One of the main reasons for the magnificent restoration of the euro in the past month has been a feeling that politicians in Europe are moving towards convergence of its response to the debt crisis. Germany, European puppetmaster looks ready to take a broader mandate and to increase the size of the fund EFSF in response to an agreement on closer coordination of policies. According to the latest issue of Germany worked closely with France on the so-called "pact of competitiveness in Europe, the main issue that was discussed by EU leaders on Friday at a regular meeting. Some proposals in the pact include the harmonization of corporate taxes and sales taxes, the abolition of indexation of wages to inflation, increasing retirement age and automatic "brake levels, which prevent any government borrowing, for the sake of increasing costs.
Unfortunately, these assumptions are met widespread condemnation from other EU member states. Austria, France and Luxembourg have a low retirement age, and call it a key attribute of its social structure. Belgium, Spain and Portugal, fiercely oppose the idea of indexation of wages. Austria and the Netherlands, long time allies of Germany were particularly active in a statement that the policy on taxes and pensions has been the dominant national governments, rather than be the subject of multilateral negotiations among European governments. In fact, each of the eurozone countries except Germany, one way or another commented on the situation. The separation was so strong that any hope of an agreement during a special summit in early March seems almost unattainable.
On Friday, once again flared up angry debate that continues to undermine the stability of the single currency. For example, all European leaders agreed on the principles of greater economic and fiscal coordination, but once it comes to a particular issue, whether it be taxes or debts or expenses, the whole chorus of voices quickly disintegrates. As the principal payer of Europe, Germany fail to fulfill these obligations without an explicit change of behavior of its partners. And here lies the main problem for the euro, namely, in the absence of control mechanisms that prevent countries behave in economic decline. In the coming weeks we can expect many different voices of dissent with the current situation of the pact of competitiveness. " In the short term, it is negative for the euro.
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