For months, the leaders of the eurozone have acted like jugglers spinning plates on sticks, trying to balance the competing demands of banks, taxpayers, bondholders, and governments deep in debt.
The spin wasn’t exactly entertaining to unsettled financial markets. The eurozone chiefs seemed to be dithering to avoid making hard choices or to contain the problem – even as Greeks rioted, Slovakia’s government fell, and Italy’s prime minister, Silvio Berlusconi, was put on the ropes.
Many American economists warned that the eurozone’s wobbliness was the biggest threat to the US economy. German Chancellor Angela Merkel spoke of “Europe’s deepest crisis since the end of World War II.”
Finally on Wednesday at their fourth summit since the crisis began, the leaders made some choices.
Germany upped its already hefty contribution to a rescue fund. European banks were told to raise their capital reserves. China will be asked for an infusion of credit. Italy, with Europe’s highest debt level, promised to raise its retirement age to 67.
This shifting of financial losses, burdens, and risks only reveals just how complex and confusing Europe’s unity project has become. The euro nations share a currency but not much centralized sovereignty over their individual spending. That contradiction will continue to weigh on this continentwide experiment.
The patchwork of solutions is only a temporary fix until the euro nations can see how much they want to further unify or let some members loose. A few other troubled nations – Ireland, Portugal, and Spain – have shown progress in cutting their budgets. But Europe as a whole is in jeopardy if Greece and Italy are finally abandoned by the markets as being just too risky.
This string of summits during the crisis only points to the need for more unity and more political courage. The latest summit, even if not a complete solution, on the surface shows that these leaders want to move forward, not backward.