Tried to use the occasion for the meeting to gain in understanding on the current situation in Europe. The top government officials in Sweden are taking a cautious stance on the Eurozone political maturation issue. Swedish voter interest in the Euro has plummeted so the Swedes are running away from the problem whereas the Poles are trying to help by joining as soon as possible with higher growth than the Eurozone average. Sweden will help via the IMF though.
Swedish officials don’t think the crisis is a political crisis as I do. Part of this reason seems to be that Europe is solvent and in better economic shape than the US. This is, I think, a very good argument for the crisis being rather political. What Merkozy wants by introducing the Maastricht criteria again in a new form is hard to understand though. The whole charade seems to work, sort of, but it might be borderline knife-wrestling. Someone said that this is not a debt crisis it is rather a current account crisis, ie having used current account rather than budget deficit maximum of 3% and the public debt maximum of 60% would have predicted the crisis. Using 3/60 would not have predicted the crisis.
At the same time as it might be absolutely essential for making progress the fiscal union/integration issue is causing ire in other countries that are beginning to feel sidelined. Britain does not want the Eurozone to go down for the sake of its economy but would probably don’t mind politically. However, since the “peripheral” countries are withdrawing from the issue the only way forward is indeed a fortified Eurozone. It is unlikely that Merkozy will manage to entice all 27 countries and instead move forward with the 17.
The question is if an “economic government”, a second floor on the EU edifice is necessary. How much of a charge on democracy would be possible to use to save the Eurozone? Neither France nor Germany would want an official loss of sovereignty though. Is the current affair an attempt to secure the cooperation of financial workers in another fashion? Is the elite placing tentacles that the populace is not controlling? The reason I’m asking is the serious writers call the meeting “making a fudge”. If people meet to do the same as earlier, that did not work earlier, my guess is that they need a cover for something else. I understand it is very uneuropean to question the good intent of the meeting but who are we trying to fool here? In any case, it is fascinating that the issue is so polarized among those that think the Euro will fall and those that think we have business as usual. This is not economics. This is politics.