Hard lessons must be drawn from Greek crisis (Juncker)

The recent bailout agreement with Greece has not put an end to the eurozone crisis, it has merely put it on pause, European Commission (EC) President Jean-Claude Juncker told the European Parliament (EP) on Wednesday.

In his State of the Union speech before the EP, Juncker told MEPs that there were hard lessons Europe needed to draw from the crisis.

"The economic and social situation speaks for itself," he said, "over 23 million people are still unemployed today in the EU, with more than half without a job for a year or more. In the euro area alone, more than 17.5 million people are without a job. Government debt in the EU has reached more than 88 percent of GDP on average, and stands at almost 93 percent in the euro area."

There were signs of progress, he added, but recovery is "too slow, too fragile and too dependent on our external partners".

"More fundamentally, the crisis has left us with very wide differences across the euro area and the EU as a whole," Juncker stated. "It has damaged our growth potential. It has added to the long-term trend of rising inequality. All this has fuelled doubts about social progress, the value of change and the merits of belonging together. What we need is to recreate a process of convergence, both between member states and within societies, with productivity, job creation and social fairness at its core."

• Speaking frankly about the Greek financial crisis, Juncker said the talks with Alexis Tsipras's government in Athens during the first half of this year had tested everyone's patience.

• "We saw democracies in the Eurozone being played against each other. The recovery and creation of jobs witnessed last year in Greece vanished during these months, and collectively, we looked into the abyss," the EC President confided. "And it was once more only when we were at the brink that we were able to see the bigger picture and to live up to our responsibilities."

• "It was absolutely necessary for us to say that 'Grexit' was not an option," he continued. "If we had not said that loudly and clearly, Grexit could have happened."

Now the new bailout programme was in place Juncker hoped it would mark a new start for Greece and the euro area. "But, let us be very honest," he added, "we are only at the beginning of a new, long journey."

Juncker proposed further reforms to give momentum to a process of convergence between member states, at least between those in the eurozone. "We need more 'union' in Europe," he said.

These reforms include a common system of guarantees to protect people's savings up to a limit of 100,000 euros, a stronger representation of the euro on the global scene, a more effective system of economic and fiscal surveillance, and truly pan-European labor market.

This should please the governments of France and Germany. In recent months, Emmanuel Macron, France's Economy Minister, and German Vice-Chancellor Sigmar Gabriel have jointly called for greater integration between eurozone countries.

Juncker reminded MEPs that the EU could fail in its efforts to prosper if it did not learn a hard lesson. "We have not yet convinced the people of Europe and the world that our union is not just here to survive, but can also thrive and prosper," he told the chamber. "Let us not fool ourselves, our collective inability to provide a swift and clear answer to the Greek crisis over the past months weakened us all. It damaged the trust in our single currency and the EU's reputation in the world."

In other parts of his 90-minute address Juncker said the EU's migrant and refugee crisis remained the immediate priority for the EU to address.
 Xinhua - globaltimes.cn
10/9/15
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