Pisani-Ferry on the Euro Crisis

A sensible point of view, especially this:

Second, the eurozone still shies away from a comprehensive approach to its internal rebalancing. Price competitiveness is a relative concept, not an absolute value, yet the policy discussion still ignores this basic fact. This is paradoxical, because the ECB’s policy framework provides clear guidance. The ECB is committed to 2% inflation in the eurozone as a whole, which implies that lower wage and price increases in southern Europe arithmetically mean higher wage and price increases in northern Europe. The wider the gap between the two, the sooner the rebalancing will be achieved.
CommentsIt is time to say loud and clear that the ECB will fight hard to keep average inflation on target, and that northern Europe – especially Germany – will not attempt to counter higher domestic inflation as long as price stability is maintained in the eurozone as a whole. This would help significantly in mapping out a sensible rebalancing strategy.