German Chancellor Angela Merkel’s ruling Christian Democrats Union (CDU) party just approved the principle of a country exiting from the shared European currency, according to Bloomberg.
Merkel urged steps towards a true political and fiscal eurozone at a meeting of her party’s annual congress today.
Allowance for exits (coerced or voluntary) from the currency would be the first step towards the foundation of a two-speed Europe—a region with and without the euro currency.
Closer political integration that would expand the powers of euro area leadership and the European Central Bank is looking more and more like the only way out of the sovereign debt crisis threatening to send the global economy underwater.
Although progress may be forthcoming from Merkel’s own party, approval from the greater German government and the German people will not be easy to earn. Many Germans have come out in opposition to plans to bail out PIIGS states using their own taxpayer money. Further, the treaty changes Merkel appears to be endorsing would directly violate the current terms of the German Constitution.
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