Business Spectator

As much as I understand the esteemed economists’ desire to end the euro crisis quickly, even with bizarre proposals such as euro devaluation, not every medicine is effective and not every cure is better than the disease.

Once it is finally realised that this economic crisis is not an ordinary recession, perhaps we will stop deploying Keynesian remedies and begin more fundamental reforms as advocated by Tanzi. But then again, it took several decades until communism’s apologists ran out of excuses – and some are still at it.

France, Germany, Italy and Greece may all be bound by a common currency but this economic linkage is not reflected in a similarly connected debate. In effect, each country has its own unique euro discussion that barely overlaps with its neighbours.

Europeans should be grateful to Signor Draghi as he has given them a glimpse into their future. It is a future in which the continent’s economic fate may be determined not by parliaments, governments, treaties or courts but by its central bank. It is a scenario in which every owner of money will be robbed a little each year to pay the debts of sovereigns and the financial sector.

Europe’s politicians are quick learners. It has only taken them about 2½ years to realise that Greece cannot be saved within the eurozone. But this timely realisation comes with an enormous bill attached: Greece’s bankruptcy and euro exit will cost central European taxpayers dearly.

Looking at France from over the Rhine, the Germans may well ask themselves what the much celebrated friendship between Paris and Berlin is still worth with a French president like Hollande. He openly sides with those southern European governments that expect unconditional bailouts and call for an end to Berlin’s austerity demands.

Germany’s highest court is currently considering an injunction to stop the German president from signing international treaties to establish a permanent European rescue fund and new fiscal rules for EU members. Markets are watching anxiously as they fear that constitutional difficulties will prevent the next bailout rounds and an eventual mutualisation of European debt.

After last week’s decisive EU summit (the 20th of its kind), and after the German parliament’s support for the latest bailout plans, the euro is saved! Again. The usual sigh of relief was heard at bourses across the continent, and once more politicians congratulated themselves on their historic achievements.