NEW YORK/BRATISLAVA, September 23, (WEBNOVINY) — The euro area based solely on the existence of the central bank and political will to have a common currency is dead and the pre-crisis status quo will not return, believes Slovak Prime Minister Iveta Radicova. She gave a lecture to teachers and students at New York University/New School of Social Research on Thursday. „The euro area did not have a political body with legitimacy and authority that would have been able to capture the dynamics of the crisis, offer solutions and immediately implement them,“ she said.
A pragmatic solution to the absence of a fiscal pillar in the European Monetary Union is a combination of tighter budgetary rules and creation of a rescue fund, whose task is crisis management and providing liquidity to member states in cases when stability of the euro area is threatened. She believes that improvisation in the search for anti-crisis instruments was not without errors, many of which have or can have serious political and economic consequences for individual member states but also the euro area as a whole.
Any technical change in crisis instruments of the eurozone needs to be ratified in national parliaments of member states by MPs from several dozen political parties. „This is a political nightmare, which exposes democratic institutions in member countries to extreme pressure,“ said Prime Minister Radicova.
In her opinion, every prime minister is also pursuing domestic politics in Brussels; therefore, finding an agreement requires very delicate sense of measure that is sometimes absent. Programs of summits are regularly tainted by political agendas, which, according to the prime minister, have none or just a vague relationship to a solution of the acute debt crisis in the eurozone. „At the other extreme is pressure for an even closer fiscal union and a common government in a situation where national parliaments have a problem at least to ratify the effective functioning of the rescue fund,“ she said.
Excessively wide scope and repeatedly opening new and new subjects permanently question agreement laboriously reached earlier, of the effectiveness of which we are trying to convince troubled financial markets and the public back home. Moreover, the fact that key decisions are increasingly adopted at EU summits open space to a situation where the future of the eurozone will be determined by large countries on the basis of their own interests. Therefore, according to Prime Minister Radicova, it is important that Slovakia pursues its priorities, such as more stringent budget rules or controlled default of excessively indebted countries. But at the same time, it is also necessary to accept that to address problems of the common currency requires in some measure also the use of common anti-crisis instruments, such as the European Financial Stability Facility.“ Shaping a „new“ euro area is an opportunity that Slovakia should use. However, we must be careful that the response to the pursuit of technical solutions to the debt crisis is not an escalation of nationalism and populism,“ said Prime Minister Iveta Radicova.
Press and information department of the Cabinet Office provided this information to SITA news agency.
SITA