Sunday, 13 November 2011
"It is not a solution to divide, the solution is to integrate. We have to create a stronger European Union"
That is what Jose Manuel Barroso - the EU Commission President - thinks.
The crisis of the moment is Italy, which needs to find money to cover its deficit. It also needs to convince bondholders to keep buying its debt.
Italian bondholders want to know one thing; will they get back all the money they lent to Italy on time? The Italian state is broke. Economic growth is negligible, while the outstanding debt stock is massive. There are good reasons to think they might not.
Therefore, Mr. Barroso's statement is loaded with financial implications. He's saying "if we have more European integration, then Italy gets more money".
So, if there is more integration, as Mr. Barroso suggests, then who is going to pony up with the cash to cover Italy's debts?
Germany is reluctant, France is almost as broke as Italy, and the UK government would fall if it began to support the bankrupt Italian state. Other European economies to too small to matter.
Integration doesn't pay off debt; only money can do that. So, Mr. Barroso's causality between integration and problem resolution seems a little faulty.