Opinion

Sunday 17 December 2017

Ambrose Evans-Pritchard: Angela Merkel’s Eurobonds lite is the start of the slippery slope towards dept pooling

German Chancellor Angela Merkel. Photo: Reuters
German Chancellor Angela Merkel. Photo: Reuters

NO, Germany has not agreed to a "banking union". It has not agreed to mutualise the costs of bank bail-outs, knowing perfectly well that this means 'Eurobonds lite' and the start of a slippery slope towards debt pooling.

It has not cleared the way for use of the EU rescue machinery (EFSF and ESM) for direct recapitalisation of banks – which is what Spain wants to avoid having to bear the contingent liabilities of its crumbling lenders on sovereign shoulders.

Germany has not moved one inch towards fiscal union of any kind. It may do so (I make no prediction). It has not done so yet. Europe faces exactly the same problem it has had since the start of the crisis.

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