EU says vital to get grip on finances
By Gabriele Steinhauser and Pan Pylas |
December 8, 2010, Wednesday
|
Print Edition
Print Edition
EUROPEAN finance ministers pressured the eurozone's weaker members yesterday to get a grip on their finances, a day after they refused to increase the 750 billion euro (US$1 trillion) bailout fund.
Much of the focus yesterday was on Dublin, where parliament was due to vote on the budget for next year - the measures proposed by the Irish government are the harshest in the country's history but are required in return for a 67.5 billion euro rescue package.
With Ireland joining Greece in getting bailed out, the markets have fretted about which country will be next - Portugal and Spain are viewed by many as the weakest links in the 16-country currency union and the European Union's finance ministers are continuing to press them to get their financial houses in order.
For many of the bloc's ministers, that's far more important than increasing the size of Europe's bailout funds.
"If we are not addressing the long-term and midterm solutions as well, the markets will never be able to completely restore the confidence they have into the eurozone," Dutch Finance Minister Jan Kees de Jager said ahead of the meeting of the EU's 27 finance chiefs.
Both Portugal and Spain are enacting further spending cuts and tax rises over the months ahead as they try to get their borrowing levels down and appease worried investors that their financial positions are unsustainable in the medium-term.
Following their meeting on Monday, leading officials from the eurozone insisted they had enough financial firepower right now to deal with Europe's government debt crisis, but did not rule out increasing the bailout fund in the future.
One of the main worries in the markets in recent weeks is that Europe might not have enough bailout money available to cope with the rescue of an economy the size of Spain's.
A proposed increase of the fund - championed by Belgian Finance Minister Didier Reynders over the weekend - as well as the idea of issuing pan-European bonds to shore up confidence in the euro were quickly rejected by Germany, Europe's biggest economy.
German Finance Minister Wolfgang Schaeuble said yesterday it was vital to impose the decisions taken recently - such as the creation of a permanent tool to deal with financial crises in the eurozone - rather than bringing up new issues every day.
Much of the focus yesterday was on Dublin, where parliament was due to vote on the budget for next year - the measures proposed by the Irish government are the harshest in the country's history but are required in return for a 67.5 billion euro rescue package.
With Ireland joining Greece in getting bailed out, the markets have fretted about which country will be next - Portugal and Spain are viewed by many as the weakest links in the 16-country currency union and the European Union's finance ministers are continuing to press them to get their financial houses in order.
For many of the bloc's ministers, that's far more important than increasing the size of Europe's bailout funds.
"If we are not addressing the long-term and midterm solutions as well, the markets will never be able to completely restore the confidence they have into the eurozone," Dutch Finance Minister Jan Kees de Jager said ahead of the meeting of the EU's 27 finance chiefs.
Both Portugal and Spain are enacting further spending cuts and tax rises over the months ahead as they try to get their borrowing levels down and appease worried investors that their financial positions are unsustainable in the medium-term.
Following their meeting on Monday, leading officials from the eurozone insisted they had enough financial firepower right now to deal with Europe's government debt crisis, but did not rule out increasing the bailout fund in the future.
One of the main worries in the markets in recent weeks is that Europe might not have enough bailout money available to cope with the rescue of an economy the size of Spain's.
A proposed increase of the fund - championed by Belgian Finance Minister Didier Reynders over the weekend - as well as the idea of issuing pan-European bonds to shore up confidence in the euro were quickly rejected by Germany, Europe's biggest economy.
German Finance Minister Wolfgang Schaeuble said yesterday it was vital to impose the decisions taken recently - such as the creation of a permanent tool to deal with financial crises in the eurozone - rather than bringing up new issues every day.
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