Finland's European Minister Alexander Stubb tells CNN Europe's debt crisis may be abating
European Commission President wants Europe to become more unified
But Stubb says treaty change to solve the eurozone debt crisis is not the right approach
Europe’s political and economic attempts to stem the eurozone debt crisis may finally be getting results, Finland’s European minister Alexander Stubb has told CNN.
Stubb told CNN a combination of political action and monetary intervention in the eurozone over the last month had put Europe on the road to economic recovery. “If we play our cards right, I think we will have turned the corner of this crisis,” he said.
Earlier this month, European Central Bank President Mario Draghi announced a program to buy bonds of fiscally-frail countries such as Spain and Italy. A week later, the German constitutional court green-lighted the European Stability Mechanism – the region’s 500 billion euro ($651 billion) permanent bailout fund – to come into force in October this year.
A victory for pro-European parties in the Dutch elections this month was also a sign that electorates in Northern European countries have not lost faith in the 17-nation currency bloc.
Stubb told CNN Europe was stuck in a “vicious cycle” between politicians, the media and the markets, which was hindering the speed of economic recovery. He said the issue was: “Politicians talking loose stuff, media interpreting that loose stuff and then markets reacting to what the media reports.”
Stubb said debt-ridden countries like Spain and Italy were taking the necessary steps to reform but reiterated the ECB’s message of conditionality in exchange for aid. He added: “I have a lot of respect for the Spanish government because they have taken a lot of tough decisions in the past few months.”
The 44-year-old is in favor of a banking union – a proposal from Brussels which would give the European Central Bank a supervisory role for more than 6,000 eurozone banks. But, he said, “we cannot be in a situation where those banks which have taken care of their funds, have a good balance sheet, would be paying for those banks which haven’t done so well.”
Stubb’s comments follow his speech to The Institute of International and European Affairs in Dublin, Ireland, in which he was skeptical over calls for a more integrated Europe. Of such an idea, he said: “We do not have the time, nor can we introduce an element of further uncertainty.”
Such a stance runs contrary to that of European Commission President Jose Manuel Barroso, who told CNN Europe needed to be more unified.