Final Word from Monday, June 11, 2012

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When Angela Merkel speaks about a two-speed Europe, she has in mind the pace of European political and fiscal integration, but there's another way to look at it. Think of it for a moment as two-speed debt integration. One part of Europe (the eurozone countries) will speed ever faster toward absolutely uncontrollable debt that will ultimately affect every euro country more or less equally (thanks to eurobonds and the relinquishing of budget sovereignty), while the rest of Europe will continue to overspend, but in a less-coordinated way. According to Eurostat, the 17 eurozone countries had combined gross government debt last year of 87.2% of GDP, while not a single one of the non-euro countries even reached the eurozone average. The non-weighted average last year for the 10 non-euro countries was only 47.9%. The CR's debt figure, as calculated by Eurostat, was 41.2% of GDP. Unless taking over someone else's debt is your idea of a fun time, being in the slower part of a two-speed Europe might not be such a bad thing.[Czech Republic European banking union]