Criticism among the countries using the euro has climbed a notch. Following French-German sniping over consumer-centred economic coordination comes impassioned talk of expulsion for backsliders.
Although Chancellor Angela Merkel did not explicitly name Greece in a speech to parliament in Berlin, given the public mood, she left it to the members to draw their own conclusions.
Repeatedly breaking the Stability Pact rules which underpin the single currency was just not on, she said: “In the future we need a treaty entry that would make it possible, as a last-resort, to exclude a country from the euro zone if the conditions are not fulfilled again and again over the long term. Otherwise cooperation is impossible.”
How the euro zone finance ministers have agreed to help Greece if it really can’t cope with its crisis remains ambiguous. But France’s Christine Lagarde was clear in her recommendation to Berlin, saying it should lower taxes so Germans can buy more French goods.
Brussels, meanwhile, called 14 countries to order — including France, Germany and Spain — saying their deficit-cutting programmes are insufficiently concrete and over-rosy. With an eye on questionable purchasing power, the European Commission estimates that the EU’s deficit on average is 7.5 percent of its GDP — more than double its Stability Pact limit.