The Slovenia Times

Deeper monetary union seen as bulwark against new crisis


Klaus Regling, the head of the European Stability Mechanism, said there were several ways ESM could play a role in deepening the union, one of them being transforming it into a European monetary fund.

The ESM played this role in a sense when it lent money to Greece, Ireland, Spain, Portugal and Cyprus. Only Greece is still in the programme and Regling said the procedure could end successfully.

Maarten Verwey, the European Commission's head of service, said significant institutional reform had already been undertaken but the structure was still incomplete.

The specific steps required in the future include completion of the banking and capital market unions, a strategy to reduce non-performing loans, and a European deposit guarantee scheme.

Boštjan Jazbec, the governor of Slovenia's central bank, meanwhile said that each financial crisis had the same rules and "we have to find mechanisms to protect ourselves."

Dušan Mramor, a former finance minister, meanwhile highlighted unclear rules.

For example, in 2007 the EU Commission detected that Slovenia's economy was overheating even though that was not the case, which is why it demanded that Slovenia cut spending more than necessary.

Mramor also complained about the debate about the deepening of the union ignoring the differences between core and peripheral countries.

"But if countries on the periphery run into trouble, the contagion will spread to core countries," he said, arguing in favour of giving peripheral countries independent economic policy instruments.

Jeroen Dijsselbloem, the former Eurogroup president, meanwhile stressed that countries which worked hardest during the crisis were now growing at the fastest rates.

He also said Slovenia should not perceive itself to be a peripheral country, because it is not.

The conference was organised by the Ljubljana Faculty of Economics and the European Commission Representation in Slovenia to debate a package the Commission unveiled in December in an effort to deepen the economic and monetary union.


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