Former Prime Minister Gordon Brown says the Eurozone must be fundamentally reformed or face collapse.
Over the past week, the European Central Bank has purchased €22bn worth of Italian and Spanish bonds sending yields down and taking some of the pressure off economies struggling under the weight of large deficits.
Without going as far as Chancellor George Osborne, who last week called for Eurozone bonds to be issued in exchange for closer fiscal coordination, Brown writes in the New York Times that the current structure is unworkable.
He says: “Some time ago I reached the conclusion that there is was no solution possible within the existing Euro structure. Either the Euro has to be fundamentally reformed by Europe’s political leaders and the European Central Bank or it will collapse. After the events of the last few days I know for sure there is not even a chance of a middle way.”
Brown argues the wider European Union is being held back by its current set up which requires agreement from all 27 member states on some economic matters.
He says: “Europe’s leaders are also handcuffed by an inadequate treaty of Union, by the problem of getting a coherent response from 27 different nations, and by a rise in anti-European sentiment in their home countries (particularly in Germany), which has deterred them from sanctioning collective action beyond that which protects short-term national self interest.”