IN DARKER times language tends to be blunt. But when Europeans are feeling perky, out come the metaphors. And by that measure, things in the euro zone are looking remarkably bright. With the wind in Europe’s sails, it is said, the time has come to clamber through the window of opportunity and fix the roof while the sun shines. Failure will leave the euro exposed when the economic storm clouds gather, or China starts to sneeze.
Three things saved the euro zone from destruction in 2011-12: a €500bn ($588bn) bail-out fund, the rudiments of a banking union, and Mario Draghi’s “whatever it takes” promise—never tested—that the European Central Bank (ECB) would, if needed, unleash a massive programme of bond-buying to protect the currency. Each of these was supposed to be a last resort, as the wildfires of the crisis licked at the bond markets of one country after another. Red lines were crossed, sacred cows slaughtered, rules bent beyond recognition.
Those were...Continue reading
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