Delors :Euro and EU 'on edge of precipice

The euro currency and the European Union each today stand "on the edge of the precipice," former European Commission chief and prominent European federalist Jacques Delors said on Thursday. Jacques Delors, credited with fathering the world's largest common market of half a billion consumers, made his comments in the wake of what he described as worthless proposals to reinforce cross-border economic governance made by German Chancellor Angela Merkel and French President Nicolas Sarkozy. "Open your eyes: the euro and Europe are on the edge of the precipice," Delors told Belgian daily Le Soir in an interview splashed across its front page and published at the same time in non-EU Swiss counterpart Le Temps. "To avoid falling, the choice looks straightforward to me: either member states accept the robust economic partnership I always demanded, or they transfer more powers to the Union." Delors said Merkel and Sarkozy were playing games by arguing for "a minimum amount of cooperation designed to limit any transfer of sovereignty" to Brussels. Taken on that basis, the ideas for eurozone reform they put forward on Wednesday after a head-to-head in Paris "won't amount to a hill of beans." He dismissed the idea of creating a pan-eurozone finance minister as nothing more than a "crazy gadget." The Frenchman used a scathing assessment of EU foreign affairs chief Catherine Ashton's impact to support his argument. "Does European diplomacy work any better since the creation, through the Lisbon Treaty, of a pseudo 'EU foreign minister'?" Delors, who led the giant Brussels-based EU executive 1985-1994, instead called for a part-mutualisation of eurozone member states' debts, "up to 60 percent of GDP," saying the pooling of guarantees on that basis would "put out the fire" on money markets. Joint "eurobonds" was an idea conspicuously not backed by Merkel and Sarkozy at their Tuesday summit meeting. Delors underlined: "Right since the start of the crisis (when the true scale of Greece's financial troubles first emerged some 18 months ago), Europe's leaders have failed to see the reality in front of their eyes. "How can they think the markets will believe their promises at the July 21 eurozone summit when they have to wait until the end of September for them to be put into action," Delors said of decisions to conclude a second bailout for Athens and expand the capacities of a rescue fund.