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22 Dec, 2010, 05.27AM
Bloomberg
Five steps to save the euro
LONDON: Another summit, another messy compromise. With the euro facing renewed crisis, and with Portugal, Spain , Belgium and Italy all under the same kind of pressure that forced Greece and Ireland into a bailout, the stage was surely set for a clear and decisive defence of the single currency.
And what did the European Union’s leaders come up with after high-level talks in Brussels?
A two-line treaty amendment. It’s crazy.
It might be the case that the euro isn't worth saving.
This column has certainly argued that it has turned into a bankruptcy machine. It would be better for the peripheral nations to get out now, and better in the medium-term for the EU as well.
But given that no one is contemplating that yet, it would surely make sense to come up with a credible plan for salvaging the euro. Boosting public spending in Germany, doubling the size of the emergency fund and creating clear economic rules for the euro area would be among the best places to start.
“Our determination is clear,” said the EU president Herman Van Rompuy in a statement at the close of the Brussels meeting. “The heads of state and government of the euro zone stand ready to do whatever is required to ensure the stability of the euro zone as a whole.”
Tough words. The trouble is, words aren’t enough. When it came to action, this had all the force of a pea-shooter when a cruise missile is needed. All the EU actually managed to come up with was a minor treaty amendment to create a permanent debt-crisis mechanism in 2013. It amounted to less than 50 words. It was a feeble and timid response.
.
Boost public spending
Bigger fund
Create euro bonds
Start rewriting the treaties
Prepare for austerity
.
Bloomberg
Five steps to save the euro
LONDON: Another summit, another messy compromise. With the euro facing renewed crisis, and with Portugal, Spain , Belgium and Italy all under the same kind of pressure that forced Greece and Ireland into a bailout, the stage was surely set for a clear and decisive defence of the single currency.
And what did the European Union’s leaders come up with after high-level talks in Brussels?
A two-line treaty amendment. It’s crazy.
It might be the case that the euro isn't worth saving.
This column has certainly argued that it has turned into a bankruptcy machine. It would be better for the peripheral nations to get out now, and better in the medium-term for the EU as well.
But given that no one is contemplating that yet, it would surely make sense to come up with a credible plan for salvaging the euro. Boosting public spending in Germany, doubling the size of the emergency fund and creating clear economic rules for the euro area would be among the best places to start.
“Our determination is clear,” said the EU president Herman Van Rompuy in a statement at the close of the Brussels meeting. “The heads of state and government of the euro zone stand ready to do whatever is required to ensure the stability of the euro zone as a whole.”
Tough words. The trouble is, words aren’t enough. When it came to action, this had all the force of a pea-shooter when a cruise missile is needed. All the EU actually managed to come up with was a minor treaty amendment to create a permanent debt-crisis mechanism in 2013. It amounted to less than 50 words. It was a feeble and timid response.
.
Boost public spending
Bigger fund
Create euro bonds
Start rewriting the treaties
Prepare for austerity
.
