Leading article: No more time for bickering


Between the unprecedented attendance of the US Treasury Secretary at a meeting of EU finance ministers, and the news of central banks intervening in the increasingly credit-crunched banking sector, it is hard not to conclude that the eurozone is at yet another crisis point. Disturbingly, there is still scant evidence that Europe's politicians are up to the task.

There is some irony in a lecture on grasping the political nettle from a US administration whose budget stalemate so recently prompted a credit rating downgrade, let alone in calls for closer fiscal union from the Conservative George Osborne. But the analysis is correct.

Austerity alone will not solve the euro's problems, even if the increasingly turbulent Greeks are persuaded to accept it. The sovereign debt crisis springs from fundamental flaws in the political project. But despite warm words about "strengthening fiscal tools", yesterday's meeting in Poland was yet more evidence of EU leaders bickering over the trees while the wood burns around them.

Most of the talk is about the European Financial Stability Facility (EFSF), chiefly the ratification of recent changes. The stakes are high, particularly in Germany, where the issue has crystallised public reluctance to be a financial backstop for profligate eurozone counterparts. But even a souped-up EFSF cannot contain the crisis. Even if it works, it addresses the symptoms, not the cause.

To suggest the eurozone be left to break up is irresponsible; the consequences would be devastating. Rather, what is required is a united front from EU politicians, setting out plans for closer fiscal union and a sharing of debts (so-called "eurobonds"), while restructuring existing unsustainable debts and recapitalising the banks most exposed to them.

None of these measures is easy. Each is awesomely complex and could take years to implement. But the eurozone crisis is primarily one of confidence, and what is needed most of all is a credible plan. Time is running out.

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