Brussels, 22/11/2013 (Agence Europe) - The head of the Eurogroup, Jeroen Dijsselbloem, prefers to give extra time for consolidating public finance rather than getting countries to sign reform contracts.
He said in an interview with French business newspaper Les Echos on Friday 22 November that he didn't believe for one moment that countries would reform their economy by signing a contract to this effect with Brussels in return for potential financial aid from the eurozone because, if a country doesn't believe it's in its interest to reform, then it isn't possible to motivate it from the outside. He said that offering recompense for reforms is not very wise, but he thought it would be good to introduce stricter reform criteria for the granting of extra time to correct budget deficits. He expressed surprise at ideas that he said were a little like the Eurobond idea of pooling some of the eurozone countries' debt and that he had rejected because it removes the incentive to carry out healthy budget policies. The only thing that counts, he said, is the different interest rates given by the money markets, which send good economic signals.
Asked about the idea of the eurozone having its own budget, a question that will be discussed by EU heads of state in December, Dijsselbloem said he did not share the view that economic and monetary union cannot work without a budget. In order to have the least counter-cyclical impact, he explained that the budget would have to be huge and he himself was in favour of coordination of eurozone economies and tackling risks together, hence the need for banking union to tackle financial risks. (MB/transl.fl)