of wisdom and political will than before.

The difficult situation that has come about in certain euro area countries should not become a pretext for establishing a two-speed Europe and preventing unified, coherent economic growth by Member States and the entire EU. We must understand that only by managing the economies of the 27 Member States more effectively and strictly can we ensure deeper integration, greater social guarantees for our citizens and greater confidence in the European Union itself. Gerard Batten EFD , in writing. The euro was never an economic project. It was a political project designed to help bring about a United States of Europe.

Once of the vital attributes of a state is its currency and that is why the European Union forced through the introduction of the euro against all the sensible advice against it. You do not have to be an economist to know that to constrain a number of completely different economies within a single interest rate and exchange rate will, over time, bring nothing but problems and eventual disaster. That is what we are seeing now, and of course Mr Barroso is calling for full economic and financial governance of the eurozone countries by the European Union. The euro is going to come apart.

It is just a question of time. The longer it takes the worse the crash is going to be. The people to blame are those who forced the economies of the eurozone into an economic straightjacket in order to serve a political dogma. George Becali NI , in writing. I have listened to the President of the Commission and the feeling has got worse. They are both asking us to support the proposed measures in front of our citizens. What should we say to the young people who cannot find a job in their own country and can no longer get into Spain where well over a million Romanians used to work until now?

The social market economy and fair society are concepts which no longer mean anything to young people in London, Madrid, Berlin, Bucharest and, above all, Athens. I believe that this is the key response. It is complicated but not impossible to re-establish credibility. At the start of this mandate, I wished the President of the Commission the power of David and the wisdom of Solomon.

Unfortunately, my wish was a kind of prophecy, defeated here in Strasbourg, because we all know that as a Romanian MEP, I was unable to be a prophet in my own land, Romania, which is still outside the euro area. Ivo Belet PPE , in writing. These are ambitious interventions and they will inevitably be time-consuming. However, we also need to send out strong signals, here and now, this very day. Bizarrely enough, the action we need to take today is much simpler in nature. In brief, what it boils down to is the fact that we have to put a stop to all this cacophony, we have to be clearly united in our credo that the euro area is a single and indivisible entity and that, in times of crisis like today, we have to be prepared to take draconian steps to safeguard that unity.

Responsible politicians have to stop broadcasting scenarios of Greece potentially having to leave the euro area. Because we simply cannot even contemplate going there. This crisis is a huge acid test for solidarity within the EU and, in particular, within the euro area. At the same time, it is a great opportunity to firm up our internal consistency. However, as I have said, that can only happen on one condition: if we stop drawing battle lines and if Brussels, Paris and Berlin, in particular, make it clear, once and for all, that we are moving towards a powerful Union with one, indivisible currency.

The European Union is not suffering so much a problem with public debt but more a lack of fiscal and political integration. This crisis needs a European solution and joint economic governance based on the Community and not the intergovernmental method, which is lacking in terms of democracy and decision-making. From this point of view, I welcome the fact that the European executive is drafting a proposal for a single public debt market, which will facilitate debt financing and ensure euro liquidity. At the same time, proposals are still required on fiscal harmonisation, European economic governance, economic growth and job creation.

The United States has recently requested a show of European unity, and the Union must rise to meet expectations. The bleak prospects of a few months ago now look even blacker. The crisis is deepening rapidly. In this situation, it is increasingly clear that the leaders of the EU are in a state of utter confusion.

It is also increasingly clear that the EU institutions and the powers that have been driving the integration process have nothing to offer the people of Europe but a major backwards step for civilisation. Straining at the leash to push on blindly is the only approach that they know and suggest. This is a dangerous path, as it is based on going further with the ideas that have led us here. Their inability to solve this crisis is, in fact, structural.

The crisis is simultaneously an expression of the uneven development of capitalism in the EU, namely the asymmetrical interdependence that relegates countries such as Portugal, Greece and Ireland to a subordinate position that is dependent on the process of capitalist integration, and also of the deregulation of capital markets and the financialisation of the economy, which have paved the way for all kinds of speculation and extortion. For this very reason, the crisis will not be solved by persisting with these two factors. The citizens ask us every day, and with good reason, why and for how long we intend to leave the euro in an exposed position, and what the shortest way out of the crisis would be.

Of course, certain Member States take practical action.


Debates - Wednesday, 14 September - Economic crisis and the euro (debate)

However, their situation is not made easy if their work is downgraded at every turn in various ways. I am referring to the irresponsible and completely unjustified manifestations of credit rating agencies, and to a few unfortunate assertions made by the Commission. Not only were crisis management tools not available in good time, but I feel that even today the Commission has no solid, forward-looking recommendations, even though it is clear that Member States are becoming increasingly exposed without clear guidelines.

So far I too have shared the opinion that this is a debt crisis rather than a euro crisis. Well, if much more time is wasted, we may even witness a euro crisis. Part of this development is the creation of the Schengen system and the introduction of the single currency. The latter, however, has proven to be incomplete: the monetary union is not supplemented by a single economic and budgetary policy.

