Jun 12 2012
The Euroland crisis is coming to a head. This week and the next few weeks will be very interesting. For a number of reasons.
Firstly, because we’ll see whether the members can jump over their own shadows and opt for the only solution to the crisis: a central government in Brussels.
Secondly, it’s interesting, for a strange reason: In times like these one needs the cleverest heads around the table. Unfortunately, Germany, the EU’s biggest country, has Wolfgang Schäuble at the helm, and the majority of voters do not realize that he’s not good enough for the situation – that he is part of the problem, not the solution.
So, we’ve arrived at the point now where the EU politicians have grasped that the crisis cannot be solved by throwing money alone at it. It also needs money. But, most of all, it needs a rethink of the EU as a project.
Should the EU become one, or should everyone (or some) go their own way, and the dream of a single economic and political entity be canned?
Let’s hope this question can somehow be answered relatively quickly. Otherwise, the Club Med countries will fall victim to political instability, and threaten to become ungovernable. Then we will be at the point which I made in the weeks after Lehman Brothers went bankrupt in 2008 – that the greed of bankers might still bring the free market idea to a fall (here).
The economist Nouriel Roubini warned in today’s Financial Times Deutschland (FTD) the EU is on the edge of a complete implosion and depression of 1930s dimension. The stakes are high. Big decisions must be made in these days.
And Schäuble? He spends his days fiddling with a new tax called financial transaction tax.