An open letter has been written to the leaders of the European Union by thirteen economists saying that action is needed this week or we face the end of the Eurozone.
The open letter says that the debt crisis has now reached the core of the Eurozone and that both Italy and Spain are now firmly in the frame.
They say that with a third of the zone on the credit black list the survival of the Euro is now at stake.
The letter published in the Telegraph starts ‘The eurozone crisis is coming to a head. This column is an open letter to European leaders imploring them to take decisive action this week. Any more delays could mark the end of the Eurozone as we know it’
The solution put forward for the EU leaders to consider is the expansion of the European Financial Stability Fund (EFSF) by making it sturdy enough to withstand a Greek default as well as giving it operational independence and allowing it to operate in the secondary bond markets.
The EC President Jose Manuel Barroso has also taken the EU leaders to task by saying that ‘the time to act is now’. His words are being seen as a swipe at the German Chancellor Angela Merkel who seems to be increasingly isolated over the debt crisis, being one of the few countries that now want to see the taxpayers’ burden being relieved by private sector involvement, possibly by taxing the banks.
A third of the Eurozone needs the help of the other two thirds to ensure their own needs are met and for the Euro to survive. The countries with the possible will and wherewithal to help are now shying away due to the potential internal economic and political cost. And the EU establishment is shouting from the sidelines to help ensure its own survival.
So here we have on show the major stumbling block for the Euro. When push really comes to shove what comes first? Your own country’s national interests (and for the politicians those of the voters who put you in power)? Or the idealistic European dream where national interests come second for the good of the European whole?
A choice will have to be made.