Reasons to be cheerful about euro zone crisis
WORLDVIEW:There are huge political issues at stake in this autumn’s debate on the future of Europe
ALEXANDER STUBB is optimistic that the euro zone crisis has turned a corner in recent weeks and believes a resolution is now possible.
Finland’s European and trade minister was in Dublin this week for talks and a speech. As he says, his country is suddenly more interesting and followed more closely because of its triple A status on the markets, its closer co-operation with Germany and other northern creditor states and the more sceptical public opinion and media constraining its government.
In an interview he spelled out why he can now see light at the end of the tunnel. The European Central Bank’s decision to buy Spanish and Italian government bonds tops the list, although both states will have to accept conditions. The Dutch election results and the German constitutional court have endorsed recent decisions.
The European Commission’s proposals for a banking union show leadership, as does commission president José Manuel Barroso’s speech to the European Parliament calling for a “federation of nation states”.
Another example of leadership comes from council president Herman Van Rompuy. He will report by December on the ambitious mandate given to him for proposals on more integrated banking, budgetary and economic policy frameworks, and on the EU’s democratic legitimacy.
Economic conditions are also improving, Stubb argues. Ireland’s recent return to the markets highlights a successful bailout programme. Negotiations on the EU’s budget to 2020 are well under way and will be completed probably during next year’s Ireland EU presidency .
Reform programmes in the bailout programme states, including Greece, and in others subject to the latest EU scrutinies, are making progress, which will in due course produce beneficial results. Thus the economic outlook is not as grim as often portrayed. Growth is low but not catastrophically so, there is a better mood and it should be remembered that since Lehman’s collapse in 2008 the EU’s debt has risen 25 per cent, compared to 40 per cent-plus in the UK and US.
It is a strong checklist. Stubb believes accumulated progress towards fixing the euro is lost sight of in a vicious circle when politicians talk loosely, media amplify them and markets react negatively. As a centre-right leader he believes this more positive message badly needs articulating and putting in context. The current crisis can be compared to that of Finland and Sweden in the 1990s and the wider recessions of the 1970s, but a 1930s depression has been avoided.
Stubb is a very able representative of the younger generation of European leaders, with a high academic and administrative expertise in EU affairs in addition to his more recent political role. He insists Finland is fully committed to the euro and the EU project.