EU in ‘Survival Crisis’ Says Van Rompuy

herman van rompuy
John Thys | AFP | Getty Images
herman van rompuy

Herman Van Rompuy, the European Union’s permanent president, said on Tuesday that the European Union was in a “survival crisis” and that its members must work together to get through the current turmoil or the bloc’s future was at risk.

Mr Van Rompuy spoke as European finance ministers began gathering in Brussels for what was expected to be a high-tension summit.

Ministers from the 16 countries that use the euro will meet on Tuesday evening to press Ireland and Portugal on details of how they plan to dig themselves out of their current debt levels, which have spooked the bond market and pushed the EU to the brink of another Greece-style bail-out.

“We are in a survival crisis,” Mr Van Rompuy said during an address. “We all have to work together to survive, with the eurozone, because if we don’t survive with the eurozone, we will not survive with the European Union.”

Mr Van Rompuys comments highlight the growing splits within the eurozone, with Ireland stubbornly resisting entreaties by European officials to accept aid as leaders of other debt-laden countries, such as Spain and Portugal, publicly suggest Dublin should comply to calm restive debt markets.

Other countries, including northern members who have been more financially responsible, are growing increasingly frustrated with the pressure being placed on Ireland, particularly by the European Central Bank. They are expected to make an issue of the tactics used by the ECB at the eurozone summit.

According to one official, some countries are expected to argue that the €440bn rescue fund should only be tapped when a country is in emergency need of funds, not just to settle the financial markets. Dublin has said it is fully funded through the spring.

In an interview, Jyrki Katainen, the Finnish finance minister, said he would propose a measure at the summit that would require countries seeking a bail-out to put up collateral before getting a loan from the European financial stability facility.

Mr Katainen said the measure would help lower borrowing costs and get around the “no bail-out” clause in the EU’s treaty. But it would also make it more onerous for countries to tap the fund, a sign that Finland is among those who feel the pressure on Ireland is unjustified.