It is a crisis which, in theory, should never have happened, say the figures who helped create it - if the stability and growth pact insisted upon by the then German finance minister, Theo Waigel, had been adhered to at the time of the creation of the euro in 1999.
Graham Bishop was a member of the European Commission's Maas Committee - preparing the changeover to the single currency - and then the Financial Services Strategy Group. He insists that had the requirements for sound public finances, embodied in the Maastricht Treaty, been met and fulfilled, the current crisis would not have happened.
"If countries with budget deficits had kept them low, there would not have been a need for the sort of measures we see now", he says. "But the other problem that we didn't foresee, was that the US would export its subprime mortgages on such a scale and that the government would need to step in."
He says that it is easy to explain monetary union, but that political union is a very different matter. "There is already a lot of political union through the European Commission, the European Court of Justice, the European Parliament", he notes. "But to go further and say countries were going to give up their fiscal sovereignty and agree common tax policies wasn't on then, and it isn't now", he adds.
There is a now a greater push, with the Fiscal Compact Treaty which was agreed in March 2012, to make sure that Member States conduct their economies in a way that does not spill over on to their neighbours. "I'm sure the eurozone will survive. There are measures being taken to boost competitiveness in a way that Mrs Thatcher's government in Britain did 30 years ago", he concludes.
Full article
© BBC - British Broadcasting Corporation
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article