Eurozone's Juncker mocks Merkel's 'Euro Pact'

15th March 2011, Comments 0 comments

A much-vaunted 'Euro Pact' being drawn up under pressure from Germany and France brings "no added value" to the eurozone's reform drive, the head of Eurogroup finance ministers said Tuesday.

The pact, on which preliminary agreement was reached at a weekend eurozone summit, is likely to fail, said Jean-Claude Juncker, who is both the finance and prime minister of Luxembourg

Identifying common targets for eurozone states in a bid to ensure sustainable public finances, the pact was the price German Chancellor Angela Merkel demanded for agreeing to strengthen debt rescue funding.

However, calls for wages to be driven down among partner countries have unleashed controversy and in Juncker's eyes, "the pact brings no added value" compared to existing European Union tools intended to foster budgetary discipline and economic policy convergence.

"All of it already exists," Juncker told a hearing at the European Parliament.

"I can't help but be impressed how debates are stirred like waves lapping up on European beaches, without us knowing why the waves are making waves," Juncker said with typical irony.

He suggested the pact's existence was an electoral sop to Merkel, who has already taken a bruising in one regional election and faces more difficult dates at the polls this year, with the German public fed up footing the bill for bailed out Greece, Ireland and potentially others too.

Juncker reckons leaving the pact's enforcement in the hands of prime ministers, presidents and chancellors is a recipe for disaster, saying their lack of hands-on understanding will take it "beyond the realms of the possible" and ensure it is "still-born."

© 2011 AFP

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