Seventeenth Brussels Washout

Wall Street Journal
Editorial
February 1, 2012

And Angela Merkel said, "Let there be jobs and growth." And lo, there were jobs and there was growth. And Angela Merkel said, "Let there be closer fiscal coordination on a non-Treaty, intergovernmental basis with penalties for sinners to be administered by the European Court of Justice." And lo, there was that, too. And Angela Merkel said, "Let Greece prove itself capable of meaningful structural reforms before we give them another, €130 billion bailout."

And the Lord chuckled.

OK, so we take a few liberties with Scripture. Still, it's worth noting that at this week's crisis summit in Brussels—the 17th such meeting in two years—European leaders had no trouble issuing vague proclamations about what they intend for the coming years. It's dealing with the here-and-now where the summit again came up short.

That doesn't solely mean Greece, where a deal on restructuring its debt continues to elude negotiators despite promises that it's just around the corner. There's also Portugal, whose debt Standard & Poor's downgraded to junk status earlier this month. Yields have since spiked to as high as 17.3% on Lisbon's 10-year borrowing. Italian and Spanish yields have cooled since the European Central Bank dished out €489 billion in cheap financing in December. But Portuguese debt remains inedible even with the help of the central bank's special sauce.

More