Monday, November 21, 2011

Belka in Financial Times on two-speed Europe

Marek Belka, Governor of the Polish central bank, published a very interesting op-ed in Financial Times (November 17) on "Europe cannot endure a rift between ins and outs". He argues for further European integration and reforms, both of which I strongly support.

His bottom line is the following:

"Now that the eurozone has approved greater financial firepower, it should effect debt restructuring for Greece and take measures to prevent spillover to other countries. Fiscal and financial supervision needs to be exercised as much as possible at the European level. It cannot be left as an almost exclusively national competence. Tough macroeconomic policies are crucial. Improving competitiveness may prove extremely difficult with rigid employment procedures, high costs of production and onerous taxation. Europe has to boost the quality of its export products and services compared with what Asia can offer. Non-eurozone countries have shown exemplary policies in all these fields. In the interests of EU cohesion, but also as regards their own economic objectives, euro members would be foolish to allow new barriers to grow between the eurozone and those outside. Eurozone strategies for higher growth and stability are welcome. They are far more likely to succeed if they embrace the whole EU"

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