Jeroen Dijsselbloem

EU FINANCE WARNING: Brussels chief admits fragile Eurozone ‘NOT PREPARED’ for shock

Jeroen DijsselbloemGETTY

Jeroen Dijsselbloem has said the eurozone is not shock resistant

Jeroen Dijsselbloem, president of the Eurogroup of eurozone finance ministers, has said national governments will have to do more to keep the single currency strong.

He told the Financial Times this means improving capital markets and making labour markets more flexible.

The former Dutch finance minister, who is set to stand down after five years in his EU role, said: “If there were to be an economic shock this year, many of our countries and the monetary union as a whole are not prepared.

“As the member states still have the main macroeconomic powers and authorities, they continue the reform and drive, this is the most important thing.”

His emphasis on markets being able to absorb shocks contrast with that of the French President.

Emmanuel Macron and the European Commission have called for new budgets or backstops to help countries weather crises.

Mr Dijsselbloem has said he is not opposed to that idea, but making markets more resilient and competitive should be the priority.

Discussions around how to bolster the eurozone are likely to dominate the tenure of his Portuguese successor Mario Centeno.

Emmanuel MacronGETTY

Emmanuel Macron has called for budgets and backstops to help country’s weather crises

Mr Dijsselbloem had to navigate the worst of the sovereign debt crisis, including bailouts for Greece and Cyprus.

His proudest achievement is setting up the eurozone banking group, launched to restore faith in the robustness of the bloc’s financial system.

He said: “(It) has forced banks to really start cleaning out the mess, has forced banks to really look at their balance sheets, take their losses, build up more provisions, sell off bad portfolios, go to the markets and bring new capital.”

One of the main focuses for Mr Dijsselbloem was dealing with the Greece debt crisis that peaked in 2015.

There was talk at the time of a temporary “Grexit”, with it said that Germany were losing patience with Greece.

Mr Dijsselbloem has contradicted those accounts and said: “Behind the broad back of Germany were a number of countries lining up who simply said, ‘we’re done. We don’t want to talk anymore with the Greek government.

“We want to talk about the Plan B.”

Greece is no longer in breach of EU rules and is set to finish its bailout programme this year.

Posted on; Express.co.uk>>

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