Swedish Prime Minister Fredrik Reinfeldt said it is a mistake to think that amending European Union treaties will solve the debt crisis.
“To make a treaty change takes a long time, it’s very uncertain for me what we would gain from that and we definitely would face the risk of political unrest in many countries,” Reinfeldt told reporters before a EU summit in Brussels today.
Sweden, one of 10 EU countries using its own currency, is “very far from entering the euro,” he added
http://www.bloomberg.com/news/2011-10-23/reinfeldt-opposes-treaty-change-says-sweden-far-from-euro.html
All of which means that instead of coming up with a credible solution, Europe's leaders seem determined to persist with their discredited tactic of extend and pretend.
Just when the eurozone governments thought it could not get worse for Europe's single currency, it did. Shell-shocked EU finance ministers meeting in Brussels on Saturday were already reeling from the worst Franco-German rift for more than 20 years and a fractious failure to resolve the problems that have brought Greece, and the euro, close to the brink.
But then a new bombshell hit as a joint report by the EU and the International Monetary Fund warned that, without a default, the Greek debt crisis could swallow the eurozone's entire $615-billion Cdn (440 billion euros) bailout fund - leaving nothing to spare to help the affected banks of Italy, Spain or France.
An EU rocked by divisions between France and Germany over how to increase the "firepower" of the European Financial Stability Facility (EFSF) to save the wider eurozone from Greek contagion now faced the prospect of losing it all in one go.
As finance ministers contemplated the pains au chocolat laid out on their desks alongside their talking points and position papers, Jan Kees de Jager, the Dutch finance minister, told colleagues: "We've got to get real. People are talking about new defences but with one gulp the whole 440 billion euros could be gone, leaving the eurozone with no protection at all."
Compounding the trauma, Christine Lagarde, the French IMF chief - and one of the few key players who appeared to be enjoying herself in her new headmistress-like role - issued a warning.
The IMF would no longer be willing to pick up a third of the bill for rescuing Greece, a contribution worth $102 billion, unless European banks were prepared to write off 50 per cent of Greek debt.
The US is becoming increasingly impatient with Europe's seeming inability to solve the ongoing euro crisis. Many in the United States think they know who is to blame: Germany.
Bundesbank President Jens Weidmann said a haircut for Greece would not resolve the country’s debt problems and could in fact be “dangerous” if it led to a relaxation in debt-cutting efforts.
“A haircut is not an cure-all,” Weidmann told Sunday’s Bild am Sonntag newspaper. “If it were to lead to a reduction in the readiness to implement structural reforms, it could even be dangerous.”
European Union leaders hold talks on Sunday to hammer out a comprehensive plan for tackling the euro zone debt crisis.
Weidmann warned against letting highly indebted countries off the hook.
“The basis for confidence in government bonds is that states can service their debts,” he said.
“We cannot allow states with debts to have an easy way out of the problems they created for themselves. That would be an invitation to others to be copycats and the crisis of confidence would only grow.”
Weidmann said he was, however, not in principle opposed to helping out highly indebted nations.
“In a crisis like this I consider it to be right to help countries and buy them time if they take on their problems with determination and resolution,” he said. “They have got to get their state budgets in order and improve their competitiveness. Greece has to implement the adjustment programme already agreed.”
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