This led to decline in a few EU Member States and at the same time to the crisis affecting the entire euro area. The European Union is once again at a crossroads: it either steps back to settle for a more relaxed cooperation and bears all the grave consequences entailed, or it implements relatively quickly the economic and financial integration within the euro area. This requires strong European control, which the European Parliament, the most democratic institution of the EU, has been urging for a long time.

It is clearly in the interest of Hungary and the other states outside the euro area to have the monetary union strengthened further and therefore to be able to belong to a community that provides economic and financial stability for them as well. Hungary must support all efforts aimed at deepening the economic integration between Member States and reinforcing the fundamental democratic values of the EU. It is our fundamental interest to have a strong, democratic Europe. Yet the economic governance reforms recently put forward by EU finance ministers fail to prioritise growth and job creation, and place little emphasis on the need for fairness and social equity when reshaping our economies for the future.

This agreement will lead us further down the path of austerity at a time when the need for strategic investment to create jobs and growth has never been more acute. I will be working with my fellow MEPs in an effort to rebalance this package in the coming weeks. I also urge the Commission to submit proposals to strengthen financial regulation, including the possibility of establishing a European ratings agency, as soon as possible.

The greed of banks and hedge funds, coupled with a lack of rigorous regulation, were the primary causes of the current crisis. It is imperative, therefore, to ensure that in future, financial institutions serve the broader economy and society as a whole; taxpayer bailouts must be conditional upon banks providing services and credit to citizens and SMEs as opposed to simply paying down debts built up due to their own speculation. By dragging its feet over the implementation of bail-out plans for Greece, the coalition of the cautious is basically turning what ought to be a strong movement of solidarity into a waste of public money down a bottomless pit.

Help granted piecemeal is of no use at all to our fellow country Greece, as it continues to come under attack from speculators. Are we going to allow the patient to die by putting him in quarantine and waiting? What exactly are we waiting for? Are we waiting to do the same tomorrow with Italy, Ireland, or Spain, which are showing the same symptoms? Since the epidemic is being passed on by the banks, as it is to them that the States are indebted, let us stop lying to ourselves: breaking up the euro area and the European Union will not save anyone from generalised economic collapse.

What we need is to get investment going again, for lasting growth — but when is this message going to be heard? One of the preconditions of European integration was to establish a single internal market in the EU based on the principle of the four freedoms, which the single currency of the euro was also supposed to promote. Over time, however, the establishment of a currency union without an adequate fiscal and institutional framework has proven to be difficult.

In my opinion, a comprehensive solution to the current crisis should cover the following three areas: the financial sector, fiscal policy and the competitiveness of the Economic and Monetary Union and the EU. Secondly, the fiscal policy of EU countries should be strengthened by issuing eurobonds and by introducing a financial transaction tax including a more active role for the European Parliament and national parliaments in this process.

Thirdly, in the long term, the sustainable economic development and competitiveness of the EU will be important. Strict compliance with the Euro Plus Pact will be necessary, including an emphasis on efficient allocations from European funds after , as well as compliance with conditionality requirements. Overall, I believe that the EU has the tools to resolve the situation, and that it will successfully overcome this crisis.

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The extensive indebtedness of households and state budgets, fostered by the illusion of cheap money and the dream of a rosy future, suddenly broke the spell of the financial markets, and this was followed by a swift spread of distrust and fear of losses. This panic is just as exaggerated as the earlier euphoria.

However, while before, when the bubble or state debt was growing, everybody seemed to be doing well, what we now see is an actual shrinkage. The crisis does not affect people everywhere and to the same extent, but everybody is getting less than they would if the whole European economy was healthy and trust was restored. In my home country, tens of thousands took out Swiss franc loans, offered abundantly by banks up to October Since then, many have lost their jobs due to the crisis, the property market collapsed, and as a result of the crisis of confidence already mentioned, the Swiss franc became significantly stronger.

All these factors together threw thousands into a hopeless situation. However, in some places it is selfish concern, and in others it is fear from the pain inflicted by restoration that hinder rapid and decisive decisions and actions. In this state of paralysis, Europe is drifting helplessly towards the vortex of crisis.

I hope we all wake up before it is too late. A weak Europe falling apart can hardly fend off the challenges of the future. It is still not too late, but there is no time for further delay, either. Iliana Ivanova PPE , in writing. At present, the EU needs to take decisive action and speak with one voice when taking the measures required to find a way out of the difficult financial situation for some Member States. A holistic approach is required which will include both a national and European action plan.

Countries with excessive public debt must carry out major structural reforms, take the necessary steps to balance their budgets and streamline the operation of their public administration system. This must be accompanied at European level by the creation of effective instruments for monitoring and controlling public finances. The countries outside the euro area must be included on an equal footing with the countries in the euro area when new fiscal regulations are being considered. This is the only way that we can be sure that all Member States are heading in the one direction and that we will avoid a two-speed Europe.

