Germany's Foreign Minister Westerwelle has stressed the need “to direct our efforts towards a strategic and forward-looking development of the euro’s future”. Long-term structural reforms are needed, he says, to avoid another debt crisis arising in the near future. What he does not see as necessary is an increase in the euro rescue package.The crux of the matter according to Westerwelle is that “we are in this situation because too much debt was taken on in too short a time; and it now cannot be refinanced on the markets”. The Minister therefore considers it essential to tackle the causes. The pressure created by the immediate problem must be used, he feels, to push through structural changes.
Foreign Minister Westerwelle is holding a meeting in Berlin today with Olli Rehn, the European Commissioner for Economic and Monetary Affairs. The Stability and Growth Pact will also determine the agenda at the General Affairs Council in Brussels on 31 January.
As Westerwelle puts it, every country in Europe has to “adopt sound financial and budget policies”. The “policy of running up vast debts” witnessed in past years must, he says, be brought to an end. The Minister also believes that it would be helpful for other countries to enshrine a national “debt brake” like Germany’s in their constitutions.
He is furthermore convinced that the EU’s competitiveness can be enhanced through greater coordination of the member states’ economic policies. As the Minister puts it, strengthening member states’ real economies will in the end affect the euro itself, since the currency “can only be as strong as the real economies of its member states”.
In contrast, increasing the euro rescue package is currently out of the question for Foreign Minister Westerwelle, who points out that only a small proportion has been made use of so far, help for Ireland having amounted to less than 10% of the available package. He sees an increase as neither necessary nor helpful, since speculation on the subject would do more to unsettle the markets than to calm them.
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