Euro crisis

Perhaps the next time the US government wants to criticise some European governments for poor economic policies, they could turn their attention to the least competitive ones instead. And the next time the US Treasury submits a report on international currency manipulation, maybe they could have a closer look at what the US Fed is doing. The cause of the problems may be closer to Washington than to Berlin.

As the sovereign debt crisis lingers, we should pay more attention to the complex and obscure issues facing Europe’s banking system. It will be one of the main battlegrounds of the euro crisis for the coming year.

At a time when many observers were expecting the next steps in the euro crisis such as the establishment of a ‘banking union’ and the next packages for Greece, Cyprus and Portugal, the political situation has become more complicated.

There may come a day in the not too distant future when Merkel will rue the day she failed to resuscitate her moribund liberal coalition partner. The rest of Europe, however, can relax. Triumphant Merkel is not nearly as powerful as she now seems.

Most followers of the euro crisis agree that the German elections, to be held on September 22, will be a watershed moment. Everything that had been put on hold in the crisis will finally be allowed to happen once Angela Merkel has been returned to power.

By announcing the next Greek package before the election, Schäuble is manoeuvring Germany into his much preferred position of actively supporting closer European integration.

The best one can say about the euro crisis at present is that it is on hold, contained by the ECB’s promises to defend the euro and some stop-gap measures to keep financial institutions and countries solvent until the German elections.

As I discovered playing Monopoly, there is no point dragging out a game artificially. Apart from that, my parents got sick and tired of having to play on just in order to keep my strange business model going for no real purpose. Perhaps the Greeks and the Spaniards should also tell the Germans that the game is up?