Saturday 21 April 2018

Thomas Molloy: Changes ahead as Europe gives an ultimatum

Thomas Molloy

Thomas Molloy

ANYBODY who believes that passing the fiscal compact will resolve the European crisis faces bitter disappointment. Thursday's vote was only the beginning of a limbering-up exercise ahead of a marathon session of discussion and reform this summer that will either lead to sweeping changes that will leave most people dizzy or bring down the European Union and destroy a 60-year dream of ever-closer harmony.

The focus on the referendum campaign has been a pleasant distraction from the worsening situation on the continent, where Spain is clearly in need of rescue and several other countries such as the Netherlands are faltering. Six months ago, six countries inside the single currency had the best possible credit rating. Today, that honour falls to Germany alone.

The next real test for the eurozone is likely to come in less than three weeks, when the Greeks head to the polls for a second general election that may determine whether the country stays inside the single currency area. The stakes are horribly high for the long-suffering and demoralised Greeks and for the other bailout nations, which will inevitably see bank runs if the Greeks leave.

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