As market speculation grows that Greece may be edging towards an exit from the Eurozone and doubts arise about the capacity of the EU's nascent firewall (€500bn European Stability Mechanism) to contain the ensuing contagion, Guy Verhofstadt, ALDE group leader underscores the need to reconsider a structural solution involving further economic integration and a pooling of debt and calls on the new French President to demonstrate strong, pro-European leadership in promoting it as part of his strategy to restore growth.
"Francois Hollande could not be taking over the Presidency of France at a more crucial moment for the future of the Eurozone. He arrives, centre stage, today for a meeting with Chancellor Merkel where he will no doubt try to convince of the need for more growth and less austerity. If this is his goal he should champion the German inspired plan for a European Redemption Fund which combines both the discipline of repayments with the solidarity of lower interest rates, allowing Member States to free up budgetary resources for productive investment rather than wasting them on ever higher bond yields."
"Last night the European Parliament's economic affairs committee voted through an amendment, tabled by the ALDE group, to the so-called "two-pack", on additional budgetary surveillance, to introduce the idea of such a fund to the toolbox of measures currently being deployed to address the crisis, in addition to a €1 trillion growth fund for infrastructure. The Redemption Fund proposal, worth some €2.3 trillion, would mutualise excessive debt (that above 60%) and provide the means to bring it back down to sustainable levels over a period of 20-25 years without having recourse to further tax-payer funded bailouts as the bondholders would bear the risks and the costs."
"Regrettably the Socialist group in committee abstained in the final vote, thus undermining Parliament's negotiating hand with Council on the legislative proposals. It is vital that Parliament unites around the Redemption Fund idea at plenary in June as it is the only sensible and durable way out of the crisis which, if anything, is only getting deeper. Mr. Hollande has the authority and legitimacy now to show strong pro-European leadership by openly advocating this strategy."
