Europe has a banking crisis, not a wages crisis - EU Observer Op-Ed by Sony Kapoor
EUOBSERVER / COMMENT - To a hammer every problem looks like a nail. EU leaders are once again proposing familiar solutions driven more by what is possible, even convenient, than by what the problems actually are.
Given that recent rhetoric has almost exclusively been about competitiveness fiscal and sovereign debt problems, one could be forgiven for having already forgotten that this was first and foremost a financial crisis.
The fact of the matter is that our leaders have proven incapable of understanding and tackling the financial crisis. Their inability and unwillingness to tackle financial sector problems upfront have put us in a bigger mess where both the financial health of EU banks and sovereigns is suspect. Now the solutions they are proffering could make things even worse.
“The treaty change discussion might end up opening Pandora’s box.” “This was definitely not urgent and probably not even necessary to set up what will be a mechanism only for liquidity support not fiscal transfers.”