"I have written the book out of anger, because I have seen no clear strategy in Europe to fight the crisis," said Verhofstadt, presenting his book, entitled 'Emerging from the crisis: How Europe can save the world'.
According to the Belgian statesman, the EU's recovery plan comes way behind that of the US and China, which respectively allocated 600 and 450 billion euros to restructuring their economies and lifting their countries out of the crisis.
The European recovery plan, which at only 170 billion euros represents at most 3% of EU GDP after economic stabilisers like unemployment and welfare payments have been taken into account, is not ambitious enough, Verhofstadt explained.
"These are exceptional times. This is an exceptional crisis. So we need exceptional solutions, not conventional recipes which do not seem to work anyway," he writes in his book.
Far-reaching reforms and bold actions require first and foremost cleaning up the banking sector of its toxic assets and push forward the recapitalisation of European banks, he believes.
Verhofstadt launched a scathing attack on the de Larosière report commissioned by the EU executive, which makes a series of proposals on financial supervision (EurActiv 3/03/09), criticising the idea of creating a body of national regulators, rather than having a single European financial supervisor.
"By continuing to draw a distinction between banks and financial institutions which are geared chiefly to a national market and the others, which are resolutely European and internationally-oriented, we overlook the essential problem which has led to the current crisis," noted Verhofstadt, arguing the only solution is to have one European watchdog.
Verhofstadt is convinced that Europe can help restart the world economy if it can come up with one investment plan, or 'Europlan'. Europe cannot emerge from the economic recession "with 27 vertical and at times even protectionist recovery plans, but by one major horizontal European investment plan, geared to the accelerated switchover from the outdated fossil to a new, sustainable economy," he said, adding Europe that needs at least 400 billion euros of additional spending.
To finance his 'Europlan', Verhofstadt calls for the EU budget to be reformed and for 'Eurobonds' to be issued, an idea which was dismissed by the EU executive after pressure from some countries, notably Germany.
The statesman wants to set up a Eurobond market of approximately 1,000 billion euros, the equivalent of just 10% of the US bond market. With the cash flow provided by the Europlan, "we will be able to repay the bonds and even cover some of the debts of eurozone countries," he stressed, arguing that no investment or recapitalisation plan should be paid for by taxpayers.
"What we need is a proposal from the Commission," he said, highlighting the Commission's lack of a coherent strategy or concrete initiatives and and recalling that the 'Single Market' had begun with a proposal by Jacques Delors. 70% of the Delors plan was rejected, but the approved 30% led to the establishment of today's internal market, said Verhofstadt.
