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Europe is going through one of the traditional stages of economic recovery for the continent: It is behaving like a massive soap opera. This may be just the media's method for keeping score in a crisis. A few countries dig in their heels. Much more rarely, some powerhouse countries, like Germany recently, send a signal that it is willing to reconsider previously dismissed options.
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Reports during the weekend said Chancellor Angela Merkel told members of her own party, the Christian Democratic Union, that "under no circumstances" would she get behind a eurozone bond, called the eurobond. Other reports quote the chancellor as saying there is one possibility for Germany to accept eurobonds and the concept of regionwide protection for bank deposits -- an international version of the Federal Deposit Insurance Corp., if you will.
"The more that other member states get involved with this development and are prepared to give up sovereign rights to get European institutions more involved, the more we will be prepared to play an active role in developing things like a banking union," she said in an interview.
The treaties governing the European Union and the eurozone would have to be amended to allow for improved fiscal integration. Part of the shared currencies' greatest failings is the lack of collective protections, including a regionwide tax -- a federal tax, if you want to call it that -- and a collective protection of banks. As such, when the financial crisis hit, the EU had to start from scratch developing programs from scratch. A banking union is the logical next step: a system that would remain in place. Bank failures -- just ask the FDIC -- come with the territory. Using a bes-practices approach, an international agency that protects depositors is, at least, the leanest rescue plan that would work. Let the industry take care of its executives. Let collective policing take care of the liabilities and assets.
Just before the weekend, Spanish Prime Minister Mariano Rajoy called for a central authority that would oversee each member's budgeting decisions. In Ireland, a stark contrast to Greece, voters approved the EU rescue plan, confident the country would recover, even though it was time now to quit dancing and pay the fiddler.
Greece is preparing to hold national elections a second time because as the recent election failed to produce a coalition government. The surprise dark horse is Alexis Tsipras, the president of the Synaspismos political party and head of a coalition of left-leading groups bound together as the Syriza party.
Tsipras is backing a host of common-sense proposals that are too far outside the box for Greece to remain a member of the eurozone. He would prefer to raise taxes on the wealthy, whom he calls tax evaders. He would also suspend payments to the so-called troika -- the European Union, the European Central Bank and the International Monetary Union -- until the Greek economy begins to grow again, and skip some critical steps to which previous administrations agreed, such as reducing the minimum wage 22 percent.
Greece has set the next election for June 17. That miniseries will have serious consequences for the soap opera as a whole. A few days later, the EU will hold a summit to look at a banking union and a eurobond, provided by then the chaos hasn't escalated too far.
In international markets Monday, the Nikkei 225 index in Japan fell 1.71 percent while the Shanghai composite index in China dropped 2.73 percent. The Hang Seng index in Hong Kong lost 2.01 percent and the Sensex in India rose 0.15 percent.
The S&P/ASX 200 in Australia slid 1.94 percent.
In midday trading in Europe, the DAX 30 in Germany declined 0.71 percent. The CAC 40 in France rose 0.89 percent while the Stoxx Europe 600 was off 0.2 percent.
