The Bundesbank said there should be no banking union until there is a fiscal union. Angela Merkel said that there should be no fiscal union until there is political union. And François Hollande said that there should be no political union until there is a banking union. They have 10 days to disentangle that knot.
Wolfgang Münchau,”What happens if Angela Merkel gets her way“, Financial Times, 18 June 2012.
That is the first paragraph of FT associate editor Wolfgang Münchau’s column. Münchau goes on to explain that, unless these parties strike a deal, Italy and Spain most likely will exit the euro and default on their foreign debt. Ironically, the resulting collapse of Europe’s financial system “would probably end up hurting France and Germany more than it would hurt Italy or Spain”.