It’s always been leading towards this. As the old saying goes “never leave a good crisis go to waste”, especially as your deliberate dithering has caused it in the first place. The EU is pushing towards a banking and fiscal union. Spain has refused a humiliating bailout and drastically looking for some alternative solution. More EU and not less is the solution proposed. 

Sources familiar with the Spanish government’s thinking said its negotiating position was that the fundamental quandary facing the eurozone was not Spain, but a European failure of leadership in persuading the financial markets that the euro would be defended at all costs.

A Brussels summit at the end of the month would have to remedy that by agreeing to establish a eurozone banking and fiscal union – major federalising steps certain to be fought over. Without that commitment, Spain fears the single currency would be finished in months.

The Spanish government believes that the eurozone’s fourth-biggest economy is too big to rescue and that the consequences of abandoning Spain to the markets without a pledge of major European reform could be so ferocious that the single currency would not survive.

The current rules governing eurozone bailouts stipulate that a government has to request help and that the money may only be channelled via governments – increasing the national debt burden.

All hopes are on the end of month meeting.

But Spain is stalling until key euro group meetings, the G20 summit and the Greek election later this month. Some analysts believe that if Spain is finally forced to request a full-scale EU/IMF bailout it is likely to come around 20 June.

Sources in Brussels confirmed that a rescue plan was being hatched for Spain – but it could be limited to desperately-needed banking aid, rather than a full national bailout.

All eyes are on Merkel to come up with a plan to save the euro.

Berlin is pushing the fiscal union, but on its own terms. It wants to force common rules and targets but avoid any early commitment to sharing liability for the debt or bank savings of individual countries. David Cameron is to go to Berlin on Thursdayto try to push Merkel into a more protective stance on the euro, which would entail German pledges to underwrite struggling countries’ debt. Following a telephone conversation with Barack Obama, the British prime minister will tell Merkel the US and the UK are insisting on “an immediate plan” on the euro, Downing Street said. The prime minister will tell Merkel the eurozone has no more than weeks to act to shore up the single currency.

She is priming the Germans for a political union and handing over more power to Europe.

Angela Merkel said Thursday she would work toward a reinforced political union in Europe “first and foremost,” saying that it cannot wait for all nations to be on the same page economically.

“We need more Europe… a budget union… and we need a political union first and foremost,” Merkel told German public television. “We must, step by step, cede responsibilities to Europe.”

“We must not remain immobile because one country or another does not want to follow yet,” She added

….

“We need not just a currency union; we also need a so-called fiscal union, more common budget policies. And we need above all a political union,” she added. “That means that we must, step by step as things go forward, give up powers to Europe as well.”

Ultimately the end game is to give up more power to the beaurocrates and cede economic sovereignty. It’s just a matter of playing this game until then.

Source: The Guardian, PressTV

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