EU Leaders Must Show They're Ready to Stand United

by Paul Hannon

Wall Street Journal
May 24, 2011

The euro zone's crisis is getting worse, as investors lose confidence in the willingness of its members to stick together. To halt the rot, all member states will have to demonstrate a commitment to keeping the currency area intact, and signal a longer-term intention to move to closer political integration.

In particular, politicians will quickly have to persuade taxpayers and bond investors that the euro zone has no core and no periphery. If they do not, the number of member states perceived to be peripheral will grow, and the number perceived to be core will shrink. Eventually, there won't be a euro zone.

The events of recent weeks have dealt a major blow to investors' confidence in the bloc's coherence. Finnish elections showed that an increasing number of voters in the currency area's stronger members are reluctant to provide more help to states that can't raise funds in bond markets.

It has also become apparent that governments in receipt of bailouts from the euro zone and the International Monetary Fund won't be able to return to the bond markets as early as hoped.

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