European Union President Herman Van Rompuy said the euro is out of danger and called the 27-nation EU “still sexy” as policy makers negotiated the final touches of a bailout package for Cyprus.
“The euro is no longer in danger, but the work is not over yet -- not at all,” Van Rompuy said in an online video response to questions recorded on March 8 and posted on the Internet today.
The euro declined as much as 1.5 percent against the U.S. dollar today as the proposed imposition of an unprecedented bank tax in Cyprus threatened to disrupt the nation’s bailout and renewed concerns about other debt-strapped euro countries. The euro traded at $1.2969, at 6:12 p.m. in Brussels, down 0.8 percent on the day.
Van Rompuy said the euro isn’t to blame for imbalances facing individual countries that have required difficult budget choices and austerity policies.
“Don’t forget that Europe is not responsible for the deficits and debts created in the member states,” he said. “These faults had to be corrected in any way, with or without the euro area and with or without the euro.”
When asked whether the EU would continue to expand, he said Croatia would soon be a full-fledged member state and other countries also want to join.
“Many countries in Europe still want to join us, so the European Union is still sexy, if I can say so,” Van Rompuy said.