This will be the fourth ‘make or break’ EU summit in a year. European leaders are gathering in Brussels later this week to come up with credible solutions to solve the euro crisis. But experts believe this meeting will be no panacea for the euro’s problems.
International pressure is mounting amid fears of a full-scale economic crisis. EU leaders consider that more ‘European integration’ is the long-lasting solution that markets are so intensively demanding. A banking union and issuing the so-called ‘eurobonds’ are in the cards.
But Germany still wants more fiscal discipline. German Chancellor Angela Merkel has so far rejected pooling European sovereign debt or any sort of common deposit insurance. In her view, eurobonds could see Germany becoming the paymaster for the rest of Europe.
As recession and high unemployment spread across Europe, Merkel’s austerity is becoming less and less popular. Instead, France’s President Francois Hollande and his growth-oriented proposals are gaining momentum and gradually putting pressure on Germany’s way of managing the crisis.
Only last Friday, leaders of the eurozone’s four biggest nations agreed to a growth plan worth 130 billion euros.
Ahead of a crucial meeting for the continent’s future, Europe’s situation is worsening.
Spain on Monday formally requested a 62 billion euro bailout to recapitalize its debt-ridden banks. According to the Spanish government, it is only a nearly-condition free loan.
In Greece, fears of a Greek euro exit were eased after the June election as political parties managed to form a pro-bailout government. Newly elected Prime Minster Samaras is expected to push for a relaxation of the bailout terms.
In Italy, technocrat Premier Mario Monti is facing contagion effects while his popularity sinks.
Meanwhile, soaring financial markets seem to ignore European efforts to tackle this “so-called” ‘systemic crisis’.
The countdown has started.