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European Commission President: Europe facing a "defining moment"

06-14-2012 08:14 BJT

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Faced with a deteriorating economic situation in Europe, the head of the European Union’s executive body has urged the region’s leaders to show the world that they are ready to move closer together to resolve their debt crisis.

Jose Manuel Barroso told the European Parliament that the continent is facing a "defining moment," and he said the only way to save the union was to make it stronger and tighter.

Days after seeking help for his country’s struggling banks - Spanish Prime Minister Mariano Rajoy has insisted they will have to pay back the loan.

Rajoy has come under fire for choosing to rescue banks while bringing in deep austerity measures.

He says he’ll discuss greater fiscal and banking integration when he meets the leaders of France, Germany and Italy next week.

That chimes in with comments European Commission President Jose Manuel Barroso made to the European Parliament.

Jose Manuel Barroso, European Commission President, said, "A deeper economic and monetary union requires deeper accountability and legitimacy. Making the technical proposals is ironically the easier part. But if the technical proposals are made without proper support all across the European Union, we risk a backlash."

Barroso called for euro zone countries to respond with more urgency to the two-and-a-half-year-old crisis.

Italy’s become the latest country to fall under the market spotlight.

Its high borrowing costs have sparked debate whether it’s next in line to ask for financial help.

Prime Minister Mario Monti told parliament his government is not about to ask for any kind of bailout.

But he is calling on European leaders to come up with a credible plan for growth by the end of the month.

Mario Monti, Italian Prime Minister, said, "If measures are instigated to allow growth, then the financial markets will see that the finances in Italy are sustainable, we will pay a lower spread, taxes will lower and businesses will have an easier time rather than be penalised with their investments and this will protect us from contagion."

Peter Westaway from Vanguard says while Italy’s banking sector isn’t a cause for concern, its debt is.

Peter Westaway, Chief Economist of Vanguard, said, "As soon as their interest rates start to creep up, it inevitably raises questions about their solvency. Italy, like Spain, has now started to put in place austerity measures and structural reforms which will hopefully get them on the right track, but without doubt the market is still worrying about Italy, for sure."

Time is of the essence for European leaders to act in this fast-moving crisis.

A slim majority of economists polled by Reuters say they believe Spain will soon follow Greece, Portugal and Ireland in seeking a sovereign bailout, on top of the rescue for its banks.

 

Editor:Zhang Jingya |Source: CNTV.CN

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