To Save Euro, 'United States of Europe' Must Be Formed
"This
idea of a federal leap is widely shared in Europe, including in countries like
Poland, which isn't part of the eurozone. Except in Germany - and therein lies
the problem. As soon as anyone talks of federalism, Berlin puts on the brakes.'
The crisis in the euro zone is
due to a lack of economic governance: a single currency with seventeen
sovereign economic and fiscal policies cannot work for very long. The markets understood
this before the politicians, maintaining that without the creation of a
"United States of Europe," they will need to return to their national
currencies. Nicolas Sarkozy has admitted privately for months: only a federal
leap will save the euro, even if his thoughts on the subject are not yet very
well developed (especially on the institutional level).
The "circle of
economists," an association of 30 senior French economists, issued a
solemn appeal yesterday in this direction.
"The sovereign debt
crisis that has swept across Europe requires unhindered responsiveness. That is
not the case today. Europe has certainly shown itself very committed, but its
capacity to react is neither quick nor effective enough. Hence the urgency of
having someone in charge, and for this reason, we support the proposal by the president
of the European Central Bank [ECB] and European finance
ministers."
The circle of economists also
advocates the creation of "eurobonds," that
is to say, public eurozone debt. On July 6, Lorenzo BiniSmaghi, a member of the ECB
executive board, also called for the issuance of bonds for Greece: "Member
States might transfer their rights of issuance to a supranational authority, which
would be set at limits to be determined by a council of ministers. With such a
system, Greece would never have been able to hide its deficits or go as deeply
into debt as it did in 2009 and during preceding years."
Regardless of this
unprecedented appeal and given the urgency of the situation, the MEDEF
(Movement of French Enterprises) has also argued for a "form of economic
federalism": Laurence Parisot on July 8 appealed
to the eurozone to have a "common approach on budgets, currency and debt
management."
This idea of a federal leap
is widely shared in Europe, including in countries like Poland, which isn't
part of the eurozone. Except in Germany - and therein lies the problem. As soon
as anyone talks of federalism, Berlin puts on the brakes. It is Berlin that has
insisted that the European
Financial Stability Facility [EFSF] be activated
only as a last resort and after a unanimous vote of the states, which would
delay its implementation and hinder its preventative role. Even worse: The German
right wants every national parliament to vote on every aid package, which risks
rendering both the EFSF and the future European
Stability Mechanism [ESM] largely ineffective. As
Bini-Smaghi has stressed, "the more we postpone a
decision, the more difficult it will be to agree to, because the measures needed
to calm markets and restore stability will have to be even stronger." For Bini-Smaghi, the rule calling for unanimity is
"clearly a failure."
But this crisis has shown
that nothing can be accomplished without, much less by against, having Germany in
the eurozone.
Posted
by WORLDMEETS.US
"But the German elite
wants to build Europe by applying the Old Testament (original sin, an eye-for-an-eye, a tooth-for-a-tooth), while the process can only be accomplished with the New
Testament (forgiveness of sins and mutual love)," says a tongue-in-cheek
Ulrike Guérot, who heads the European Council on
Foreign Relations office in Berlin, and who, along with Mark Leonard, has just
published a study entitled, The New German Question: How Europe Can Get the
Germany it Needs. In the case of the Greek crisis, he says this will pass with
the eurozone buying back Greek debt, which will wipe the Greek slate clean and keep
the country afloat.
"We have sinned together
and we must be forgiven together. If Germany follows the Old Testament, Europe
will never recover."
But, for the moment, Ulrike Guérot sees no "Messiah" who might convert
Germany.
