Barroso says there is still no solution to debt crisis
Barroso says there is still no solution to debt crisis
European Commission president says it is essential that the European Central Bank stays independent.
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José Manuel Barroso, the president of the European Commission, today acknowledged that eurozone leaders had still not agreed on a plan to end the turmoil affecting the single currency.
Speaking at a conference in Portugal, Barroso said that politicians and officials needed to find a solution that calmed the financial markets.
His comments came a day after Nicolas Sarkozy, France’s president, and Angela Merkel, Germany’s chancellor, appeared to rule out supporting the European Central Bank (ECB) becoming a lender of last resort. They also seemed dismissive of Barroso’s proposal for Eurobonds.
“The truth is that so far there is no response to the sovereign crisis that restores confidence to investors,” Barroso said. “As long as that does not happen we will have very serious problems and debates in Europe.”
Barroso said it was “essential” that the ECB remained independent and “not subject to political pressure”.
“We have confidence that the European Central Bank will carry out its role as it has done so far,” he said.
Italy’s woes
In Rome today, Olli Rehn, the European commissioner for economic and monetary affairs, met Mario Monti, Italy’s new prime minister, as Italy’s short-term borrowing costs rose to record levels.
Italy’s cost of borrowing for two-year bonds rose to more than 7%, which is considered unsustainable, while the country was forced to pay a record 6.5% to borrow over six months – nearly double what it paid six months ago.
Rehn told Italy’s parliament that the country needed to “adopt ambitious measures to re-launch growth” and that the country still had “formidable” challenges ahead.