The euro area needs countries to tackle their own fiscal difficulties to build cooperation within the currency bloc, Finnish Prime Minister Jyrki Katainen said.
“Solidarity can’t mean shifting responsibility onto others,” Katainen said in a speech in Helsinki today. “Everyone must abide by jointly agreed rules.”
The single-currency area is struggling to contain a debt crisis now in its fourth year after countries borrowed funds to bridge budget gaps that have exceeded the union’s deficit rule of 3 percent of gross domestic product. Five countries have now sought international assistance and the region’s economy is poised to contract for a second year amid austerity measures.
Finland, together with Germany, has rejected joint liability for debts within the currency bloc.
“We already have solidarity,” Katainen said, citing development funds distributed through the European Union budget. “We want to strengthen weaker areas to make the whole EU stronger.”
The region needs to boost its competitiveness and fiscal discipline, he said. Katainen’s government last week unveiled new austerity measures for the northernmost euro economy, even as the Cabinet also announced corporate tax cuts to foster growth and help Finnish companies compete.
“I do understand that the citizens are angry about budget cuts,” the premier said of the region as a whole. “Is it the EU’s fault the countries are in such bad shape? The only thing the EU can be accused of is not stopping that early enough.”