Tags: EU | Official | euro | state | Insolvency

EU Official: Euro State Insolvency Isn’t Ruled Out

Friday, 02 Jul 2010 01:18 PM

European Monetary Affairs Commissioner Olli Rehn refused to rule out in a newspaper interview that a mechanism to allow euro zone member states to undergo "orderly insolvency" could be drawn up.

German business daily Handelsblatt asked Rehn about the proposal floated by German Finance Minister Wolfgang Schaeuble that such a mechanism should be available in future.

"Finance Minister Wolfgang Schaeuble deems this is necessary and is therefore demanding a procedure for an orderly insolvency," Rehn said in the interview published on Friday. "However, to do this the EU would have to change the Lisbon Treaty which we know is very difficult."

Asked whether this meant he was fundamentally opposed to an orderly insolvency, Rehn responded:

"I didn't say that. But I'm concentrating first on reforms that are possible without changing the Treaty."

The paper noted that the German government hoped to impose tougher sanctions on budgetary deficit sinners and was therefore pushing for a change in the EU treaty.

"I have nothing against that in principle," he said. "But the initiative on this can't come from me."

© 2015 Thomson/Reuters. All rights reserved.

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