EBRD President: Euro area has best chance of survival

Kazakhstan, Astana, May 24 / Trend I.Khalilova / The euro area has the best chance of survival, but this requires a very tight coordination of fiscal and budgetary policies of EU countries, the overall monitoring by the European Commission, EBRD President Thomas Mirow said during the Astana Economic Forum on Thursday. "It is therefore necessary to create unified budgetary, monetary and economic unions, but today there is no political will and political preconditions for the creation of these alliances, which is associated with distrust of the political elite of one European country to the national sovereignty of the other, which ultimately led to economic crisis," Mirow said. "At present it is necessary to balance the weaknesses, and the EU takes appropriate action in accordance with the specifics of each country." This uncertainty regarding the degree of solidarity within the EU and the Euro area, has arisen because of the manner in which countries tried to solve the problem of the debt crisis in Greece, Ireland and Portugal. First Vice-President of the Argentine Hipotecario Bank Mario Bleher believes that the creation by the European Central Bank of stabilization mechanism is an encouraging fact. Meanwhile, in the light of the expectations of the mass withdrawal of deposits due to panic about the deterioration of situation in some countries, in order to avoid liquidity problem of the euro area it is necessary to create the European system of deposit insurance, Mirow believes. During the high anxiety of the financial markets relating with problems in Greece and other countries, there was a depreciation of the euro against the dollar, Japanese yen or Swiss franc, although these were fluctuations that do not exceed the limit of the oscillations observed earlier. This is not proof that there was loss of confidence in the euro that is a lead from the euro as the currency in favor of other currencies. In principle, the euro continues to be credible, and it has a reputation for hard currency. "Europe must have a way to provide funding for weak countries and common eurobonds, which do not involve the replacement of all national bonds, and that would be a good implementation of this mechanism," the former chairman of the Central Bank of Argentina, Domingo Cavallo, believes. The European Central Bank, in its opinion, should provide support to ensure financial stability and reconstruction of countries that are experiencing a recession. "European countries, creating a single currency, did not anticipate that the euro will require tight fiscal discipline," the former Prime Minister of the Netherlands, Wim Kok, believes. Supporting Kok, former Italian Prime Minister Romano Prodi said that Europe is now entering a new phase of the crisis, and taking into account the share of GDP and exports of EU countries in the world economy, its position as a whole will depend on how the situation will develop in Europe. "We can not allow the collapse of the euro area. If Greece withdraws from it, it will be followed by Portugal, Spain, Ireland, Italy, etc," Prodi said "Although the economy of Greece is only two percent of the European economy, but the idea that if there is no solidarity between European countries, the collapse of the euro zone can not be avoided". Do you have any feedback? Contact our journalist at agency@trend.az