Europe Needs Decisive Action, Not Sub-Prime Measures – Prendergast

Labour MEP for Ireland South Phil Prendergast urged EU Member State government leaders to take decisive action to avert further deterioration of the Eurozone crisis.

Speaking ahead of next Sunday’s European Council summit, Ms. Prendergast said:

“The sovereign debt crisis is a consequence of an economic crisis triggered by the near-implosion of a reckless financial sector in 2008, not its cause. Government purses had to step in to save a financial sector which has since exploited the weak points of our economic and monetary union to pocket speculative profits.

“European Council leaders have since been dragged to react under pressure from credit rating agencies, agencies which have been as extreme as they have been dubious in the reasoning behind their assessments. The European Commission has initiated welcome, long overdue moves to regulate their activity.

“European Council leaders’ reluctance to take decisive, collective action instead of protracted debating, lagged by national banking and sovereign rating concerns, has cost us dearly.

“Dithering has brought extra costs to our citizens in terms of higher taxes and lower access to social benefits and public services.

“Piecemeal, last-minute, deals cobbled up through 19th century-style shuttle diplomacy have not convinced the markets and will no longer deliver the answers we need to shore up our entwined economic fortunes.

“Chancellor Merkel and President Sarkozy have again surprised EU leaders with their announcement of an additional summit on Wednesday.

“I hope this means they intend to build a common approach and avoid divisive delays due to narrow, short-term priorities and take action to the long-term benefit of everyone in the EU. Ultimately, such leadership is in the best interests of their countries just as much as everyone else’s.

“This summit mustn’t be all about capitalising banks.

“Our public purses have done their utmost to save the financial system from collapse. We also need to save our citizens from the spectre of double-dip recession and further damage to the European Social Model by introducing a credible, sizeable jobs and growth strategy and closing our economic governance gaps.

“For an open, export-oriented economy such as Ireland, this is the surest way to guarantee that future troika assessments of our debt sustainability and growth prospects will be as positive as yesterday’s.

“At the last summit, Ms. Merkel’s “Marshall plan” claims over assistance measures to Greece quickly fell into ridicule. I call on her to renew her pledge, and to back it up with policy leadership worthy of that name. It’s also time to outflank market speculation, rather than reacting to it with sub-prime measures.”