Today European Finance ministers met and the ECB has been stabilising countries where interest rates are higher by buying their governments bonds. These countries within the Euro zone have had higher unemployment and (in the case of Greece and parts of Spain and Portugal) more seasonal economies.
As such there is the option of further economic integration and debt stabilisation within the Eurozone but that would create a two tier Europe as the European Commission and Parliament could get democratic control of the Euro which would undermine the idea of european nation states sharing sovereignty and leave states without the Euro with less control over the European Union. That is why the UK always seeks to meet its international obligations at the IMF and world bank and through that is stabilising the European and International economic system.
Yet the ECB can't buy back the bonds of governments within the Euro indefinitely.
Today the marlkets stabilised as European leaders refromed their bond markets but the questioin remains, is this going to bring a single bond market that goes on investment in infrastructure and energy to aid the free movement of goods and capital or is it just going to stabilise until one of the seasonal economy states such as Greece and Italy or Spain seek to default.
ReplyDeleteThats why other countries banks should invest in infrastructure in the European Union and bid for the open tender contracts in the journal of the European Union.