Wednesday

20th Feb 2019

Ex-commissioner questions survival of euro

Frits Bolkestein, the former EU internal market commissioner, has questioned the chances of survival for the euro in the long term.

Mr Bolkestein, who served in the previous Prodi commission from 1999 to 2004, predicted in a speech delivered on Wednesday (25 January) that the common currency will face a huge test in around 10 years, when a pensions boom is likely to hit Europe.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The ageing of Europe's population will hit the continent "ruthlessly," the outspoken Dutch politician stated, with eurozone states like Italy being unprepared for the expected jump in pension claims.

These states "will be forced by political pressure to borrow more and increase their budget deficit, with consequences for interest rates and inflation," he indicated, adding "the real test for the euro is not now, but in ten years time".

The ex-commissioner concluded "therefore, in my view the long-term chances of survival of the euro should be questioned."

In his speech, delivered before Dutch business leaders in London, Mr Bolkestein highlighted Italy as an example of member states' unpreparedness for demographic change.

The country finances pensions through contributions of the current working population, not through savings of pensioners themselves, managed by pension funds, the former commissioner pointed out.

This system will be put under pressure when the number of retired people increases compared to people with jobs.

Mr Bolkestein indicated that rising budget deficits as a consequence of the pension boom will be difficult to control, as the EU's stability and growth pact - the set of rules underpinning the euro - is not working.

Despite the pact, which stipulates that eurozone states' budget deficits may not exceed 3 percent, "member states, particularly the big ones, do what they want," according to Mr Bolkestein.

Mr Bolkestein, a free-market oriented liberal, is currently writing a book on the influence of intellectuals on politics in the 20th century.

Italian euro scepticism taking root

One in five Italian private sector employee think scrapping the euro would be the best solution to Italian economic problems, according to a fresh poll.

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Vestager says 'no' to Siemens-Alstom mega-merger

The EU blocked the merger of the makers of Germany's ICE and France's TGV trains, citing concerns of reduced competition and extra costs for consumers and taxpayers. The two countries now want to change the rules.

'Robin Hood' measure in CAP seems doomed

Commission wanted farmers' EU subsidies to be capped at €100,000, with payouts they would have received beyond that redistributed to smaller farms. But member states oppose the idea.

News in Brief

  1. Estonia kicks out Danske Bank over money laundering scandal
  2. May and Juncker meet over Brexit on Wednesday
  3. EU promises to open up advisory groups
  4. EU agrees to limit CO2 emissions by trucks
  5. Juncker under attack in Hungary government ad
  6. EU would not oppose extending Brexit talks, Juncker said
  7. Juncker expects Trump not to impose new car tariffs
  8. Former EU official sentenced for office rape

Opinion

Eastern Europe Matters

The foreign ministers of Sweden, Poland and the Czech Republic reflect on 10 years of the Eastern Partnership with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

Stakeholders' Highlights

  1. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  2. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  3. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  4. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  5. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  6. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  7. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  8. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  9. Nordic Council of MinistersSeminar on disability and user involvement
  10. Nordic Council of MinistersInternational appetite for Nordic food policies
  11. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  12. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups

Latest News

  1. College of Europe alumni ask rector to cut Saudi ties
  2. EU says Hungary's anti-Juncker campaign is fake news
  3. Trump right for once: Europe should take back foreign fighters
  4. EU should clarify rules for plant burgers and lab meat
  5. Italian populists could be second biggest force in EU parliament
  6. Merkel defends Russia ties, ridicules Trump on cars
  7. British MPs condemn Facebook CEO's misrule
  8. EU's chance to step up on Hungary and Poland

Join EUobserver

Support quality EU news

Join us