President Higgins intervenes in political debate on euro zone debt crisis

European leaders criticised in his most forthright remarks since taking office

President Michael D Higgins: remarks put him at odds with the German government’s response to the the debt crisis

President Michael D Higgins: remarks put him at odds with the German government’s response to the the debt crisis

 

President Michael D Higgins has intervened directly in political debate on the euro zone debt crisis, criticising the response of European leaders and the actions of the European Central Bank.

In some of his most forthright public remarks since taking office, Mr Higgins said the introduction of jointly-issued eurobonds could create scope to boost the economic recovery.

He also took issue with the failure of EU leaders to fulfil their pledge almost one year ago to break the link between bank and sovereign debt.

“It would have been of immense benefit naturally to growth, employment creation and investment if the ... commitment of separating banking debt from sovereign debt had in fact been implemented,” Mr Higgins told the Financial Times in an interview.

“It would give you the opportunity to breathe and create growth in the economy.”

Mr Higgins’ remarks put him at odds with the response to the crisis of the German government, which has largely set the parameters for other member states.

The Merkel administration has faced down numerous demands for the joint issuance of sovereign debt and it is in the vanguard of the countries which are resisting demands for the ESM bailout fund to retrospectively compensate bailout recipients for taking on historic banking losses.

Stating that Europe faced a “moral crisis” as much as an economic crisis, the President said European leaders needed to make up their minds on the type of union they really wanted. There was a need for “radical economics” and a “radical rethink” of how EU leaders were handling the economic crisis, he said.

The President’s concerns about the crisis in Europe are well known.

In a speech to the European Parliament two weeks ago, he said Europe’s citizens were threatened with an unconscious drift to disharmony, a loss of social cohesion and a deficit of democratic accountability.

While he called then for the idealism, intellectual strength and moral courage that drove Europe’s founding fathers to be reasserted, he went further in his interview by directly tackling some of the most difficult policy questions faced by EU leaders.

He also questioned Europe’s basic economic model, saying there was a requirement for a multi-layered approach.

“There is a real problem in what was assumed to be a single hegemonic model,” he said.

“The unemployment profile in Greece is different from the unemployment profile in Ireland. You need a pluralism of approaches.”

Adding his voice to the fractious debate over the mandate of the ECB, the president said the Frankfurt-based central bank should act to fuel economic growth.

Ireland was unusual in its acceptance of such a high degree of cuts when compared to other euro zone countries, he argued.

“The polite version is that we are pragmatists,” Mr Higgins said. “What we really need now is something that goes beyond outrage and recrimination.”

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