RPT-EU chief plays down comment on euro survival

Published 11/18/2010, 01:59 PM

(Fixes typo in paragraph 6)

BRUSSELS, Nov 18 (Reuters) - European Union President Herman Van Rompuy played down on Thursday his comment that the future of the 27-nation union was at stake because of debt problems experienced by some countries, such as Ireland.

Van Rompuy said in a prepared speech that his statement this week that the EU was "in a survival crisis" had referred to the situation from April and May when Greece's ballooning budget deficit brought the euro zone to the brink of a crisis.

He said his remark did not point to the current debt problems of Ireland. Since the Greek crisis, the euro zone had set up an emergency aid mechanism to help euro zone members.

He stressed that he was confident the euro zone would overcome its current problems and that he had never questioned the ability of the euro zone to survive. "I had hoped that the message would have come across, rather than a reference to 'survival crisis' of the spring, which was wrongly interpreted as also referring to the present situation," he said.

He said the euro zone's economic situation was generally sound, although divergences, such as between Germany and Greece, needed to be corrected.

"Economic growth in the euro zone is much stronger than most of us thought... The fundamentals of the euro zone are sound," he said.

He reaffirmed his determination to reform euro zone budget discipline rules so as not to allow its member states' deficits and debt levels to grow too much.

He confirmed that a team of the European Commission, the International Monetary Fund and the European Central Bank was working with the Irish authorities "to determine the best way to provide the necessary support to address market risks."

Van Rompuy told a Brussels think-tank on Tuesday that the future of the EU was at stake in the latest spasm of a debt crisis that began a year ago with Greece.

"We are in a survival crisis," he told the European Policy Centre. "We all have to work together in order to survive with the euro zone because if we don't survive with the euro zone, we will not survive with the European Union." (Reporting by Marcin Grajewski; Editing by Ron Askew)

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