European President Herman Van Rompuy gave a “State of the Union” speech Thursday in which he defended the Eurozone.
Rompuy defended Europe by saying that “the Eurozone is not contributing to the global unbalances which were at the root of the financial crisis.”
The speech he gave was called a “Plea For the Euroland”. He doesn’t want people to refer to it as the Eurozone because it “sounds distant like some industrial zone, somewhere outside the city’s centre.” “Euroland” is what he wants people to refer it to, maybe because it sounds like Disney and will make investors happier with the state of Europe. Anyway, here are the key takeaways from what Van Rompuy’s State of the Union:
- The Euro is “a strong and a stable currency”.
- There clearly is a gap between its underlying strength and the public mood.
- The economic recovery in Europe is “quite good”
- He mentions the US, UK, and Japan’s problems, saying that the average public deficit in the Eurozone is lower than those countries.
- He calls for a common fiscal policy, saying, “we simply cannot have one currency and 17 divergent policies.”
- Croatia still wanting to join the European Union proves that the EU isn’t in such bad shape after all because states still want to join.
Rompuy closed the speech by saying, “the fact that a crisis in three small countries, together representing only 6% of the GDP of the Euro area, could threaten the financial stability of the entire euro zone has indeed been totally underestimated.”
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