The “worst part” of the European debt crisis is over and Greece’s near default has convinced European Union leaders of the need for a common fiscal policy, former EU Commission President Romano Prodi said.
EU leaders were “late and slow” in addressing the crisis caused by Greece’s deteriorating finances, Prodi said in an interview with Bloomberg Television from Beijing today.
The euro has declined 13 percent against the dollar this year as the Greek crisis fuelled investor concern that the 11-year-old currency might unravel if other high-deficit countries like Spain and Portugal needed the type of emergency aid extended to Greece. EU leaders will eventually adopt a common fiscal policy to control deficits, Prodi said.
“It’s much more clear to the Europe politicians now at last that there is no alternative,” he said. “It will take a long time.”
Prodi, a two-time Italian prime minister, said there is little risk Greece or any other country will seek to abandon the single currency.
“I don’t think that there will be any danger of Europe collapsing or Europe dissolving,” he said. “The interests of the euro members are to keep the currency as it is and to strengthen their links.”