Tunne Kelam PPE , in writing. The eurozone is at serious risk of losing its credibility, first due to an irresponsible style of living that includes consuming more than we earn, and secondly to the fact that the EU has not been able to react decisively enough and in a more coordinated way to the crisis. The key problem now is to act to repair the hole in the bottom of the European boat.

New loans may be necessary but, if the hole is not repaired by cutting expenses and conducting serious structural reforms, the credibility crisis cannot be overcome. If needed, the country has no problem in taking out loans on favourable conditions. The internal market is the very foundation of the EU. However, there are still hundreds of obstacles to its completion; the services sector especially comes to mind. In this situation, the Union must act effectively on two fronts — the institutional and the economic. The crisis has exposed the weakness of a crisis management system which has many actors.

It is difficult, today, to say unequivocally who takes decisions and who takes responsibility for them — we are seeing the phenomenon of dispersal of responsibility.

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  7. The effect of this is a multiplicity of conflicting announcements. It seems that effective management is possible today only at EU level, because only such a strategy will allow us to avoid fragmentation of the Union or — in the worst case — the appearance of a two-speed Europe. Institutional reform would allow EU bodies to rebuild their credibility and restore faith in the process of integration.

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    7. In the European Parliament we have said a lot about debt in relation to national economies. We must, however, remember that debt is not only the cause of the crisis, but is also a consequence of it. A rise in debt is not dangerous as long as it is accompanied by economic growth. If it were not for the lack of competitiveness which has emerged in the permanently weak economic growth of some countries, no one would be talking about a crisis today.

      What we need is reforms which allow a fall in debt but which also ensure the long-term financing of growth. The stability of public finances is not enough in the long-term perspective; we need sustainable economic growth. The crisis has revealed blatantly that the economic system in Europe as we know it today can no longer be sustained. In fact, most of the EU countries seriously need to review their economic and social policies in order to avoid falling into financial difficulties.

      Keeping that in mind, we can support Greece only on the condition that Greece makes further cuts in its expenditure and reforms its economy, starting with an extensive privatisation programme. If Greece fails to comply then the rescue package will only be able to alleviate the symptoms, but not treat the actual cause of their problems.

      The success of the recovery from the economic crisis at large depends first and foremost on each and every Member State and their strict and persistent adherence to the common rules as well as their dynamism in adapting to a different global economic environment. The EU economic governance package will surely be an important step forward, but earnest will and effort by the Member States must come first.

      Alfredo Pallone PPE , in writing. Solidarity among the countries of the EU must be accompanied by a sense of responsibility and compliance with the rules, which the States cannot and must not infringe. However, solidarity cannot and must not be one-sided: being part of a Union with shared ideals and values means committing oneself to growth and development and supporting each other even in times of trouble. We are promoting the concept of a social market economy, but one in which the emphasis is mostly on the market, with the social aspect overlooked.

      We have weakened the Stability and Growth Pact. This was a mistake, and we are paying the price for it. We need to go back to having rules on budgetary discipline, and procedures must be automatic. It is a good idea for the constitutions to include the principle of balanced budgets, but it should be achieved by combining rigour and consolidation of public finances with growth.

      I say this because, if we do constrain our public budgets with very strict rules, we should also introduce measures to ensure growth. Otherwise, Europe as a whole will not survive in a global context. Franck Proust PPE , in writing. However, they are mistaken. As well as having a domino effect, such an event would send a dramatic message to the entire world that the European Union is no longer capable of realising its own monetary unification project.

      Let us not give in to haste, nor to the prevailing demagogy. Withdrawal into oneself has always been a harmful concept. History has unfortunately proven this to us, and that is why we sought to create the European Union. There is only one remedy for the crisis, and that is the Community method. The Commission, the Member States and Parliament: we have all shown the will to get out of this together. Today, it is time for us to act in concert.

      We have pooled our currency, let us now establish a genuine economic government and bring our fiscal policies into line, as Germany and France are proposing. Above all, let us not lose sight of the fact that we are acting on behalf of the people of Europe. Consolidating our finances means long-term investment in research and innovation to generate growth and employment.

      We must explain this to our fellow citizens, who are observing the reforms under way and rightly wondering about their future. The daily turmoil that is rocking governments, stock markets and banks is a sign of worse to come if Europe does not respond immediately. What are the causes of this crisis? To begin with, there is a structural flaw: how can we guarantee the long-term stability of a single currency without establishing proper budgetary coordination?

      The old stability pact was weak and detached from reality. The second reason is the economic climate: for a long time now, and more markedly since the economic crisis of , governments have been hit-and-miss in the way they have managed public expenditure. This must stop. Lastly, the crisis has been made worse by the political selfishness of some States, who tinker here and there according to their short-term interests and the latest opinion polls. Buy Hardcover. FAQ Policy. About this book State guarantees commonly function as financial panacea, allowing states to consolidate banking systems and create intergovernmental funds.

      Show all. Effects of the Guarantees Pages Bassan, Fabio et al. Conclusions Pages Bassan, Fabio et al. Show next xx.