How can we save the Euro?
An essay of Guy Verhofstadt, former Prime Minister of Belgium
After November 2008, the Bertelsmann Stiftung today, for the second time, publishes a break-in of Guy Verhofstadt, former Belgian prime minister and Leader of the Liberals (ALDE) in the European Parliament, on the impact of the financial crisis on the European Union and, much more, on how the EU should further integrate to overcome one of the biggest challenges to date.
No doubt, the euro is in dire straits. Fresh as much as blunt thinking is necessary to save the eurozone from breaking apart. So far, all measures taken by the EU and its member states have not calmed down the turbulence in the marketplace. After the debt crises in Greece and Ireland, the heat is now on Portugal and Spain. Italy and others might follow suit. We agree pretty much with Guy Verhofstadt: for the future a strong sign is needed that the EU will opt for more rather than less integration. Ultimately, the euro can only thrive if member states get serious and complement monetary union with fiscal, economic and social union. Nevertheless, even more fiscal integration would not overrule the very fact that mismanagement of whatsoever kind and origin will be punished by the markets. The different spreads for bonds in the eurozone are sufficient proof. They cannot be put aside by criticizing Germany´s economic performance. Quite the contrary, it might be high time to pay more attention to private investors’ behaviour . Not only for taxpayers in Germany will it become more and more difficult to understand why they have to shoulder the losses whereas private business has the benefits of high risk-taking.