If newspaper reports over the weekend are to be believed, German chancellor Angela Merkel and French president Nicolas Sarkozy are preparing a new eurozone stability treaty. Such news would almost be funny were it not for the seriousness of the euro crisis.
There is an old joke about a man being told by his doctor that he has only half a year left to live. “What should I do?” asks the frightened patient. “Marry an economist”, the doctor replies. “And, will that make me live longer?” the patient wants to know. The doctor’s answer: “No, but half a year will just seem much longer.”
Merkozy’s grand stability plan is just like this old joke. A new stability pact will not cure the ailing eurozone. It is just another placebo for capital markets that have lost confidence in European politicians’ ability to solve the continent’s many crises. But it won’t make the euro a workable currency.
To be clear, there is nothing wrong with a commitment to budgetary prudence and fiscal stability. Just as there is nothing wrong per se with marrying an economist. But in present circumstances, signing off on another stability treaty won’t save Europe – just like a marriage with an economist does not make you live longer.
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