16/08/2012
In the years to come, it would not surprise me if we looked back on this summer as the time when the single currency passed the point of no return in its journey to obscurity.
Throughout its brief life, what has sustained the euro has been the doctrine of ineivitability, but all that has gone, lost in the recriminations and squabbling of (largely) German politicians who dared to question the great secular religion of the age.
Latest of those trying to shore up the breach, however, is a blast from the past in the form of
Gerhard Schröder, one time chancellor and earnest supporter of the project.
Bringing him out of retirement are the attacks of the FDP and the CSU against Greece. The "bashing" must stop immediately, he says. This is not conducive to the European idea and will not help the euro. "The continuation of Greece in the euro area is not easy but is possible, provided that there is solidarity and common effort", he insists.
In the German mainstream, though, a battle is shaping up between Merkel's coalition and the SPD, the representatives of the one arguing for a "stability union" while accusing the Socialist challengers of favouring a debt or "liability" union.
Enter SPD budgetary policy spokesman of the parliamentary group, Carsten Schneider, who is trying to
turn the argument by suggesting that, whether left, right or centre, all parties are already lumbered with a debt union.
Says Schneider, talking to the
Berliner Zeitung, the total exposure far more than the â¬310 billion Greek bailout funds, as the operations of the ECB have to be underwritten as well â the so-called "target II" balances, which Germany stakes to the tune of 27 percent. And there, Schneider estimates, the German liability now stands at a "breathtaking" â¬1 trillion.
Schneider
also questions the assumptions on which the austerity programmes are based. If the Spanish package was transferred to Germany, he says, on a
pro rata basis, that would require savings of about â¬250 billion, roughly the entire tax revenue of the federal government.
Such austerity would not be feasible for us, says Schneider. There would be a social uprising. The last major austerity package Merkel presented, in 2010, was only â¬80 billion, and that was spread over several years. And even now it has only been half implemented.
On that basis, the Spanish austerity plan is not realistic, and the Greek plan even less so, being much more extreme, at least on paper. To halt the death spiral, says the
Irish Independent, Greece must leave the euro. The pain cannot go on much longer.
