(Brussels) Europe's leaders are determined to keep the euro alive, Margrethe Vestager (Radikale), the economy minister, said yesterday after a meeting of the EU’s finance ministers.
The statement comes as insecurity about the future of the single currency deepens after the European bail out fund, the EFSF, raised only two-thirds of the €1 trillion that was initially planned.
Talks between the 17 Eurozone finance ministers Tuesday night ended with the decision to turn to the International Monetary Fund (IMF) rather than the European Central Bank to make up the EFSF shortfall, though in Brussels there is growing insecurity about how such a deal would be put together.
Despite these worries, Vestager underscored that there was a will to resolve the European sovereign debt crisis.
“The cost [of losing the Euro] would be enormous, unimaginably enormous, and that should motivate everyone to do their utmost,” Vestager said. “We need to make concrete decisions and make sure countries take control of their economies.”
There has been a growing concern that Greece will be unable to control its rapidly growing debt, leading to some businesses warning that they were already preparing contingency plans for the failure of the euro.
But Vestager was adamant that troubled Eurozone members such as Greece and Italy would make the necessary changes to bringing their economies back into line.
“I think some people are acting a little like drama queens because when we sit around the table there is a determination. No one is taking this lightly at all,” Vestager said.
One of the options currently being discussed to help raise funds is creation of Eurobonds, bonds guaranteed by 17 Eurozone members. But such a move would require a change to the Lisbon Treaty that currently prevents Eurozone members guaranteeing each other’s debt.
A treaty change would have an indirect effect on Denmark, whose new government has promised a referendum on whether to eliminate the Danish opt-out from European defence arrangements as guaranteed to it in the Edinburgh agreement.
Making a treaty change can be a lengthy undertaking and while it is underway the Danish government would be unlikely to call a referendum, without which Denmark is limited from participating in joint EU military efforts.
This issue was underlined earlier in the day by the defence minister, Nick Hækkerup, in Brussels who said the government wanted a referendum as soon as possible in order to participate in EU defence projects such as ‘pooling and sharing’ in which member states share their troops and resources.
“We’re in a situation in Denmark where we’re having to save a lot in our defence budget, so one of the ways to get through this and have a defence that can solve the problems we want it to solve internationally, is to undergo binding agreements with other countries and we can’t do that with the EU right now.”
But with Denmark assuming the rotating six-month presidency of the EU this January the primary concern of the government may be to keep Euro afloat rather than push its national interests.
“The primary objective of the Danish presidency is that decisions which have been made are acted upon,” Vestager said. “Implementation is the new black – it’s the most important thing to do, to make sure that citizens and markets and businesses experience that we do what say we’re going to. And if we want Eurobonds, we may need to have to make a treaty change.”
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