Maria Fekter has revealed that the Eurozone’s finance ministers consider asking Greece to guarantee reforms “in writing”.
The Austrian People’s Party (ÖVP) finance minister said yesterday (Mon) that she and the finance ministers of the other Eurozone members planned to call on the debt-stricken country’s politicians to present a written statement promising to carry out the urgently needed cutbacks and reforms. Fekter explained that the provision of eight billion Euros in financial support for Greece would depend on the presentation of such an agreement.
“I am convinced that we will ask all of Greece’s opposition parties to agree with an immediate start of reforms – and declare doing so in writing. They must not wait until the elections are over. We will pay the next part (of credits to Greece) only if we are assured of this,” the Austrian government minister said.
Fekter claimed European Union (EU) financial politics decision-makers were not considering using federal banks’ gold reserves to increase the volume of the European Financial Stability Facility (EFSF). German newspapers claimed earlier this week that the German Bundesbank’s gold reserves could be reduced to provide economically challenged Eurozone members like Greece with more capital and credits to get through the crisis.
A state bankruptcy of Italy is widely seen as a greater risk to the stability of the Euro than Greece’s ongoing financial troubles. Italy – Europe’s third-biggest economy – is struggling to reduce its immense debts and high budget deficit. The country’s opposition wants Prime Minister Silvio Berlusconi to resign due to the dismal state the Italian economy is in. The Italian opposition faction but also political partners of Berlusconi are calling for early elections. Fekter said yesterday she was putting great trust into Italy’s capability of freeing itself from the difficult situation thanks to the southern EU member’s economic strength.
Fekter – who is in favour of an introduction of a tax on financial transactions within the Eurozone if other EU members like Great Britain keep opposing an EU-wide regulation – said the EU would not stop trying to welcome as many countries as possible into the Eurozone. However, the finance minister also warned that EU leaders would take a closer look when it comes to it whether applicants fulfil criteria like solid public finances and a positive economic performance.
Greece has been accused of having manipulated state budget figures when it applied to join the Eurozone. The country – where tens of thousands of people went on strike in the past weeks – introduced the Euro in 2002. Austria and 11 other EU countries joined the Eurozone in the same year.
The Austrian Society for European Policies (Österreichische Gesellschaft für Europapolitik, ÖGfE) found in June 2011 that 38 per cent of Austrians still had “great trust” in the Euro. Eight per cent said they had “no trust” in the currency while another 10 per cent admitted having only “very little trust” in the Euro’s strength and stability.
Speaking about the rules for becoming a member of the Eurozone, Fekter suggested that EU bosses must be “much stricter” in application negotiations in the future. “We must take a closer look than we have done considering Greece,” the ÖVP vice chief added.
The former Austrian interior minister also said she was convinced that Europe would manage the current crisis. The conservative politician minister described the Eurozone finance ministers’ will to stick together and create new stability as the “most solid” factor she had ever experienced in her entire political career. Fekter also warned about a rise of “national egoisms” among EU members. This appeal comes shortly after she had claimed Othmar Karas “has no idea” of the situation in Austria when the ÖVP member of the European Parliament (MEP) criticised his party’s opinion considering a possible increase of the European Commission’s (EC) budget. Karas harshly attacked ÖVP chairman Michael Spindelegger for warning that the Austrian government would oppose higher EC funds – before Fekter hit back at Karas.
Fekter recently stressed that the Euro “is not a faulty construction”, but admitted that it “had certain structural deficits when it was introduced.” Speaking about the volatile political circumstances in Greece, the minister made clear that the Eurozone “cannot afford many more such weeks.”
Asked to comment on people’s increased interest in reintroducing former currencies in countries which currently use the Euro, Fekter said: “A renationalisation of currencies is the biggest-possible nonsense. (…) Banks would go bankrupt. Europe would not exist anymore economically in this globalised world.”
Economist Friedrich Schneider of the Johannes Kepler University of Linz (JKU) claimed throwing Greece out of the Eurozone would be the “most stupid and expensive” of all solutions for the country and the whole Eurozone. Speaking to magazine profil in September, Schneider criticised EU leaders for having done nothing but to “postpone a solution”.
