Gripping the Rehn
Just back from a most remarkable exchange with the European Commission Vice President Olli Rehn. Responsible for economic affairs and the euro, his head seems to be in a vice right now - he simply refuses to answer several questions on the grounds he does not want the outcome I am asking him about.
Our first exchange is about whether there is any room for renegotiation of the austerity dependent bailout of the Greek economy – while avoiding a categorical “No” it is clear Mr Rehn believes the only way for Greece to stay in the euro is to stick to the reform plan agreed. He keeps insisting that this was a “compact” between the whole of the rest of Europe and the Greek people and it must be stuck to. “We expect both sides to respect the undertaking and commitment,” he says. “We want Greece to stay in the euro through reforms that will enable Greece to stay within the euro.”
But when I ask him whether it is even possible for Greece to be forced out he again refuses to answer. That is probably because he knows the threats from Angela Merkel about showing Greece the door are empty – without a mechanism to do that. On the news that his colleague, the EU trade commissioner, has admitted emergency contingency planning has begun for a Greek exit, again Mr Rehn refuses to discuss it – and even tries to suggest there is no planning going on – “We are not preparing for any Greek exit,” he claims, but when challenged on why not, says: “I’m not commenting on any scenario planning or anything like that.” Hmmmm.
Mr Rehn says it is easy for Mr Cameron to ”dramatise” with talk of make up or break up in Europe, and he rules out Britain’s preferred solution of eurobonds as a way of solving the current crisis with a carefully dismissive: “I appreciate friendly policy advice from the UK prime minister…. eurobonds are possibly a medium to long-term solution.”
But perhaps the most revealing answer from Mr Rehn is at the end of our exchange when asked if it was his belief that Greece would stay in the euro. He would only say it was his goal and workplan. Belief is some way away from that, it seems.
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There are 5 comments on this post
He takes the same view of Ireland’s MOI, compact with Irish people (who had no say). Refuses to renotiate re bank debt forced on Irish people. He also knows EU cannot force Greece out if they wanted to. Game of chicken.
Well done Krishnan. The implied threat of expulsion has long been used by the EU to scare member states into toeing the EU line. When forced to vote again on both the Nice and Lisbon Treaties the Irish people we’re told that they were effectively voting on their membership of the EU. In this way all debate on the contents of the Treaties was stifled and those advocating a No vote overnight became demons in a country where the EU (to a large degree, correctly) is seen as such a positive influence.
Krishnan, I’ve never commented on here before but I was SO impressed by you in last night’s interview with Rehn. Refreshing to see a journalist who just wanted to understand the situation and the facts (on the public’s behalf) and was not willing to accept the stonewall from these unelected bureaucrats who are doing so much damage. You asked clear and simple questions and stood your ground – and Rehn’s evasions told us all we needed to know. Courage!
Seconded. These slippery, self-important stooges need to be exposed – most of the UK’s political parties and mainstream media are too far in the EU’s pockets to do the job, so it’s particularly gratifying when someone like Krishnan shows up one of their kind for what they all are.
Unfortunately, the audience of Ch4 News is not high in volume and my 50p says the clip of that interview won’t find its way onto mainstream Greek, Irish, Spanish, Italian or Portuguese TV – and certainly not British TV – strange that !
There is a wide spectrum of views about how the worldwide financial crisis began. That is paralleled with the spectrum of views about how to solve the worldwide recession?
On the one hand there are the right-wing comments such as from Rehn that believe the recession is perpetuated by “fear” of debt that must be dealt with by drastic plans to cut all spending.
On the other hand, there is the argument that the reduction in both consumer and government spending has reduced demand for goods, and discouraged business investment and job-creation.
It´s clear to me that one person´s spending creates another´s employment. That if I cut my spending, others must lose. Moreover, my borrowing enables others to save – or at least get a sensible rate on their savings.
Bond markets are clearly signalling that there´s not enough spending going on. That´s why interest rates on most debts are so low: they reflect the surplus of savings over investment by households, businesses and governments.
The clear remedy is that German, N American, Chinese & British people should each accept big pay rises, and go and spend their higher pay as quickly as they can do it. But none of their governments wants that. Pity!
Because that extra spending would revive consumption and lead to recovery from this worldwide crisis.