Wednesday, August 1, 2012
Can Draghi do 'whatever it takes' to save euro?
August 1, 2012
As we wait to see whether Mario Draghi and the European Central Bank will tomorrow announce "whatever it takes" to save the euro (to use his resonant phrase of last week), it is worth reminding ourselves of the eurozone's unhealthy lifestyle (forgive my anthropomorphising please).
Since 2009, its history has been of fiscal and banking crises that force eurozone leaders to make modest reforms, which provide calm for just a few weeks and months, till there is another crisis and more modest reforms.
So if you were the eurozone's physician, here is why you would be concerned.
The crises have become progressively more serious: the €500bn or so that Spain may need in a bailout is more than four times Greece's initial rescue needs in 2010.
But there has been limited progress towards the kind of political union - or central control of budget-making, borrowing and supervision of banks - that many would see as necessary to the eurozone's long-term survival.