Euro zone leaders meet on Oct. 23 to discuss further aid for
Greece, with countries such as Germany and the Netherlands
frustrated by Athens’ lack of progress on privatisation and
other reforms. A larger write-down on Greek debt, bank
recapitalisation and tighter controls are all on the agenda.Calling the crisis a “formidable eye-opener” Gucht said a
pattern had emerged of markets attacking highly indebted euro
zone states, driving down the value of their bonds.”Emergency meetings make sweeping announcements; but on
closer inspection, markets are unimpressed and the cycle starts
all over again. It is now two to midnight; this vicious circle
must be stopped,” he said in Berlin.”If Europe’s political class is unable to take unpopular
decisions on deficits, haircuts, the size of the European
Financial Stability Factility (EFSF) and bank recapitalisation,
the monetary union may well unravel with truly incalculable
economic and political costs.”Gucht said he believed new rules that had been put in place
should allow the euro zone to avert future crises, but the bloc
still faced a huge challenge in sorting out the crisis of today.The Achilles’ tendon of the euro zone lay in its
macroeconomic regime, he said.”The debate that led to the Lisbon Treaty did not deal in
any depth with economic and monetary union…it is the storm we
have been in since 2008 that has laid bare the defects of the
construction of the euro zone: the rules were inadequate and
enforcement mechanisms too weak.”Keeping global markets for trade open was a key part of
European recovery, he said, and he urged commitment to pushing
the Doha round.De Gucht praised the European Union’s ability to speak with
one voice on trade matters, but highlighted that with regard to
foreign policy the European Union remained a “very complex
entity to deal with” for third country partners.High Representative for Foreign Policy Catherine Ashton wore
“not two, but three if not four hats”, he said. She could
request the assistance of other commissioners, but this was not
a perfect situation as “personal chemistry” mattered in foreign
matters, he added.Disruptive change in Europe had seen people resort to their
old national frameworks, he said, but to solve Europe’s problems
there was no real alternative than “more Europe”.
