Angela Merkel is right. It is not often that I have said this about the German chancellor. I continue to disagree with her overbearing obsession with fiscal stability at a time like this, and her refusal to engage in a dialogue on macroeconomic imbalances. But on the specific question of the need for achange in the European Union treaties to create a permanent crisis resolution mechanism, she is indeed right. The current Lisbon treaty is simply inadequate to deal with the legal and political complexities of an institutional crisis mechanism. Such an institution is needed to replace the European Financial Stability Facility when it expires in 2013.
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