In The Press
Press Release - Merkel and Hollande need to form left-right grand coalition to save eurozone
15 May 2012
With the prospect of a Greek exit from the euro being openly discussed, Europe needs Chancellor Merkel and President Hollande to show political leadership, by agreeing a left-right settlement on austerity and growth.
Phillip Souta, Director of BNE said, “Europe is approaching a crucial phase of the eurozone crisis. Politicians are openly discussing a Greek exit from the euro, which has pushed Spanish bonds yields up and markets down. After the pre-negotiation posturing, Chancellor Merkel and President Hollande need to negotiate a deal, on behalf of both the left and right of Europe, to ensure that this crisis does not bring about disastrous consequences.”
Souta went on to say, “The debate between austerity versus growth has been oversimplified. Europe needs both responsible budgets and stimulation of private sector spending. It is encouraging that Jens Weidman of the Bundesbank and German Finance Minister Wolfgang Schäuble have indicated that they believe Germany should accept above average inflation to help stimulate growth in Greece and other struggling countries.” He added, “We also need to put reform of the euro on the agenda - the structure is incomplete and needs to be supplemented by a more powerful central bank and either a European bank resolution framework or eurobonds.”
“Despite not being in the euro, the UK has a role to play in this,” added Souta. “We have a good story to tell on the Vickers report and we should be going around European capitals selling it as a model. The recent piece in the Guardian by Ed Balls and Peter Mandelson shows that the left is seriously grappling with the problems Europe faces and the government’s recent contribution to the IMF and hints at support for a funding boost to the European Investment Bank also show that the UK is not the euro-sceptic bogeyman it is often made out to be.”
Notes to Editors
Business for New Europe is a coalition of pro European British business leaders who articulate a positive case for reform in Europe. We comment on European issues that have an impact on the UK. For a list of our members, please follow this link http://www.bnegroup.org/about/people/
For media enquiries, please contact Paul O’Hagan on .(JavaScript must be enabled to view this email address) or contact +44 (0)7944 572 351. Phillip Souta can be contacted directly on +44 (0)78 8788 6437.