Brian Hayes MEP today welcomed news that Greece is exiting its EU bailout programme but said that there needs to be a temporary hold on new members joining the Eurozone.
“The news that Greece is to exit its bailout programme signals a major turning point in a long and painful financial crisis for the EU. While Greece’s economic woes are far from over, the significance of leaving the EU/IMF programme is massive for a country that has been subject to the constraints of a bailout for 8 years.
“We know all too well in Ireland the hardship of a bailout programme but we also remember how significant it is to come to the end of a programme. Ireland exited its bailout programme in December 2013 and was subsequently the fastest growing country in Europe for four straight years.
“We now know that Greece had serious problems even before it joined the euro. It did not meet all the ‘Maastricht criteria’ required to join the Eurozone – in particular, it had a budget deficit that exceeded 3% of annual GDP and its debt to GDP ratio exceeded 100% in 1998.
“One lesson we have learned from the financial crisis is that extreme caution should be exercised when admitting new Member States to the Eurozone. I believe that we should put a temporary hold on new members joining the Eurozone until we get debt and deficit thresholds down to acceptable levels.
“The crisis is still not over in Europe. The ECB continues to pump money into the Eurozone economy through quantitative easing and the Italian banking system still poses major threats to the Eurozone. Now is not a time for euro enlargement.
“I recognise that all EU Member States except Denmark have given a commitment to join the euro at some point in the future. But we have to reassess if this is still in the best interests of the Eurozone as a whole.
“Greece’s problems demonstrate the structural problems that still face the Eurozone. The public finance position is so varied from country to country in the Eurozone. And when one Eurozone country is in trouble, it can cause contagion because of the interconnectedness of the Eurozone.
“One of the main problems is that the EU fiscal rules are still flouted by many Member States. We have clear EU rules on debt and deficit levels but some Member States continue to pursue reckless fiscal policies.
“If we are to proceed with further euro enlargement, EU fiscal rules must become stricter and there can be no lax treatment of public finances.”