Haven’t we been here before?
Under the pressure of financial crisis and with the euro currency at stake, the two key leaders of the euro zone said Monday that they would together push to remake the European Union into a more integrated political and economic federation, with tight legal restraints on how much debt national parliaments can issue.
German Chancellor Angela Merkel and French President Nicolas Sarkozy, meeting here at the start of a crucial week that will end with a European Union summit meeting on Thursday and Friday, called for amendments to European treaties that would include centralized oversight over budgets and automatic sanctions against countries that violate firmer rules on deficits…
The automatic sanctions – or threat of – are the most Neverland part of the proposals, of course. Who expects a country unable to pay sufficient bills to pay a fine for not paying those bills?
“We want to make sure that the imbalances that led to the situation in the euro zone today cannot happen again,” Mr. Sarkozy told a joint news conference. “Therefore we want a new treaty, to make clear to the peoples of Europe that things cannot continue as they are.”
Mrs. Merkel, warmly embracing the French president despite their often testy relationship, insisted that the euro zone must be effectively reestablished under a different set of rules. “We want structural changes that go beyond agreements. We need binding debt brakes,” she said…
The two leaders are aiming to develop a clear consensus among the other members of the euro zone that they will push ahead with a new treaty. They appear to be calculating that such a signal of solidarity will be enough to persuade the European Central Bank, the only institution in Europe with enough financial firepower to defend the ability of member states to raise money on bond markets, that it has enough political cover to move more aggressively to protect vulnerable countries like Italy and Spain.
RTFA for the details, anecdotal hogwash, hopeful analysis – all of which ignores the fact that standards meant nothing for the several nations brought into the EU in the first place though they didn’t really meet standards. Creative analysis, voodoo economics were used to justify including countries like Greece into the club although they were miles and years away from realistic qualification.