Thursday

20th Jan 2022

Barroso lays down the line for EU summit

  • "Leaders need to come to the table saying what they can do and what they want to do and what they will do. Not what they can't do and won't do" (Photo: consilium.europa.eu)

Amid continued uncertainty over whether Thursday's (20 July) summit will be a success, European Commission president Jose Manuel Barroso has stepped into the breach with a list of five must-do tasks for eurozone leaders to achieve at the emergency meeting.

Calling on the 17 eurozone countries to "show European responsibility", Barroso said that the summit must at a "minimum" provide clarity on a second bailout for Greece and on the "feasibility and limits" of private sector involvement.

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Leaders should also be clear on how the European Financial Stability Facility, the eurozone's rescue fund, can be made more flexible, on what still needs to be done to repair the banking sector, and on measures to keep the banking system in liquidity.

Barroso's laying down of the line is a direct challenge to German chancellor Angela Merkel, who has been playing for time as she insists on involving the private sector in a second Greek bailout, with Germans deeply unhappy at the prospect of more loans going to the Mediterranean country.

"I urge all the leaders to show the ethics of European responsibility. I have been making the case that it is in the self-interest of every member state to commit. It is true for those who have to reduce deficit and debt, and it is also true for those who are asked for support and solidarity."

A summit without a response will mean "negative consequences will be felt in all corners of Europe and beyond".

Barroso is the first leading EU politician both to spell out the seriousness of the eurozone crisis, which lately has been lapping at the heels of Spain and Italy, and what is needed as a response.

The EU got a major fright in recent days when borrowing costs rose in Italy and Spain with markets simply doubting the political commitment behind the public assurances that member states would do whatever it takes to manage the crisis.

The International Monetary Fund, which will be part of any new bailout for Greece, has been clamouring for some clarity from the EU and has warned about the global consequences of inaction.

Angela Merkel, however, yesterday put the brakes on any suggestions that Thursday's meeting would see a comprehensive solution to the debt crisis.

"Further steps will be necessary and not just one spectacular event which solves everything," she said.

Stricter bank rules

Barroso also used the press conference to announce the setting up of a special taskforce on Greece, to "support delivery" of the EU-IMF programme and "accelerate absorption" of EU funds.

The task, which will be based in Brussels but have a support team in Athens, will make its first report in October.

Meanwhile, EU financial services commissioner Michel Barnier on Wednesday announced another flank in the bloc's attempt to prevent a recurrence of the financial crisis.

Under the proposals, which have to be agreed by member states and parliament, banks will be forced to raise some €460 billion in capital by 2019 to act as a buffer against another crisis.

"We cannot let such a crisis occur again and we cannot allow the actions of a few in the financial world to jeopardize our prosperity," said Barnier.

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