Envoy Predicts Greece Will Stick With Euro

Roubini: Why Greece Will Become More Compromising

Greece will remain in the euro currency zone and the U.K. will stay in the European Union, the EU’s ambassador to the U.S. predicted.

While negotiations over the terms of an EU-backed bailout for Greece “have been dragging on,” Ambassador David O’Sullivan said on Tuesday that he’s confident a solution will be found and that “Greece will very definitely stay within the euro.”

Speaking with reporters and editors at Bloomberg’s Washington bureau, O’Sullivan cited polls indicating that an overwhelming majority of Greeks want to stay in the 28-member European Union and said he expects the new Greek government to keep its pledge to meet the conditions needed to retain the currency shared by 19 of those states.

No one “is saying there’s no room for compromise,” with Greece over the terms of the bailout, O’Sullivan said. “I think what people are saying is that we need from the Greek government a clear plan of how they propose to make the numbers add up, how they propose to balance the budget, and how they propose to achieve the overall targets which we know are there.”

The European economy has “clearly turned a corner” because of the success of fiscal consolidation in troubled economies, quantitative easing by the European Central Bank, the depreciation of the euro and a decline in oil prices, said O’Sullivan, a former Irish diplomat who previously served as chief operating officer of the EU’s foreign service.

U.K. Election

Asked about the May 7 election in the U.K., in which Britain’s EU membership has become topic of debate, O’Sullivan called it “the least predictable British election of living memory.”

Nevertheless, he said he’s confident that the U.K. will remain in the EU -- either because voters from major political parties, industry and trade unions would support staying if a referendum were held, or because the winners of the election would see no reason to reconsider Britain’s membership.

Asked about discord among EU member states over how far to push economic sanctions on Russia for supporting separatists in Ukraine, O’Sullivan said, “The real story is that we have had unity and that we have maintained it,” which has surprised Russian President Vladimir Putin.

Sanctions limiting EU trade and investment with Russia will remain in force, he said, until the February agreement signed by Russia to end the conflict in Ukraine is fully implemented, which won’t be assessed until the end of the year. Sanctions on Russia set to expire on July 30 are expected to be extended through the year.

Trade Agreement

A former EU director-general for trade, O’Sullivan said he recognizes that it may not be possible to complete a free trade agreement between the EU and the U.S. before President Barack Obama leaves office, though he said he’s hopeful that the proposed Trans-Atlantic Trade and Investment Partnership can be completed by 2017 or 2018.

O’Sullivan said Europe “would very much like to see greater possibilities for the export of oil and gas” from the U.S. to the EU, a move that would “contribute to alternative supplies” for member states that now depend on Russia for natural gas.

The EU envoy dismissed as “complete nonsense” any notion that the anti-competitiveness investigation of Google Inc.’s Internet search engine is a protectionist cover for European competitors to emerge.

“Antitrust cases are antitrust cases,” he said. “Google is a great company” like other U.S.-based technology giants. “But they are not immune from the rules of competition, and they have to be answerable.”

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