'Explosion' looming over instability of euro

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WASHINGTON – One leader in the European Union is warning of a possible "explosion" because of the instability of the euro, and Germany says it wants its partners in the coalition to change some treaties to build a foundation under the currency and inspire confidence by investors, a sentiment that indicates the underlying shakiness of the economy as well as the possibility of a coming United States of Europe, according to a report from Joseph Farah's G2 Bulletin.

Germany and France are proposing tough fiscal discipline, including near-automatic sanctions for countries that maintain excess debt or deficits.

As G2Bulletin recently reported, analysts believe dramatic changes are needed in the structure of the EU if it is to survive, and this will require not only political will by all eurozone members but also good policy.

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They add that the EU is at the stage where it needs to change to a more centralized parliament representing the respective members, who will have to give up some national sovereignty to create what amounts to a United States of Europe.

"The old EU is finished," said one informed regional observer. "The 27-member bloc has never been as unpopular as it is today."

As it now stands, the old EU is made up of countries whose parliaments can dictate the limits of their participation.

Members have seen how some countries in southern Europe with fewer resources and spiraling debt are forcing the more productive countries of northern Europe to bail them out.

Such bailouts come without any enforcement mechanism to require the southern countries to implement belt-tightening measures needed to help recover from their own economic downturn.

Although the suggestions to revise EU treaties that Germany and France are reviewing have been met with resistance, there now is an acknowledgement that something must be done if the Eurozone is to survive.

The push by the two richest countries in the EU – Germany and France – came in an agreement between German Chancellor Angela Merkel and French President Nicolas Sarkozy.

"The risk of explosion is looming if the decisions taken with Angela Merkel are not put into effect," Sarkozy warned members of his ruling UMP party.

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