European leaders' inability to make decisions until the last minute gets reactions.

Take a look the conditions facing the European Central Bank. It has to purchase the bonds of problematic countries of the European Union. Thus it gives way to monetary expansion. This way it saves time for the European Union leaders which somehow cannot make decisions to provide a radical solution to the existing problem. On the other hand European Central Bank's saving time for the leaders also play a role in the delay in leaders' decisions or in the introduction of band aid measures which reinforces the problems felt in the troubled countries. This is such a bitter situation facing a central banks. 

Reaction grows against European leaders

European leaders' attitude with reflects inability to make decisions until the last minute and their declarations after somehow making a decision that such decisions will not be repeated in the future, which at the end inflames the crisis gets reactions. On Friday on www.voxeu.org there was an article arguing that the European Union is in need of a psychiatrist than a financial guru. The author underlined that if the current conditions prevailed, all public debt issued in the European Union would become German's public debt. This might seem as an exaggeration; but if Ireland is followed by Portugal and Spain, this might become true. Of course there is another option which is considered by everyone and which is expected by a broader group: Euro will be abolished and each country will go to their separate ways. If this option comes true, you should definitely expect a chaotic climate. 

This film does not develop to a happy ending
The 2001 crisis should have taught Turkey one lesson if nothing else: you cannot obstinate with financial markets. Under normal conditions you can reduce public debt accounting to X percent of GDP to less threatening levels without facing major challenges by cutting budget deficit radically and lending to the state in trouble at market rates. However if you cannot even decide to extend such loan or demand high interest on the loan, or if you declare as Merkel and Sarkozy did in November that you are working on a plan which will shock the financial markets and suspend that plan upon the reaction of financial markets and then draw attention to debates on another plan we can no longer talk about normal conditions. In that case you cannot shoulder even three quarters of the initial public debt. You become the plaything of financial markets; you run away like a chicken with its head cut off from one decision to another.

I do not now how badly Europeans need a psychiatrist. But there is one thing I am sure of: This film does not develop to a happy ending. If I were in the European leaders' shoes I would weight the possibilities in case the awkwardness prevails and then stop procrastinating and take action.

This commentary was published in Radikal daily on 13.12.2010