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"The Way out of the Crisis. How Europe can save the world"

Date

12 May 2009

Sections

EU Priorities 2020

Book launch: Tuesday 12 May 2009 at 11h00 European Parliament (ANNA POLITKOVSKAYA, room PHS 0A50)

In his latest book called "The Way out of the crisis. How Europe can save the world", Guy Verhofstadt, former Belgian Prime Minister, provides an analysis of how the European Union can tackle the current economic and financial crisis. He pleads for more European integration and less protectionism. In addition Verhofstadt argues that the issuing of Euro bonds by the European Investment Bank is necessary.

According to Verhofstadt the current crisis is comparable with the recent crisis in Japan where the housing market was overheated, the population was aging and problems with banks arose. In spite of 12 recovery plans the Japanese economy never fully recovered.

Europe should prevent such a scenario, but at the moment Member States are presenting a range of national recovery plans without much coordination. They also tend to return to protectionist reflexes.

This behaviour is counter-productive and not necessary. Europe can offer the necessary solutions. A considerable number of its inhabitants are middle class citizens with sufficient savings and the euro has the potential to function as a lever, giving the world economy a boost. At the same time, Verhofstadt acknowledges that European banks have made considerable debts by acquiring a high number of toxic financial packages. This hampers the role that European banks can potentially play. Therefore he pleads for a threefold solution.

First of all it is necessary to restore order in the financial market to reach a sustainable solution. Europe needs a common financial regulator with the power to supervise the market and put new regulations in place. Verhofstadt also wants to re-capitalise the banks and create a European bad bank managing all toxic products from the European banks.

The next step is a dramatically restructured European economy providing solutions for European mobility problems and the ageing population. Furthermore, more emphasis should be put on the creation of a European IT- and ICT network. In order to achieve these ambitions, the current European recovery plan should be increased with at least a further 400 billion euros. Verhofstadt believes that the European Investment Bank should issue European bonds to finance this scenario.

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For more information, please contact:
Pascal Dubois: +32 473 94 46 09
Katrien Van den Broeck: + 32 485 46 14 03
Jeroen Reijnen: + 32 473 39 4710
Web: http://www.alde.eu

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