The European Commission's Directorate-General for Competition released last August a review of guarantee and recapitalisation schemes in the financial sector in the current crisis. In this review, the Commission emphasised the need for Member States to ensure that there were exit strategies in place for the assistance they provided. In other words, Member States should ensure that they were providing this assistance only to re-heat the economy, as a means of moving away from the crisis more smoothly. Once the economy would grow again, Member States would then pull out.
Now that we are beginning to see signs of economic improvement, the European Liberal Youth (LYMEC) believes that Member States should bear these recommendations in mind and prepare to phase away the aid they have provided to the financial sector. The levels of public debt in the EU are indeed a cause of concern, and the Commission has already started to initiate excessive deficit procedures against several Member States.
LYMEC President Aloys Rigaut stated: 'The economic crisis should not be used by the financial sector as a means of becoming permanently 'hooked' on public assistance. Member States are leaving increasing levels of debt for future generations to bear, and this is already enough a burden. This is a dangerous mortgage put on our public finances, and it is time to think about a way out', adding: 'This goes together with moving away from creating national barriers and creating the necessary conditions for a real European banking sector, adequately regulated at European level. It is essential to prevent distortions, foster competition and thereby improve consumer protection'
