Tuesday

17th Oct 2017

Euro-saving operations due within 'days,' says Juncker

  • "We have come to a crucial point. There is no more time to lose," Juncker said (Photo: consilium.europa.eu)

Eurogroup chief Jean-Claude Juncker has said there is "no time to lose," as the world talks about a eurozone breakup, with joint action by the European Central Bank and the eurozone bailout funds expected in the coming days.

"We have come to a crucial point. There is no more time to lose," Juncker said in an interview published both in Le Figaro and Sueddeutsche Zeitung on Monday (30 July).

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ECB chief Mario Draghi last week said the bank was ready to do "whatever it takes to preserve the euro" and hinted at more government bonds being bought up, a move which would help Italy and Spain bring down their record-high borrowing costs.

Juncker said the eurozone bailout fund, the European Financial Stability Facility (EFSF) - which has roughly €200 billion left to spend - will also contribute to the rescue operation.

Under current rules, the EFSF can buy bonds directly from the governments only for bailed out countries. It can buy bonds on the free market for other eurozone countries too, but they have to make a formal demand and sign a memorandum of understanding - also seen as a 'bailout lite'.

German subsidiary

Juncker also blamed Germany for treating the eurozone "as its subsidiary" and taking eurozone decisions according to internal political interests. "If all 17 governments would do this, what would be left of that was is common? Why is it like this?" he said.

He criticised German politicians - including German economy minister Phillipp Roesler - who in recent weeks have said a Greek exit from the eurozone would be better than keeping the country in.

"Those who think a Greek exit would solve the problem are wrong. They do not understand a thing about the deep origins of the crisis. Greece needs to improve its record, certainly. But nobody can ignore the staggering cost of an exclusion for the others. Anything else is low politics," Juncker said.

Meanwhile, over 71 percent of Germans want Greece to leave the euro if it did not live up to its austerity promises, a poll published Sunday by Bild newspaper shows.

Over 50 percent of Germans also think their country would be better off outside the euro. Only 29 percent said the German economy would hurt if it was to leave the common currency.

ECB chief indicates upcoming help for Spain

Markets rallied after European Central Bank chief Mario Draghi on Thursday pledged to do "whatever it takes" to salvage the euro and suggested the bank may buy more government bonds.

Analysis

Juncker's euro-push could risk unity, warns eastern flank

The EU Commission chief hopes that as Emmanuel Macron pushes for euro area countries to integrate further creating a multi-speed Europe, central European members will be more inclined to join the single currency. Are they?

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