Tuesday

28th Mar 2017

Polish finance minister says Europe at risk of "collapse"

  • Rostowski: 'We have to be sure, that going into this house [the eurozone] it will be earthquake-proof' (Photo: consilium.europa.eu)

Polish finance minister Jacek Rostowski has said the EU could "collapse" if leading countries such as Germany mishandle the financial crisis.

Speaking in Polish daily Gazeta Wyborcza on Monday (29 August), the minister said: "European elites, including German elites, must decide if they want the euro to survive - even at a high price - or not. If not, we should prepare for a controlled dismantling of the currency zone."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

He added: "We have a simple choice: Solidarity or the collapse of Europe."

Rostowski criticised the German "elite" after German President Christian Wulff last week said the European Central Bank (ECB) should not buy struggling Italian and Spanish bonds.

The Polish minister said the ECB programme is an essential stop-gap measure until the EU crisis-fund, the EFSF, is given new powers to buy sovereign debt.

He indicated that eurozone countries will have to pour more cash into the €440 billion EFSF to make it fit for purpose.

"We cannot allow markets to have a shadow of a doubt that the EFSF is not big enough to stabilise all the euro countries which need help," he said. With Italy's debt alone standing at almost €1.9 trillion, the EFSF should be "very big" he noted.

The Polish minister said the long-term solution to the crisis is deeper integration.

"The fundamental problem of the eurozone is not an economic but a political one," he explained. "The choice is: much deeper macroeconomic integration in the eurozone or its collapse. There is no third way."

He attacked Finland for its "egoism" in seeking collateral for a new loan to crisis-struck Greece.

He also diagnosed two forms of "dangerous populism" at work in EU politics - a southern populism based on financial irresponsibility and a northern one based on lack of solidarity with southern countries.

Rostowski said Poland will not join the euro until it is sure the currency is "earthquake proof".

But he added that wealthy northern countries as well as non-eurozone EU members will suffer if it falls.

"It's hard to imagine anything that would hit the Dutch, German or Finnish economy harder than the collapse of the banking system in any eurozone country," he said. "The collapse of the eurozone would [also] be catastrophic for Poland."

Eurozone bank buys record €22bn in bonds to contain euro crisis

The European Central Bank last week spent a record €22bn buying eurozone government bonds in a bid to prevent the eurozone debt crisis spreading, a move that is likely to fuel debate on the creation of eurobonds. Details of the buying spree came on the eve of a meeting between the French and German leaders in Paris.

Barroso raises alarm about severity of euro crisis

EU commission chief Barroso has indicated that market developments on Italy and Spain threaten the survival of the euro, amid fresh talk of increasing the EU's €440 billion bailout pot.

Rehn questions political appetite for eurobonds

EU monetary affairs commissioner Olli Rehn has questioned whether euro countries are really prepared to accept the loss of national fiscal power that would come with the introduction of eurobonds - deemed by many as the principle means of exiting the eurozone debt crisis.

Agenda

This WEEK in the European Union

This week see the return of a full institutional house in Brussels after the long summer holidays but the eurozone crisis that blackened much of August looms larger than ever.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

Stakeholders' Highlights

  1. Belgrade Security ForumCall for Papers: European Union as a Global Crisis Manager - Deadline 30 April
  2. European Gaming & Betting Association60 Years Rome Treaty – 60 Years Building an Internal Market
  3. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  4. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  5. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  6. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  7. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  8. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  9. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  10. Party of European SocialistsWe Must Renew Europe for All Europeans
  11. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  12. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People