Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-10-27-Speech-4-062-000"
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"en.20111027.6.4-062-000"2
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"Mr President, ladies and gentlemen, we were promised a bold move that would constitute a comprehensive solution to overcome the debt crisis. But what has the summit actually achieved?
The Greek debt crisis has entered a new phase with the agreed haircut of 50%. This is something to be welcomed because it means that the country is freed from a significant part of its national debt. This is a positive outward signal and eases the situation for the Greek Government. This step does not mean a reversal in the downward spiral of the Greek economy, however. According to expert assessments, the country’s financial needs up to 2020 have already risen to EUR 250 billion. Likewise, this has not reduced the disastrous consequences for the people of Greece.
In particular, the Greek banks need to survive the consequences of the haircut. They need extensive supports if they are to be rescued from ruin, otherwise it is not just the bond holders who will bear the cost, but also countless Greek citizens with their savings, pensions and other insurance cover. Much as I welcome the fact that the main culprits for the debt crisis are being called to greater account, this may be a risky move, particularly for small and medium-sized enterprises and for many ordinary savers.
What assets will be levied by the banks? I believe that a socially just solution can more probably be achieved with nationalised banks, although a rescue or capitalisation of the banks should be made conditional on direct consultation or even more effective controls by the state. Banks in these countries should be recapitalised to the same extent as banks in France, Germany and other countries.
The question remains whether the haircut will bring the much-vaunted lasting solution for Greece and the other endangered countries. Will this restore the trust of citizens and investors in the international financial markets? This is a question that I can only answer by quoting a famous phrase from Faust: ‘While I have heard the message– about the summit – I am not sure I believe it.’ When I think of the general strike and the further mobilisation of the public, I know that the Greek people have lost confidence massively. What is more, democracy itself is in huge danger, after all a government can only act against the opinion of the majority of the population for so long. This is a question that must also be answered by the IMF, ECB and the Council, in other words the so-called Troika, which has placed Greece under this austerity regime.
My doubts also relate to the financial trick of leveraging the rescue fund. Although this will mobilise more financial resources, the question is at what cost? Countries are playing according to the rules of the financial markets and believe themselves to be in a strong position. If you will permit me, this is an illusion. The state debt crisis may not just spread very rapidly, but may also require massively increased commitments. This increases the risk to the taxpayer several fold.
We must act decisively in bringing the power of the international financial community to heel, otherwise the crisis will spread. Everything is to play for."@en1
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