A giant of European integration, France’s Jacques Delors, who headed the European Commission between 1985-94 and is considered the founding father of the euro as a single currency for Europe, is not impressed by the eurozone reform proposed at a Franco-German summit in Paris (August 17).

“Open your eyes,” he said in an interview with Swiss and Belgian reporters in Brussels, “the EU and the euro are on the edge of the abyss.”  He suggested that only way to avoid falling in is for EU member states to either accept a more robust economic partnership or transfer more powers to Brussels.

Financial observers say the agreement reached between French President Nicholas Sarkozy and German Chancellor Angela Merkel was a political rather than a market-based solution, precisely in order to avoid any transfer of sovereignty.

Sarkozy and Merkel pledged to lay the groundwork for future fiscal union but stopped short of increasing the EU’s Financial Stability Fund (EFSF) to help rescue fragile economies.  They also said that a proposal for creating Eurobonds to finance future projects would have to wait.

Delors blamed EU leaders for Europe’s current sovereign debt crisis. “Who is guilty,  Greece alone? No, that would be too simple. The responsibility lies with the finance ministers of the eurozone for not calling the authorities in Athens to account… Why was Spain allowed to increase its private debt or Ireland to unduly favor its banks?” 

“I am convinced that the general impoverishment resulting from leaving the single currency will exceed the benefits of remaining in it…The euro is a collective adventure. It was mismanaged, so correct it – but stay together,” Delors advised.

“The current risk is that the 17 member countries of the euro, on which all attention is focused, are paralyzing the European project.”

Jacques Delors was in Brussels with his daughter Martine Aubrey, the Socialist Party candidate for the French presidency in 2012, and is expected to be a key advisor during her campaign.