Verhofstadt: "EU Member States must take G20 warning very seriously" / 27-02-2012

Yesterday the G20 and the IMF, meeting in Mexico, decided to postpone the discussion on boosting the IMF resources to April by launching a clear message to the EU: Europe must first swiftly and convincingly solve the current debt crisis by improving its 'defences'.

ALDE Group Leader Guy Verhofstadt said: "EU Member States must take G20 warnings very seriously. This shows that the measures taken so far by the EU have not convinced our international partners of our commitment to restore stability. But this comes as no surprise. The slow decision making and half measures imposed by certain Member States have proven, as we predicted, counterproductive and to a certain extent have worsened the situation and increased the cost of the crisis. It is now time for long-term solutions".

"Heads of Government of the Eurozone must accept the inevitable logic that in a single currency area there is a common economic policy strategy, a single system of governance and a common bond market and thus enable highly indebted countries to meet their repayment schedules by offering them the best available interest rates thus combining discipline (repaying debts) with solidarity (sharing low interest rates)", continued Verhofstadt.

"They cannot continue relying on he ECB injecting funds as it will do again this week. As the G20 said yesterday, also the intervention of the IMF will be conditioned by our capacity to improve our defences".

"No time is left; they must endorse once and for all the much needed long-term solutions and stop just buying time. They must seriously take into consideration the German-inspired proposal for a European Collective Redemption Fund (ECRF). A temporary facility that mutualises the debt over 60% for those countries not part of a bailout programme (until debts have been brought back down to sustainable levels) as an instrument to guarantee solidarity and fiscal discipline. They must also ensure an effective firewall. And this will not be done even by combining the current and permanent facilities (EFSF and ESM) - totalling €750bn. Even this amount would prove insufficient in the event of insolvency of countries like Italy or Spain".

"We in the Parliament will push for this redemption fund as part of a structural solution in the context of approval of the two new legislative measures to deal with deficits in times of severe economic downturn", Verhofstadt warned. 

(Portal Europe)