Brussels, 12/05/2009 (Agence Europe) - The former Belgian prime minister, Guy Verhofstadt, who is top of the Flemish Liberals list (VLD) in the June European elections, says that if Europe is lacking a common strategy for tackling the financial and economic crisis, it is mainly the fault of José Manuel Barroso's European Commission, which remains “silent” and refuses to put forward the necessary proposals. Mr Verhofstadt informed the press on Tuesday that it is the Commission's “duty” to put on the Council's table, the ambitious proposals for formulating a common European response to the crisis. He made this announcement at the European Parliament, where he was presenting his most recent book, “The Way out of the Crisis. How Europe can Save the World”. Mr Verhofstadt claimed that this Commission had failed to provide a common European response and exclaimed that “a more active Commission is needed in the future”. Verhofstadt backs up his observation with the figures and states that Europe is not taking the right action and is too lacklustre for cleaning up the banking sector and relaunching the economy. He says that it is taking the wrong action because it is happy to settle for 27 national recovery plans whilst the other global powers (US, China, Japan etc) are following a single approach. Too lacklustre, because the cumulated amounts committed by the Europeans for rectifying the banking system and relaunching the economy (3% of GDP) only account for half of what the Americans have put in.
Mr Verhofstadt warns that if Europe does not rapidly exchange its national plans for a common strategy, “we are at risk of falling into what I call a Japanese winter”, a long period of recession or economic stagnation as Japan has experienced since the 1990s. The IMF's most recent forecasts, underlined by Mr Verhofstadt on Tuesday, are based on the implementation of the recovery plans recently announced for Europe and the world and appear to indicate that the EU might experience a longer period of economic stagnation (going beyond 2012) than the rest of the world. This is why, insists the Belgian Liberal, Europeans must “rapidly change strategy”.
European financial regulator, “Euro-bonds”. What is Mr Verhofstadt proposing? Firstly, to put some order back into the financial markets by “cleaning up” the banking system. The EU must set up a “European financial regulator…if possible with all 27 states or if not, with the eurozone countries alone” and set up a European bank to take care of all the toxic products from the bad European banks and recapitalise the banking sector. The following stage will be to launch a European investment plan, which will radically reshape the European economy, create an economy that is based on non-fossil fuel and develop a solution that resolves problems linked to mobility and the ageing population, and which creates hyper-rapid information highways. The current European recovery plan brings together 27 national plans (with a total of €200bn) but is “insufficient”. Mr Verhofstadt says that Europe has to increase this to €400bn. To fund the investment plan and bank recapitalisation, Mr Verhofstadt appeals for Euro-bonds to be issued worth “at least €1 trillion”. He says it would be “an enormous mistake” not to launch a Euro-bonds market at a time when most European or Chinese savings are going to the US because there are no such bonds in Europe. Repaying these bonds would be covered by the cash flow of the investments made and the revenue generated in the long term from the recapitalisation of European banks and would not cost member states “a single euro”. The former Belgian prime minister says that the EU's net contributors do not have any cause for concern because there is no fear of any increase in their national contribution to the EU budget, which would “remain unchanged”.
With or without José Manuel Barroso? Some have said that Mr Verhofstadt will be chairing the Liberal (ALDE) Group at the next European Parliament but he categorically denies that he will be a candidate for the post of European Commission president. He pointed out that he had already been a candidate in 2004 (Ed: but had been blocked by Tony Blair) and said that this experience had not been a very happy one. Verhofstadt said that his ambition is “to go to the European Parliament”. The European Democrat Party (EDP), mainly composed of the “Modem” (France) and the Italian Margherita, has designated Mr Verhofstadt as one of its candidates for the post of Commission president (the other candidate being the former Italian commissioner, Mario Monti).
Until now, Mr Barroso has been the only candidate for the Commission presidency but is he the right person for carrying out the requested change in strategy? Mr Verhofstadt refuses to make any personal comments about Mr Barroso but demands that the candidate for the post of Commission president puts him-/herself forward at the EP, before the confirmation vote planned in July, together with a “kind of political programme”. On the basis of this political declaration, Mr Verhofstadt will decide whether he will support the candidate designated by the European Council or not. (H.B./transl. rh)