Europe Economy

Euro Collapse Could Lead to War: Polish FinMin

Reporting by Silvia Wadhwa, writing by Antonia van de Velde|

A collapse of Europe’s monetary union would likely lead to a breakup of the European Union as a whole, posing significant risks to the region and even raising the possibility of war in the long term, Poland’s Finance Minister told CNBC late on Thursday.

A tramway pass in the center of Warsaw on June 8, 2011. Poland and Ukraine will co-host the 2012 European Football Championship.
Franck Fife | AFP | Getty Images

"If the euro zone were to fall apart then it's hard to exclude the possibility of EU falling apart as well," Polish finance minister Jacek Rostowski said in an interview.

"The EU has been one of the two great pillars of European peace and security of the past 60 years," he said.

"Therefore the danger in a longer-time horizon, in 10-20 years, in the absence of one of the key elements of our security system and one of the key elements of our political system, which ensures we deal with problems in this peaceful, democratic way we've developed, the risk of all sorts of authoritarian political movements, and therefore even war, in the long horizon, rises,” he said.

On Friday, Treasury Secretary Timothy Geithner will join EU finance ministers at a meeting in Poland, which holds the rotating EU presidency, to urge them to take decisive action in response to the euro zone debt crisis.

Poland joined the European Union in 2004, but has not adopted the euro.

"I think a lot has been done and a lot is on its way,” Rostowski said of the meeting of EU finance ministers on Friday and Saturday.

He said the intervention on Italian and Spanish bond markets by the European Central Bank had been “very courageous but also necessary and essential and correct.”

Long-Term Risks of Euro Collapse
Long-Term Risks of Euro Collapse

“The ECB has provided a window of opportunity, given democracy a time to work,” Rostowski said.

He warned however that EU leaders had to use the time gained by the ECB’s intervention effectively.

“We really are very close to twelve o'clock and the fact we've been given a little more time does not mean we can afford to waste any of it. We have to use every second of that time to come to agreement, to devise solutions, and not delay and not pass the ball backwards and forwards without coming up with the goods," Rostowski said.