No major initiatives are in the pipeline to resolve once and for
all the incompatibility at the heart of the euro project. Governments
are terrified of scaring financial markets -- and voters. Finance
minister meetings are an unedifying succession of stalemates. Southern
powers want more pooled sovereignty, economic and fiscal strength in
numbers, to insulate their vulnerable economies. Northerners demur,
until their balance sheet risk is reduced.
As long as these two schools of thought exist, the cycle of debt overhang and liability risk will continue.
The European Central Bank president, Mario Draghi, has drafted a
roadmap to deepen economic and monetary union. But there are no unified
ideas on how to take the 19-nation euro bloc towards fiscal and
financial union, and all too quickly it has started to look like the
kind of integration that demagogues mock and the people have rejected.
may remain a haven of relative prosperity, peace and democracy, but the
sense of perma-crisis is taking its toll on core values. Perhaps even
more than Brexit, the agreement between Brussels and Ankara last year to
send back to Turkey refugees who had arrived in Greece has create a
deep unease inside European institutions.
But the EU's
inconclusive results cannot be blamed on a lack of big ideas, argues
Guntram Wolff, director of the Bruegel thinktank. Whether it is stagnant
productivity, the migration crisis or corporate tax avoidance, "there
is no one switch you can flick", but instead, numerous micro policies
are needed to solve Europe's problems, many of which are in the control
of national governments.