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Use ‘overwhelming force’ to fix crisis, US tells EU

The United States urged Europe on Thursday to use "overwhelming force" to fix the sovereign debt crisis threatening to tip the world economy into recession.

White House economic advisor Mike Froman, speaking as the Group of 20 summit opened in Cannes said Washington had used its experience in the 2008 global financial crisis to advise Europe on how to handle its own woes.

“From our own experience … of dealing with the 2008-2009 financialcrisis, we have a number of lessons to be shared with the Europeans,” said Froman, President Barack Obama’s deputy national security advisor for international economic affairs.

“The fact that the US administration acted with overwhelming force in terms of putting up the necessary resources to deal with the crisis” was one of the lessons “relevant to the current crisis,” he said.

Eurozone leaders agreed last week to bail out Greece for a second time so as to prevent the debt crisis from spreading to other countries.

But the plan was thrown into doubt on Monday after Greek Prime Minister George Papandreou called a referendum on the rescue package. However, Greek officials indicated on Thursday that Papandreou was planning to cancel the referendum.
Froman said the eurozone debt crisis was for Europeans to resolve but that the United States was there to help by sharing “our own experience,” not necessarily by contributing directly to the bailout package.

“There are many different ways of being supportive,” he told a briefing.

“It is our belief that our ability to contribute, our ability to lead, and our ability to influence the outcome of these sorts of issues is not tied necessarily to having the American taxpayer pay for every problem.”

BUDGET

Paris, Berlin agree on future eurozone budget: French ministry source

France and Germany have agreed on the broad outlines of a proposed eurozone budget which they will present to EU finance ministers in Brussels on Monday, a French finance ministry source said.

Paris, Berlin agree on future eurozone budget: French ministry source
French Economy and Finance Minister Bruno Le Maire (R) and German Finance Minister and Vice-Chancellor Olaf Scholz. File photo: AFP

The common single-currency budget was one of French President Emmanuel Macron's key ideas for protecting the euro, but it caused differences between France and Germany, the region's two largest economies.

French Finance Minister Bruno Le Maire and Germany's minister, Olaf Scholz, will “jointly present a proposition on Monday… about the layout for a budget for the eurozone,” the ministry source told AFP.

“It's a major step forward,” the source said. “We will look forward to sharing with other members.”

The source said the amount of the budget has not been established as the proposal was to first set out the “architecture and main principles” of the budget.

According to a copy of the French-German proposal, the budget would be part of the EU budget structure and governed by the 19 euro members.

Macron will travel to Berlin at the weekend to meet with German Chancellor Angela Merkel where the two leaders will bolster their alliance as champions of a united Europe.

READ ALSO: France and Germany push for compromise on eurozone reform

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