Lack of EU Regulation Weakens Euro
24 Feb 2010
Congress Economic Advisor Paul Sweeney today (Feb. 24) questioned the long-term viability of the 'Euro project' in the absence of any EU-wide bank regulation or enforcement capacity.
Speaking at a debate organised by the European Commissions' Dublin office on the Europe 2020 Strategy Mr Sweeney said the ongoing Greek crisis had exposed potentially fatal flaws at the heart of the Euro.
"How can we hope to address this crisis in a serious and sustainable manner when the EU lacks the regulatory and enforcement capacity necessary to police the banking and financial sector?
"We have a single currency but we don't even have a European Bank Regulator and are without a mechanism to safeguard the financial stability of the Euro area," Mr Sweeney said.
Mr Sweeney highlighted the non-existence of a Eurobond - similar to government bonds and backed by the ECB - which could have been deployed in defence of the more troubled EU economies.
He also asked whether it was now time to begin amassing a central EU fund to assist with any future difficulties in the financial sector.
"The current crisis was caused by economic fundamentalism and we must be clear that the fundamentalists are not allowed to control the terms of the recovery.
"In Ireland, unfortunately, the fundamentalists control the terms of the debate which explains the obsession with an inaccurate view of 'competitiveness' and a delusion that wage cuts will stimulate growth," Mr Sweeney concluded.
ends