The eurozone\’s screwed then

Mrs Merkel said treaty changes would \”make clear that we must take steps toward a fiscal union to express the conviction that we know policies must be more closely coordinated if you have a common, stable currency.\”

\”It is political confidence in Europe that has been lost – we can only win it back politically,\” she added.

No love, it\’s a financial, banking, problem now, not a political one.

7 comments on “The eurozone\’s screwed then

  1. All problems that big are political ones. They almost always fall into other classes and specialities as well.

    But Falco’s point applies to – it is just a specialist restatement of the axiom (and REME motto) “if all you have is a hammer, all problems look like nails.”

  2. “make clear that we must take steps toward a fiscal union to express the conviction that we know policies must be more closely coordinated if you have a common, stable currency.” [Merkel]

    Even if it were entirely a political problem, expressing vaguely wishy sentiments, whether in treaty form or not, won’t resolve it. Merkel also never explains what could sensibly enforce “coordination” if, as with the current euro agreements on debt levels, countries for one reason or another simply do as they like or must.

  3. Also, isn’t it inconsistent to “take steps toward a fiscal union” but at the same time rule out euro-bonds? Won’t any effective fiscal union end up issuing euro-bonds? Furthermore, won’t the creditors in the union end up paying for the debts? The German political position is hopeless.

  4. Merkel is completely out of her depth.

    To be fair, most politicians would be, but she has been reduced to sticking her fingers in her ears and shouting lalalalalal I can’t hear you.

  5. It’s all going to be fine you know as long as we keep on doing these rain dances. Yes, we have an excellent irrigation system all ready to use, but we can’t agree who should pay for the water…..so we pray for rain in ever more elaborate ways. Wonderful logic.

  6. All they keep doing is delaying the need for spendthrift nations and people and the reckless lenders who lent them money from accepting the consequences of their decisions.

    On the news they keep talking about the *need* to enable member states with high bond rates to circumvent their national lack of credibility by issuing eurobonds from the centre at a lower rate. This will perpetuate the problem, institutionalise it even, rather than deal with it.

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