Euro 'flawed' from start, claims former EC president
The euro zone was flawed from the beginning and efforts to tackle its problems have so far been “too little too late”, the architect of the single currency has said.
Jacques Delors, former president of the European Commission, suggested that “a fault in execution” had doomed the euro to its present crisis.
Leaders in the 1990s chose to turn a blind eye to the economic weaknesses of some member states, and the response now the issues had surfaced had generally been inadequate.
The intervention, in an interview with the British Daily Telegraph, came as France and Germany edged towards closer fiscal union to head off a potentially disastrous collapse of the single currency.
Mr Delors, head of the commission from 1985 to 1995 and known for his clashes with Margaret Thatcher, admitted that when “Anglo-Saxons” warned that a single central bank and currency without a single state would be inherently unstable “they had a point”.
“The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he said.
Mr Delors insisted that all European countries had to share the blame for excessive borrowing by countries such as Italy and Greece that have brought the system to the brink of disaster.
“Everyone must examine their consciences,” he added.
However, the 86-year-old singled out Germany for its strict insistence that the European Central Bank must not support debt-stricken members for fear of fuelling inflation.
The euro’s troubles spring from “a combination of the stubbornness of the Germanic idea of monetary control and the absence of a clear vision from all the other countries”.
Such is the scale of the crisis, he warned, that “even Germany” will struggle to find a solution. “Markets are markets. They are now bedevilled by uncertainty.”
According to Mr Delors, Britain is not “sharing the burden” because it is not in the euro.
But he claimed that the UK is “just as embarrassed as the Europeans by the financial crisis”, as some of the measures put in place to deal with the crisis pose a threat to British interests.
For example, the creation of common “Eurobond” underwritten by all euro zone governments and traded in Paris and Frankfurt would be a “big worry” for the City of London.
“I can see Mr Cameron’s worries,” he said.
The British prime minister held talks in Paris yesterday with French president Nicolas Sarkozy head of next week’s crunch EU summit.
That gathering is expected to focus on discussions about whether fundamental treaty change will be needed to help deal with the crisis in the euro zone.
German chancellor Angela Merkel insisted yesterday that such reforms were necessary and hailed recent steps towards creating a “fiscal union”.