No miracle for the euro
30 September 2011
The prayers of Radek Sikorski have been heard. On September 25, which came just before a week heralded as decisive for the future of the eurozone, the Polish Minister of Foreign Affairs attended a mass for European solidarity and social justice. That decisive week has just ended – and the skies actually seem to have cleared a little.
On September 29 Germany’s Bundestag voted in favour of an increased German contribution to the rescue funds for Greece, Ireland and Portugal. This is a milestone in the effort to stabilise the eurozone and a great worry less for all those political and economic leaders responsible in Europe and beyond.
Good news never comes alone. The green light from Germany followed the go-ahead from Finland, one of the two countries threatening to block the support mechanisms put in place in 2010 and reinforced at the July 21 summit this year. The other recalcitrant, Slovakia, seems to have brought a little order to its coalition government and should also end up voting in favour of the plan. When Austria votes on September 30, a “yes” will bring the count of countries to have ratified the bolstering of the European financial stability funds to 13 out of 17.
However, not everything has got better in this best of all possible worlds. Two and a half months after the July 21 emergency summit, some of the measures adopted that day have yet to be enforced. There was a fire in the euro house, and the firefighters went on holiday before going to fetch water.
In addition, the German debates on the situation in Greece leave the impression of a headlong rush into bailouts and austerity. The bailout funds are coming one after another and being beefed up, yet without bringing any fresh breath to Greece or making the other countries seem less vulnerable. It’s a vicious circle that can only put off the return to growth and lead to social tensions.
But did the EU have a choice? Markets, as irrational as ever, are keeping up the pressure, and even Barack Obama, who should know the torments of political negotiation and powerlessness, is blaming the global slump on Europe. For now, even if the destination remains uncertain, the path taken seems the only possible one. Radek Sikorski may have to pray again.
Translated from the French by Anton Baer