As the euro lurches its way through yet another crisis, German chancellor Angela Merkel has come out with the assertion that the single currency is what holds the EU together, a claim about as believable as the idea that the virus is your friend.
Nevertheless, by raising the rhetorical stakes as high as she has done, Merkel is signalling that Ireland will be bailed out:
Merkel is “trying to send a clear message that Germany is pro-European, that they are ready to help out Ireland, Portugal and other countries if necessary and they will not put the euro at risk,” Henrik Enderlein, a political economist at the Hertie School of Governance in Berlin, said by phone. She “wants the Irish to take the bailout now to make it clear to everyone that the situation is safe, that markets should calm down.”
Merkel elevated the euro to a matter of life and death for European unity as the European Union statistics office said the euro area’s budget deficit swelled to more than double EU limits last year, led by Greece and Ireland. Merkel, without mentioning Ireland, said that Germany’s task is to “anchor a new stability culture in Europe” to prevent a repeat of the debt crisis.
“If the euro fails, then Europe fails,” Merkel said today in a speech to a convention of her Christian Democratic Union party in Karlsruhe, southwestern Germany. The 16-nation euro- area’s collapse would signal the end of Europe’s “uniting idea” that gave the continent peace and prosperity after World War II, she said.
That’s nonsense, but at least it’s predictable nonsense.
This comment from Merkel, however, made me smile:
It was market “excesses” that caused the crisis, and “markets have to bear the consequences of their actions.”
Well, yes and no. Let’s not forget the role in all this played by the EU politicians and bureaucrats responsible for the premature creation and incompetent operation of their wretched single currency, one of the shabbiest and shoddiest of all the speculative financial instruments to deface the last decade. It’s well past time they bore the consequences.