A report on public finances of the European Commission published yesterday, the public debt in the euro zone will reach the rate of 88.7% of GDP in 2012, the year the debt will be recorded the highest levels.
In 2007, the proportion of debt 66.3% in the euro area and 59% in the entire European Union. Will be 83.3% in 2012 for the 27 states.
The report said that «the disinfection procedures (public finance), will allow adopted to halt this increase, and indicated the Member States in their stability and convergence of its plans to strengthen these procedures. In the case of States applied its plans, the debt will be stable from now until 2012 ».
If States are unable to honor its commitments, the public debt will decline from now until 2014, but with wide variation by country, so see Finland and Luxembourg to reduce their debt before that date, but Greece, Ireland or Portugal will face more difficulties.
As for the European Commission, the decline in public debt will also require a number of years in Spain and Britain, which Stmzian a long time ago to reflect the trend since the financial crisis.
It was due to present economic affairs commissioner Olli Rehn this report on public finances in the context of a press conference, but canceled at the last minute for personal reasons.
EU officials expressed concern about the failure of the entire European project can not be settled if the debt crisis in the euro area, with increased fears of the consequences of the bankruptcy of Greece. The Minister of Finance announced the Polish Aacek Rostovski whose country holds the rotating presidency of the European Union that the whole of Europe is in danger due to the debt crisis in the euro area.
He said if the euro zone cracked, the European Union will not be able to continue, with all the imaginable consequences for it.
The Minister spoke about the danger of the Polish prospect of a new war in the long term. Rostovski and warned of the impact of the current crisis on the real economy, and said that the current crisis if it continues like this, who can not predict, will have major consequences.
And if it continues or two years, must prepare to face unemployment rates may increase more than doubled in some countries, including the richer countries. He and European Commission President Jose Manuel Barroso also expressed concern. He said the most serious challenge facing this generation has known, that the struggle for the political future of Europe and European integration itself.
The specter of bankruptcy
The President of the European Commission that the risks of bankruptcy are lying in wait for most of the countries and urged the countries of the euro on the application of the measures that are decided on July 21 to plan a second rescue of approximately $ 160 billion euros for the benefit of Greece, while facing the same crisis of Finland, Slovakia and the Netherlands.
He said: We need to apply Greece fully its program of reforms, "Economic reduce the national deficit the year, while the EU should his part, approval of a plan to tighten budget discipline joint, which is being negotiated over it for months, between governments and the European Parliament. Barroso said that the euro zone accelerated economic integration in the long term.
Dialectical bond
On the controversy over the bond Repeat Barroso stressed that his services will soon be a study on the possible options in order to develop bonds in euros, a mechanism to distribute the burden of debt equally between the euro-zone countries, which is considered Mtalegoha the only means available to the monetary union to settle the debt crisis permanently.
He said: I want to emphasize that the Commission will soon be options on the adoption of the euro bonds. He explained that it is possible to apply some of them in the framework of the European Convention either the current setting calls for others to change the Treaty.
The government refuses to German bonds in euros, because it sees it as an encouragement to countries suffering from large deficits to be complacent. France does not oppose it in principle but excluded at the moment. Barroso criticized the current trend in the major countries, France and Germany in the vanguard, which wanted to settle the debt and reform the management of the euro area among themselves, by keeping the decisions and the exclusion of the Commission and Parliament as possible.
Greece fails to
For his part, EU Commissioner for Economic and Monetary Affairs Olli Rehn said the failure of Greece to settle its debts or exit from the euro zone involves a heavy cost for Greece and the region and the global economy. He added that he can not issue bonds in the euro area, but under the financial control is much stronger than ever before in the single currency area, which includes 17 countries.
He said: Let me say to those who are suggesting that Greece would be better off outside the euro zone, and I strongly disagree with them. Greece will not be put or the euro area the better.
Rehn added that the crisis of sovereign debt in the list for nearly two years, affecting the real economy and offers growth and jobs under enormous pressure.
Enormous risk
In the same context, said Marco Botti Director General of Economic and Monetary Affairs at the European Commission that the implementation of the restructuring of the debt of Greece and that they risk widening the scope of the problem of debt in the euro area is enormous. He explained: There and Lehman on Greece. It can be the first implementation of the restructuring of the organization. Poti was referring to a plan developed in July to restructure the debt of the private sector in Greece voluntarily. He said there were difficulties but on the right track. He said the second illusion is the belief in the possibility of isolating the problems of religion within its borders Greece, pointing out that the risk of infection is enormous.
