If you’ve ever worked for an international organisation, the phrase “We’re just, rearranging the deckchairs on the Titanic!” is likely to have some resonance. It means that we all know we are in a dire situation, but rather than do something meaningful about it now that could alter the course of events, we are busy trying to look busy and engaged in activities which we know will not alter anything.
The Euro crisis is somewhat analogous to the Titanic disaster in that we know there are icebergs ahead and that we should avoid them – even if we cling to the idea that SS Single Currency, The Euro, is indeed unsinkable. It is not unsinkable, but it would take the perfect storm to send it to the bottom.
Chief amongst the deckchair crew is ECB president Mario Draghi. He pointedly remarked that: "it is not right for monetary policy to fill other institutions' lack of action". In other words, the political leaders of the Eurozone are the bridge crew and ought to be making course decisions, not the poor stoker! The ECB has injected €1 trillion into the financial system recently, however, as Draghi pointed out: "Some of the problems in the euro area have nothing to do with monetary policy". There is no point in injecting further cash if the fundamental problem lies with government policies within the bloc rather than a technical issue of liquidity.
The first class passengers are also getting restive with both President Obama and British PM, David Cameron calling for effective, immediate action to stabilise the Euro and restore market confidence that nation states can pay their bills and will support their banks.
If the ship of fiscal unity does strike the iceberg, there is nobody well placed to come to the rescue should the water-tight compartments fail. The end of the Euro would have far reaching and incalculable effects on the global economic situation. There is time to avert the disaster, but leaders need to lead.