Econintersect: The 17-nation EU summit in Brussels on concluded on Friday without any concrete proposals.
According to AP, Germany and France pressed weaker eurozone countries to make their economies stronger to help pull the currency union out of its financial morass and gave their approval to strengthening the bailout fund that remains the bloc’s first line of defense against the crisis. Associated Press continues:
EU policymakers have vowed to come up with a comprehensive solution over the coming weeks. But many economists are skeptical that the final plan will be enough to avoid a debt restructuring or more transfers of money from the region’s rich states to the poor ones.
“Whatever the Grand Bargain proposals look like, they are likely to fall a long way short of the significant moves towards a proper fiscal union that are arguably necessary for the longterm survival of the single currency,” analysts at Capital Economics in London wrote in a note Friday.
Reuters reported that The head of Germany’s prestigious Ifo economic research institute on Friday slammed European plans to increase economic coordination, calling motions by the EU’s executive arm “ridiculous.” His statement continued:
“The Commission wants to monitor unit labor costs and fine a country if it deviates from others,” he told Dutch business daily Het Financieele Dagblad in an advance copy of the interview. “This is ridiculous. This is a central planning solution that is alien to a market economy,”