Time for change

German Chancellor Angela Merkel recently said that financial aid for Greece would probably not be necessary and would only be used as a last resort. Now, it's surprising how quickly the worst case scenario has come about. The Germans and other Europeans are gritting their teeth and paying up.

Of course, this aid is frustrating. For decades, Greece lived beyond its means. Statistics were doctored several times and the country entered the European monetary zone with false figures. And now the rest of the countries are jumping in. Where is the incentive for improvement, not just for Greece, but also for the next bailout candidates, like Ireland, Portugal, or Spain?

But the European Commission and the other countries of the euro zone have apparently not wanted to know for some time exactly how Greek economic data was calculated. If nothing else, German exports were doing particularly well during a time of uninhibited borrowing on credit. And it's above all the Germans who have every reason to maintain stability in the euro zone. The country's entire economic concept rises and falls on it.

However, not all the work has been completed with the bailout. Without structural reform in the European Union, the next financial crisis is just around the corner.

Why have hardly any attempts to impose stronger controls on the finance markets made any progress? Why is it that a few rating agencies can determine the fortune of an entire national economy? Why do taxpayers rescue banks, only to have the banks turn around and speculate against entire states? It seems that lobbyists representing the financial industry are doing their jobs just as well as ever.

Things inside the euro zone have to change, too. Founding Europe's common currency was first and foremost a political decision, then an economic one, and the decision was based on periods of smooth sailing.

Now that a storm has moved in - one that has already lasted quite a while - no one seems to be playing by the stability rules. In the future, the mutual exchange of information between euro-zone countries must be improved so that an approaching crisis can be counteracted early enough. In addition, economic politics must be linked closer together. And although it's a taboo topic at the moment, temporarily removing a country from the euro zone must be an option in the future.

The European Union survived the first part of the financial crisis relatively well, because it took joint, decisive action. And there is every reason to learn from that.

Author: Christoph Hasselbach (mz)
Editor: Chuck Penfold