John Bruton: The Euro crisis-What could go wrong?

The European Union is facing a crisis because of the loss of confidence in the debts issued by several member states. This is related directly to the problems and activities of Europe’s banks.

On 9 December in Brussels, the Heads of Government of the 27 EU member states meet, yet again, to come forward with a solution to the escalating loss of confidence in the debts owed by European banks and governments. Each time leaders meet, and come forward with proposals that, within days, prove to be inadequate, further confidence is lost both in the leaders themselves, and in the European Union, as a functioning and competent political authority capable of managing the affairs of its peoples.

This is corrosive. It undermines political solidarity within and between Europeans, and it encourages reversion to 1930s style nationalism, and to general anti politician sentiment, which could eventually erode the tolerance that is essential to democracy itself.

There is a limit to the number of failed government bond auctions we can endure. Many further such bond auctions are due in January and February. In February there will be a General Election in Greece, and the campaign in that election will be critically influenced by the perceived effectiveness of present EU arrangements and the steps Greeks are having to take to comply with these arrangements. If there is to be a good result in that election, the EU needs to show electors that it is in control of the situation.

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John Bruton was Prime Minister of Ireland’s Rainbow Coalition government in the mid-1990s