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The impact of the coronavirus pandemic on the eurozone economy has been significant, according to the European Central Bank (ECB). The ECB’s May 2020 Financial Stability Review suggests that the euro governments’ vast fiscal response to the pandemic could raise questions over their ability to repay debts, and could revive the threat of countries leaving the single currency. The ECB said: “Should measures taken at the national or European level be deemed insufficient to preserve debt sustainability, the market assessment of redenomination risk might rise further.”
“Redenomination risk” refers to the danger of some countries quitting the euro or the single currency collapsing altogether.
Despite the severity of the crisis, in an interview with Express.co.uk, Italian MEP Antonio Maria Rinaldi revealed that EU chiefs have refused to cut their exorbitant salaries.
Accusing President of the European Commission Ursula von der Leyen of “disgusting” behaviour and wasting taxpayers’ money, Mr Rinaldi said: “Even if she decides to cut her salary by 20 percent, she would still have more than enough money to buy her groceries.
“She earns around €33,000 (£29,000) a month!
“Sadly, right now, many European citizens cannot say the same thing.”
Over the years the bloc has often been at the centre of scandals and controversy, in particular over the waste of taxpayer’s money.
According to a 2011 report by The Daily Express, the bloc set up three watchdogs in order to oversee the European economy in the hope of preventing another financial crisis nine years ago.
Critics feared the new institutions, which officially came into being on January 1, 2011, would have increased EU meddling in British business and swamped the City of London with a tide of regulation.
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The watchdogs reportedly cost EU taxpayers £35million in 2011, rising to around £58million in 2014.
The bodies employed 150 staff split between headquarters in London, Paris and Frankfurt, with the total payroll rising to around 300 three years later.
Former Conservative MP Douglas Carswell said at the time: “We promised to scrap quangos, but while we remain a member of the EU, quangos are foisted upon us and there is nothing we can do.”
An overhaul of the EU financial regulation system was launched in 2010, following the debt crises in Greece, Ireland and other eurozone countries.
Under the framework, a European Systemic Risk Council was set up to monitor threats to financial stability and three watchdogs – covering the banking, insurance and securities markets – were also established.
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Former Chancellor George Osborne agreed to the move at a summit in December, 2010, after winning assurances that the new bodies would have not had direct supervisory powers.
Despite the concessions, critics feared yet another expansion of regulatory control by the EU.
When the watchdogs were announced in 2010, now EU’s chief Brexit negotiator Michel Barnier, who at the time was internal market commissioner, hailed the move as a “political consensus on the creation of a European financial supervisory framework”.
He said: “It’s is a crucial stage in our effort to better protect our economy and our citizens in the future.”
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