April 30, 2012 / 10:18 PM / in 5 years

Juncker: Germany must not suggest it pays for euro zone

HAMBURG (Reuters) - Luxembourg Prime Minister Jean-Claude Juncker said on Monday he is stepping down from his post coordinating policy among euro zone finance ministers in part due to frustration with Germany suggesting it is paying for the euro zone’s crisis on its own.

Eurogroup Chairman and Luxembourg's Prime Minister Jean-Claude Juncker attends a conference organised by EU40, a network of members of the European parliament addressing those under 40 years of age, at the European parliament in Brussels March 27, 2012. REUTERS/Yves Herman/Files

Asked if French and German attitudes were among the reasons for quitting when his term as Eurogroup chairman expires in June, Juncker, at a panel discussion in Hamburg, said: “Yes.”

He said he did not approve of the two largest countries pretending they were alone in determining the 17-nation currency bloc’s policy.

“It’s part of the problem that Germany pretends it has to foot the bill for all the other countries. That’s massively insulting to the others,” Juncker said, stressing that out of the 17 euro zone countries seven had lower debt levels than Germany.

Juncker’s post is one of four coveted jobs that European governments are currently wrangling over but on which they have postponed a decision until after the second round of the French presidential election on May 6.

Juncker has said he does not want to stay on after his term expires in June, citing time constraints. He also has complained of ill health.

Juncker praised German Finance Minister Wolfgang Schaeuble, coveted as a potential successor, saying he had the right qualities for the job. “He has my full support,” Juncker said.

However, Germany should stop pretending it was the euro zone’s model pupil, Juncker said.

Germany, whose economy has largely shrugged off the two-year old euro zone debt crisis, has relentlessly pushed for structural reforms such as labour market policies and fiscal consolidation, as the key to forstering growth and employment across the euro zone, triggering high unemployment and poverty in some countries.

Juncker said the euro zone needed economic growth but not at the expense of budget consolidation. The painful tax hikes and spending cuts across the euro zone have triggered a debate that the emphasis should shift to growth-boosting measures from tough German-driven austerity.

Juncker added his voice to calls to bolster the European Investment Bank (EIB), saying it was conceivable to strengthen the European Union’s investment arm with a capital increase of 10 billion euros.

European leaders, including German Chancellor Angela Merkel and EU Economic and Monetary Affairs Commissioner Olli Rehn, have proposed boosting the fund.

Reporting by Jan Schwartz; Editing by Michael Roddy

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