Magazine article Newsweek International

Booster Barroso

Magazine article Newsweek International

Booster Barroso

Article excerpt

Byline: Dan Gross

Can his team do enough to save the euro?

When Jose Manuel Barroso, president of the European Commission, and his entourage swept into Newsweek's offices in late September, the procession had the aura of a victory lap. Earlier in the month, the European Central Bank (ECB) finally stepped up and promised to purchase government bonds of struggling countries (Spain and Italy, to name two likely candidates) that formally ask for help. That seemingly decisive move pushed interest rates on government debt lower across Europe, fueled a stock-market rally on both sides of the Atlantic, and buoyed the euro against the dollar. "People have predicted the default of Greece, the end of the euro," Barroso told Newsweek. "This is now out of expectations." Barroso, who used to coach his kids' soccer team, chose a sporting metaphor: "We are in the beginning of the second half and are resisting very well," he said. "I believe we will win."

Some members of the European policy-making team have distinguished themselves, and European Central Bank head Mario Draghi has emerged as the Cristiano Ronaldo of Europe--a game-changing superstar. But like Ronaldo, Draghi can't be a team of one. "More than Cristiano Ronaldos, what you really need is team spirit," as Barroso put it. And as the week unfolded, the team spirit was declining. It was apparent that the ECB's measures alone couldn't alleviate the underlying conditions that have prolonged the European financial crisis: the lethal cocktail of high debt, slow growth, and hesitant reforms. …

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