July 11, 2011
At every turn the euro crisis gets harder to solve.
Europeans are sick of living in a state of permacrisis. We have grown numb to the real urgency that surrounds the problem because the news headlines speak of looming catastrophe every weekend, followed by a mid-week sticking plaster that defers the tough talking until the next ‘moment of truth for the eurozone‘.
We are suffering from a chronic case of crisis fatigue. The Greek tragedy has dominated the headlines for months but even if it is somehow put to bed, (premature) talk of a second Portuguese bailout and Ireland’s banking black hole are never far away.
I realise that if there were easy solutions they would by now have been agreed. But putting off the hard decisions until we are circling the drain will only make it harder (See ECB’s view for more in-depth explanation).
With every election, war-weary voters return populist inward-looking politicians who promise an end to the crisis – but in fact make the conundrum even more difficult to solve. In creditor nations like Germany and Finland, anti-bailout sentiment runs high. Election seems guaranteed for those who pledge to let feckless neighbours hang. European solidarity has turned to dust.
In austerity-soden debtor nations, electorates’ appetite for protecting the balance sheets of foreign banks long ago evaporated. Politicians making unrealistic pledges to turn their backs on the EU and IMF gain ground.
Whether we are talking of such unpalatable solutions as closer economic surveillance, fiscal transfers or eurobonds, be assured that it is easier to face up to this now than to muddle through in a haze of denial and false optimism.
Politicians fearful of losing power for taking unpopular action should know that they will lose power anyway and spend their retirement watching history condemn their cowardice.Author : Gary Finnegan