Sunday, November 27, 2011
New stability pact
Germany, France plan quick new Stability Pact: report (Reuters)
- France and Germany are planning a quick new pact on budget discipline that might persuade the European Central Bank to ramp up its government bond purchases, Welt am Sonntag reported on Sunday.
Echoing a Reuters report on Friday from Brussels, the Sunday newspaper said the French and German leaders were prepared to back a deal with other euro countries that might induce the ECB to intervene more forcefully to calm the euro debt crisis.
Comment: The logic of the matter is coming to its conclusion: a deeper trade integration requires a monetary union, and a monetary union requires a fiscal union. Not opting for a fiscal union means to discard the monetary union, and discarding the monetary union means desintegration of trade.