Saving the euro: Solutions vary nation by nation

AP News
Posted: Nov 29, 2011 2:54 PM
Saving the euro: Solutions vary nation by nation

As Europe's debt crisis threatens to consume the global economy, the 17 countries that use the euro have very different solutions in mind. Here's a look at some key countries:

_GERMANY: Chancellor Angela Merkel says in order for the eurozone to restore its financial credibility, its members need to give up more sovereignty, including surrendering some control of their budgets. Europe's biggest economy opposes one idea _ having bonds guaranteed jointly by all eurozone countries _ saying that would ease pressure on weaker countries to reform their economies. Many Germans are adamant about not being held liable for what many see as irresponsible spending by other countries. Austria's position is very similar to Germany's.

_FRANCE: Once hostile to the idea of eurobonds, the eurozone's second-largest economy is now the main voice in favor. President Nicolas Sarkozy has embraced a closer fiscal union as a way to prevent new financial crises. He wants the eurozone to have greater oversight of national budgets and impose stiffer sanctions for countries that break rules or manipulate economic figures. France has increasingly pushed for more intervention by Europe's central bank to bring borrowing costs down for weaker member nations.

_SPAIN: With its economy hurting badly, Spain is led by a lame-duck Socialist government until a center-right party takes over Dec. 22. Both want Europe's central bank to buy more Spanish debt to keep their nation's borrowing costs down and avoid a bailout. The Socialists support eurobonds, stricter oversight of national finances and greater penalties for scofflaws, but the conservatives have yet to state their positions.

_ITALY: New Italian Premier Mario Monti supports deeper European integration but his government has not said whether it would back a tighter fiscal union. Italy has, however, already let the European Union pore through its budget. Monti's administration has not stated its position on eurobonds, though they would certainly benefit Italy by lowering its sky-high interest rates.

_GREECE: Greece is led by a caretaker technocratic government and is already under strict EU financial supervision because it is existing on an international bailout. Greece has long favored eurobonds and the intervention of the European Central Bank to bring down borrowing costs for nations with high interest rates.

Leaving the Left
John Stossel

_FINLAND: A small country with a big voice, Finland opposes jointly backed eurobonds. It supports German calls for stricter punishments for nations that don't adhere to eurozone rules, and only wants to strengthen the European Central Bank so it can stage a massive intervention in bond markets if all else fails. It also wants a larger role in bailouts for the International Monetary Fund and non-European countries.


Associated Press writers contributing to this story included Alan Clendenning and Daniel Woolls in Madrid; Juergen Baetz in Berlin; Angela Charlton in Paris; Colleen Barry in Milan, Italy; Elena Becatoros in Athens, and Matti Huuhtanen in Helsinki, Finland.