By Alfredo Aranda, in Madrid| The proposal to centralise fiscal policies in the euro zone is perhaps the only initiative that has received the almost unanimous agreement of the EMU members, although it remains to be seen how it can be articulated. At Agenbolsa, analyst Paula Hausmann considers that this is a good option to restore confidence in the euro and stabilise shaken bond markets. But the big question remains: will Germany give its ok to Eurobond issuance in return of a transfer of fiscal sovereignty?
“Arrangements for the set-up of a pan-EMU fiscal control it’s the right thing to do: the goal is to find the best formula to restore investor confidence in the area through agreements that will render a stronger and more stable future economic union, one capable of taking coordinated and flexible decisions in any situation.”
The alternative, a break-up of the euro, would mean the death of the common currency, in fact.
“A subdivided euro isn’t viable if we really want all countries to overcome the poor economic situation of the moment. The actions taken should be designed to strengthen the whole euro area, although some countries must make major efforts to stay in it.
This is an optimistic voice, you may ponder. Yes, she is. For a change, in a sea of observers who cannot imagine a German chancellor Angela Merkel’s U-turn, Hausmann forecasts a softer position in months to come:
“Merkel should relax Germany’s stance in order to achieve a global goal. Eurobonds, with the necessary corrections and preconditions, would be a good choice. Germany is going to gradually adopt a more flexible role, even though it is understandable that it keeps its demands over all the EMU countries entering a commitment to ensure the euro area’s stability.