Brussels, 10/01/2013 (Agence Europe) - The head of Eurogroup, Jean-Claude Juncker, said it was important not to give people the impression that the worst was behind us. It may be, but tough work remains, he said during his last meeting with the European Parliament's Economic and Monetary Affairs Committee as head of Eurogroup on Thursday 10 January. Juncker will be leaving the job which he has held since 2005 at the next Eurogroup meeting on 21 January, but he said there was no time for nostalgia because it was a time for action. Although 2012 had been a year of far-reaching decisions for the eurozone, Juncker admitted that the years ahead would be difficult. He pointed to recent progress, such as the bailout of Spanish banks, sustainability of the Greek debt, the bank supervision mechanism and the European Stability Mechanism, which has been up and running since October 2012. He said that it would be necessary to ensure that the ESM was able to do its work, particularly direct bailout of banks, which will allow banks to be recapitalised without deepening the debt of the countries where the banks have their headquarters. This new bailout mechanism would have to work retroactively to some extent, explained Juncker, because otherwise it would not have any meaning, but the Eurogroup has yet to decide on how “legacy assets”, as they are called, are to be dealt with.
No agreement on Cypriot bailout this month. There are plenty of new challenges ahead. The Cyrpiot bailout plan has not yet been finalised and Juncker said the sustainability of the island's debt was a real problem and he didn't think it would be possible to find a solution on 21 January. Another problem facing the eurozone is the fact that unemployment rose to above 11% in November 2012 (see EUROPE 10759). Regretting the way the crisis is hitting the poorest hardest, the head of the Eurogroup called for a compensation system to be introduced for countries like Portugal that are making an effort. He said the impression must not be given that Europe is there to punish, not to guide.
Juncker defended what has been described as the “mediocrity” of eurozone finance ministers' decisions, despite long hours of talks. He said that the views of everyone around the table had to be listened to because the euro is a common currency and everyone has the right, and duty, to express their opinion. That also goes for countries outside the eurozone because it was important not to build new walls, he argued in response to a question from Wolf Klinz (ADLE, Germany) about a possible gap opening up between countries in and out of the single currency. Juncker added that people always underestimate the complexity of Europe, which is why, in his opinion, chairing the Eurogroup should be a full-time job, though not everyone agrees with him. His successor, probably someone from one of the Benelux countries, is, therefore, unlikely to be full-time in the post. (EL/transl.fl)