Published on 16 January 2011
Last year, the EU countries set up a 750 billion euro rescue package to stabilize the currency.Is the package big enough?
That amount refers not to direct payments but to guarantees which enable affected states like Greece to finance themselves on the capital market. Only a small percentage of the package has been made use of so far. The German Government therefore sees no immediate need to make it bigger. The statement by President Barroso of the European Commission ...
... who said this week that an increase was necessary ...
... is not one I understand. If only a small proportion of a package is being used, there is no reason to talk about increasing that package. Portugal has just managed to place its government bonds on the financial market. We should use the time gained to agree on structural changes, drawing lessons from the crisis.
What does that mean in real terms?
The euro is not in crisis; what we are dealing with is a debt crisis in certain member states. We will continue to meet with difficulties if the countries of the EU do not vigorously set out to consolidate their budgets. In Germany, we have anchored the debt brake in the Basic Law, which took a major effort. That sort of thing, as we saw with the austerity package last summer, does not necessarily make governments popular. Nonetheless, there is no alternative if we are to guarantee stability. That is why I call on the other EU states to embed debt brakes in their constitutions too. Sound budget management needs to become the norm throughout the EU.
How can that be brought about?
We Germans are perfectly willing to show solidarity, but it cannot all be one-way. Those who want help must also be prepared to make sure they manage their budgets responsibly at home. The scale of the damage done by the waves of speculation in the last few months is partly due to the fact that budgets were standing on very sandy foundations of excessive debt.
What still needs to change in the EU to keep the euro stable in the long term?
Any currency’s stability depends on the competitiveness and strength of the national economies using it. Every country in the EU needs to work to keep its real economy competitive enough to prevent the euro suffering. We need better coordination of economic policy within the EU to make sure that there is a healthy balance between consumption expenditure and what individual member states invest in education, research and infrastructure.
The cabinet this week adopted a mandate extending our mission in Afghanistan which envisages the withdrawal of German soldiers beginning in 2011.At the same time, Minister of Defence Karl Theodor zu Guttenberg said it “didn’t matter” whether the withdrawal started in 2011 or another year.Which is it to be?
What plans we develop for withdrawing our troops is extremely important. That is why the Government in its mandate expressed its confidence that a first reduction of the Bundeswehr presence will be possible in 2011. It goes without saying that taking such a step will always have to depend on whether the situation on the ground allows for it. We do not intend our troops to be deployed in combat operations in Afghanistan for any longer than absolutely necessary. There can be no military solution in Afghanistan, only a political one. It is crucial for us to lay down a timetable and stand by it, not least as an aid to the Afghan Government in its assumption of responsibility. We are supporting President Karzai in his aim to take over full responsibility for security by 2014. It is our intention that there will be no German combat troops in Afghanistan after that time.