"The current crisis has uncovered the deficiencies in the construction of EMU (European monetary union) mercilessly," was the uncharacteristically frank admission from Angela Merkel and Nicholas Sarkozy in a joint letter to the European Council President on the eve of the December 9th summit. What is typically exasperating about this telling diagnosis of the euro’s ills is that the treatment that the heads of government recommended at the close of the summit – namely tougher budgetary rules with fines – neither addresses the deficiencies in the construction of EMU which the leaders referred to, nor offers any prescription for ameliorating the severity of the current crisis.
This yawning gap between rhetoric and reality, between identifying the seriousness of the crisis and delivering an adequate solution has plagued the euro zone for the last two years as it has wrestled unsuccessfully with the Greek debt crisis. Indeed, the failure of the December 9th summit to produce a “breakthrough of sufficient size and scope to fully address the euro zone’s financial problems” was one of the reasons cited by Standard & Poors in its recent decision to downgrade over half of the bloc’s 17 countries, including France.
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Posted on January 22, 2012
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