Eurozone Ministers back euro: Announce more talks

BELGIUM: Eurozone Finance Ministers vowed Tuesday to fix the region’s finances after expressing concern at the plunging euro, but announced more talks to finalise the massive rescue fund for debt-hit members. The Chairman of the 16-strong eurozone group meanwhile backed controversial plans for Brussels to vet budgets in all 27 European Union countries before they are put to national parliaments.

Luxembourg Prime Minister Jean-Claude Juncker insisted however: “The commission is not going to become the school headmistress for member states’ budgetary policies.”

Juncker was speaking eight days after the European Union and the International Monetary Fund announced a 750-billion-euro (close to a trillion dollars) rescue plan for heavily indebted members.

Despite the plan, and last week’s announcement by Portugal and Spain of their plans to accelerate cuts in public spending in a bid to restore market confidence, the European currency has suffered in recent trading.

On Monday, it hit its lowest level since April 2006 in Tokyo trading, before making a partial recovery. In early trading Tuesday in Tokyo, it remained under pressure buying 1.2335 dollars, up from its low of 1.2234.

Eurozone ministers had welcomed the proposals set out by Spain and Portugal, said Juncker, after the seven hours of talks in Brussels.

“The euro is a credible currency,” he said.

But he conceded: “I am not worried by the current exchange but by the speed at which the exchange rate deteriorated.”

Juncker also announced that the massive rescue package for the eurozone needed further talks, scheduled for Friday, to settle “technical details”, while adding: “Nothing dramatic is under way.”

Some countries wanted to be able to go back to their national parliaments to seek approval any time a eurozone country called for funding from the rescue package, he acknowledged.

Finland was one such country, said a diplomatic source, but Germany had also insisted on the need for parliamentary approval during talks with French officials.

The “need to exchange points of view” in elected chambers was “all the more surprising because on May 9 it was said that there was complete agreement on the rescue plan,” he told journalists, betraying a degree of frustration.

Brussels, Tuesday, AFP