Saturday

4th Feb 2023

Summit will not be end of eurozone's troubles, says Barroso

  • Barroso: 'You cannot hope that this will be the end of all our troubles' (Photo: consilium.europa.eu)

In a reminder to jittery markets about how difficult decisions for the eurozone do not just need to be taken but also implemented, European Commission president Jose Manuel Barroso has said Sunday's (23 October) key summit will not necessarily draw the much-wanted line under the eurozone's sovereign debt crisis.

"Even if we do arrive at a political decision on everything that's on the table, which I hope we will, that doesn't necessarily mean that there will not then have to be an implementing phase," Barroso told reporters on Wednesday.

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"You cannot hope that this will be the end of all our troubles, but I very much hope that important, long-term decisions which are important for the future of the European Union and the euro will come about," he said.

The approaching summit, much like previous eurozone gatherings, has represented something of a boon for students of the art of political communication.

With mounting global pressure to fix the problem, analysts were quick to assume that eurozone leaders would not dare to gather for yet another meeting only to emerge with stop-gap agreements.

However Germany, as the continent's paymaster, was once again quick to lower expectations. German chancellor Angela Merkel said that those raising hopes about the 'big bang' nature of the summit "have either lost patience or don't understand the extent of the challenges."

Eurozone leaders on Sunday have to agree on the losses that the private sector should be obliged to take on Greek debt - a major point of division between Paris and Berlin - decide on the extent to which European banks need to be recapitalised and take steps to prevent the crisis spreading to major eurozone economies such as Italy.

But both France and the commission reacted to Berlin's reticence by upping the pressure once more. "Allowing the destruction of the euro is to take the risk of the destruction of Europe," said French president Nicolas Sarkozy on Tuesday while a commission spokesperson called for an end to a "piecemeal approach."

President Barroso's statement represents an acknowledgment of Berlin's pragmatism and an attempt to look beyond Sunday when whatever is agreed needs to be put in place.

The last eurozone leader agreement from July only made it through the final national ratification process last week, and caused the Slovak government to fall on the way.

The expectations game will continue all the way up to the summit but an assessment on the sustainability of Greece's debt by representatives from the EU, European Central Bank and IMF will largely influence the proceedings.

Sunday's meeting will be preceeded by a flurry of other meetings. Eurozone finance ministers will meet in Brussels on Friday evening, followed by a meeting of all 27 ministers on Saturday morning. Centre-right leaders will meet on Saturday afternoon.

On the day itself, all 27 EU leaders will meet at 10.30am for their regular autumn summit. They are due to wrap up at 3pm, although the contentious issue of bank recapitalisation could see the timetable stretched.

Eurozone leaders are due to start their summit at 4pm. Diplomats are already wondering if they will still be negotiating the details when Asian markets open on Monday morning.

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