Thursday, July 3, 2014

Merkel and Sarkozy Named Euro's Biggest Threat

Merkel and Sarkozy Named Euro's Biggest Threat

A photo courtesy of the European Commission of former Commission President Manuel Barroso with Angela Merkel and and Nicolas Sarkozy
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Merkel and Sarkozy Obstacles for Solution to EU Crisis

Erika Grey,  Yahoo Contributor Network
Reading from a recent Financial Times article, Guy Verhofstadt, former Belgium Prime Minister and leader of the Alliance of Liberals and Democrats in the EU Parliament, which is the most outspoken group on the way out of the euro crisis, read to the EU Parliament, "International companies have started preparations for the breakup of the Eurozone." He stated, "the EU is fast approaching the breaking point of the euro and it is not because of Greece or Italy, but because of the incapacity of the two main players today in European politics - the incapacity of Merkel and Sarkozy to deal with this crisis." Verhofstadt called German Chancellor Angela Merkel and French Prime Minister Nicolas Sarkozy obstacles for a solution to the EU crisis.

Verhofstadt a week earlier commented on the EU Commission's Green Paper on "The feasibility for issuing Stability Bonds" and declared that these bonds would end the crisis. Verhofstadt stated, "Merkel is excluding euro bonds, is resisting a bigger role for the European Central Bank, she is even against the idea of her own wise economists." Verhofstadt added, "Sarkozy is opposing a real fiscal union. He is opposed to the European Court of Justice having the right to intervene in the budget."

Verhofstadt continued, "Germany and France in the past have made agreements, which have been beneficial for the Union, but today they form an obstacle to the survival of the Union of today. We have to stand up to this, we have had enough of their half measures, bad compromises and their deals that only calm the markets for 24 hours."

Verhofstadt is a fierce proponent of a euro bond market as a way to stop the crisis. He advocates federal union - a United States of Europe - modeled after the U.S., with increased powers for the European Commission and a European Collective Redemption Fund proposed by the five German economists in the Green Paper. The Fund will consolidate the debt of the euro countries above the 60 percent mark, combined with bold debt reduction schemes.

In a speech five days earlier, Verhofstadt speaking to the ELDR (European Liberal Democrats) Congress in Palermo stated, "We do not believe in less, but in more Europe. Europe is not the problem. Europe is the solution to the problem. A state can exist without a currency but a currency cannot exist without a state." He added, "Either we are capable in the next weeks and next months to establish a real federal union or the Euro shall disappear, and the loss of the Euro will be a tragedy. A disaster. A disaster for everyone.

Verhofstadt stated that while all of Europe would feel the effects, the county with the most to loose would be the UK because the City of London is the financial heart of Europe and trades more euros than any other city in the world. Next in line would be Germany. Debunking the geopolitical myth that Germany funds the EU while gaining little from their contributions, Verhofstadt affirmed, "The euro is the engine of their economic growth, the drive of their successful exports. The source for their surplus on their trade balance. In short, the reason for their success."

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