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'Things will turn out well' says Reynders on euro crisis


'Things will turn out well' says Reynders on euro crisis


In some ways Belgium epitomises much that is wrong about Europe; it has had no government for over a year, a lack of leadership that mirrors Europe’s struggles to set a clear course all member states will follow. It is a nation which struggles to hang together, much like the EU, and yet, again like the EU, it works, somehow.

Gülsüm Alan, euronews: “Who better to speak about the political crisis in Belgium and the problems facing the euro single currency than Belgium’s Finance Minister Didier Reynders? As we record this you have been a minister without a government for the last 450 days, so how do you manage an economy when your decisions can only affect day-to-day matters?”

Didier Reynders, Belgian Finance Minister:

“It’s true that this stop-gap government has limited powers, but it can take all the emergency decisions, the decisions needed to protect the nation’s interests. Above all it can take these decisions if it has governmental support, and the government does have a parliamentary majority. It’s a little bit special compared to other countries; we have a parliamentary majority, and in some countries governments are minority administrations that need the support of at least a part of the opposition.

“So when we need to take a decision we take it in front of parliament. That’s how we passed the 2011 budget, for example, and how we approved Belgium’s participation in the Libyan military operations.

“This is how I hope we’ll proceed in the coming weeks for the 2012 budget. In the last few days in fact I’ve been before parliament to get approval for the EU’s financial stability fund. I think it’s important for Belgium to be at the forefront of EU nations putting into effect the measures decided on at the July 21st summit.

“So, while it’s true we don’t have a fully-fledged government we are perfectly capable of taking decisions in the national interest, and more importantly we can go further than that with the parliament’s support.

euronews: “Prime minister Yves Leterme has announced his departure for the OECD at the very moment an agreement has been found. Is this the light at the end of the tunnel?”

Didier Reynders:

“I think it’s very hard to see an end to talks to form a new government. What’s certain is that while there’s a little progress in the negotiations, there’s still a lot of issues to work through. But, at the same time, we have a prime minister who’s going to stay in place till the end of the year.”

euronews: “Are you going to succeed Yves Leterme to try resolve the crisis?”

Didier Reynders:

“That’s a matter of protocol. Normally in the Belgian government, in the absence of a prime minister, it’s the number two of the government who takes on his functions, but that’s not where we are. Yves Leterme is going to stay in charge until the end of the year and it’s probably under him that we’ll set the budget for 2012. I hope before the end of the year a new government will be up and running. If not it’s a question of protocol of functions.”

euronews: “The Eurogroup president, Jean-Claude Junker, has called on Belgium to tackle the crisis with structural reforms. How can that be done without a government?”

Didier Reynders:

“The best thing would be to do it with a new government. But even if we have to do it with the current government we can go again to the parliament. There are two essential reforms to do in parliament, the pensions reform – as has been done in a number of countries. Today we have to take into account that financing retirement is going to be more and more costly in the coming years. And to finance the pensions system, we have not only to reform it, we have to ensure more people are in work to support it.

“The second reform to implement is that of the jobs market. In Belgium people stop working around 58, that’s much to early. It’s not about raising the retirement age above 65, but about bringing the legal retirement age up to that, to 60, 62, and maybe tomorrow 65.

“With Yves Leterme and others we’re going to go to parliament to put these reforms in place. Jean-Claude Juncker is right. Belgium is like every country in the euro zone. Belgium must take budgetary measures and implement fundamental reforms, and our responsibility, and mine as finance minister, whatever the political climate in Belgium, is to show that these decisions have been taken”

euronews: “Political leaders regularly gather here in Brussels to talk about Greece, which is on the point of going under. Recently there’ve been more and more voices calling for Greece to leave the euro zone. Do you think that will happen?”

Didier Reynders:

“I hope not because that really is a catastrophic vision. I could caricature this by saying; we can kick out Greece, even other countries, why not build a wall, why not move towards the total destruction of Europe, of all the euro zone? Europe has been built at moments of crisis, and during moments of crisis you have to be strong enough to manage the short-term, to make it possible for the Greeks to take the necessary measures to re-establish their situation. But we also have to make it possible for us to help them, to give them time to improve their economic, budgetary and social situation.

“But besides that we must think about stronger reforms and I remain convinced that in the coming months we will reinforce the integration of euro zone, meaning that we will have a European finance minister as Jean-Claude Trichet has proposed, maybe even give to the eurozone, or even the European Union the capacity to take budgetary decisions when the member states don’t take those decisions, to act in their place, to have real capacity for action, and then have a tool – we don’t see a finance minister without funds, without a treasury, and that’s why we have to have eurobonds, but we will have both at the same time.”

euronews: “The 27 finance ministers will meet this weekend in Poland to talk about Greece. Several are calling for guarantees for any further aid offered to Greece. Is that the end of European solidarity?”

Didier Reynders:

“Well, that is a risk. We know very well that these demands are coming from countries dealing with rather populist political parties who oppose the development of Europe and particularly solidarity in Europe. We have to take that into account, it’s a democratic debate. But, taking that into account, we must find solutions which maintain solidarity. I think that a country like Finland, to take one example, in calling for guarantees should receive a lower price for its loans. I mean if you ask for guarantees you can’t have a high interest rate. And so if the Greek rescue goes according to plan, if in the end it repays its debts, Finland must receive less because it demanded guarantees. That would explain why other countries, like Belgium, don’t ask for guarantees in the first place, because we want to show solidarity, because we are convinced things will turn out well. that Greece will pay off its loans, and we will receive a higher interest rate.”

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