The problem might be solved, Germany newly argues, if there was on financial authority for all the EU. Germany may favor this because its contributions to support this structure would give it ongoing leverage with its poorer neighbors. Or Merkel may actually believe that the present situation is untenable and that serials defaults could bring down EU based banks which hold hundreds of billions in sovereign paper.
After falling short with her “fiscal compact” on budget discipline, German Chancellor Angela Merkel is pressing for much more ambitious measures, including a central authority to manage euro area finances, and major new powers for the European Commission, European Parliament and European Court of Justice.
She is also seeking a coordinated European approach to reforming labor markets, social security systems and tax policies, German officials say.
The suggestion makes sense, but the European governments have a history of destroying plans, via bickering, which might benefit them.
Douglas A. McIntyre