Inside Story - Survival of the fittest in the Eurozone
From: Inside Story

The survival of the Eurozone’s fittest

Are tensions in Berlin and Rome raising questions about the future of the euro?

On Tuesday, thousands of workers took to the streets of Italy in a general strike to protest against a package of austerity measures, adding to tensions in a crucial week for the future of the euro.

The strike placed mounting pressure on the government of Prime Minister Silvio Berlusconi, which last month proposed the austerity package of $64bn, in exchange for the European Central Bank buying Italian debt in order to help the country fend off a sovereign debt crisis.

In Germany – the Eurozone’s effective paymaster – the constitutional court rejected a lawsuit aimed at preventing Berlin from participating in bailouts for struggling governments. The court ruled that Germany’s contributions to a European Union bailout fund for Greece were legal, finding no proof that the amount of the guarantees left a hole in the country’s budget. The judges did however say that parliament’s budget committee must have a bigger say in any future bailouts. This will likely make it more difficult for Germany, and therefore the Eurozone, to move as quickly on any future bailouts.
Will the sovereign debt crisis in the Eurozone spiral out of control? And what would it all mean for the euro?

Inside Story, with presenter Teymoor Nabili, discusses with guests: Udo Steffens, the president of the Frankfurt School of Finance and Management; Pietro Paganini, an adjunct professor for management at John Cabot University; and Fabian Zuleeg, the chief economist at the European Policy Centre.