12 July 2012 15:30 [Source: ICIS news]
However, for the euro system to work, eurozone members in southern
“We can achieve a stable euro if reasonable common fiscal policies are being pursued, and if all eurozone members continue to pursue the path towards consolidation seriously and consistently,” VCI said
Germany’s chemical industry supports the German government's policy approach of “promote and demand”, that is, of granting aid but demanding that receiving countries fulfil certain fiscal conditions in return, the group said.
VCI warned said that agreements reached at the EU’s recent summit could soften this policy approach.
In particular, the conditions under which the European Stability Mechanism (ESM) will grant aid to directly recapitalise banks were not stringent enough, thus raising risks that the ESM may run out of funds and the fiscal pact may fail, the group said.
At the same time, VCI welcomed the summit’s move to further promote growth and employment in the EU, it said.
The euro eliminates currency exchange risks, brings lower inflation and interest rates, and stimulates the common market, it said.
A failure of the common currency would result in incalculable risks and costs, it added.
In related news on Thursday, VCI said that
However, despite the decline, VCI maintained its previous forecast of zero year-on-year production growth for 2012, saying that full-year chemical and pharmaceutical production will still be level with 2011 production.
VCI represents the interests of about 1,650 Germany-based chemical firms.
Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog
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