Regling: ESM 'saved euro'
24/09/2013 - 12:04pm
One or more country would certainly have left the euro if it were not for the efforts of the EU's financial instruments, a senior figure has said.
Speaking in the European Parliament on 24 September, Klaus Regling, managing director of the European Stability Mechanism (ESM), said that he was “convinced” that the efforts of the mechanism were vital in keeping the Eurozone together.
“I am convinced that without our assistance, some of our borrowing countries would have been forced to leave the monetary union,” he told members of the parliaments economic and monetary affairs committee.
The ESM is the Eurozone's permanent crisis mechanism, with the mandate to safeguard the fiancial stability of the Eurozone through various instruments. It currently has a maximum lending capacity of €500 billion. Around €450 billion of that is still unused. The spent money has gone to Spain and Cyprus.
According to Regling, the ESM is comparable to the IMF, saying that, as that institution has shown, “structural reforms inevitably lead to growth and employment, but with a time lag.” He said that those involved with financial restructuring in Europe “are well aware of the pain the adjustment has caused.”
He said that while unemployment was steadying in borrowing countries, “it still remains unacceptably high.”
Referring to an earlier meeting at the same committee with Eurogroup President Jeroen Dijsselbloem, in which the president said that there was very likely going to be a need for a third bailout for Greece, Regling said that “it is very likely that this will be the case.”
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