Flemish taxpayers must stop paying for debts racked up by southern European countries

14 March 2019

“Flemish taxpayers must stop paying for debts racked up by southern European countries.” MEP Ralph Packet does not agree with the intention of the European Parliament to anchor the European Stability Mechanism (ESM), which provides financial emergency support to member states, in law. “Handing out money solves nothing. If a country cannot pay its debts, structural measures must be taken. As long as they are not, the sword of Damocles remains hanging over the euro zone.”

Bail-out for problem countries

During the euro crisis, a bail-out was necessary for a number of countries in the south of Europe. Via international treaties, temporary and later also permanent mechanisms such as the ESM were set up for the purpose. For example, since 2010 Greece has received emergency loans in the gigantic amount of 289 billion euros. Ralph Packet wants Europe to reinstate the “no bail-out” clause in the medium to longer term so that no more wild financial rescue plans are necessary: “The setting up of the emergency funds ran counter to the important principle of individual responsibility of the member states and the ‘no bail-out’ clause in the Treaty of Maastricht,” says MEP Ralph Packet.

Respect for budget rules

Now, the European Parliament wants to anchor the ESM in the legal framework of the EU, with its main task being to give financial support to member states. “The ESM must not focus on bail-outs, but on respect for the budget rules and the elimination of the enormous debts of member states. That is the only way to avoid problems in the long term,” Ralph Packet responds.

Playing with fire

According to the MEP, a fund such as this takes away the stimulus for member states to shoulder their responsibility: “As long as the Greeks can count on a European fire insurance, they can play with fire. The bill then finds its way to other member states. That costs the taxpayer huge amounts of money. An additional point is that for large countries such as Italy, a bail-out is even totally unachievable and unaffordable,” Ralph Packet concludes.

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