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19Nov10
Van Rompuy rows back from EU 'survival crisis' remarks
EU Council President Herman Van Rompuy has rowed back from his strong words from Tuesday (16 November) over the "survival crisis" of the euro and the European Union, saying his words had been misinterpreted.
On Thursday, speaking to a group of politicians from the centre-right European People's Party in the European capital, he said: "A reference to the 'survival crisis' of the spring ... was wrongly interpreted as also referring to the present situation. Everybody in the audience who listened carefully to my words, was surprised by reactions afterwards."
"A radical declaration from a cautious man would really have been a surprise."
Earlier in the week, the European president had shocked commentators and the markets when he told a Brussels think-tank audience: "We're in a survival crisis," adding that if the eurozone does not survive, neither would the EU.
"We all have to work together in order to survive with the eurozone, because if we don't survive with the euro zone we will not survive with the European Union," he said at the time. "But I'm very confident we will overcome this."
In the wake of the flurry of concerned reaction he had not expected, he was eager to put minds at ease on Thursday.
"The euro is the most visible and the most palpable sign of the European common destiny. What happens with pensions or debt in one country, may affect the economy in another country. In good times and in bad times," he said.
"As I said in Berlin last week: 'Until one year ago, all this was just knowledge - theoretical. This spring, it became an experience - unforgettable.' Now, we have to act upon the fact - responsibly."
"And, that's exactly what we are doing. We are drawing the lessons from the spring crisis ... We established a safety net for those countries in need, linked to a strong conditionality [and] ... We agreed on a new model of economic governance in order to avoid the problems of the past."
"This is a real breakthrough."
He stressed that despite the recent fluctuations in the market concerning the debt considerations of Ireland and Portugal, the euro and the wider European Union are in safe hands.
"Economic growth in the Eurozone is much more stronger than most of us thought. The projected growth rate doubled in six months - from around 1 percent to 1,8 percent.
"Of course we have differentiated growth inside the Eurozone, due to the robust austerity and reform measures in some countries, but these differences can be temporary. We draw the lessons from the 1930s so that the recession did not turn into a lasting depression. The quality of economic policy is now much better than 80 years ago."
He also criticised doom-sayers following his earlier remarks.
"Many observers have underestimated and continue to underestimate the political determination of the leaders and of the countries, to safeguard their currency."
"The fundamentals of the eurozone are sound: low inflation, an balanced current account, and, again, respectable economic growth."
[Source: By Leigh Phillips, Euobserver, Brussels, 19Nov10]
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