During the last few days of my visit in Ireland and the UK I have had numerous discussions about the current situation in Europe and its future. I have come to a conclusion that there are ten reasons to be a Euro optimist these days:
1. Recent enforced ECB action to buy bonds
2. Pro-European election result in the Netherlands
3. Decission of the Karlsruhe Constitutional Court
4. Plan to create a Banking Union
5. State of the Union Speech by Barroso
6. Van Rompuy?s proposal on EMU
7. Financial framework negotiations
8. Possible Irish return to the markets
9. Structural reforms in many EU countries
10. Fair economic outlook
Europeans have heard a lot of good news during the month of September. Enforced ECB action has resulted to lower interest rates for Italy and Spain. Dutch voters said a clear no for Euro-Populism and yes for a stronger Europe.
Karlsruhe Constitutional Court has given the green light for Germany to participate in the ESM crisis mechanism and the European Commission issued a proposal on a Banking Union, which in essence transfers responsibility for the financial sector from tax-payers to where it belongs, i.e. the banks.
The President of the European Commission, José Manuel Barroso, made an excellent suggestion of European political parties submitting their candidates for the next Commission president at the EP elections. I personally think that the same logic could apply to members of the Commission with individual Commissioners being appointed from the ranks of the European Parliament.
A new sign of leadership and vision can be seen from the proposal to deepen the economic and political union by Van Rompuy. Financial framework negotiations in the other hand have demonstrated more effective decision-making within the EU.
During the summer Ireland quietly made a comeback to the markets with two successful bond sales. If Portugal continues with structural changes, it might just do the same next year. I personally admire the efforts of the Spanish government to continue on the road with structural reform and better economic competitiveness.
We are close to reaching a turning point in the euro crisis. Since the beginning of the current crisis in 2008, the euro-zone countries have been able to limit budget deficit much better that the UK and the US for example.
Europe is therefore heading to a right direction but more work is still needed to reach the destination. I am not saying that this will be easy but supported by right kinds of decisions it is possible. Meanwhile it is justified to be a Euro optimist.
