Brussels, 05/09/2008 (Agence Europe) - Chairman of the Eurogroup Jean-Claude Juncker, speaking in an interview in Le Monde on 4 September, has rejected all thought of budgetary reflation in response to the slowing of economic growth in the Euro area. “After the American recovery plan, adopted in January, we in Europe decided not to respond to the financial crisis with a programme of this kind. History has demonstrated their limits. Such policies can lead to some small, short-term improvement, but, in the medium term, the resulting imbalances always have to be corrected,” he said. Juncker favours better coordination of the economic policies of the countries of the Euro area, but he feels that “virtuous countries”, like Spain, which have given themselves some wriggle room, “are allowed to act, while the less virtuous countries”, like France and Italy, “will not be able to do so”. He backed a support programme for small and medium-sized enterprises under the aegis of the European Investment Bank.
On his position as head of the Eurogroup, the Luxembourg prime minister said that he was not looking for a further mandate. However, at this time of economic and institutional uncertainty in Europe, he would not rebuff a third mandate if he was asked. The 2004 protocol setting the term of office of the chairmanship of the Eurogroup at two years (renewable once) would have to be amended as a consequence. Such a turn of events could be of great disappointment to Belgian Finance Minister Didier Reynders, who, in June, signalled that he would be willing to take up the post (see EUROPE 9677). (M.B./transl.rt)