At Spiegel Online, Stefan Schultz offers this ironic assessment of the way that Europe’s leaders have, thus far, managed the euro crisis:
Since the start of theEurope’s leaders have perfected two techniques: scrambling to catch up with events, and playing them down. Again and again, they have been forced to assemble bailout packages to prevent the euro zone from breaking apart. And after each new one, they insist that the measures are purely psychological and will probably never be needed. That’s what happened in the spring, when countries like Germany first refused to rush to the rescue of ailing Greece, only to change their minds and bail it out a few weeks later. And in May, when the European Commission, EU countries and the International Monetary Fund stitched together a €750 billion ($978 billion) safety net that was never intended to be used — until Ireland jumped into it.
But with all this cynicism, Schultz, at the conclusion of his article, sees light at the end of the tunnel:
After the euro was introduced, countries like Spain and Portugal didn’t tackle their structural problems and instead just went on running up more debt. The interest rates on their government bonds remained low because creditors believed in the implicit guarantee that the EU would stand by troubled member states in a crisis. “Now that will finally change,” says Weil. The implicit guaranteer will gradually disappear over the next decade. That will have two consequences for the euro zone: the risk premiums are unlikely ever to fall back to the levels they were at before the crisis. And countries like Greece will in future have to maintain stricter budget discipline.