Callanan: The Euro zone sugar rush has worn off; time for euro leaders to make a decision
Posted, April 18, 2012 @ 17:00
Speaking in a European Parliament debate today with EU commission president Jose Manuel Barroso, European Conservatives and Reformists group chairman Martin Callanan MEP said that it was time for euro zone leaders to stop pointing fingers at each other and make some tough decisions - particularly regarding the future of Greece within the euro zone, which Mr Callanan described as a 'lightning rod' for the crisis.
Callanan said that there are two options: create a full-scale fiscal transfer union, or allow Greece to leave the euro. Since it seemed increasingly unlikely that the first option would work for either Germany or Greece, Callanan said that 'a ten year child' was able to work out the only course of action required.
Mr Callanan said:
"The euro zone has experienced several months of a sugar rush thanks to the ECB's cheap credit. Now, the sugar has worn off and the hangover has kicked in.
"The euro still faces the same problems. Solutions will only be identified when our leaders decide to put economics ahead of politics, and hard-nosed realism ahead of federalist romanticism.
"As I see it, there are two rational options: either Germany accepts that it must enter into a full-scale fiscal transfer union with permanent flows of money from northern Europe to Southern Europe; or we allow the lightning rod of this crisis - Greece - the opportunity to leave the euro and devalue their way back into the marketplace.
"I can understand why German taxpayers are reticent about their hard-earned taxes flowing to unreformed countries. And I sympathise with Greeks reluctant to hand over more of their economic sovereignty.
"So there is only option: for Greece to be let out of the zone, to devalue and to fully default. A 10-year old child could work that out.
"Instead of solutions, we have seen finger-pointing. I agree with Prime Minister Rajoy that it is not right for others - most notably the electioneering Nicolas Sarkozy - to point fingers in Spain's direction.
"Instead, it is time for the euro's leaders to make a decision. The choices are simple: either Germany pays, Greece leaves, or the euro fails. The choice seems obvious.
"Unfortunately, there is a small group of people who are simply unable to accept economic reality: and Mr President, almost all of them are either in this chamber, in the commission, or in the European Council."