June 1, 2012
Is the euro entering the end game? With Spanish banks on the brink and the Greek political situation uncertain, many senior economic leaders say that the time for drastic action is swiftly approaching. On Friday, World Bank head Robert Zoellick argued that it is almost time to "break the glass" on the emergency alarm.
Is it time for Europe to break the glass and pull the alarm? World Bank chief Robert Zoellick certainly thinks so. In an editorial for the Friday edition of the Financial Times, Zoellick wrote that "while those living in the euro-zone building, especially those on the executive floors, will not want to hear an alarm, they had best read the instructions. Events in Greece could trigger financial fright in Spain, Italy and across the euro zone, pushing Europe into a danger zone."
Such sentiments about the dangers currently facing the European common currency are hardly new. But this week, concern at the highest levels appears to be slowly morphing into panic. Several senior European leaders have urged speedy action to prevent the situation in Greece and Spain from spiralling out of control -- amid increasing indications that that is exactly what might be happening.
European Central Bank head Mario Draghi provided what was perhaps the most urgent appeal to euro-zone political leaders on Thursday in comments delivered to the European Parliament in Brussels. He said the structure of the euro as it stands now is "unsustainable unless further steps are taken" and also criticized European heads of state and government for not being clear about their common currency strategy. Leaders, he said, "must clarify what is the vision … what is the euro going to look like a certain number of years from now?" Draghi also said that the ECB was unable to save the euro on its own and could not "fill the vacuum of the lack of action by national governments."
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