Europe's conservative leaders, meeting here Friday to plot a response to the Continent's persistent sovereign debt crisis, said they were committed to pushing tough economic reforms as the price of aid to weak states.
They also made clear that private investors who lend to euro-zone countries would, in the future, face losses if those countries got in trouble. So far in Europe's bailouts, taxpayers have paid the entire cost.
"We have to make sure there is really a concrete risk to lose money," said Jyrki Katainen, Finland's deputy prime minister and the gathering's host.
The Helsinki summit assembled 12 leaders from Europe's dominant center-right political grouping, chief among them German Chancellor Angela Merkel. In a statement, the leaders broadly endorsed a Franco-German "competitiveness pact" of economic reforms and a proposal to put numerical targets on how fast indebted countries must decrease their debt loads.
Among the 12 were the prime ministers of Italy and Belgium. Italy, which has high debt itself, had earlier been cool to a numerical debt requirement. Belgium had earlier disagreed with a piece of the competitiveness pact on inflation-linked wages.
It wasn't clear how much the competitiveness pact itself might be softening; Mr. Katainen allowed that it was still taking form.
The meeting of the European People's Party sets the tone for a month of rapid-fire diplomacy aimed at shaping a big-bang answer that has so far eluded Europe.
Next week is a gathering of the 17 euro-zone leaders, which is followed by possibly two meetings of finance ministers, and then another summit of the entire European Union at the end of the month. That event is the self-imposed deadline.
The meeting Friday underscored sharply Europe's North-South divide—between rich and poor, between benefactor and supplicant.
Helsinki is the northernmost capital in the 17-member euro-zone, a city of snowbanks and pine and white birch. The Finns are models of fiscal restraint; they are projected to have the second-lowest deficit this year in the currency bloc, after tiny, rich Luxembourg.
The conservatives' counterpart—the Party of European Socialists, which counts the leaders of Greece, Portugal and Spain—opened its own convention Friday in Athens.
Greek Prime Minister George Papandreou was the only national leader attending. Spain's José Luis Rodríguez Zapatero and Portugal's José Sócrates begged off.
The euro-zone faces a handful of interlocking problems, few of which can be resolved without affecting the others.
First, there is the bloc's main rescue vehicle, the European Financial Stability Facility. It is temporary and can't embark on new rescues after mid-2013. Leaders are debating a permanent replacement, but it required a change to the bloc's founding treaties. There isn't yet agreement on what powers the new fund should have, besides a desire that it be more flexible than the existing fund. If the permanent fund were established, it would raise the question of how to handle the temporary EFSF.
Then there is the matter of the so-called competitiveness pact. Germany wants other nations to sign up for broad economic overhauls, such as balanced-budget laws, older retirement ages in state pension systems and a step toward more-consistent taxation across the bloc.
Source: http://online.wsj.com
They also made clear that private investors who lend to euro-zone countries would, in the future, face losses if those countries got in trouble. So far in Europe's bailouts, taxpayers have paid the entire cost.
"We have to make sure there is really a concrete risk to lose money," said Jyrki Katainen, Finland's deputy prime minister and the gathering's host.
The Helsinki summit assembled 12 leaders from Europe's dominant center-right political grouping, chief among them German Chancellor Angela Merkel. In a statement, the leaders broadly endorsed a Franco-German "competitiveness pact" of economic reforms and a proposal to put numerical targets on how fast indebted countries must decrease their debt loads.
Among the 12 were the prime ministers of Italy and Belgium. Italy, which has high debt itself, had earlier been cool to a numerical debt requirement. Belgium had earlier disagreed with a piece of the competitiveness pact on inflation-linked wages.
It wasn't clear how much the competitiveness pact itself might be softening; Mr. Katainen allowed that it was still taking form.
The meeting of the European People's Party sets the tone for a month of rapid-fire diplomacy aimed at shaping a big-bang answer that has so far eluded Europe.
Next week is a gathering of the 17 euro-zone leaders, which is followed by possibly two meetings of finance ministers, and then another summit of the entire European Union at the end of the month. That event is the self-imposed deadline.
The meeting Friday underscored sharply Europe's North-South divide—between rich and poor, between benefactor and supplicant.
Helsinki is the northernmost capital in the 17-member euro-zone, a city of snowbanks and pine and white birch. The Finns are models of fiscal restraint; they are projected to have the second-lowest deficit this year in the currency bloc, after tiny, rich Luxembourg.
The conservatives' counterpart—the Party of European Socialists, which counts the leaders of Greece, Portugal and Spain—opened its own convention Friday in Athens.
Greek Prime Minister George Papandreou was the only national leader attending. Spain's José Luis Rodríguez Zapatero and Portugal's José Sócrates begged off.
The euro-zone faces a handful of interlocking problems, few of which can be resolved without affecting the others.
First, there is the bloc's main rescue vehicle, the European Financial Stability Facility. It is temporary and can't embark on new rescues after mid-2013. Leaders are debating a permanent replacement, but it required a change to the bloc's founding treaties. There isn't yet agreement on what powers the new fund should have, besides a desire that it be more flexible than the existing fund. If the permanent fund were established, it would raise the question of how to handle the temporary EFSF.
Then there is the matter of the so-called competitiveness pact. Germany wants other nations to sign up for broad economic overhauls, such as balanced-budget laws, older retirement ages in state pension systems and a step toward more-consistent taxation across the bloc.
Source: http://online.wsj.com
No comments:
Post a Comment