…Merkel, addressing parliament in Berlin, rejected “miracle solutions” such as issuing joint euro bonds or creating a Europe-wide deposit guarantee scheme, backed by other leaders such as new French President Francois Hollande and Italian Prime Minister Mario Monti. Instead, she called for gradual steps towards the “Herculean task” of building a European political union. Such proposals were “counterproductive” and would violate the German constitution, she said.
“It is our task today to make up for what was not done (when the euro was created in 1999) and to end the vicious circle of ever new debt, of not sticking to the rules,” Merkel said.
She warned against overstraining the resources of Europe’s biggest economy, saying: “Germany is putting this strength and this power to use for the wellbeing of people, not just in Germany but also to help European unity and the global economy. But we also know, Germany’s strength is not infinite…”
But I see from the Financial Times that someone’s back, chattering away:
Mr Blair’s said the remedy should be a “grand bargain” between Germany and the rest of Europe to rescue the single currency. This would involve a pooling of European debt and a new push for growth, matched by deficit reduction through pension and welfare reforms…
It is, of course, possible to debate (endlessly) what the next move in the euro-drama should be, but if there’s one thing that is clear it is that Mrs. Merkel should not waste a second of her time listening to Tony Blair. If he’d had his way, Britain would have joined the euro years ago, a move that would have been the crowning act of the demolition job that was carried out on the foundations of the U.K.’s economy during his time in office.
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