In today’s Wall Street Journal, European Commission Vice President and Commissioner for Economic and Monetary Affairs Olli Rehn writes that the euro zone is at a decisive juncture as “Europe is undergoing a correction of the macroeconomic imbalances that built up before the financial shock of 2008.”
Noting that “over the last two years, Europe has made remarkable progress in addressing these imbalances,” he points out that Europe’s financial firewalls have been significantly strengthened and that “Europe is committed to building a genuine economic union to complement and strengthen our existing monetary union.”
Vice President Rehn highlights that “the sovereign-debt crisis has both underlined the need and created the conditions for Europe to rebuild and reinforce its economic and monetary union. Thus the euro zone will continue to defy its detractors.”
Furthermore, he reminds that the U.S. and the EU are in this together. “The U.S. has its own hard choices to make, notably with regard to the debt ceiling and the looming fiscal cliff. In Europe we have learned the hard way that unsustainable fiscal and current-account deficits have to be corrected sometime. The U.S. fiscal position has recently benefited from abnormally low yields on Treasurys, which are the flip side of the tensions in European bond markets. When these tensions subside, so will the yearning for perceived safe havens.
So let us not lay blame. Instead let’s work together on both sides of the Atlantic to learn the lessons of the past and ensure that we emerge from the current crisis stronger.”