Opening Discussion
Is the Euro the Problem or the Answer?
The President of Latvia, Andris Bērziņs, opened the Riga Conference stating his commitment for Latvia to join the European Monetary Union, and other Baltic leaders joined him in supporting the Euro. In the panel “Is the Euro the Problem or the Answer?” President Toomas Hendrik Ilves of Estonia suggested that is not in the interests of E.U. member states to be outside the Eurozone, as the Baltic States were at the beginning of the crisis: “If it goes bad, the first place that gets it are the countries outside the Eurozone.” Instead, the Eurozone provides opportunities for solutions. Rather than finding the Euro the problem, President Ilves insisted, “If you are not a part of the solution, you are not part of the Eurozone.”
From the perspective of the global economy, leaders argued that the Euro is an asset. Speaking on the basis of a recent trip to China with Latvian Prime Minister Dombrovskis, Lithuanian Prime Minister Andrius Kubilius argued that the “euro as a single currency is a basic requisite for Europe to be globally competitive.“ President Ilves insisted that trade between European countries was crucial.
But what is the Euro crisis in the first place how best to solve it? The panelists of sought to disentangle the financial, regulatory, cultural, and ideological aspects of the Euro crisis. Prime Minister Valdis Dombrovskis of Latvia put forward the idea that the E.U. does not “have a euro crisis” but a “debt crisis in and out of the Eurozone.” Although the panelists hotly debated the E.U.’s methods for addressing the crisis, certain recommendations stood out. Latvia and Lithuania made rapid and drastic reforms, unlike some existing EMU members. The prime ministers and even Professor Leszek Balcerowicz, who opposed bailouts and the politicized nature of the debate, suggested that taking on reforms early is key. Reforms “with or without a bailout are possible” but “what is important that we did the reforms quickly,” suggested Prime Minister Dombrovskis.
Recommendations for solutions included creating more effective sanctions to enforce Maastricht criteria, taking initatives on the national level, and establishing greater trust between the states and within political systems.
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Toomas Hendrik Ilves, President of Estonia
