Van Rompuy urges closer convergence of eurozone economies

13th January 2011, Comments 0 comments

EU Council President Herman Van Rompuy defended the idea Thursday of greater economic convergence between eurozone countries as a way of bolstering the single currency following the global financial crisis.

His comments, in a speech in London, came amid fears of a fresh debt crisis in the 17-member eurozone following the bailouts of Greece and Ireland.

"The countries of the eurozone, of course, must work even more closely together than the others: after all, they do not just share a market, but also a currency," Van Rompuy told members of a European business lobby group.

"This implies going further in the coordination of economic policies. Making use of the tools put in place, the eurozone countries can and must develop a convergence of their economic policies."

He cited the example of pension reform or the co-ordination of certain tax regimes, saying: "This would strengthen the monetary union thanks to a stronger and more credible economic pillar."

Debt-ridden Ireland and Greece had to be bailed out last year and there are fears that Portugal could be next, putting the whole single European currency at risk.

Van Rompuy called for greater cooperation between all the EU member states, although he stressed that the convergence envisioned for the 17 eurozone members was different from that required from non-euro countries such as Britain, which is currently led by a coalition containing the eurosceptic Conservative party.

"In order to reassure a British audience: this would not involve those non-euro countries that do not wish to be concerned," he said.

"Such economic policy coordination is not about uniformity -- our points of departure are often different -- but we must pull in the same direction."

© 2011 AFP

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