Van Rompuy Says Euro to Stay Intact, Hails Narrower Bond Spreads

European Union President Herman Van Rompuy comments on the integrity of the 17-nation euro area and confidence in the region as it seeks to overcome the three-year- old debt crisis.

Van Rompuy, speaking at a conference today in Brussels, also comments on a planned summit in November on the 2014-2020 EU-budget guidelines. Annual spending by the 27-nation EU is about 1 percent of its gross domestic product.

On the euro’s integrity:

“A few weeks ago, or a few months ago, the discussion was not about if the euro zone will break up but when. I don’t say that this discussion is over, but I don’t read a lot on this now. In some way, it is not real news anymore.”

“We will convince people only by our results. And it takes more time than we thought. It takes more time than we expected.”

“We will find a solution in the upcoming weeks so that the euro zone will still be a euro zone with 17 member states and that we could keep this integrity and keep the euro as an irreversible project.”

“I am confident that we will keep the euro zone with 17 member states.”

On confidence in the euro:

“What I see more clearly around me in the last few days and weeks is that people realize that we are heading somewhere new.

“And even if the exact destination will depend on many factors, there is an increasing confidence in the future of the euro zone, a growing sense that we will get there.”

“Our union and the architecture of the euro zone look already different today from how they did three years ago. And this process of change is bound to continue further before of course it stabilizes.

“Shaping this change together then is the driving principle behind the actions of all European leaders. It is also the principle behind the difficult but courageous reforms taking place in the member states.”

“Every transition of this magnitude takes time. And some member states’ economies were mismanaged for years or even decades. Moreover, the euro zone did not have the tools to deal with this crisis.”

“Growth and jobs are our main goals -- the rationale driving all our efforts. But our success hangs on one key condition: restoring economic confidence of consumers and companies, which in turn requires the return to financial stability and trust in our own currency.

“In this respect, the fact that spreads declined rather spectacularly in the past weeks is a good sign. We are on the right track. And we are working on three fronts.

“First, we need to keep reforming and to demonstrate through actions and results that all European countries are determined to remain among the most competitive in the world whilst preserving social cohesion. The results are starting to show.”

“Across Europe we already see a clear convergence for public deficits, inflation, current account of the balance of payments and competitiveness. Admittedly, there are divergences in growth and employment figures. But we can overcome this in a second stage.

“My second front: we must make sure that we are equipped in a bullet-proof way to withstand short-term shocks. And here I salute the launch of the European Stability Mechanism earlier this week. It is the crown jewel in our tool kit.”

“Finally, the third front, we need a longer-term plan to further reinforce our economic and monetary union.”

“Our immediate priority is progress on the banking sector. The foreseen benefits are clear, both in terms of preventing bank failures and protecting taxpayers.”

“At stake is breaking the vicious circle between banks and the sovereigns. Our first aim is to agree in the upcoming months on a single supervisory mechanism.”

On the EU’s planned budget for 2014-2020:

“I also want to make sure we activate all the growth levers. It is not a huge budget; it’s only 1 percent of European GDP. But it can have a big impact on future growth since it is to a large extent an investment budget.

“I have dedicated a special summit in November to the negotiations and my colleagues have already been warned it could become the first three-shirter under my watch.”

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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