Eurocrash: tulip mania revisited
Saturday 8 September 2012
The transition from panic to EUphoria, though, has all the hallmarks of a latter-day miracle. Next thing, Draghi will be packing up his loaves and fishes and jetting off to Athens (if he can get there), to feed the indigent 5,000. Nevertheless, despite the transformation in Spanish bond prices, Welt asserts that it is "beyond question" that Rajoy will still have to pack his bags and go to Brussels where he will have to make the request for assistance from the euro rescue pot. That much he will have got from Angela Merkel, who was paying a visit to the beleaguered Spanish prime minister on Thursday. While the public statements were less than informative, no doubt hard words were exchanged in private when, it is said, it was clearly understand what they expect of him. Yet Rajoy remains true to his reputation as a procrastinator - but this time possibly with strategy. He is, we are told, betting that he, as with the banks, will get special treatment. Bizarrely, even as his country goes down the tubes, his main concern is whether the EU commission and the IMF can cobble together "country-specific conditionality" that will help him save face. For the prime minister, though, the key date is 15 September. While he plays his games, the unions have announced mass protests for this date, with the specific target of bringing the government down. We will see, for the first time in this three-year crisis, street action with an overtly political objective that goes all the way to the top. Whether it succeeds will be a great test of the labour unions in the country. Meanwhile, Greece has had the Van Rompuy treatment, and the Greek trade unions are to mount major protests today, attacking the new austerity programme. The protests are focused on the northern Greek port city of Thessaloniki and police have sent 3,500 personnel to deal with the expected riots. Some will find themselves policing their own, since police officers are planning their own demonstration. But that probably says all that is needed about the way this crisis is developing, lending a degree of unreality which makes the surreal seem relatively sane. A sort of madness is gripping the project now which defies explanation or analysis. It is getting to the stage where we are seeing warnings of stock market bubbles, where the herd rules. By contrast, even the tulip mania psychology looks sensible. The worst of it all though is that there is no knowing when this madness will end. Once it gets like this, there is no way of predicting what will happen next. COMMENT THREAD Richard North 08/09/2012 |
Eurocrash: eine europäische Öffentlichkeit
Friday 7 September 2012
Amongst its various activities is to award an annual media prize which "honours a European personality who, through his or her work has left their mark on Europe".
And, in a presentation yesterday evening, this year's award - sponsored by Google and Audi - went to none other than Mario Draghi, president of the ECB. It was given specifically in recognition of his commitment "to solving the global economic and financial crisis", and for his contribution to a more stable institutional framework of Economic and Monetary Union in Europe.
Draghi's acceptance speech proudly graces the ECB website and although not expressing any new ideas, is a useful summary of the state of the art from the ECB perspective. The main thrust of his speech was to address the defects in the institutional design of the euro area, and then argue that there is a need to develop a new architecture that properly reflects lessons of the current financial crisis. Together with the presidents of the European Council, the commission and the eurogroup (making up the "quartet"), he acknowledges that he has been "given the task of working on such a vision for the next decade". And the group, he says, has aimed to be "as pragmatic as possible". With this in mind, the "realistic and attainable" conclusions are that member states "will have to pool more sovereignty in selected policy areas" – but only "where it is essential to ensure a stable and prosperous monetary union". This, says Draghi, "will be accompanied by broad democratic participation and legitimation". The quartet's "vision" for EMU has four pillars: fiscal union, financial union, economic union and political union. Progress on all four, says Draghi, "should be made simultaneously". The first three pillars will help to steer fiscal, financial and economic policies in a sustainable way. They will also help to create institutions commensurate with the degree of monetary integration in the euro area. Commenting on the fourth pillar - political union – Draghi says this is "essential for engaging euro area citizens more deeply and making the other three pillars legitimate". But more had to be done to make the voice of Europe's citizens heard, he says. "We need what in Germany is calleddemokratische Teilhabe". For this he made a plea for assistance from his audience - journalists and publishers but also policy makers and academics – to help to develop what he called "a genuine European public space, eine europäische Öffentlichkeit", then declaring: Most of us in Europe are exposed mainly to our national media in our national languages. These media naturally define our perspective: our sense of the "public" tends to stop at national borders. But this no longer describes reality. What is happening in other Member States matters to all of us. Problems that cross borders require citizens to find consensus around common solutions.What he wants, therefore, is an exchange of media between countries, with newspapers, for example, publishing "imported pages" from foreign newspapers. This, says Draghi, "would allow citizens to get a better sense of how issues are seen in other countries; it would increase cultural sensitivity; and it could generate Europe-wide debates that divide along policy lines rather than national lines. Over time, such debate would help to put European decision-making on a more legitimate footing". Ultimately, we are told, a genuine European public space is essential for supporting the long-term vision of the euro area. Citizens need to be in basic agreement that, within a monetary union, certain economic models are no longer possible. These citizens "must understand that there are limits to national discretion in economic policies that affect the area as a whole. In other words, there needs to be a new consensus on economic policies that will reinvigorate the European social model and make it fit for the 21st century". Then we get our instructions. "This is a discussion we must begin today. Setting EMU on a path towards stability is essential so that we can move permanently beyond the crisis. It will send a clear signal to citizens and financial markets that the euro area is committed to staying the course. And it will remove any grounds for doubting the euro's future". So there we are. Informing ourselves about news from "foreign countries", it seems, is part of the process of creating "a genuine European public space". Ignorance, one might just conclude, is not only bliss, but eurosceptic. COMMENT THREAD Richard North 07/09/2012 |
Saturday, 8 September 2012
Posted by Britannia Radio at 03:00