Eurocrash: tunnel vision
Friday 31 August 2012
 Meawhile, the markets have been relatively quite – in part because the money is going elsewhere and partly because traders are holding their collective breath, waiting for the explosion. But it is the relative calm on the markets that strikes the WSJ, which has quite obviously failed to recognise the political drama for what it is. It is so narrowly focused that it cannot even see history being made. And that is why commentators continue to get it wrong. They have tunnel vision. It cannot be said enough times – this is fundamentally political, not monetary or financial. It doesn't matter how great your prestige, or how big your paycheque. Get that wrong, and you'll get it all wrong. COMMENT: COMBINED THREAD Richard North 31/08/2012 |
Eurocrash: it isn't complicated after all
Friday 31 August 2012
Clearly, the euro crisis cannot be that complicated – even The Economist can understand it (click pic to expand). "The euro’s crisis is fundamentally political, not monetary or financial", it says. "The ECB cannot fix the euro; it can only buy time".
Well, one can always be thankful for small mercies – they have finally recognised the truth of it. We've been saying it all along, and wondering why they get it wrong, with the likes of the Great Bootle confidently telling us that: "The eurozone's predicament is both financial and economic". Even though the mighty Economist has pronounced, however, does not mean anything is going to change. The hacks are going to stay wedded to their narrative, and the reports are going to continue with their financial and business bias. But recognising that the eurocrisis is political does help you understand what is going on. It helps you understand that there is no economic solution. There has to be a political solution – there can only be a political solution. It helps you understand, therefore, why the ECB can only buy time. It helps you understand why that has been the "colleagues'" strategy all along – buying time. They are waiting until the ground can be prepared for a political solution. It also helps you understand why – against all the odds – Merkel is pushing for a new treaty. That is the political solution, the only one that has a chance of working, even if it is probably doomed to failure, buried under the avalanche of debt. And even if it has taken The Economist so long to recognise that this is a political issue, the politicians were there a long time ago. They have been dealing with it as a political event – confounding their critics who have, in their ignorance, been expecting economic responses. If then the ECB, along with others, does manage to hold the line, buying time hour by hour, day by day, week by week, they might just get to the end of the year with the euro intact. Then we will see the proposal for a convention put to the European Council. Then, the "colleagues" will go for a new treaty. They have to, because that will be the only game in town, and because that was the intention all along. And if they defy gravity and succeed, thebeneficial crisis will have done its work. Simples really. COMMENT THREAD Richard North 31/08/2012 |
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