Brussels, 08/02/2010 (Agence Europe) - At the G7 finance summit in Iqaluit, Canada, last weekend, Europeans reassured their international partners that the eurozone will be able to cope with the budget crisis being experienced by several of its members and recent doubts about the solvability of Spain and Portugal.
The chair of the Eurogroup, Jean-Claude Juncker, said that the eurozone was perfectly able to deal with its own problems, as was illustrated by the situation vis-à-vis Greece. He said that the ministers had discussed Greece, Portugal and Spain and had told international partners that the eurozone would sort out its problems itself without the aid of the IMF. Speaking after the G7 meeting on Saturday 6 February, Canada's finance minister, Jim Flaherty, said that the debts of the eurozone countries would be managed by the EU rather than the G7. The president of the European Central Bank, Jean-Claude Trichet, said that the ECB was confident that the Greek government's efforts to correct its public deficit and take necessary measures would bear fruit. Germany's finance minister, Wolfgang Schäuble, also made reassuring noises, ruling out the option of more direct intervention by EU member states to shore up the Greek public purse. He said that Greece had to understand that when rules are broken for too long a time, then there is a greater price to pay, he explained, adding that the euro will remain stable and markets always tend to over-react. In one sense, the current crisis even seems to be having a positive impact in that the euro fell on Friday to its lowest level against the dollar for eight months, making a euro worth less than 1.36 dollars (it has since risen slightly).
Public economic stimulus measures are continuing around the globe, explained the G7. Flaherty said the G7 countries would be continuing with their economic recovery strategies but were considering exit strategies as well. This was echoed by UK Chancellor of the Exchequer, Alistair Darling, who said that all the politicians were determined to continue to support their economies until strong recovery has been established.
In order to solve the global financial crisis more generally, the G7 repeated its demand for the IMF to come up with proposals for introducing a bank tax. Flaherty said the politicians had agreed to work together to ensure that the financial institutions pay their share of causing the crisis. A special G7 meeting on regulating the financial markets will be held in Berlin on 20 May 2010. (A.B./transl.fl)