Eurozone needs ‘mother of firewalls’ to halt crisis

The debt-wracked eurozone needs to build “the mother of all firewalls” to prevent the crisis spreading throughout the bloc, the head of the Organisation for Economic Cooperation and Development (OECD) said on Saturday, ahead of a crunch G20 meeting.

“We still have to build the mother of all firewalls,” Angel Gurria, Secretary General of the OECD, told bankers ahead of the gathering of top ministers and central bankers.

“To be strong, we have to have a thick firewall, a tall firewall, a wide firewall, a very big firewall that is credible. Therefore, the more credible it is and the bigger it is, the less likelihood we will have to use it,” he said.

However, he said it was “frankly six months late, a year late.”

The issue of bolstering the eurozone’s defences against the crisis is set to dominate the G20 meeting and an EU leaders’ summit on March 1 and 2.

US Treasury Secretary Timothy Geithner on Friday used similar language to Gurria’s, saying Europe must build a “credible” firewall that is “bigger than they have today”.

Delay is costly
The International Monetary Fund and the United States, among others, have called on the eurozone to combine its current bailout fund, the European Financial Stability Facility (EFSF), with its permanent European Stability Mechanism (ESM) pot that is due to come into effect in July.

The EFSF started with 440-billion euros but now has around 250-illion after bailouts of Ireland, Greece and Portugal. The ESM has a maximum lending capacity of 500-illion euros.

Combining the two would therefore give a war chest of around 750-billion euros.

Gurria warned that delay was costly.

“Every day, the cost of the uncertainty and the cost of indecision is enormous. Every day, the attempt to substitute real resources with another summit and another speech, it just gets more and more expensive,” he cautioned.

“You can’t accuse Europe of being too fast.” –AFP

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Your M&G

Hi , To manage your account please click here.

You can access your digital copy of this week’s paper here.


READ IT IN FULL: Ramaphosa’s address on the extension of...

This is the full address given by President Cyril Ramaphosa on April 9

Meet the doctor leading Africa’s fight to contain the coronavirus...

Dr Matshidiso Moeti’s father helped to eliminate smallpox. Now she’s leading Africa’s efforts against the coronavirus

Stella set to retain her perks

Communication minister will keep Cabinet perks during her two months of special leave

Covid-19 grounds Nigeria’s medical tourists

The country’s elites, including the president, travelled abroad for treatment but now they must use the country’s neglected health system

Press Releases

Rahima Moosa Hospital nursing college introduces no-touch facial recognition access system

The new system allows the hospital to enrol people’s faces immediately, using artificial intelligence, and integrates easily with existing access control infrastructure, including card readers and biometrics

Everyone’s talking about it. Even Kentucky

Earlier this year South African fried chicken fast-food chain, Chicken Licken®, launched a campaign for their wallet-friendly EasyBucks® meals, based on the idea of ‘Everyone’s talking about it.’

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world