Wednesday, May 13, 2009
EUOBSERVER / BRUSSELS - Ex-Belgian prime minister Guy Verhofstadt has strongly criticised the European Commission for failing to be more active in tackling the current economic crisis.
Mr Verhofstadt, who heads the Liberal list in Belgium's Flanders region for the June European elections, accused the commission of staying "silent" in the face of Europe's recession.
"It is the duty of the commission to take the initiative", said the politician, referring to the institution's right to propose laws.
Speaking in Brussels to promote his new book, Emerging from the crisis, how Europe can save the world, Mr Verhofstadt, a strong EU federalist, said the only way to bolster the EU is to massively increase it's spending, recapitalise banks, issue eurobonds, set up a European financial supervisor and a single European bank for bad assets.
He drew parallels with Japan, which, with it's similarly over-heated housing market and ageing population in the 1990s plunged into recession and then took about a decade to come out of economic stagnation.
Mr Verhofstadt noted that it was only when Tokyo implemented a plan to rescue the banks that Japan's economy started to recover.
"Recovery must come from the resumption of lending by the financial markets rather than from any government stimulus package."
He poured scorn on the fact that there is no single European recovery plan, rather "27 separate ones" and how little is being spent by governments. With automatic stabilisers such as welfare payments included, the EU as a whole is spending only half of what the US is using to tackle the crisis (€600bn).
Mr Verhofstadt also argued that Europe "for purely economic reasons" as well as for environmental reasons should "switch to a low-carbon economy."...(Click for remainder.)