The world needs the euro. If there was favourable mood music surrounding the construction of the European project these days and if euroscepticism wasn't so fashionable, then the international reaction to the euro crisis would be interpreted within the EU as a positive sign, demonstrating how well the euro operates because the whole world is concerned about the euro's woes. There are many signs of this. The US treasury secretary travelled over to Europe especially to attend a meeting of his EU colleagues to discuss the euro, where he urged the EU to bail out Greece and stimulate economic recovery. China is buying the treasury bonds of struggling eurozone nations. Emerging economies as a whole have said they are willing to follow China's example and emerging economies' banks have provided dollars for the European banking system. Most of the above take the form of promises with strings attached which make them more rhetorical than real, yet the significance is clear - the whole world and his dog needs a solid euro to stop the world financial system from implosion.
UK concerns. Even the United Kingdom, an EU country that rejects the euro, needs the single currency to function property and is demanding that the eurozone deals property with Greece. One of the strongest arguments for bailing out Greece, irrespective of the cost, comes from Martin Wolf, Editorialist at the Financial Times, for whom Greece being kicked out of the euro is out of the question. In his opinion a huge lightening of its debt burden is necessary. The eurozone must bring this about by an aggressive economic expansion drive; immediately easing the ECB's monetary policy; supporting countries whose debts are not “liquid”; and ensuring a huge lightening of the debt burden, starting with Greece.
Why does the City of London believe that it would be crazy to consider the idea of countries leaving the eurozone? Wolf explains that such a move would jeopardise the European single market and the cooperative fabric of Europe across the board. How odd that such a comment comes from the one country that has rejected the euro. Surely the fact that the UK rejected the euro in the past would also have “jeopardised the European single market and the cooperative fabric of Europe across the board”? Other sections of Wolf's argument explain the British position. He points out, for example, that US banks have €478 billion invested in Greece, Portugal, Italy, Spain and Ireland. Why should the Continent deal with this? The British prime minister said recently that the eurozone's problems are a danger to the UK and the global economy, and those responsible for the eurozone have to take immediate action to consolidate defence of the euro and solve the debt crisis, because the collapse of the euro would be very bad for the UK. David Cameron rejects the idea of a referendum on the question of the UK leaving the EU, which absorbs 40% of British exports.
Effective and generally accepted compromises. Faced with the avalanche of advice, carps and criticisms, the strong stance taken by the head of the Eurogroup, Jean-Claude Juncker, is welcome. He demands autonomy for the eurozone to decide for itself how to deal with its problems, adding that the 17 eurozone nations will do all that is necessary to ensure stability. Juncker never had much time for the Euro Plus Pact, too full of empty phrases for his liking, but he takes a different line on the new rules, which provide genuine euro-management tools that took months to negotiate, with the Council of Ministers and European Parliament examining every detail, and the European Commission acting as mediator when required. Compromises had to be made, of course, as with any negotiations and there are therefore aspects that are not to everyone's taste, and which come in for criticism. Overall, however, the division of powers among the EU institutions and the euro management procedures are felt to be balanced. Some of the criticisms and reservations made by the Left are understandable, but in a democracy it is the party with the most votes that decides. A key aspect of eurozone management has now been agreed, however, and the eurozone authorities naturally see themselves as the people responsible for managing it, while at the same time collaborating on a large scale at international level.
The institutional debate. In this connection, the division of powers and responsibilities within the eurozone is under discussion, following Barroso's strong argument in favour of the Community method and the powers of the European Commission. I will discuss this highly controversial question tomorrow.
(FR/transl.fl)