By Tania Suárez, in Madrid | Intermoney chief economist José Carlos Díez considers that a monetary union with stability and credibility will not be possible unless there is a surrender of sovereignty. He adds that it is not only Germany the one that must be flexible in its position, but all member countries alike.
Can be the Thursday-to-Friday summit considered as “the definitive” or will it result into a new disappointment? I think it will be disappointing again, but I would like to be mistaken. What is true is that there is a big need to take many measures and soon, so that in this sense, some interesting progress will probably be made.
You comment in your blog that if the European summit does not fulfil expectations, tensions in the markets will grow even over those in 2007. Could you give a more detailed explanation about what should be done? It is essential to surrender sovereignty if we want to advance. Furthermore, it is necessary to take measures to stop the recession because what has been done so far is not enough. The European Central Bank should intervene massively in the markets to achieve stability. It is also importa
nt to develop an European Treasury. In a given moment, the main European economic policy should have been focused on Germany, but it was on other countries; now, it is just the opposite situation: it is focused on Germany and should be on Spain, Portugal… in the countries that really need it.
Is it possible a monetary union without this surrender of sovereignty? Will we see this actually happening? To the first question, my answer is no, categorically. Whether we will witness this surrender, I say yes, but it will not happen quickly enough or emphatically enough to really end up with the problem. If there is not a surrender of sovereignty, a solution will not be reached.
Also, the sovereignty surrender requires a banking supervision channelled by a European deposit guarantee fund with European authorities retaining the control. It is also important that Brussels manages the currency. If the ECB lends money, it is the one that must supervise, which consequently will introduce more stability in the euro area.
What do you think about last Merkel’s statements? If Germany does not give its position away, there will not be a solution. The truth is that everybody must give up, not only the German. The solution to this problem involves a major cooperation stands. This is the ony way to save the euro.