In a few hours, our European leaders will emerge from their meeting, with a, supposedly, comprehensive package by which to deal with the euro crisis. Personally, I am not holding my breath. It is not that such a package is hard to put together (goodness knows this blog has made a meal of the availability of simple solutions) but that the continuation of the crisis may be of great utility to the surplus countries.
Imagine for a second a science fiction twist to this story. Suppose that Mrs Merkel is offered access to a small electronic device featuring a red button. Press the red button and the crisis goes away instantly and at no cost to anyone; to the German taxpayer, the ECB, the peripheral stragglers etc. Question: Would Mrs Merkel press it instantly and enthusiastically? I doubt it very much!
Suppose she does. Before she enters the EU ‘synod’ tomorrow morning. All of a sudden, and despite everyone’s joy, Mrs Merkel will be just one leader amongst many. Relieved of the angst caused by the crisis, and the very real threat of being left behind by a resurgent Germany, Mr Sarkozy and Mrs Lagarde will find themselves in a position to speak their minds. The same will apply to Mr Tremonti and Mr Yuncker you will not be backwards in going forwards with their proposal of an homogeneous eurobond by which to rationalise the debt distribution within the eurozone.
Compare and contrast this situation with what will, in fact, go down tomorrow (in the absence of the red button): Mrs Merkel, as representative of the surplus countries which are uniquely situated to abandon the euro ship (if need be), will exercise complete control over the agenda. Put bluntly, the French, Tremonti, Yuncker, Zapatero will not get even a smidgeon of a chance to table any proposal, for mere discussion, that irks Mrs Merkel. Allowing the euro crisis to go on a little more, by not pressing the red button (even if available), seems to me a great temptation for the surplus countries; a small price to pay for immense power bestowed upon them.
Some argue that Mrs Merkel may have a point in not wishing for the crisis to go away quickly and painlessly, especially for the ‘profligate’ periphery. That such a speedy resolution would encourage the South to recommence its borrowing-and-spending antics. Two points need to be raised here: First, this train of thinking assumes that the crisis can be prolonged while kept under a leash. This is highly irresponsible thinking, I submit. Secondly, such an attitude is the death knell of the very notion of European democracy. By accepting the utilisation of the crisis to prevent a robust discussion at the level of heads of state and ministerial councils, we are, effectively, acquiescing to a feudal Europe that puts paid to the European Ideal as a Commonwealth of nations.
At first, when everyone was saying that the euro crisis is a sovereign debt crisis, I was retorting by claiming that it is, mostly, a banking crisis. Now, I have changed my tune somewhat: It has become a fully fledged Crisis of European Democracy!