Wall Street Journal
February 28, 2011
If wishes were horses, beggars would ride. As true now as it was when chanted in 16th-century nurseries. Which is why the new Irish government and the old Greek one had best not saddle up. Their beggars' wishes for better bailout terms just don't seem certain to turn equestrian transport into a brighter future.
When euro-zone policy makers gathered on Feb. 4, they once again took the opportunity to miss an opportunity. Instead of signing on to the grand bargain that German Chancellor Angela Merkel and French President Nicolas Sarkozy had crafted, they could only agree to meet again—the now-usual conclusion of these meetings. And to meet not once in March, but twice, determined to strike a grand bargain, a "competitiveness pact," that will give Germany enough control over member-state finances to allow Ms. Merkel to agree to more and bigger bail-outs.
En route to those meetings several new stumbling blocks to a deal emerged. The first was the failure of the G20 meeting to produce an agreement on how to eliminate trade imbalances—how to get the surplus nations to adopt policies that would encourage domestic consumption and reduce reliance on exports. Germany is Europe's China, a nation building its exceptional prosperity by operating a massive export machine. But its 16 euro-area partners need Germany as a market for their goods, rather than as a seller of German products to their consumers.
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