Euro Area debt crises
Paris, December 1, 2010
Q. – The aid plan for Ireland didn’t, frankly, reassure the markets. Do you think today that the Euro Area is sufficiently solid to face up to this new financial crisis?
THE MINISTER – First of all, I don’t want people to be mistaken on this point: the euro currently protects us and, if we had a Europe without the euro, the monetary situation in Europe would be apocalyptic. So we mustn’t get this wrong: the euro is a protection for us. And globally, in the post-crisis period, we need Europe even more than before. And I think we really have to be reminded of that, because amid this kind of turmoil we’re undergoing there’s a bit of a danger of saying to ourselves: “Well, what’s the point of it all?” The euro protects us.
Q. – For the moment, the people watching you may be saying to themselves: the euro, Europe, it’s all austerity plans, and huge efforts - financial efforts - are being demanded of Europeans.
THE MINISTER – We mustn’t get the illness confused. The illness was the crisis. The medicine for us – and the support, the protection – is the euro.
The second thing is that we tried to act fast and what happened this weekend proved Europe’s determination and ability to react out of what I’d call solidarity. First of all, swiftly, a plan for Ireland, in a fortnight – a fortnight! For Greece it took six months. This time we decided in two weeks. And secondly, making a visible impact by saying: look, not only do we act as a matter of urgency, we also now provide ourselves with a tool that’ll enable us, in the future, to deal with all the financial crises we’re attacked on, all the monetary crises. And I think what the speculators must understand is that we’re determined to save the euro and to protect it from speculators. And I’m convinced that, in the long run, that’s the way to gradually restore calm.
Q. – Is restructuring the European debt a possibility? N. Roubini, the famous economist who predicted the sub-prime crisis, believes that’s the fundamental solution to get the Euro Area out of the situation it’s in today. On restructuring the European debt, do you say: no, never?
THE MINISTER – The only thing that counts - and the thing the President worked on with Angela Merkel this weekend – is that from 2013 onwards, when there are debt problems, like the one we have at the moment, the creditors must also take part in discharging the debts. That’s envisaged in the mechanism that was put on the table. It’s just saying: look, we have a problem of debts; must the creditors participate? Yes. And we put in place something that’s stable from 2013 onwards. It didn’t exist before; we’ll have it. I’d say it’s also a question of fairness and justice. I think everyone can understand that./.