Friday

29th Mar 2024

Belgian ex-PM accuses commission of inaction in face of crisis

  • Guy Verhofstadt heads the Liberal list in Belgium's Flanders region for the June European elections (Photo: EUobserver)

Ex-Belgian prime minister Guy Verhofstadt has strongly criticised the European Commission for failing to be more active in tackling the current economic crisis.

Mr Verhofstadt, who heads the Liberal list in Belgium's Flanders region for the June European elections, accused the commission of staying "silent" in the face of Europe's recession.

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"It is the duty of the commission to take the initiative", said the politician, referring to the institution's right to propose laws.

Speaking in Brussels to promote his new book, Emerging from the crisis, how Europe can save the world, Mr Verhofstadt, a strong EU federalist, said the only way to bolster the EU is to massively increase it's spending, recapitalise banks, issue eurobonds, set up a European financial supervisor and a single European bank for bad assets.

He drew parallels with Japan, which, with it's similarly over-heated housing market and ageing population in the 1990s plunged into recession and then took about a decade to come out of economic stagnation.

Mr Verhofstadt noted that it was only when Tokyo implemented a plan to rescue the banks that Japan's economy started to recover.

"Recovery must come from the resumption of lending by the financial markets rather than from any government stimulus package."

He poured scorn on the fact that there is no single European recovery plan, rather "27 separate ones" and how little is being spent by governments. With automatic stabilisers such as welfare payments included, the EU as a whole is spending only half of what the US is using to tackle the crisis (€600bn).

Mr Verhofstadt also argued that Europe "for purely economic reasons" as well as for environmental reasons should "switch to a low-carbon economy."

He noted that since the financial crisis, investment in areas such as wind energy as part of reaching Europe's headline goal of reducing CO2 emissions by 20 percent by 2020 "have dried up" because the approach is too fragmented.

The US, by contrast, "has made the ecological revolution a spearhead of its policy" which means Europe risks losing its "pioneering role" in the area, as well as the chance to create lots of jobs for EU citizens.

The only country that can help pull Europe out of the economic doldrums, according to Mr Verhofstadt, is Germany.

"Only Germany can propel Europe into a higher gear" being the "most densely populated" country and having the "strongest economy."

Mr Verhofstadt said that German "dynamism" cooled down after re-unification of the country "but 20 years after the fall of the Berlin Wall, it is time for Germany to look beyond its borders once again."

So far, Mr Verhofstadt's ideas on eurobonds and higher spending are not on the EU table. He denied this is because they have little chance of being accepted by the EU 27 and that he is being unrealistic.

Instead, he insisted, it is because the commission, headed by Jose Manuel Barroso, has not come up with an initiative.

"What we need now is a proposal from the commission to the Council [representing member states]. Then starts the big fight."

He pledged that if elected as an MEP he would work with fellow deputies to bring a broad coalition together "to launch one single European [recovery] strategy."

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