Eurozone Summit Was A Dud

The Financial Times reports that eurozone leaders were unable to decide on a course of action to resolve the problems of slow economic growth, the ability of the banking system to absorb credit risks, and fiscal consolidation in Greece.  They put decisions off until their next meeting in June.  One of its problems is the lack of agreement about how to deal with their common problems.  The most striking difference is between Angela Markel and the new President of France.  Hollande wants to give reassurance to Greece that the leadership is committed to keeping Greece in the union.  Markel, has taken the position that Greece's membership in the union is conditional.  She is worried about moral hazard that might spread from Greece to other countries with debt problems.  They would be less willing to live up to their fiscal consolidation commitments if Greece does not live up to its fiscal commitments.  There is also disagreement about the role of the ECB.  Some leaders support the idea of eurobonds that are backed up by the 17 member states.  German leaders, see that as a measure of last resort.  In the meantime, the euro continues to fall in value relative to the dollar.