The saddest comment to come from Europe this week was made by a senior Brussels official who declared that the eurozone crisis was now on its way to a solution thanks to the intervention of the European Central Bank to pump a further half-trillion euros into the system by way of loans to the banks.
Oh, yes? With the Irish now holding a referendum on the new fiscal pact agreed by eurozone members, with the Bundesbank openly criticising the ECB for its actions, and the markets stolidly refusing to believe in the Greek bailout or in the guarantees on sovereign debt, does anyone really believe it's over? Certainly not in the capitals of Europe, Berlin and Paris among them.
That's the trouble with the EU at the moment. It has become a case of the dog that doesn't bark. The only thing at all interesting about its summits is not what they decide but that they never quite decide anything.
Look at the latest summit in Brussels, which began yesterday and should finish today. It was supposed to set the seal on the new fiscal pact that would create a new era of fiscal responsibility and economic union. It was also intended to raise the ceiling on the bail-out funds to a level that would convince the markets that the eurozone was here to stay, solid, complete and effective.
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Instead the decision on the size of the bailout fund has been pushed to later in the month (or the month after or the month after that, as the case may be). There was also meant to be a separate summit of eurozone leaders today to propel the whole thing forward. That will not now happen. "It wasn't cancelled because it was never officially on the agenda," said a spokesman in that glorious Brussels double-speak.
Crisis spreads to northern Europe
The summit in Brussels, writes the Süddeutsche Zeitung, has been -
... dominated by illusions. Instead of talking about how to manage the crisis, [the government heads] talked about job creation [and] the competitiveness of the European economy. This is not wrong, but it’s only half the truth.
Still far from being resolved, the crisis “is being swept under the rug,” the Munich daily continues. It is still unclear if Greece will indeed receive more aid, or even how much more money will be pumped into the EU’s rescue funds – those decisions have been put off. At the top of the agenda, another problem has cropped up: the Netherlands, long a champion of a strict budgetary policy, is seeing so much economic power drain away from it that the government in The Hague has been forced to bring in austerity measures.
The crisis has reached northern Europe. The centre of economic stability has been shaken.