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Jeroen Hiemstra

‘Let the Greek politicians explain how we got into this crisis'

Politicians throughout the whole of Europe need to be more honest with their voters and dare to take confrontational measures when necessary. This was the message given by Jeroen Dijsselbloem in the annual Europa lecture on 17 January in Leiden's Academy Building. As newly resigned President of the Eurogroup, he looked back on the turbulent crisis years.

In recent interviews he was not as open about his ambitions as a writer, but, having resigned as President of the Eurogroup just a few days previously, Dijsselbloem let it be known in Leiden that he intends to write his memoirs. 'After such a crucial period, it's important to look back at why particular decisions were taken, for historical, political and democratic reasons. And in particular so as to avoid a repeat of such a crisis that had so many repercussions, economically but also more particularly in a social sense.' 

Focus more on the causes

To understand how the crisis became so serious, Dijsselbloem said, more attention has to be paid to the underlying problems: the sky-high national mortgage debts in countries such as the Netherlands and Denmark, and the huge sovereign debts of Ireland, Spain and Greece. In these countries, wages also increased explosively, while labour productivity growth was low.

The audience in the Small Auditorium in the Academy Building

Wrong reflexes in Europe

Dijsselbloem criticised 'the wrong reflexes' within the member states: ‘When there are problems, Europe gets the blame, but at the same time people look to Europe to solve the problems.' About Greece he said, ‘Let the Greek politicians explain how we got into this crisis.' Former Greek Minister of Finance Varoufakis, who suddenly torpedoed agreements about a rescue plan, came in for particular criticism. 'He did everything in his power to make matters worse, for the economy, for politics and particularly for the Greeks themselves.'

'Some people think I'm too hard.'

Let investors rescue the banks

The banking sector in Europe also proved too vulnerable, and taxpayers were forced to rescue the banks. Dijsselbloem believes one of his main achievements was to take a hard stand with this sector. The wake-up call came in 2013 when Cypriot banks - where many Russians kept their money - threatened to go under. 'Why should European taxpayers have to pick up the pieces?' He introduced the policy that from then onwards private investors would have to foot the bill, and that the banks themselves had to make sure they had a greater stock of reserves. 

Politicians need to be more honest

Dijsselbloem spoke with some concern of Italian politicians in the run-up to the elections this year, who are again making far too rosy promises and are failing to tackle real problems, such as low labour productivity. ‘Politicians need to be more honest and take confrontational measures if necessary.' He is nonetheless aware of the price they may have to pay for this and as an example pointed to the dramatic election results for the Dutch Labour Party.     

Students asked questions after the lecture.

Should there be a European Minister of Finance?

'Is it time we had a European Minister of Finance, a permanent President of the Eurogroup?' was one of the questions put by a student in the hall. Dijsselbloem's response was not overly enthusiastic. 'Our Prime Minister Mark Rutte has already said that Europe has enough presidents. A ministerial role like that implies a lot of responsibility and power, but that won't be easy because none of the member states wants to be told what to do. A Minister of Finance who isn't an integral part of an actual European government won't work too well either.' 

Stefaan Van den Bogaert, Director of the Europa Institute, presented the speaker with a print of Leiden.

Unpopular role

Dijsselbloem emphasised that the European institutions and the monetary union need to be further strengthened and reformed, and mentioned the role of the European Commission: ‘The Commission has to monitor European agreements and make sure that member states keep to them. It isn't a popular role, but it's one the Commission does have to take.' 

(LvP, photos Jeroen Hiemstra)

Dijsselbloem with Law students at Leiden's Rapenburg.

The Europa Institute at Leiden Law School organised the Europa Lecture for the seventh time. This is an occasion when leading European politicians give their vision on an issue. Previous speakers (in chronological order) were:

•             Radosław Sikorski, former Minister of Foreign Afairs in Poland;

•             Alexander Italianer, Secretary-General of the European Commission;

•             Herman Van Rompuy, former President of the European Council;

•             Petro Poroshenko, President of Ukraine;

•             Jonathan Mance, Lord Justice at the British Supreme Court, and

•             Margrethe Vestager, European Commissioner for Competition.

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