New eurozone deal a right step
Source: Agencies |
December 12, 2011, Monday
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Print Edition
Print Edition
AN agreement reached by European countries for deeper economic integration was a step in the right direction but not a complete solution for the eurozone's debt crisis, International Monetary Fund chief economist Olivier Blanchard said yesterday.
"I'm actually more optimistic than I was a month ago, I think there has been progress," Blanchard told the Globes business conference in Tel Aviv.
"What happened last week is important: it's part of the solution, but it's not the solution," he pointed out.
He did not say what further steps were needed.
European leaders agreed in Brussels on Friday to draft a new treaty for deeper eurozone economic integration.
However, Britain, the region's third-largest economy, refused to join the 17 euro nations and nine other European Union countries in the fiscal union.
Asked whether diverse statements from policymakers in Europe were causing volatility in markets, Blanchard said: "A lot of the volatility is coming from statements from Europe, showing the range of opinions and inability to get to a logical decision process."
EU leaders also agreed eurozone states and others should provide up to 200 billion euros (US$270 billion) in bilateral loans to the IMF to help tackle the crisis, with 150 billion euros coming from countries in the euro currency.
"The commitment to give us 200 billion euros makes a major difference in the sense that we can now go out and talk to other countries and say, 'the Europeans have given us money, can you help?," Blanchard said.
"Whether this gives us the whole bazooka or not, I hope so."
Asked by Reuters on the sidelines of the conference whether Britain's decision to isolate itself was right for its economy, he said: "I think that's an issue for the Europeans to decide."
"I'm actually more optimistic than I was a month ago, I think there has been progress," Blanchard told the Globes business conference in Tel Aviv.
"What happened last week is important: it's part of the solution, but it's not the solution," he pointed out.
He did not say what further steps were needed.
European leaders agreed in Brussels on Friday to draft a new treaty for deeper eurozone economic integration.
However, Britain, the region's third-largest economy, refused to join the 17 euro nations and nine other European Union countries in the fiscal union.
Asked whether diverse statements from policymakers in Europe were causing volatility in markets, Blanchard said: "A lot of the volatility is coming from statements from Europe, showing the range of opinions and inability to get to a logical decision process."
EU leaders also agreed eurozone states and others should provide up to 200 billion euros (US$270 billion) in bilateral loans to the IMF to help tackle the crisis, with 150 billion euros coming from countries in the euro currency.
"The commitment to give us 200 billion euros makes a major difference in the sense that we can now go out and talk to other countries and say, 'the Europeans have given us money, can you help?," Blanchard said.
"Whether this gives us the whole bazooka or not, I hope so."
Asked by Reuters on the sidelines of the conference whether Britain's decision to isolate itself was right for its economy, he said: "I think that's an issue for the Europeans to decide."
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