Euro will survive at the cost of stagnation, loss of democracy, Klaus says

Prague, Nov 24 (CTK) - The euro will survive the current problems, but at the price of establishing a budgetary and political union, which will lead to a loss of democratic principles, Czech President Vaclav Klaus said during a debate at the University of Economics in Prague yesterday.

This will be accompanied by a long-term economic stagnation in Europe, said Klaus.

"The euro will continue to exist and I have no reason to speculate whether in the same number of countries, that is not important," he said.

"But it will be at the price of large fiscal transfers and intercontinental distribution, which means an establishment of the European Fiscal Union (EFU) and departure from the principles of democracy, that is to the advantage of the European Political Union (EPU)," Klaus said.

"All this will be paid for by a long-term stagnation of European economy," he added.

It is possible that the budgetary union as well as the political union will work, according to Klaus.

"But without democracy and only at the price of establishing an authoritarian European central government," he added.

But Miroslav Sevcik from the Faculty of National Economy at the University of Economics expects that the eurozone in its current form will cease to exist in 10 to 15 years.

"An optimal solution would be a dismantling of the existing eurozone and preparation of a new economic project in which only the so-called hard core, that is Germany, Austria, Belgium, the Netherlands and Luxembourg, would be present," Sevcik said.

Klaus said the idea that the eurozone will fall apart is only an illusion.

"European politicians are ready to pay any price for sustaining the project of the euro," he said.

Klaus pointed to the fact that nothing else but a gradual establishment of a common budgetary policy is being discussed at EU summits at present.

But the establishment of the so-called EFU will be a long process during which budgetary sovereignty will be increasingly taken away from countries.

Klaus also repeated that the project of the euro is a risky political project in the first place, and only then an economic project, and during its establishment simple economic arguments and theories were not taken into account.