Special Report: Van Rompuy warns leaders not to panic markets

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Asked how the EU should deal with financial crises in Greece, Ireland and Portugal, Council President Herman Van Rompuy said yesterday (19 May) that because “money matters”, leaders must take care when giving out messages and “think twice” before they open their mouths.

Speaking at the European Business Summit in Brussels, Van Rompuy strongly warned politicians against conveying messages which prove to be counterproductive considering the likely reaction of the markets.

"The biggest problem I have these days is the messages being given out. The messages are part of the problem, not a part of the solution," Van Rompuy said.

The Council president declared that politicians with huge responsibilities should "think twice" before they speak on "delicate" monetary matters.

"There is an expression: money matters. And because money matters, you have to be very careful what you say in public. And that's the reason why I'm very, very silent. But it's my nature that I'm cautious," Van Rompuy said.

Asked by EURACTIV if it were normal for the person representing the EU according to the Lisbon Treaty to be so silent and avoid giving interviews, Van Rompuy answered: "An interview with me or another leader doesn't change things."

He said that one day, once people had ascertained what the first president of the European Union had left behind as his legacy, they would not look at the number of interviews he did but at what he had achieved.

'Not a glamour boy'

"When I accepted this job, of president of the European Council, I gave a definition of what you could expect, and you can't be disappointed, because I announced the way I would like to carry out this job. It's not the way of a glamour boy, or a bling-bling, but someone who chairs important meetings, and hopefully gets results," he said.

'Bling-bling' is a slang term taken from hip-hop culture, but in the political field, it has been widely used by the French press to describe the flashy lifestyle of French President Nicolas Sarkozy.

Van Rompuy was apparently in a good mood and made the audience laugh on several occasions.

‘Even the Pope is no longer Italian'

His best pun came on the topical issue of seeking Dominique Strauss-Kahn's successor at the helm of the IMF.

At first, Van Rompuy stunned the audience by questioning whether the tradition of a European candidate should be maintained. He said that traditions were not eternal, and even the Pope was no longer Italian.

His words appeared to totally contradict the view expressed the previous day by Commission President José Manuel Barroso, before the same audience.

"Is this once and for all a tradition that can't be changed?" he asked a puzzled audience.

A few seconds later, he answered his own question: "It is a tradition that can be changed, but not now," he said, triggering laughs and applause.

Van Rompuy said the next leader of the IMF should be "a person with the highest level of ethics," and that leaders should not lose time finding a good candidate, because for psychological reasons the IMF chief should be replaced quickly.

Georgi Gotev 

French President Nicolas Sarkozy's Élysée office published a press release saying "the president of the Republic wants the next director-general of the IMF to be chosen by a board of governors following an open and transparent process".

"The European Union, whose member states are the Fund's leading stakeholders, can offer a very high quality candidacy. Europe must make the choice of unity," it added.

Jürgen Thumann, co-chair of the Transatlantic Business Dialogue, said at the event "I feel very confident with regards to the euro and the euro zone. I don't want to be misunderstood when I say I am totally with President Van Rompuy when he says that we should learn to be much quieter when it comes to money issues, the euro and all about Greece".

"I think there are way too many people talking in public, and I would start with my own country Germany. At night we have talk shows and everybody is talking about the solutions that they believe they have to help Greece to get out of these problems. I think money markets are extremely sensitive and we should reduce our public discussion," he added.

He said on the subject of Greece's economic prospects that "I believe we have to make sure that we have a look at the time frame. I think it will take more than a year or two. I give a lot of credit to the Greeks for what they have accomplished in such a short period of time. I think we are talking of 10 or 20 years before they totally recover. They have to rebuild their industry. They have to become more competitive. And we all know they have just overspent over the last five to 10 years".

He added, however, that he was optimistic about the euro zone as a whole, saying: "And let me make one other point to put it in perspective. If we look at the total liabilities that we have in euros, compared to our American friends, also compared to other countries in the world, relatively speaking our deficits are not that high."

Pierre Alain De Smedt, chairman of the Federation of Belgian Enterprises, discussed the results of a survey of 400 European CEOs: "What do they tell us if we analyse their answers? They say not only are we confident and optimistic for the future, and we agree with the idea of 2% growth. But they say: We are going to invest more. There is a clear indication from the analysis that investments will grow. And they tell us beyond that: We will create jobs, we will hire people."

Eurozone finance ministers approved a three-year, €78-billion emergency loan programme for Portugal this week (17 May) and said Lisbon would ask private bondholders to maintain their exposure to its debt.

The decision is the third bailout granted to a eurozone country in the past year, after the EU and IMF put together a €110-billion package to Greece last May and an €85-billion programme for Ireland in November.

However, in spite of the substantial financial effort made, the markets remain restless. On a number of occasions, statements by various political players have impacted negatively on the stability of the euro zone.

  • 24 June: EU summit; Van Rompuy to put pressure on leaders to implement 'Europe 2020' strategy.

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