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November 20, 2011
The policy of Europe's leaders policy of doing just enough, just in time, is not working. Beijing will not bail Europe out, nor will the IMF. The euro is likely to need a fiscal fund, or something that functions very much like one. You cannot have a single currency without a treasury, or a fully empowered central bank behind it.
Germany does say more Europe --German plans are for a revision of the Lisbon treaty to provide a legal basis for tough new fiscal rules for the eurozone. According to Angela Merkel this means that:
It is time for a breakthrough to a new Europe. The task of our generation is to complete economic and monetary union, and build political union in Europe, step-by-step … That does not mean less Europe, it means more Europe. If Europe is not doing well, Germany cannot do well, and Europe finds itself in perhaps its most difficult hour since world war two.
Germany should lead the way towards this "European domestic policy" with measures including automatic sanctions on eurozone members that cannot or will not keep their fiscal houses in order and a financial transactions tax at least in the euro area.
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"Deutschland, Deutschland über alles..."