Gavyn Davies: Europe Must Compromise To Solve Its Debt Crisis
This is the absolute truth. Indecisive politicians and lack of leadership are two most significant EU problems.
Finacial Times Blogs / Gavyn Davies: Europe must compromise to solve its debt crisis.
…The first point to note is that the required budget adjustment for the eurozone as a whole (at only 5.5 per cent of GDP) is much lower than that required for the US (11.6 per cent) and Japan (13.0 per cent). Furthermore, the planned fiscal tightening from now on, based on announced plans, is about the same size as that in the US, and is bigger than that in Japan. Consequently, if the EU could wave a magic wand and create a fiscal union tomorrow, its overall budgetary position would be easily the best in the developed world. There would be no “European” sovereign debt crisis. It is very important to remember this, because it shows that the solution to this problem lies in Europe’s own hands…