I think this really deserves some publicity.
Twelve european top economists just published a dramatic appeal on VoxEU.org. In terse words, they describe that the single currency is at stake and urge EU leaders to save the Euro. They implore them to
“ to take decisive action this week, any more delays could mark the end of the Eurozone as we know it.”
They argue that the debt crisis has reached the core of the Eurozone and refer to the fact that Italy and Span are now directly affected. Additionally, they point out that the creditworthiness “of more than one-third of the Eurozone is being challenged” and stress:
“For the first time, the very survival of the euro is at stake.
EU leaders gathering in Brussels on Thursday face a historical responsibility.
It is essential that an agreement be reached on a plan that prevents further escalation of the crisis.”
So what should politicians do? The economists argue that the European Financial Stability Facility (EFSF) should be expanded. It should “be able to make banks strong enough to withstand a default by Greece.” The EFSF should also be able to buy government bonds on the secondary market and “be given operational flexibility and independence”.
However, details do not matter at this point of time, as the economists argue:
“The important thing is to acknowledge that leaders are out of time. Deciding to not decide could mark the end of the Eurozone as we know it.”
The appeal is entitled “A call to action: EU leaders must act to save the euro and avoid a recession” and signed by Angelo Baglioni, Richard Baldwin, Tito Boeri, Paul De Grauwe, Juan Dolado, Luis Garicano, Francesco Giavazzi, Daniel Gros, Jean Pisani-Ferry, Richard Portes, Guido Tabellini and Beatrice Weder di Mauro.
I think they really have a point. Let’s hope that Angela Merkel and Wolfgang Schäuble have a look at the letter.