German Finance Minister Wolfgang Schaeuble warned Wednesday of a growing ‘rift’ between European Union institutions and citizens, as a debt crisis continues to grip the bloc.
‘The rift between Europe and its citizens is already there. Europe no longer registers well with many Europeans,’ Schaeuble said as he delivered one of the keynote speeches at the Brussels Economic Forum.
‘Europe’s institutions and its representatives are perceived as distant and technocratic, immersed in their own world,’ he added. ‘Ultimately Europe stands and falls with the support of its citizens. We have to convince citizens that Europe is good for them.’
Schaeuble argued that one approach to fixing the problem would be to have private lenders shoulder some of the cost of future bailouts for European Union countries – a position that has been repeatedly pushed by German officials.
‘Citizens’ trust crumbles when they see their representatives bailing out investors time and time again,’ he said. ‘It would be wrong to cushion their losses in the future.’
EU officials have said that private lenders could be asked to pay into future bailouts on a ‘case by case’ basis after 2013, when a permanent rescue fund, which has yet to be finalized, is set to come into force.
Schaeuble said he was not convinced by arguments that private sector involvement would worsen volatility, saying he believed that ‘markets have to a large extent accepted the fact that there will be rules for private sector involvement.’
The bailouts provided so far to Greece, Ireland and Portugal have been funded by EU and eurozone countries, along with the International Monetary Fund.
But Schaeuble warned against only ‘throwing other countries’ money at the problem’ in Europe, calling instead for all member governments to commit to fiscal consolidation and an increase in their competitiveness.
‘The union was not intended to be … a system of redistribution from richer to poorer countries,’ he noted. ‘A member state has to be willing to deal with problems itself. We can help them, but we cannot do their job.’