United States of … Europe
JEREMY HOBSON: If you think it’s tough to fix this economy with divided government — try doing it with multiple governments. That’s what European leaders are grappling with, and after a high profile meeting yesterday between the presidents of Germany and France the question is, will a more united Europe help?
Marketplace’s Stephen Beard is with us live from our European Desk in London with more. Good morning, Stephen.
STEPHEN BEARD: Hello, Jeremy.
HOBSON: First tell us what came out of this meeting yesterday of President Sarkozy of France and German Chancellor Merkel?
BEARD: A plan for what they call an economic government for the 17 countries in the Eurozone. The 17 leaders would meet at least twice a year and, we’re told, coordinate their economies and the public spending of the 17 countries to avoid the sort of huge deficits we’ve seen in Greece, Ireland and Portugal.
HOBSON: More coordination — is this the United States of Europe people have been talking about for years, Stephen?
BEARD: It’s a very small, tentative step down that road. It doesn’t really deal with the present debt crisis. Investors are certainly underwhelmed by it, says Steve Barrow, currency strategist at Standard Bank.
STEPHEN BARROW: We’ve heard all this sort of of thing before from Eurozone leaders about closer integration, cooperation. It hasn’t worked in the past and I don’t think it will work now.
BEARD: Investors want something a lot more concrete. They want the Eurozone leaders to show us the money. They want to know that the bailout fund is going to be increased — so they can bail out Spain and Italy, if need be — or they want Eurobonds. One type of bond issued over the whole of the Eurozone, backed by the whole of the Eurozone.
HOBSON: That would be a much bigger step towards the United States of Europe. France and Germany haven’t taken that step because there’s so much public opposition in it, especially Germany, which would pick up much of the tab.
HOBSON: Marketplace’s Jerry Maguire, rather Stephen Beard, in London. Thank you.
BEARD: OK, Jeremy.
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