Charlemagne: Back to school

“LA RENTRÉE”, the start of the academic year, is a time of dread and hope for pupils. And so it is for the euro zone’s political class. Its performance last year was mediocre at best, but not as dire as in the previous two years. A chaotic breakdown has been averted. Greece, the worst kid in the class, avoided expulsion (and will get extra help). Latvia, the poster child for austerity, will join in January, while Ireland should graduate from its bailout programme. These days investors are fleeing emerging markets in other parts of the globe, not the old continent.One reason for hope is that the economy is returning to growth or, better said, it may have stopped shrinking. The fear is threefold. First, any growth may be so anaemic that unemployment will for a long time only worsen. With that, European politics may be destabilised and polarised, with dejected voters turning to fringe parties. Third, without a fear of impending catastrophe, incentives lessen for debtor states to make needed changes and for creditor countries to reform the euro zone.Much is still to do, but time is short. Banks need to be fixed and an emerging banking union must credibly spread...

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