EU Needs a Plan B for Life Beyond the Euro, and Fast

Another weekend, another set of 'solutions' for the Eurozone hammered out in Paris or Berlin. Not that we know the details yet - of course not.

Another weekend, another set of 'solutions' for the Eurozone hammered out in Paris or Berlin. Not that we know the details yet - of course not.

This Eurozone situation is like 'Waiting for Godot' - Samuel Beckett's absurdist play. For it is now truly absurd.

We continue to head towards what looks increasingly like a road crash for the Eurozone and yet Europe's political leaders remain coy about the options on the table for their electorates.

The time for being coy really is over.

After weeks of caution from the UK on this issue - unwilling to be embroiled in a crisis made in continental Europe - you have to welcome UK Prime Minister's David Cameron's intervention in the Financial Times calling for 'decisive action'.

For as long as policymakers keep the potential solutions under their hats, markets will continue to make the solvency and liquidity situation even worse for EU sovereigns and our banks. All markets, investors and electorates now want is some clarity.

Last week in Brussels I attended the GFS News conference and it was clear from the IMF speakers they are losing patience with Brussels and its leaders. The world wants a roadmap for the Eurozone and soon.

Are we really now going to wait another month until the G20 in Cannes? Can we?

What amazes me in all this is that there seems to be no talk of a Plan B for Europe taking place.

The EU treaties' assumptions that there can be no rowing back on the nature of the Euro has created another fatal flaw in its design. The biggest flaw, of course, has been the lack of fiscal discipline and union over the past decade. A fatal lack of governance over the project from the EU Commission and European leaders.

Any household, any business small or large, needs to have a range of plans to cope with unfolding events.

The Commission should let it be known they have a Plan B for a two speed Europe - the so called loose:tight idea. This would have some states inside a federalised EU with fiscal union and the rest outside this framework. I think this would liberate many EU leaders to start to level with their electorates and create that firewall around the most problematic Eurozone areas we so desperately need.

But, afraid of some of the more irrelevant political effects right now, the EU superstructure does not appear to have Plan B for life beyond the Euro.

It should, and quickly.

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