Europe Still Wants to Start From Somewhere Else - by Clive Crook

The European Union seems stuck in an endless loop of the old joke about an Irishman (aptly enough) giving directions: "I wouldn't start from here."

ECB president Mario Draghi caused a surge of optimism, or let's say diminished pessimism, earlier this week with his assurance to an audience in London that the central bank would do "whatever it takes" to preserve the single currency: "Believe me," he said, "it will be enough." Good news, you think: That would have to include buying Spanish and Italian bonds, since that's what it will take. But hadn't he previously said, to loud affirmation from Germany and elsewhere, that the ECB lacked the authority to do this? Not quite, in fact. The question of authority turns on a distinction which seems to be important to Mr Draghi but that many others fail to understand. As the FT reports, he repeated this delicate point this week.

So once again, Europe can't quite start from here. Unless it can stipulate, of course, that it has moved to a different place without anybody noticing. Reforms are in place! Our preconditions have been met and our firm resolve rewarded! Mr Draghi, go ahead!

We'll see. Financial markets pushed Spanish and Italian bond yields a bit lower today. They're calculating that Draghi, at least, is coming round. I hope they're right. In the end, Europe's future is likely to come down to him.

Note EU-Digest: why  must pessimism about Europe always come from the other side of the Atlantic? 

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