With new European Union leaders practically invisible and some national leaders acting largely for domestic political reasons, the burden of shaping a rapid and credible restructuring program for Greece has fallen primarily to the International Monetary Fund — exactly where proud European Union leaders had insisted it should not be.
Once again — as during the 2008 financial crisis and the more recent halt in European air traffic due to volcanic ash — European leaders have failed to surmount national interests and cobble together a coherent policy quickly enough to address a problem. In the process, they may have done permanent damage to the credibility of the European Union.
“There is no doubt that the European project has suffered structural damage from this,” said Jacob Kirkegaard, a research fellow in European affairs and structural reform at the Peterson Institute for International Economics here. “It’s clear that the IMF is the last man standing and is structuring the program.” Criticism is rising about the competence of European leaders, which has worsened the plight of all the countries in the euro zone.
Senior US officials, while not wanting to interfere in a European problem, have nonetheless expressed their anxiety to European counterparts and to the monetary fund itself. US President Barack Obama called Chancellor Angela Merkel of Germany on Wednesday to lend his support and encouragement for her willingness to take a bolder position to try to calm the markets.
Merkel has been the central figure in the debt crisis, as she has tried to respond to German voters’ displeasure at having to bail out Greece, after years of bailing out eastern Germany.