Euro bonds won't work without a political authority that backs them up, says the European Economic Policy blog, but continues that we have seen over the last week that the EU has no intention of establishing such a government.
In the Wall Street Journal, Irwin Stelzer states:
One thing is certain: The euro cannot survive without a major change in the governance structure of the euro zone.
In a fairly detailed blog post Arend Jan Boekestijn wonders if it is five past twelve, instead of five to twelve for the eurozone (in Dutch).
We are still not offered any useful and open information by the German and French governments, but we see more and more reports about a new disciplinarian code among eurozone governments in the making. The Wall Street Journal article adds important details to what it calls fiscal union.
The pact, it is hoped, could liberate the ECB to intervene massively in the bond markets, something many see as necessary to prevent the eurozone from collapsing.
Have I understood correctly? If things go bad – and they already have – this intergovernmental agreement would put in place a state of emergency in individual countries, based on their prior consent. Formally democratic government would be preserved, but the policies dictated by the pact.
For all we know, these extraordinary powers could be assumed outside the political and institutional framework of the European Union (and the eurozone) with nothing in the way of transparency and public debate to influence execution.
And we still have no convincing promises of democratic European level government where the national level has failed? A Faustian pact, if I may say, dear Angela Merkel and Nicolas Sarkozy.