Saturday, 29 January 2011

Merkel wants new "economic government" for the eurozone

Chancellor Angela Merkel is according to Der Spiegel planning a new "economic government" for the eurozone in order to avoid the euro crisis to escalate:
German Chancellor Angela Merkel is to propose a "pact for competitiveness" to the member states of the euro zone in a bid to get countries to harmonize their policies. The plan, which is intended to calm the financial markets' fears about the euro, would introduce a kind of economic government in the euro zone that goes far beyond what has so far been agreed.

Plans by German Chancellor Angela Merkel to introduce an economic government in the euro zone are taking concrete form, SPIEGEL has learned.

The chancellor intends to propose a "pact for competitiveness" to the 17 member states of the monetary union. The planned agreement will "contain concrete commitments to strengthen competitiveness that are more ambitious and more binding than those that have already been agreed by the EU-27," reads a Chancellery document, referring to the wider group of the 27 European Union members. The paper, which has been seen by SPIEGEL, argues that "closer integration of national financial, economic and social policies is necessary" in order to dispel financial markets' concerns about Europe's common currency.

Read the entire article here.

No matter how hard Merkel would like e.g. Greece, Ireland, Spain and Italy to start acting like Germany, it will not succeed. The euro group of countries will never be able to act together in an effecient way, unless they are a part of the federal state of Europe - and even then it would be quite a challenge! But this talk about economic government maybe buys a few months of time ahead of important elections in Germany.

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