Europe

Threat to euro overcome, says Commission President Barroso

  • 7 January 2013
  • From the section Europe
Jose Manuel Barroso speaking in Lisbon
Jose Manuel Barroso believes 2012 was a watershed in the history of the euro

European Commission President Jose Manuel Barroso has said he believes the threat to the survival of the euro has been overcome.

Mr Barroso said the turning point was last September's promise from the European Central Bank to buy unlimited amounts of eurozone states' debts.

He said investors now understood that EU leaders had committed themselves to the currency's survival.

However, he warned that the economic situation remained "difficult".

Members states were still burdened with debts and moves to consolidate budgets were only just beginning, Mr Barroso told an audience in his native Portugal.

But he said that "in 2013 the question won't be if the euro will, or will not implode" - a question posed by many in 2012.

He argued that after saving, or stabilising, its currency, the European Union now had to ensure its institutions were fit for purpose.

"The credibility of a currency depends on the soundness of the institutions behind it," Mr Barroso said, adding that political union was a "necessity".

He insisted that the crisis should not be blamed on the EU itself, but on "unsustainable public debts" run up by members and "irresponsible behaviour" in the financial sector.

But he held out the hope of unspecified "adjustments" to help reduce the social effects of the bailouts being implemented in highly indebted states such as Portugal, Greece and Ireland.

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