By Frank-Walter Steinmeier and Peer Steinbrück Published: December 14 2010 20:47 | Last updated: December 14 2010 20:47The time for stumbling through the euro crisis is over. Piecemeal approaches and wait-and-see attitudes are endangering European integration. We now need a more radical, targeted effort to end the current uncertainty, and provide stronger support for the future of Europe's common institutions. This must also protect the European Central Bank from becoming Europe's "bad bank", and ensuring its credibility and independence in guarding a strong euro.The required solution is a combination of a haircut for debt holders, debt guarantees for stable countries and the limited introduction of European-wide bonds in the medium term, accompanied by more aligned fiscal policies. These measures would only work together; none alone would restore stability.
By Frank-Walter Steinmeier and Peer Steinbrück
Published: December 14 2010 20:47 | Last updated: December 14 2010 20:47
The time for stumbling through the euro crisis is over. Piecemeal approaches and wait-and-see attitudes are endangering European integration. We now need a more radical, targeted effort to end the current uncertainty, and provide stronger support for the future of Europe's common institutions. This must also protect the European Central Bank from becoming Europe's "bad bank", and ensuring its credibility and independence in guarding a strong euro.
The required solution is a combination of a haircut for debt holders, debt guarantees for stable countries and the limited introduction of European-wide bonds in the medium term, accompanied by more aligned fiscal policies. These measures would only work together; none alone would restore stability.
This is a huge departure from the German opposition on this issue. Coming right on the eve of the summit, it may impact, or possibly undermine, Merkel's position at tomorrow's summit. The SPD is an opposition party, and the shift in its position does not have an immediate consequence. But the important political point about this statement is Merkel can no longer claim that the Bundestag would not support a more supportive German position. In their article in the FT, Steinmeier and Steinbrück argue that "for the first time in decades, German isolation has become a real concern," they write. They conclude that this week's summit would be a fateful one. EU leaders will either extend the crisis by continuing to stumble through, or regain the momentum to end it.
This is a huge departure from the German opposition on this issue. Coming right on the eve of the summit, it may impact, or possibly undermine, Merkel's position at tomorrow's summit.
The SPD is an opposition party, and the shift in its position does not have an immediate consequence. But the important political point about this statement is Merkel can no longer claim that the Bundestag would not support a more supportive German position. In their article in the FT, Steinmeier and Steinbrück argue that "for the first time in decades, German isolation has become a real concern," they write. They conclude that this week's summit would be a fateful one. EU leaders will either extend the crisis by continuing to stumble through, or regain the momentum to end it.
German Chancellor Angela Merkel moved Wednesday to silence fears of a eurozone break-up, saying that although some members faced tough challenges, Europe's paymaster would not desert them. "No one in Europe will be left alone, no one in Europe will be abandoned. Europe succeeds when it acts together and I would add, Europe succeeds only when it acts together," Merkel said in a speech to parliament. Merkel said that some in the 16-nation eurozone faced an uphill task in repairing their public finances but she expressed confidence that the single currency would survive.
