Historians may look back at this moment and consider it the end-game of the current Euro-crisis- the three countries that were always going to ask for a bail-out did, but that was the end of it.
Spain suffered but survived. Italy hung on. And Belgium finally got its act together.
This is the best-case scenario, but what actually does happen next is anyone’s guess. In the short-term, will the bailouts be successful? In the long-term – well, just who would want to join the Eurozone now?
As they say in the US, “all politics is local”, but this looks like one of the few trends which will successfully span the transatlantic divide.
At the end of the day, Chancellor Merkel is not elected by Portuguese citizens, and her shocking defeat in the Baden-Württemberg elections a few weeks back will focus Christian Democrat minds, meaning that Portugal can expect few favours from Europe’s paymaster in the weeks and months ahead.
Germany will pay, but it will get its money’s worth. It has to. Make no mistake.
Further ahead, the question needs to be asked: will the Eurozone ever agree on a common fiscal policy?
The current crisis has demonstrated the folly of a “one size fits all” approach when it comes to a single monetary policy, stretching as it does from Finland to Faro, whilst fiscal policy remains a national comptetence.
It was worth a try, but the carrot hasn’t worked, so the stick needs to make a comeback. Hence, if Spain is to be brought back on an even keel, the Eurozone needs to act now or risk being terminally stunted by its members on the periphery.
It won’t go down well in Stuttgart or Salerno, but the time has come for the Eurozone to put its money where its collective mouths are!