Monday 18 December 2017

European philosophy cannot solve euro's existential crisis

The latest wisdom to resolve the currency's problems is no help to countries on the verge, writes Colm McCarthy

Colm McCarthy

Colm McCarthy

ENDA Kenny spent Friday with colleagues from the European Christian democratic parties, including German Chancellor Angela Merkel, in Helsinki, where the temperature was about zero. Eamon Gilmore wisely headed for Athens, a full 10 degrees warmer, for a meeting of the European socialist parties. Both will have been taking the political temperature prior to critical negotiations over the next few weeks on Europe's next steps in addressing the lingering economic and banking crisis.

For many European countries, the crisis appears to be over. Their economies may be subdued but they are beginning to expand again and their banks are returning to health. The complacency all too evident in European responses to the far greater difficulties in Greece, Ireland and Portugal needs to be seen in this context. There is, at European level, a focus on preventing the next crisis and on creating mechanisms for dealing with it whenever it comes. This looks pretty crass from an Irish perspective, where the banking crash remains unresolved three years after it emerged and the public finances are unsustainable, despite serious measures already implemented to cut spending and raise taxes.

The Sarkozy-Merkel 'Pact for Competitiveness' went down like the proverbial lead balloon at the last European summit, not least because it was seen as another high-handed Franco-German initiative. It has now received a substantial make-over from Messrs Barroso and Van Rompuy, the European Commission and Council leaders, in a document which will form the agenda for political decision-making over the next few weeks. You would never guess from this latest version that some eurozone countries are already in IMF programmes. Words like 'sovereign' and 'default', singly or in combination, do not feature. Diplomatic language aside, it adds little to the discussion and contains no proposals whatsoever to address the real and present danger.

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