Commission says response to turmoil in hands of EU members
The European Commission has hit back at criticisms that it is losing the battle with financial markets, saying that it is up to member states to fast-track changes to the eurozone's rescue fund.
"There is a mismatch between decisions and implementation, but there is no lack of EU leadership in Europe," said a spokesman for Commission chief Jose Manuel Barroso yesterday.
Eurozone leaders agreed on July 21 to expand the fund's remit, allowing it to buy up ailing countries' bonds on secondary markets, channel loans for bank recapitalisations and offer cash-strapped countries special credit lines.
The spokesman said officials were working to ready a legal text making changes to the fund, and that harsher austerity measures taken by Spain and Italy should be enough to restore investor confidence.
"Member states are taking measures every day to boost their economies and increase fiscal consolidation," he added. "We are more optimistic than what we witness on the financial markets."
The EU executive also lashed out at rating agencies, saying their influence was "sometimes too high" and expressing "doubts about their ratings when it comes to member states of the EU".
The US is the latest country to feel the wrath of a downgrade after Standard & Poor's slashed its assessment of the government's creditworthiness by a notch last week citing the inadequacy of the hastily agreed debt limit deal.
Meanwhile, Socialist MEPs are calling for a meeting with eurozone and ECB officials. "The European Parliament cannot remain shut, leaving the field to the European governments, whose attempts to react to the crisis have been so far rather disappointing and weak," said German MEP Udo Bullmann.
Socialists are also calling for the introduction of commonly issued eurobonds and a tax on financial transactions to counter speculative attacks on the single currency. The commission has said it will make proposals on both in the autumn.