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French FSA: Eurozone may be at “beginning of the end”

Greece’s financial troubles could signal “the beginning of the end” of the eurozone if a restructuring of its debt is allowed to go ahead.

The warning was delivered by Jean-Pierre Jouyet, the president of the French Authority for Financial Markets, today in response to Germany’s rescheduling proposals. 



However, Jouyet added that such a move could also signal a new phase of cooperation between EU governing powers.

He said: “What is at stake through Greece is the credibility of the eurozone and of the construction of Europe.”

“The Greek problem reveals that there is a very strong clash between a single currency … and an economic and financial organisation for Europe which is not strong enough.”

Jouyet said that a restructuring of Greece’s financial obligations would not only undermine confidence in the eurozone but would also just delay the country’s problems.

Should confidence be disrupted in such a manner, it could lead to increased outflows from Greek funds. The European Central Bank has previously indicated it would not be permitted to continue offering Greece financial assistance should a restructuring be allowed.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Just what does “restructuring” mean? Spreading the repayment period over 50 years? My view on the Eurozone is that it was never going to be a sustainable proposition, any more than a single currency, both of which appear to have been created with the grand idea of an equally unworkable US of Europe in mind.

    When all else is said and done, countries have to be responsible for managing their own economies and either stand on their own two feet or fall down. If the Greek economy collapses, it’ll doubtless result in a lot of financial pain, the effects of which will ripple into the economies of other European countries. But what’s the alternative? The rest of Europe can’t just keep bailing out the likes of Greece, Spain and Portugal ad infinitum.

    The root of these problems, apart from inept governments, seems largely to be bloated public sectors that don’t actually produce anything (they’re just a vast national overhead). Yet whenever governments announce plans to make very necessary economies, notably on the pensions front, those who work in the public sectors threaten revolt. It’s as if the issue of just who pays for it all is none of their concern and that efforts to put the brakes on the ever-escalating costs of public sector pensions constitutes some sort of pernicious and completely unjustifiable attack on their human rights.

    To which I say: Well, if you feel you’re getting a bum deal, go off and see if you can find a better one in the private sector. No one’s stopping you.

  2. The root of the problem in Greece is endemic corruption based around the principle that taxes amongst the rich seem to be optional.

    As for Julian’s gratuitous swipe at the public sector, he misses the glaringly obvious point that nurses, firemen, policemen, care workers and the armed forces aren’t supposed to actually ‘produce’ anything. They look after our health, maintain law and order and put out fires – all the things that tend to happen in a civilised society.

    Unlike MPs (also part of the ‘bloated’ public sector) I haven’t heard of any examples of nurses or care workers claiming £1500 to have the wisteria cleared from their house (David Cameron) or £35,000 paying the mortgage on his second property (Francis Maude)

  3. Well said Mark. My wife is a hard working non complaining nurse who just gets on with the job. Fortunately for us, she and many others regard it as a vocation and is not in it for profit. She loves caring for others, often in her own time. A nurse or fireman can’t knockoff mid way through a job at 5-30pm. On the other hand I do agree that the public sector retirement age should be in line with the private sector.

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