'Too Many Cooks' in Euro Debt Crisis: OECD Head
Finding a solution to the euro zone crisis is such a complex task that investors, as well as many citizens of the European Union, have grown disgruntled with attempts to sort out the debt.
“The complexity of the issue is such that you have to discuss, you have to talk about it, you have to analyze it," Angel Gurria, the Secretary-General of the OECD, said in an interview with CNBC following the latest meeting of euro zone policy makers in Brussels.
"You have to look at different options and the costsand then continue to discuss which are least costly in terms of what you want to obtain. But it is not something which is obvious, therefore it takes time,” Gurria added.
According to him, there are simply too many people in the kitchen.
“I think as they say, when there are too many cooks, it is difficult to know what it is that is on the menu," Gurria said. "But here, almost by definition there are a lot of cooks, the only question is whether there can be a greater convergence. Normally this was done indoors and now it is being done very publicly and that maybe has added to the cacophony.”
Not many people would disagree with that but the problem is trying to find agreement, as the Dutch Finance Minister told CNBC when asked if he and his peers from across Europe where close to a deal.
“Of course it is a very difficult knot to break, and it is important that we need, and we are determined also to get a comprehensive solution,” said Jan Kees de Jager.
“And a comprehensive solution is not only money. A comprehensive solution will also encompass governance...it will also deal with debt positions and the deficit position throughout the whole of Europe and of course economic strength, competitiveness....we have to deal with all those issues,” he added.
“More and more money, or emergency funds will not do the job, and we have said that, all ministers of finance we have stated that, we are in agreement with that,” de Jager said.
Leadership Is Needed
But agreement on what is not the solution is a long way from agreement on what the solution is.
It is very important to develop a comprehensive package for the whole of the euro zone, and "definitely also address the Greek debt problem," de Jager also said.
The solution, according to the boss of the OECD, is no more bailouts and private sector losses, something everyone now appears to agree upon.
“Today, what I would insist is that you cannot continue to pay the creditors of Greece with the money of taxpayers. This is a process that is not possible to prolong....participation of private sector is absolutely indispensable,” said Gurria.
Leadership is needed according to Gurria, not an easy thing when there are so many people involved.
“We have to take leadership....for this of course there has to be a convergent point of view, everybody needs to speak with same play, right now we have not been very good about reading from the same script, I think we have learned how important it is and this Italian event may accelerate the process of convergence,” he said.
Will investors see what many euro-skeptics have said has been absent since the launch of the euro, political leadership? Jean-Claude Trichet, the president of the ECB, believes a single euro zone finance minister is the answer but the countries' finance ministers, who would lose some influence if this where to happen, do not agree.
“I don't think that is the answer, to be honest. I think political union and one minister of finance for the euro zone will not help, or will not address the core of the problem,” said de Jager.
“I think we can do it with 17 ministers if we stick to the stability and growth pact, especially adapt all the enhancements and the strengthening of the stability and growth pact which we proposed in February. When we do that, we do not need political union, we are able to solve the problems in all 17 countries,” he said.