Jean-Claude Juncker, the president of the Eurogroup organization of eurozone finance ministers, said that the single currency had reached a “decisive phase.” In the near three years since the sovereign debt crisis first erupted, how many times has that phrase been trotted out, only for this slow-motion car crash to continue? We are no nearer a lasting resolution now than we were at the outset — though many billions of euros have been frittered away on a series of ineffectual, short-term fixes.
Will the outcome be any different this time? Expectations have certainly been stoked up since Mario Draghi, the head of the European Central Bank, told a global investment conference in London that the ECB would “do whatever it takes to preserve the euro.” Taking their cue, the leaders of Germany, France and Italy spent the weekend repeating the Draghi formula verbatim.
The evidence is growing that the eurozone’s political leaders are grappling with this crisis without any democratic mandate to shore them up. The most striking sign of this was an opinion poll that showed that a majority of German voters want to return to the Deutschmark.
This hardening of opinion against monetary union is significant. It is the voters of Germany who are going to have to dig the deepest to deliver “whatever it takes.” When the people on whom the entire edifice of the single currency is built want out, it is clear the euro is facing an existential crisis that will take far more than further fiscal juggling to resolve.
It is not only in Germany that political tensions are growing. In Spain, the strains between the national government in Madrid and Catalonia, the country’s most prosperous (and indebted) region, are intense. The euro’s leaders remain so fixated with their totem that they seem not to notice the mounting anger and dissent among their own electorates. They will surely come to regret it.
The Telegraph, London (Aug. 1)