Europe must choose

“What will become of the European Union?” wonders The Economist.

For the influential business weekly, the choice is simple, either a break-up of the euro, or a move towards closer European integration — even if only ”technocratic and limited”:

For two crisis-plagued years Europe’s leaders have run away from this choice. They say that they want to keep the euro intact—except, perhaps, for Greece. But northern European creditors, led by Germany, will not pay out enough to assure the euro’s survival, and southern European debtors increasingly resent foreigners telling them how to run their lives.

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But if the EU’s leaders were to choose a euro break-up —

… banks and firms across the continent would topple because their domestic and foreign assets and liabilities would no longer match. A cascade of defaults and lawsuits would follow. Governments that run deficits would be forced to cut spending brutally or print cash.

This is one of the reasons for which, the august journal “reluctantly” concludes that “the nations in the euro zone must share their burdens.”

Saving the euro is desirable and it is doable. One question remains: will Germans, Austrians and the Dutch feel enough solidarity with Italians, Spaniards, Portuguese and Irish to pay up? We believe that to do so is in their own interests. The time has come for Europe’s leaders, and Mrs Merkel in particular, to make that case.