Juncker lists 10 steps to stem euro zone crisis
Eurogroup Chairman Jean-Claude Juncker has proposed ten steps for solving the euro zone crisis including automatic sanctions for fiscally irresponsible governments, greater authority for the Commission and a dividend for taxpayers who rescue banks.
In an interview with German newspaper Handelsblatt published on Wednesday, Juncker also implied that a deeper debt reduction might be necessary for Greece.
"If elements appear in the troika report which call into question the sustainability of Greece's debt burden, then we must discuss how we can guarantee Greek debt (with measures) beyond a participation of the private sector," Juncker said.
Asked whether he had a plan to end the crisis, Juncker made ten suggestions:
- 1 - "(Release) the next tranche, if that's possible"
- 2 - "Ascertain the sustainability of Greek debt, otherwise we have to think about other steps that we can only take if we have given thought to all the consequences of those steps -- to those outside Europe as well."
- 3 - "Strict continuation of course of budget consolidation, with automatic sanctions for repeated failures to meet budgets
- 4 - "A road map toward bank recapitalization. The under-capitalized banks have to first try to get refinanced on markets. If that does not succeed, states have to consider whether they can jump in to make available the necessary capital."
Tax payers should get dividends for rescuing banks.
"We cannot simply hand them the money. We need to make sure that those who provide capital in whatever form are also represented in the decision making bodies -- in the supervisory board, the board of directors, in management -- and that we participate in the profits."
- 5 - Introduce a financial transaction tax
- 6 - "A growth program for so-called struggling countries."
- 7 - "A different tone in Europe on budgets. It is not acceptable that European Union countries are divided into those who give and those who take."
- 8 - "Stronger regulation of financial markets"
- 9 - "A new way to deal with ratings agencies."
- 10 - "We need an economic government. I'm delighted that the number of those supporting this idea has grown rapidly."
[Source: Reuters, Frankfurt, 12Oct11]
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