Merkel Unable To Move Forward With Her Agenda
The euro was steady near $1.37 on Thursday morning after a quiet week which was interrupted by the Christmas holiday. The common currency was strong against the dollar going into the new year as confidence in the 17 nation bloc returned.
With Europe's financial crisis under control and several eurozone nations having turned the corner towards growth, the bloc's policy makers are looking to take preventative measures to keep the currency union from breaking down again. However, with so many national interests being represented, many are are doubtful that any real changes can be made.
The Wall Street Journal reported that German Chancellor Angela Merkel is facing some push-back from other eurozone nations as she attempts to overhaul the region's economic policies.
At the EU summit in Brussels last week, Germany was successful in convincing the bloc to adopt a plan for handling failing banks which calls for more national responsibility than many Southern European nations wanted. Shortly afterwards, Merkel tried to convince her peers to enter into legally binding contracts with the European Union which would give it power to oversee individual members' economic policies.
The proposal has received little support and is unlikely to be worked out before the new year. Without any agreement about the region's economic policies moving forward, many worry that the intensive overhauls, which were considered necessary to avoid another financial meltdown, will make no forward progress.
Moving forward most will be watching the currency union for signs of progress. The European Central Bank has propped the bloc's economy up since the beginning of the crisis, but the central bank's leader Mario Draghi pointed out that the ECB's funding is not a substitute for economic reform.
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