PARIS (Reuters) - The possibility of Britain voting to leave the European Union must not prevent euro zone countries from deepening their economic integration in the months ahead, French Finance Minister Michel Sapin told Reuters on Thursday.
In an interview, he also said that current financial market volatility is not justified by the economic conditions.
In a previous stint as finance minister, in 1992, Sapin witnessed firsthand the humiliation of his British counterpart Norman Lamont, when London was forced to leave the European exchange rate mechanism, the precursor of the euro.
“I think that it was the burn from that expulsion that has left scars,” he said, warning against complicating London’s task of winning voters support for remaining in the EU.
In a package of proposals aimed at persuading Britain to remain in the EU, European Council President Donald Tusk has offered London a way of slowing down euro zone legislation that it does not like while being careful not to give it a veto.
“It’s perfectly legitimate that we take each side’s interests into account, but nothing must block the deepening of economic and monetary union in the coming years,” Sapin said.
With France and Germany planning proposals on strengthening the euro zone before the end of the year, Sapin said more coordination was needed, specifically on structural reforms.
But the priority was not setting up a common euro zone finance ministry as the German and French central bank heads suggested earlier this week, Sapin said.
“It’s time to move in the coming months by taking strong initiatives,” he said, adding France was in favour of changes that did not require rewriting EU treaties in 2016 or 2017.
Brought to the brink of breaking up over Greece, the euro zone’s debt crisis forced its members to strengthen in particular supervision of the banking sector. But some officials, particularly at the European Central Bank, say that much remains to be done to avert any future crises.
Sapin said he was confident that the Greek government would live up to its reform promises with a review of its efforts underway, which has to be completed before talks on easing its debt burden can be launched.
With financial markets once again gripped by a bout of volatility, Sapin said that the euro zone was this time much more resilient due to members’ reform efforts in the recent years.
Finance ministers from the Group of 20 economic powers would address the issue of volatility at a meeting this month in Shanghai and stress that markets must reflect underlying economic fundamentals.
“Today’s volatility does not seem very legitimate to me. There’s a yoyo effect that doesn’t reflect real trends in the world economy,” he said.
Fears of a Chinese slowdown have rocked financial markets in recent days, with speculation that Beijing may devalue the yuan in a bid to stimulate its economy.
Additional reporting by Yann Le Guernigou and Myriam Rivet; editing by Alister Doyle, Larry King