European Union

Source : © European Union, 2015 - EP

Regling, right, with European Central Bank president Mario Draghi at a press conference

Klaus Regling has been the head of the eurozone’s rescue funds – first the temporary European Financial Stability Facility, now the permanent European Stability Mechanism – since the outset of the debt crisis, a perch that has given him a unique insight into the five years of occasionally contentious deliberations over the bloc’s five bailouts: Greece, Ireland, Portugal, Spain and Cyprus.

But as the EFSF turned into the ESM, and as the €500bn ESM gained staff and authority, Regling’s own role in eurozone debates has grown – particularly on the issue of Greek debt, where he has been a frequent and outspoken critic of the argument, made both in Athens and by the International Monetary Fund, that the heavy debt burden is what ails the Greek economy.

Two years ago, in an interview with our friends and rivals at the Wall Street Journal, Regling in essence sounded the death knell for a November 2012 deal where eurozone governments had promised debt relief for Athens as long as it achieved a primary budget surplus – something it achieved by the end of 2013. As Regling predicted, the eurozone did not restructure Greece’s debts despite Athens living up to its side of the 2012 agreement and posting a surplus.

In an interview this week with the Financial Times, Regling has done something similar. As part of July’s controversial €86bn bailout deal, creditors again held out the promise of debt relief. And Regling is now suggesting that even if it does occur, a restructuring will not be on the scale Athens and the IMF had been arguing for just four months ago.

Our story on the Regling interview is here, but as is our practice at the Brussels Blog, we’re offering an annotated (and slightly edited for length) transcript for readers who want to hear more from Regling below.

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Since the Treaty of Lisbon entered into force in December 2009, major efforts have been made to implement the new institutional set-up it created: the EU has acquired legal personality, the post of Vice-President of the Commission / High Representative for Foreign Affairs and Security Policy has been created, the European External Action Service has been operationalised, and the EU Delegations around the world have boosted the EU’s presence and increased diplomatic and policy outreach. The European Parliament has also acquired a greater role thanks to the Lisbon Treaty, particularly in the fields of foreign policy oversight and budgetary scrutiny. Nevertheless, many provisions of the Lisbon Treaty, designed to provide a boost to foreign, security and defence policies, remain non-implemented owing to a lack of political support stemming from the fears of some EU Member States of the creation of a ‘two-speed Europe’ and loss of control over these fields in favour of the EU institutions.
Source : © European Union, 2015 - EP