Rehn singles out Ireland as he praises three bailout states' efforts
EUROPEAN Economic and Monetary Affairs Commissioner Olli Rehn yesterday hailed the "remarkable" efforts of bailed-out Ireland, Greece and Portugal, saying all three countries had brought their economies back into line after years of heavy overspending.
He said Ireland, in particular, had been able to re-access the markets earlier than envisaged.
However, he warned that other countries faced a "formidable challenge".
"Countries under intense market pressure have little breathing space to adopt the game-changing reforms that are essential for long-term gain," Mr Rehn said in the 'Wall Street Journal' yesterday.
The euro area had rescue mechanisms, including bond-buying programmes, in place for countries that requested aid and were willing to meet strict conditions, he said.
"To ensure that such interventions help to bring down bond yields in a lasting way, they will only be available for member states that pursue sound budgetary policies, adopt structural reforms for growth, and address macroeconomic imbalances," Mr Rehn said.
He pointed out that European aid for Spain's banking sector "should provide for restructured and recapitalised banks that are effectively regulated and rigorously supervised".
Spain's debt woes have created the latest headline in an ongoing debt crisis that has seen few concrete moves to solve the big issues.
The absence of a rescue plan has drawn particular condemnation from the US. But Mr Rehn urged the two continents to work together instead of playing the blame game, as the US has suffered its own financial problems.
"The US and the EU are in this together. The US has its own hard choices to make, notably with regard to the debt ceiling and the looming fiscal cliff. In Europe, we have learned the hard way that unsustainable fiscal and current-account deficits have to be corrected some time.
"The US fiscal position has recently benefited from abnormally low yields on Treasuries, which are the flip side of the tensions in European bond markets. When these tensions subside, so will the yearning for perceived safe havens.
"So let us not lay blame. Instead let's work together on both sides of the Atlantic to learn the lessons of the past and ensure that we emerge from the current crisis stronger."