The euro, the target of populist politicians who claim it has inflicted undue economic pain on Europeans, has a new lease on life after Emmanuel Macron, a firmly pro-euro moderate, won the French presidential election this week. There are political logjams making the currency more resistant to market crises and to end its most painful shortcoming — a reliance on crushing budget austerity to fix countries whose finances and economies run into trouble. Countries that ran into heavy debt — Greece, Ireland, Portugal, Cyprus and Spain — got bailout loans from the other members in return for massive cuts to public spending. [...] even countries like France or Italy, large economies that are struggling to grow but did not need bailouts, have had to focus on public spending cuts to meet euro rules. Roberto Gualtieri, who chairs the committee on economic and monetary affairs in the European Parliament, thinks the need for new steps is widely enough recognized that action could follow the German election in September. The European Central Bank took market pressure off government finances by offering to buy the bonds of governments facing excessive borrowing costs. Another is some more limited form of central fiscal help — such as EU-wide unemployment insurance that would automatically provide collective assistance when recession strikes an individual country. Gualtieri says the first step is to avoid reducing deficits too aggressively and to take a more balanced approach that would include more investment spending — and then tackle improvements to the make-up of the euro. EU jobless insurance, for instance, could provide a crisis cushion but avoid permanent transfers by requiring the assisted country to pay the money back over time once the economy improves.
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