Wall Street Journal
December 14, 2011
The latest solution to the euro-zone’s dragging debt crisis is a new treaty. But few actually believe this will end the saga. So, then what?
The main point of crafting a new set of rules for stricter central governance over member state budgets and economic policies appears to be to show the European Central Bank that the European Union can get its house in order–and pretty please help us!
If the euro zone establishes a closer union, officials and diplomats around Brussels are hoping the central bank can be spurred to act as a lender of last resort, step more aggressively in to help Italy, and offer markets that sense of confidence in policymaking that they’ve been seeking for the past several months.
So there it is. Leaders are taking a very complicated and difficult route to secure the support of an institution they created.
But here’s the rub: What if the ECB still doesn’t step in more forcefully, and what if euro-zone governments just can’t go far enough to meet the central bank’s expectations–or even Germany’s demands?
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