After meeting for several hours, European leaders published a communication in which they expressed their support for the euro. But we already know that these statements are being made just when the politicians cannot improve disagreements. That is to say, there isn´t a consensus about how to find a solution for Greece and, by extension, the euro.
And the problem is that the markets will continue to apply any treatment that´s given to the rest of the peripheral countries, which could infect everyone. Only when Europe is seen as a block of unified countries with a single treasury will the bleeding stop.
Yesterday, Zapatero said that the most powerful also should take on responsibilities, something that was interpreted as a direct message to Merkel. Another indication that Zapatero is passing the hot potato? On the one hand, he should be busy taking measures himself.
But on the other hand, he is not incorrect in asking Merkel to take on some responsibility herself. The Germans are financing at low rates thanks to flight from risk. Nonetheless, nearly half of their deals are happening in the Eurozone.
As soon as this stops, its currency could inflate and would leave, it would no longer be as competitive, and it would have difficulty financing debt. Further, Germany?s tendency to save a lot and consume a little was what financed the PIIGS´ excesses. We understand that Merkel should pressure leaders (such as Zapatero) that called reform to any rehashing of measures and are incapable of generating growth in a global economy.
But she should assume that she has no alternative. She should be explicit with measures associated with the euro. Perhaps she will wait to buy time, but it is already evident that the markets aren?t going to give any.
Translated and Edited in English by Brandon Dyches and Jose L. de Haro
