Tuesday, May 18, 2010

To save the eurozone, reform its governance

by Wolfgang Münchau

Financial Times
May 16, 2010

The European rescue package has changed the odds about the future of the eurozone in two ways. It has reduced the probability of a collapse within the next three years – and increased the odds within the next 10 years.

The eurozone came extremely close to a breakdown 10 days ago. The Spanish newspaper El Pais reported a claim by José Luis Zapatero, the Spanish prime minister, that Nicolas Sarkozy “beat his fist on the table and threatened to withdraw from the euro” unless Berlin accepted a deal. Whether this story is true or not, the deal is unquestionably the result of a successful French ambush.


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