ECONOMY

Costs should not be too heavy, Barroso says

The European Union should not impose costs on Ireland and Greece that are too difficult for those countries’ citizens to pay, European Commission President Jose Manuel Barroso said on Tuesday.

Barroso expressed worries about a division within Europe between countries with healthier balance sheets and those with weaker finances.

“[We] can’t impose costs which are very difficult for Greek and Irish citizens to pay,» Barroso said in Strasbourg.

He also addressed calls for taxing the financial industry to cover the costs of the financial crisis.

“Several member states oppose it fundamentally,» he said. «They will not agree.”

The Commission is instead assessing different options for the financial sector. For instance, it recently proposed the introduction of a common corporate tax base.

“The Commission has put forward a proposal and we will fight for it,» said Barroso.

Meanwhile, IMF Managing Director Dominique Strauss-Kahn denied press reports claiming that the Fund was trying to force Greece to restructure its debts and that it has lost faith in the country’s economic recovery.

“We are supporting the Greek government in its position that it doesn’t want a restructuring of the debt,? Strauss-Kahn told students at George Washington University late on Monday.

He said the challenge for Greece was to make its economy more competitive and that restructuring the country’s debt would not resolve that issue.

“To restore growth in Greece, you have to restore competitiveness. That is the real problem and what we’ve tried to address,? he added.

But Strauss-Kahn acknowledged that Greece could have been in a better situation if the IMF and the European Union were able to help earlier as the country battled a debt crisis last year.

“But for governance problems, political problems within the European Union, it took more time than necessary and of course, the later you do what you have to do, the worse it is,? the IMF chief said.