Euro zone finance chiefs to beef up cooperation

The stars of the European Union flag are seen through the Union Jack in a circle symbolising unity in this arranged photo taken in the Netherlands. Many fear that a British withdrawal from the EU would hurt not only Britain but also the rest of Europ
The stars of the European Union flag are seen through the Union Jack in a circle symbolising unity in this arranged photo taken in the Netherlands. Many fear that a British withdrawal from the EU would hurt not only Britain but also the rest of Europe. A new IMF report warns that a pro-Brexit vote could further loosen ties within the euro zone.PHOTO: BLOOMBERG

Group head says they will press on regardless of which way the British referendum goes

LUXEMBOURG • The 19 countries sharing the euro zone will strengthen their cooperation in all necessary fields regardless of the outcome of the British referendum on European Union membership next week, said the head of the euro zone group of finance ministers.

The ministers meeting in Luxembourg for regular talks did not formally discuss what might happen in the event of a British vote next Thursday to leave the EU, but they looked at how to bolster cooperation.

"We had a discussion about what we need to do, independent of Brexit, in the euro zone," Dutch Finance Minister and chair of the Eurogroup Jeroen Dijsselbloem told a news conference after the meeting.

"That was a very fundamental debate, and it showed a great sense of urgency, a great sense of common goals and targets, which is to strengthen what we have.

"It was very much about how we should deal with growing concern in our electorates about the effects of the European projects, more specifically the euro project, and there is a very strong commitment and determination to take steps forward."

This approach seems to clash with calls from European Council president Donald Tusk to put further EU integration on hold for now as such plans only fuelled eurosceptic sentiment in Europe.

DELIVERING ECONOMIC SECURITY

In the current political climate, they won't be historic, dramatic steps forward, but they will be steps forward, inevitable, unquestionable. We will take the project further, we will deepen our cooperation, make it stronger to deliver what people want from us, which is basically security in economic terms or otherwise.

MR JEROEN DIJSSELBLOEM, Dutch Finance Minister, on moving integration forward.

Mr Tusk, who will chair a summit of EU leaders at the end of this month, just days after the British vote, said last month that, "obsessed with the idea of instant and total integration, we failed to notice that ordinary people, the citizens of Europe, do not share our Euro-enthusiasm".

But Mr Dijsselbloem said the atmosphere among euro zone ministers was different, even if the next integration steps will not be dramatic.

"In the current political climate, they won't be historic, dramatic steps forward, but they will be steps forward, inevitable, unquestionable. We will take the project further, we will deepen our cooperation, make it stronger to deliver what people want from us, which is basically security in economic terms or otherwise," he said.

He did not clarify which projects would have to be accelerated, but noted more work needed to be done on fiscal and banking rules.

He and other ministers avoided any direct comment on Brexit. They condemned the murder on Thursday of British lawmaker Jo Cox, who campaigned for Britain to remain in the 28-nation EU bloc.

The International Monetary Fund (IMF) warned on Thursday that a pro-Brexit vote could stifle economic growth and weaken the ties that bind the euro zone.

In a new report on the euro area, it warned that the 19-nation single-currency bloc within the EU already faces rising doubts from within that could loosen bonds, citing tensions over the refugee crisis and financial strains. It said a pro-Brexit vote could exacerbate that trend.

"Strong collective actions are needed to allay euroscepticism and renew faith in the monetary union," it said.

"A 'leave' vote in the referendum, or even a close result in favour of remaining, could exacerbate these tensions, contributing to further euroscepticism and uncertainty."

It later announced it would delay by one day its annual economic report on Britain, which includes an analysis of the consequences of a Brexit vote, after Mrs Cox's murder.

The IMF has already sounded warnings several times about the potential negative impact of a Brexit. Last month, managing director Christine Lagarde said quitting the EU would be "pretty bad to very, very bad" for the British economy.

REUTERS, AGENCE FRANCE-PRESSE

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A version of this article appeared in the print edition of The Straits Times on June 18, 2016, with the headline 'Euro zone finance chiefs to beef up cooperation'. Print Edition | Subscribe