Interview with Polish Finance Minister: 'There Is No Choice But to Go Forward' with Euro
Polish Finance Minister Jacek Rostowski has described proposals for tighter economic policy coordination in the euro zone as "stale." In a SPIEGEL ONLINE interview, the former economics professor pleads for a true European economic government and warns that the common currency will fail without reforms.
SPIEGEL ONLINE: Everybody acknowledges the need for greater coordination of economic policies in Europe. The question is whether there should be an economic government comprised of all 27 European Union member states or whether it should just be within the 17 euro-zone countries?
Rostowski: Everything that can be done within the 27 states should be done there. Those things that have to be done among the 17 but do not need to be considered among all 27 can be handled by the euro-zone members. Sometimes, however, it seems there is a tendency on the part of some euro-zone members to exclude the other 10 EU countries because that might make decision-making easier. That can only be acceptable in situations where it is absolutely necessary for the proper functioning of the euro zone.
SPIEGEL ONLINE: As a country which is not a member of the euro, would you not object to a two-speed Europe?
Rostowski: It is quite clear that we need a great deal more macroeconomic integration within the euro zone. We are very much in favor of that, as is the United Kingdom. The reason is very simple: If we do not have greater macroeconomic integration, then we face a high probability of the dissolution of the euro zone. That would be an absolute catastrophe for everybody. Not only for the deficit countries within the euro zone, but also for the surplus countries where unemployment world soar to levels not seen since World War II. It would also be a catastrophe for the other EU members who are not part of the common currency. Given that choice, we are definitely in favor of greater macroeconomic integration.
SPIEGEL ONLINE: Why have you dismissed proposals for an economic government by German Chancellor Angela Merkel and French President Nicolas Sarkozy as "stale"?
Rostowski: I haven't dismissed them, but I didn't see a great deal that was new in these proposals. Having the heads of state and government of the euro zone meet twice a year is quite far from being a joint economic government. My impression is that Germany and France do not mean the same thing when they talk about economic governance.
SPIEGEL ONLINE: How optimistic are you that closer economic policy coordination will occur?
Rostowski: Everybody agrees that economic policy coordination is a good idea. The problem is that people usually have demands about others' behavior rather than about their own. I have never met a finance minister from any country who has come to me to ask: What should I do in my macroeconomic policy to suit you?
SPIEGEL ONLINE: Do you understand the German resistance to joint euro bonds?
Rostowski: I will say something that will be unpopular among German readers and politicians: When we are talking about a much higher degree of integration, we are essentially talking about a much higher degree of solidarity. That includes the idea of standing behind the liabilities of partners. Europe is faced with the choice of greater solidarity or dissolution. The euro has already been created, and its collapse would be catastrophic also for Germany. There is, therefore, no choice other than to go forward. Whether that integration comes through "euro bonds" or something else, is secondary. But, of course, just as there can be no Europe without solidarity, there can be no solidarity without responsibility. The beneficiaries of solidarity must show the requisite responsibility. And the higher degree of integration that we need must ensure both solidarity and responsibility.
SPIEGEL ONLINE: Should economic governance be organized on an intergovernmental level, meaning between the governments of the member states, or through the EU institutions?
Rostowski: It is hard to imagine how we could have something that was a stable and continuous mechanism that depended exclusively on intergovernmental cooperation. We do need the European Commission as a neutral referee. One can imagine emergency response happening on the basis of intergovernmental cooperation, but not much more than that. On the other hand, a solution to this great threat must be found. If the institutions that have been created to make the "community method" function -- i.e. the European Commission, the European Council (the powerful body of European leaders) and the European Parliament -- don't succeed in being part of the solution, then that will be taken as evidence that we can't get things done quickly enough through the community method.
SPIEGEL ONLINE: When will Poland join the euro?
Rostowski: When it is safe to do so. At the moment it is not safe. At the moment the euro is not constructed in a way that is safe for Europe as a whole -- neither for the surplus nor for the deficit countries.
Interview conducted by Christoph Schult in Brussels.
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