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Finnish EU commissioner, Rehn: Indecision at EU summit will lead to recession

Monday, 05 December 2011
EU Economic Commissioner Olli Rehn says failure to reach decisions at this week’s EU summit to secure the euro’s stability would lead to recession also in Finland and a possible break-up of the common currency in its present form. Speaking to YLE, he called for the establishment of the permanent European stability mechanism to be brought forward from 2013 to 2012.
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A “make or break” week in the euro crisis lies ahead. Only a few days remain for a solution to be agreed on how to solve the debt crisis. In Rehn’s view, failure to find a consensus would only exacerbate the situation.
Rehn likened the continuing uncertainty on the debt crisis to the style of Finnish negotiations between unions and management. A solution was usually reached but only when an absolute deadline had been set.

Turning to the role of the IMF in the current crisis, Rehn said that the fund had participated in providing cash for those euro zone nations with a conditional bailout package such as Greece, Portugal and Ireland.
“The question remains whether IMF resources can be strengthened for use if needed to enhance the cash flow of euro nations by means, for example, of a credit mechanism,” he asked.
Rehn said he preferred bringing forward the establishment of the permanent European stability mechanism from 2013 to 2012. This was one of the most important measures required.
“I hope the summit would agree to this as it would provide a strong signal that the euro zone can ensure its economic stability,” Rehn affirmed.
Rehn praised the savings package agreed by the Italian government calling the measures significant as they reduced public sector debt and stimulated economic growth.
The EU's 27 heads of government will meet later this week for a two-day summit to hammer out solutions to the euro's instability.
News source: Yle, Finland


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