Planned stronger surveillance of government budgets will ease the European Union's debt crisis and lead to more jobs in the single currency area, the chief executive of the European Financial Stability Facility, the euro zone's bailout fund that was tapped by Ireland last year, said Wednesday.
Klaus Regling, speaking in Dublin on "Ireland and the Euro" to the Institute of International and European Affairs, an independent think tank, said that problems connected with the euro have now "been clearly identified." These problems included economic governance, financial market supervision and the currency area's crisis-resolution mechanisms, he said.
Regling said planned reforms and bailout mechanisms, such as the temporary EFSF, had helped dispel market doubts about the future of the euro area, while strengthening economic governance, reform of the EU's Stability and Growth Pact and early surveillance of national deficits represented "substantial progress" for the euro that could only have emerged following the crisis.
The European Stability Mechanism, which is due to replace the EFSF in 2013, will be "a real public international institution," he said. Despite its weaknesses "the euro has been a success story," which will emerge from its crisis to provide more jobs and growth, he said.
Regling was also the co-author of one of three reports commissioned by the previous Irish government into the causes of Ireland's banking and economic crisis.
In November, Ireland became the first country to use the EFSF, tapping EUR17.7 billion from the facility as part of the EUR67.5 billion bailout borrowed from the EU and the International Monetary Fund amid the country's banking and debt crisis.
The new Irish government, led by Enda Kenny, that took power last month has pledged to reduce the near 6% annual interest rate Ireland is paying for the European loans.
Regling said Wednesday Ireland turned from the best-performing economy in the EU to lose a cumulative 15% of output over the past three years. Its crisis was due to a combination of home-made and global factors, including the unprecedented access by banks to financial markets during a period of weak regulation.
The bailout from the EFSF, he said, aimed to overhaul the banking system and return Ireland to "robust and sustainable growth."
A planned European Systemic Risk Board and other supervisory authorities will strengthen the surveillance of the euro zone's banks, Regling said.
Source: http://online.wsj.com
Klaus Regling, speaking in Dublin on "Ireland and the Euro" to the Institute of International and European Affairs, an independent think tank, said that problems connected with the euro have now "been clearly identified." These problems included economic governance, financial market supervision and the currency area's crisis-resolution mechanisms, he said.
Regling said planned reforms and bailout mechanisms, such as the temporary EFSF, had helped dispel market doubts about the future of the euro area, while strengthening economic governance, reform of the EU's Stability and Growth Pact and early surveillance of national deficits represented "substantial progress" for the euro that could only have emerged following the crisis.
The European Stability Mechanism, which is due to replace the EFSF in 2013, will be "a real public international institution," he said. Despite its weaknesses "the euro has been a success story," which will emerge from its crisis to provide more jobs and growth, he said.
Regling was also the co-author of one of three reports commissioned by the previous Irish government into the causes of Ireland's banking and economic crisis.
In November, Ireland became the first country to use the EFSF, tapping EUR17.7 billion from the facility as part of the EUR67.5 billion bailout borrowed from the EU and the International Monetary Fund amid the country's banking and debt crisis.
The new Irish government, led by Enda Kenny, that took power last month has pledged to reduce the near 6% annual interest rate Ireland is paying for the European loans.
Regling said Wednesday Ireland turned from the best-performing economy in the EU to lose a cumulative 15% of output over the past three years. Its crisis was due to a combination of home-made and global factors, including the unprecedented access by banks to financial markets during a period of weak regulation.
The bailout from the EFSF, he said, aimed to overhaul the banking system and return Ireland to "robust and sustainable growth."
A planned European Systemic Risk Board and other supervisory authorities will strengthen the surveillance of the euro zone's banks, Regling said.
Source: http://online.wsj.com
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