A banking union wasn’t strictly needed to solve the euro zone’s problems and what has been agreed isn’t even what the designers wanted. That said, with a few changes, it could be turned into something that is fit for purpose.
The boss of Credit Suisse blamed a few private bankers for recent U.S. legal problems. The Employees Association wants management to take more responsibility. Such blame-casting misses the point. In too many businesses, the culture encourages ignoring the voice of conscience.
Angela Merkel’s visit to London has been viewed as a snub to David Cameron’s aim to reform the EU. But it depends on what one means by reform. If he focuses on completing the single market, extending free trade, cutting red tape and boosting the City, the prize is achievable.
It’s a scandal that poor people in rich countries have to choose between eating and winter heating. The problem is not the traditional economic curse of inadequate production nor the modern scourge of malign neglect by politicians. This hunger is a symptom of societal malfunction.
Both are currencies that can be used for certain purposes, but not everything. They depend on networks of people but are not backed by a government. And their worth reflects demand, which is based on murky fundamentals. The trick is to monetize them while they still have value.
A lot is riding on the cleanup of euro zone lenders, which is being overseen by the bloc’s central bank. Progress so far is encouraging. But clarity is needed on a few more things to ensure that banks get a proper scrubbing and can therefore support an economic recovery.
The head of AOL managed to say something really stupid about employee benefits two weeks ago, and to sound callous while he was at it. It’s a shame Tim Armstrong came off so badly, because he was grappling with a serious topic without an easy solution: How to share costs fairly.
Finance Minister P. Chidambaram missed the whole point of his last budget. It wasn’t to make ingrained fiscal problems vanish by conjuring up unbelievable deficit estimates. Investors would have preferred a gritty appraisal of the tough tradeoffs ahead. He let them down.
The currency bloc’s leaders want weaker countries to sign contractual vows of economic reform. But there needs to be a quid pro quo. “Euro-rates”, where countries with lower interest rates subsidise those with higher yields, could do the trick.
Italy’s likely new leader is taking big risks by kicking out Enrico Letta. His majority is unstable, he knows little about governing and he is relying on Silvio Berlusconi for a critical reform of the constitution. If Matteo Renzi fails, Italy may need to call in the troika.