Your correspondent was quick to agree with The Economist's assessment that this financial crisis could bring the EU closer together, rather than break it up.
Some highlights from this Bloomberg report illustrate this:
"German Finance Minister Peer Steinbrueck said euro-region countries may be forced to bail out cash-strapped members of the 16-nation bloc, going further than his counterparts in saying euro states can’t be allowed to fail.
“Some countries are slowly getting into difficulties with their payments,” Steinbrueck said late yesterday in a speech in Dusseldorf. “The euro-region treaties don’t foresee any help for insolvent countries, but in reality the other states would have to rescue those running into difficulty.”
...
“The most likely option is that the European Investment Bank or some other multinational organization will start supporting these countries by buying government bonds or by providing direct support,” Michels said. “That would help narrow spreads and reduce refinancing costs.” "
Robert Frost once wrote, with a sense for the ironic, that building fences made good neighbors, pointing out how far the ideals of community have fallen. The EU has a vested interest in supporting its member states. Although the EU treaty expressly states that member states are not responsible for another member's solvency or economic health, the use of the common currency throughout the Euro Zone contradicts that assertion. The reality is that the countries that use the euro will have an interest in protecting other countries who use the same currency from default.
As a tool for building the future and a the best, though naturally imperfect, to-date example of soft diplomatic power. By offering EU membership to countries who liberalize their economies and liberalize their laws, the EU has managed to affect change (slowly but surely) in Eastern Europe as well as in Turkey and her neighbors. The EU, for the sake of improving a model of cooperation that is working more effectively than other multinational organization, must keep in mind the idea of tying self-interest to the interest of all its members.
For the sake of both the world of ideas and the world of the here-and-now, specifically the world of economics, the EU must offer centralized support to member states that need it.
Some highlights from this Bloomberg report illustrate this:
"German Finance Minister Peer Steinbrueck said euro-region countries may be forced to bail out cash-strapped members of the 16-nation bloc, going further than his counterparts in saying euro states can’t be allowed to fail.
“Some countries are slowly getting into difficulties with their payments,” Steinbrueck said late yesterday in a speech in Dusseldorf. “The euro-region treaties don’t foresee any help for insolvent countries, but in reality the other states would have to rescue those running into difficulty.”
...
“The most likely option is that the European Investment Bank or some other multinational organization will start supporting these countries by buying government bonds or by providing direct support,” Michels said. “That would help narrow spreads and reduce refinancing costs.” "
Robert Frost once wrote, with a sense for the ironic, that building fences made good neighbors, pointing out how far the ideals of community have fallen. The EU has a vested interest in supporting its member states. Although the EU treaty expressly states that member states are not responsible for another member's solvency or economic health, the use of the common currency throughout the Euro Zone contradicts that assertion. The reality is that the countries that use the euro will have an interest in protecting other countries who use the same currency from default.
As a tool for building the future and a the best, though naturally imperfect, to-date example of soft diplomatic power. By offering EU membership to countries who liberalize their economies and liberalize their laws, the EU has managed to affect change (slowly but surely) in Eastern Europe as well as in Turkey and her neighbors. The EU, for the sake of improving a model of cooperation that is working more effectively than other multinational organization, must keep in mind the idea of tying self-interest to the interest of all its members.
For the sake of both the world of ideas and the world of the here-and-now, specifically the world of economics, the EU must offer centralized support to member states that need it.
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skewz
Chris MacDonald
Kerry Lauerman
Joan Walsh
Salon.com
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