22/05/2012
With the "informal" Spring European Council scheduled for this week â a meeting when, traditionally, economic affairs are discussed â the euro is entering sharply political territory, while the "colleagues" are struggling to put a lid on a crisis which is spiralling out of control.
The favoured nostrum at the moment is "Eurobonds", debt issued jointly by eurozone countries, and jointly underwritten by them all â which means, in effect, Germany.
The issue was, according to
Reuters raised at the G8 summit by Hollande, and has gathered the support of Italy, Spain, and other Med countries. The EU commission is also very supportive of the idea, as this amounts to a further level of economic integration but, unsurprisingly, Germany is wholly opposed to picking up the tab for the rest of the eurozone.
Ambrose, in typical
Failygraph style, turns this into a
punch-up, telling us that the eurozone's "Latin Bloc" is in full revolt, calling the shots with Germany isolated.
Merkel's life is not made any easier by Jörg Asmussen - former deputy German finance minister and now German board member at the ECB. He is calling for a politically integrated eurozone that would split the EU of 27 in two, with the hard core joined in a "banking union, fiscal union, and political union".
In the inner core, this becomes a full political union, financed by a special fund taken from the EU budget and a financial transaction or Tobin tax levied in the eurozone,
Greece, meanwhile, with caretaker premier Panagiotis Pikrammenos at the helm, is
looking for ways to square the circle â staying in the eurozone while finding a formula that will encourage growth.
What comes over more generally, though, is that there is no consensus as to the line to take and, far from being top dog, Berlin is under siege from indigent southerners, and very far from being in control.
As this develops, what we are seeing is the 1989
Delors report revisited, a document that puts the commission firmly in the driving seat. The 42 pages are essential reading for any student of this crisis, so much of it relevant to the current situation and being offered as if it was something new.
But, as the struggle for a solution continues, some commentators are going to have to re-write their personal narratives, downgrading their German rhetoric. They will have to demote the federation to the status of yet another victim of a crisis in which nobody is in control and no-one has the first idea of how to resolve.
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