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April 15, 2021

EU Commissioner, Rehn: Crisis is eroding influence

The euro-zone crisis is eroding Europe’s geopolitical influence and compromising the European Union’s negotiating position in international circles, European Commis­sioner for Economic and Monetary Affairs Olli Rehn (photo) told a gathering of Finnish ambassadors in Helsinki on Wednesday, Wall Street Journal informs, quoted by Mediafax. “In political decision-making involving global economic matters, such as in G-20 and IMF [meetings], we have constantly been on the receiving end because of the debt crisis,” Rehn said. “At this rate, Europe’s status in the global economy is weakening ominously.”  The European economic crisis is mostly a crisis of confidence, he said, and the region can regain the confidence of the global community by acting as a team. “We can best reinforce confidence by giving the picture of a united European team,” Rehn said. “European decision-making should be a confidence-building team sport, otherwise it will not accomplish anything, nor will it bear fruit.” Rehn, who is also vice president of the European Commission, said politicians and investors in Asia and the U.S. believe Europe should close ranks politically and economically as well as set up the institutions required to support the common currency.
“In their opinion, the euro-area problems are the result of this unfinished business, and for this reason, strengthening the euro area is the logical way forward,” Rehn added. The commissioner pointed to the proposed common bank-supervisory body financed by the European Central Bank as a step in the direction of building institutions to strengthen the euro. “When it begins operations, the Eu­ropean Stability Mechanism [the euro zone’s permanent bailout fund] will have the authority to direc­tly capitalize banks. Because of this, countries will no longer in­crease their debt burden with funds from the ESM, which has great market pressures,” he explained.
Rehn said the euro’s survival is based on three core strategies: programs for the stabilization of public finances and structural reforms by member states; the creation of financial firewalls or stability funds to finance reforms, including price-stability activities by the ECB; and a development plan for economic and monetary union.

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