Rehn: critics of Cyprus bailout are "comparing apples with pears and coming up with oranges."
During a debate in the European Parliament this morning, Olli Rehn, the European Commission’s economic chief, got roughed up by MEPs lambasting the handling of the €10bn Cypriot bailout by the so-called “troika” of international lenders, of which the Commission is a member.
Jean-Paul Gauzés, the French conservative who led the debate for centre-right parties, called it “disastrous”; his centre-left counterpart, Austrian Hannes Swoboda, dubbed it “neo-colonial” and called on Rehn to disband the troika altogether.
In his response, Rehn chose instead to focus on remarks by Philippe Lamberts, a Belgian Green, who questioned why the size of Cyprus’ funding needs had risen by €6bn over the nine days between the first botched bailout agreement and the second, final deal struck the following weekend:
A month before this famous weekend, €17bn was necessary in order to render Cypriot debt sustainable. Now we found at last week it’s €23bn. Just a slight mistake, a comma here or there. Those who carry out the forecasts and estimates for you, are they incompetent…or was it: well, we’ll play around with the figures to make sure reality looks better than it really is?
Rehn's remarks in London last month appear to be the crux of the dispute with Krugman.
Just when you thought the war of words between Nobel prize-winning economist Paul Krugman and European Commission economic chief Olli Rehn had died down, the normally level-headed Finn has hit back at the Princeton academic in an interview with his home country’s largest newspaper, Helsingin Sanomat.
In the interview, Rehn in essence accuses Krugman of lying, insisting the economist criticised him for things he never actually said. “Krugman put words in my mouth that would be termed in the Finnish parliament a ‘modified truth’,” Rehn said in the interview. The newspaper helpfully notes that “modified truth” is the Finnish parliament’s polite terminology for lying.
Rehn also takes a little dig at Krugman’s use of Monty Python to defend himself. After a deluge of attacks from European Commission officials last week, Krugman noted he never made personal attacks on Rehn – only on his policies – writing: “I never asserted that Mr Rehn’s mother was a hamster and his father smelt of elderberries.”
To the uninitiated, the line is from a famous scene in Monty Python and the Holy Grail, where a French soldier played by John Cleese taunts King Arthur, played by the late Graham Chapman, with those very words.
“We should perhaps be grateful to Mr Krugman for his generosity in promising at least not to compare my recently-deceased mother to a hamster,” Rehn deadpanned in the interview. Read more
Rehn during last month's presentation of the Commission's winter economic forecasts.
Following yesterday’s barrage from the European Commission, Princeton economist Paul Krugman today ratcheted up his criticism of the way policy is made in Brussels, arguing that the attacks demonstrate EU officials are more “focused on defending their dignity from sharp-tongued economists” than on getting economic policy right.
Krugman’s latest fusillade, titled “Of Cockroaches and Commissioners”, notes that despite the occasionally personal nature of the attacks against him from the Berlaymont, he never made a personal attack on Olli Rehn, the Commission’s economic chief:
What you would never grasp from those outraged tweets is that all my criticisms have been substantive. I never asserted that Mr. Rehn’s mother was a hamster and his father smelt of elderberries; I pointed out that he has been promising good results from austerity for years, without changing his rhetoric a bit despite ever-rising unemployment, and that his response to studies suggesting larger adverse effects from austerity than he and his colleagues had allowed for was to complain that such studies undermine confidence.
Nobel prize-winning economist Paul Krugman, during a visit to Brussels in 2009.
Nobel prize-winning economist Paul Krugman has in recent weeks emerged as something of a bête noir for EU economic chief Olli Rehn, singling out the understated Finn as the symbol of the austerity-led eurozone crisis response that Krugman blames for exacerbating Europe’s economic recession.
Last week, after “browsing through the collected speeches of Olli Rehn”, who he declares “the face of denialism when it comes to the effects of austerity”, he criticised the European Commission vice president for arguing that budgetary tightening is the reason for the recent eurozone market calm, when Krugman believes it was more European Central Bank action.
That followed a particularly nasty attack a few days earlier at what Krugman labelled a “Rehn of Terror”, saying that Rehn’s repeated predictions that economic growth was returning was misleading – and taking Rehn to task for a letter to EU finance ministers in which he said the recent academic debate over austerity and growth “has not been helpful”. Read more
Timo Soini, the True Finns leader, is in a face-off with his fellow Finn, the EU's Olli Rehn.
It’s been a rough few weeks for Olli Rehn, the European commissioner in charge of economic affairs.
Last month, a Belgian minister lashed out at him for demanding the new government cut up to €2bn from its 2012 budget. Then he was forced to spend all of Monday night and Tuesday morning locked in a 14-hour session with eurozone finance ministers negotiating Greece’s bail-out. And today he had the unenviable task of announcing the eurozone would likely return to recession this year.
But if you really want to make the mild-mannered Finn angry, it appears you have to go another route: compare him Nicolay Bobrikov, the Russian general who ruled Finland in the early 20th century, before it gained independence. Read more
Finn Olli Rehn, last week in Davos, has been seen on Finnish media by 45% of his fellow countrymen.
In Brussels, being a member of the European Commission, the EU’s executive branch, is about as high as an official can climb in the eurocracy. But just how well are those Brussels luminaries known back in their home countries?
Thanks to the commission itself, we now have a good idea. According to a telephone survey conducted by Eurobarometer – the results of which haven’t been published, but were presented to commissioners during a meeting Tuesday – the best-known is Finland’s Olli Rehn, the economic commissioner who has been in the press almost constantly thanks to the eurozone crisis. He also contemplated running for president of Finland last year, which undoubtedly helped boost his score.
According to the survey, obtained by Brussels Blog, 45 per cent of Finns said they had seen or heard Rehn in the media, far ahead of the rest of the commission – including its president, Portugal’s José Manuel Barroso, who finished 9th with 31 per cent of Portuguese respondents saying they’ve seen the former prime minister on local media.
At the bottom of the list were commissioners from two of the largest member states: France’s Michel Barnier, who only 8 per cent of French respondents said they had heard or seen, and Britain’s Cathy Ashton, who came in at 16 per cent.
The complete list after the jump. Read more
New York Stock Exchange on August 4, 2011. Image by AFP
In a sign of the severity of this week’s market turbulence, Olli Rehn, Europe’s economics commissioner, has cut short his holiday and will be back in Brussels today. Rehn is to address the press corps at midday – presumably to undo some of the damage caused by an explosive letter penned by his boss, José Manuel Barroso, the European Commission president.
In his letter – which was sent to the eurozone heads of government on Wednesday, but released to the press on Thursday – Barroso acknowledged that the big decisions taken at a eurozone summit on July 21 were not having the intended effect on financial markets. He also called for a “rapid reassessment” of the eurozone’s €440bn bailout fund just two weeks after leaders had armed it with new weapons following a torturous, months-long debate. Read more
Olli Rehn, the European commissioner for economic and monetary affairs
The debate in the Greek parliament has begun, and pressure is building ahead of the key meeting of eurozone finance ministers on Sunday which – in the event of parliament’s passage of a new €28bn austerity plan – will both approve a quick €12bn in aid to Athens and set up the outlines for second Greek bail-out package. Read more
One of the unwritten rules of a financial panic seems to be that the more severe a crisis is, the more scripted and repetitive public officials become. Read more
When they announced their provisional rescue package for Greece on Sunday, European officials pointed not only to its size – at least €30bn- but also its details. For euros and details are what the markets have been demanding these last frustrating weeks. Read more