The university lecturer offered his point of view a few weeks before the EU, the International Monetary Fund (IMF) and the European Central Bank (ECB) decided to cancel 50 per cent of Greece’s debts in an attempt to help the country back on the road to recovery. Speaking about a possible remission of debts, or haircut, Schneider told profil in September that the EU “reacted way too slowly. (Greece’s) debts should have already been cancelled one year ago. This would have saved us several billion Euros – and the situation would not have become so explosive (as it is now).”
Experts are at odds whether Greece could leave the Eurozone voluntarily or be asked to exit the group based on EU treaties. It would be the first time a member state departs the community. Seventeen of the EU’s 27 member nations use the Euro as their national currency. Estonia became the last EU country to join the Eurozone in January 2011. EU members which once had great interest in becoming members of the Eurozone like Poland and the Czech Republic reportedly halted their activities getting them closer to an accession of the Eurozone due to recent developments in Greece, Ireland and Portugal. The EU’s decision to support the ailing countries financially worsened the reputation of several federal EU member country governments while populist opposition parties gather pace in polls.
Researcher Karmasin recently found that one in two Austrians think that Greece should leave the Eurozone. The agency’s poll for magazine profil in September revealed that 50 per cent of Austrians are of this opinion. Only 34 per cent disapprove such a step. One month earlier, 73 per cent of Austrians interviewed by Karmasin said they were convinced that the crisis would worsen. Twenty-one per cent told the public opinion research firm that the Eurozone’s economic turmoil would not worsen as the crisis had already reached its peak.
Forty-seven per cent of Austrians are worrying about the effects the crisis will have on their personal future, according to a survey conducted last month. Only 17 per cent said the same in July. Peter Filzmaier of the Institute for Strategy Analysis (ISA) said research also showed that many people put no trust into Austrian politicians’ ability to solve the crisis. ISA researchers spoke with more than 300 Austrians.
Meanwhile, ÖVP Economy Minister Reinhold Mitterlehner criticised Heinz-Christian Strache for “short-term ways of thinking”. The head of the right-wing Freedom Party (FPÖ) – Austria’s strongest opposition party – claimed the Austrian government coalition of Social Democrats (SPÖ) and the ÖVP was “acting like an EU sect”. He suggested throwing Greece out of the Eurozone and accused SPÖ and ÖVP of “dispossessing” Austrians by approving the EU’s financial rescue mission for Greece and other economically challenged countries.
SPÖ Chancellor Werner Faymann justified the measures. He warned from immense effects on the domestic economy if Austria left the Eurozone itself – a suggestion brought forward by Strache in recent parliamentary debates.
Faymann’s European policies are under scrutiny ever since he informed Hans Dichand, the late chief of the Kronen Zeitung, in an open letter published in the paper of a disputed U-turn of the SPÖ considering EU issues. Faymann and then SPÖ Chancellor Alfred Gusenbauer revealed in the reader letter that the SPÖ would hold referenda on all major changes of EU law which affect Austria and its people. The letter was published in the Kronen Zeitung a few weeks before the most recent general election in 2008.
The decision to reposition the SPÖ as more of an EU-critical party was widely seen as a desperate bid to prevail in the ballot – which served up losses for all parties but the FPÖ and its right-wing rival, the Alliance for the Future of Austria (BZÖ). Faymann was criticised by some SPÖ officials and many columnists for “falling to his knees” in front of the market-leading daily and its politically muscular boss who passed away last year.
The chancellor – an outspoken supporter of a levy on financial transactions in Europe – recently underlined that the Euro “is not yet rescued”. Fekter argued that the Euro “was never at risk.” She claimed that Eurozone members were currently experiencing a crisis, but not the Eurozone or the EU as a whole.
German Greens MEP Daniel Cohn-Bendit warned about asking Greece to leave the Eurozone. He told Austrian newspaper Kurier that the Greek government should be ordered to spend less on the country’s army.