 |
Jeroen Dijsselbloem, the head of the Eurogroup. (Bloomberg) |
BRUSSELS (AFP) ― Eurozone countries are “worried” by the problems hitting emerging economies but do not believe there is a risk of contagion, senior officials said Monday.
Jeroen Dijsselbloem, the head of the Eurogroup which gathers the finance ministers of countries that use the single currency, insisted that the euro’s fragile recovery was not threatened.
The worries over markets such as Argentina, Turkey and Russia come as the eurozone is emerging from the worst of its debt crisis.
“Of course we are worried about this from the perspective of the emerging countries,” Dijsselbloem told a press conference after a meeting of the group in Brussels.
“I am not particularly worried about the risk of contagion. I think the position of the eurozone is different and that we have to maintain our progress.”
Dijsselbloem said the recent tapering of the U.S. stimulus program was partly responsible, but that emerging economies also had to tackle “structural imbalances.”
“I am not particularly worried for the eurozone itself, but I am worried for the emerging countries,” added Dijsselbloem, who is also the Dutch finance minister.
EU Economics Affairs Commissioner Olli Rehn agreed that the struggling emerging markets needed to reform.
“The most important thing in my mind that emerging economy countries can do to help themselves in the short and medium term is to undertake such structural reforms to enhance their economic fundamentals,” Rehn told the news conference.
European and Asian stocks slid on Monday following the worst losses on Wall Street in seven months on Friday
Fears of turmoil in emerging economies were sparked last week after Argentina’s peso slumped by 14 percent in two days.
Turkey’s central bank announced it would hold an extraordinary meeting on Tuesday as the lira slid further against the euro and the dollar.
Russia’s ruble has also fallen heavily.
Spanish Economy Minister Luis de Guindos earlier played down fears of a knock-on effect on the eurozone, saying Argentina was unique.
“The case of Argentina is singular. The exposure of Spanish companies is much lower, Argentina is a special case,” he told reporters in Brussels.
The euro is only just overcoming its long-running debt crisis, which saw Greece, Portugal, Ireland and Cyprus needing bailouts and tough austerity measures to stave off bankruptcy.
Dijsselbloem said that the “extremely short” Eurogroup meeting which lasted less than two hours showed that the crisis was waning.
It was “not an indication that we have dealt with all our problems but we are getting there,” he said.
In Paris, French central bank chief Christian Noyer agreed that the eurozone was unlikely to be affected by the emerging markets problems.
“There is no reason that Europe should be particularly hit by problems in a small number of emerging countries,” he said.
“I think they can fix them fairly quickly.”
The head of Germany’s central bank, Jens Weidmann, who was also in Paris, said the troubles in the emerging markets were a “call to carry out reforms”.
