Leading article: Tentative progress, but Germany remains the key

That the solution to the crisis is more Europe, rather than less, should not be lost in the rhetoric

Share

After months of dithering and denial, the last week has seen a flurry of activity in the eurozone – and, for once, it has been as much among Europe's policymakers as in its gyrating stock markets. But it is today's vote in the German Bundestag that is the real gauge of whether the talk will turn to action.

The fact that there has been real progress in recent days should not be downplayed. It is absurd that it took calls for action from the likes of the US President and the head of the World Bank to impress on Europe's bickering leaders the severity of the situation. But it is gratifying that last week's desperate chorus does appear to have had some effect, and hints from the IMF meeting in Washington last weekend suggest something more than another short-term policy sticking-plaster is at last on the table.

That merely the ghost of an unconfirmed plan was enough to stabilise the markets is a measure of how much has been missing so far. The likely proposals are good ones, including writing off a higher proportion of Greece's debts and leveraging the €440bn European Financial Stability Facility (EFSF) up to €2 trillion (which should be enough both to support ailing EU debtor nations convincingly and to recapitalise the banks hit hard by the extra losses on their Greek debt). Arguably, such measures were due months ago. But it is still a relief that they are finally being considered. It also helps that this week has seen positive developments in Greece. Notwithstanding the strikes and protests, Athens cleared a major hurdle when lawmakers passed highly contentious new property taxes, clearing the way for talks about the next €8bn tranche of rescue funding.

Meanwhile, José Manuel Barroso is approaching the crisis from the other direction, setting out bold plans to resolve the issues that allowed it to happen in the first place. Alongside specific proposals – for eurobonds and a financial transactions tax – the President of the European Commission used his second annual "state of the union" speech in Strasbourg yesterday to make the case for "completing our monetary union with an economic union".

It is too easy to dismiss Mr Barroso's ambitions with a shrug of "he would say that wouldn't he". The analysis that the euro's problems spring from implementation oversights rather than fundamental flaws is right. And while deeply politically unpalatable to increasingly sceptical EU voters – not least here in Britain – the conclusion that the solution to the crisis is more Europe, rather than less, is one that should not be lost in the rhetoric of catastrophe.

So far, so good. But the advances in thinking the hitherto unthinkable still have to be translated into domestic politics. Yesterday Finland became the seventh out of the 17 eurozone parliaments to agree to tweaks to the bailout fund agreed in principle in July. But it is Germany that is the bellwether. And today's vote – on changes under which Germany's contribution to the EFSF rises from €123bn to €211bn – takes place with as many as 75 per cent of voters against it. Despite the dire predictions, it is unlikely that the German Chancellor will lose the vote altogether. What is in question is whether it will pass without relying on opposition support, an outcome that would not necessarily trigger an election but would leave Angela Merkel dangerously exposed.

Among all the inadequate responses to the crisis, perhaps the most egregious is Ms Merkel's failure to explain to her electorate that the cost of not bailing out Greece far outweighs the cost of saving it. Even if she succeeds today, the next round of EFSF changes, let alone Mr Barroso's proposals, are still to come. Progress, yes; but far from enough.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Sustainability Manager

Competitive: The Green Recruitment Company: Job Title: Scheme Manager (BREEAM)...

Graduate Sustainability Professional

Flexible, depending on experience: The Green Recruitment Company: Job Title: T...

Programme Director - Conduct Risk - London

£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...

Project Coordinator/Order Entry, SC Clear

£100 - £110 per day: Orgtel: Project Coordinator/Order Entry Hampshire

Day In a Page

Read Next
Former N-Dubz singer Tulisa Contostavlos gives a statement outside Southwark Crown Court after her trial  

It would be wrong to compare brave Tulisa’s ordeal with phone hacking. It’s much worse than that

Matthew Norman
The Big Society Network was assessed as  

What became of Cameron's Big Society Network?

Oliver Wright
Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn