Thursday

7th Dec 2023

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."

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

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.

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.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.

Analysis

Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

Latest News

  1. EU suggests visa-bans on Israeli settlers, following US example
  2. EU ministers prepare for all-night fiscal debate
  3. Spain's Nadia Calviño backed to be EIB's first female chief
  4. Is there hope for the EU and eurozone?
  5. Crunch talks seek breakthrough on EU asylum overhaul
  6. Polish truck protest at Ukraine border disrupts war supplies
  7. 'Green' banks lend most to polluters, reveals ECB
  8. Tense EU-China summit showdown unlikely to bear fruit

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Join EUobserver

Support quality EU news

Join us