September 14, 2017 / 6:06 AM / 3 years ago

Austria's leaders reject Juncker's vision for euro expansion

People walk past election campaign posters of Social Democratic Party (SPOe) leader and Chancellor Christian Kern in Vienna, Austria, September 12, 2017. REUTERS/Leonhard Foeger

VIENNA (Reuters) - Austria’s Social Democrat Chancellor Christian Kern and conservative Foreign Minister Sebastian Kurz on Thursday rejected European Commission chief Jean-Claude Juncker’s vision to expand eastward the euro and a border control free zone.

In his annual State of the European Union speech, Juncker sketched out a vision of a post-2019 EU where some 30 countries would be using the euro, with an EU finance minister running key budgets to help states in trouble.

French, German and eastern European officials have made positive comments about the speech.

Kern, who is running against Kurz in parliamentary elections on Oct. 15, told ORF radio there was no point in expanding the euro and Schengen zone as long as tax fraud, the practice of contracting out work to lower-cost eastern European firms and breaches of limits for government debt had not been vanquished.

“It simply makes no sense to enlarge the euro zone before this has not been dealt with, because (otherwise) problems would get bigger,” Kern said, pointing to Greece’s struggle for years on the verge of bankruptcy as a prime example of such problems.

“If you like this is an expansion of the problems at the end of the day and not a plus in European cooperation. I think this concept is not thought through.”

Kurz also pointed to Greece as a bad example of including countries which do not fulfil the conditions for public finances the EU has set for itself.

“The euro and the Schengen zone is open for everybody, but only for those that fulfill the criteria... We must avoid another situation like the one in Greece,” Kurz said.

Reporting By Shadia Nasralla; Editing by Shri Navaratnam

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