This beats the annual Christmas Pantomime
Well, every day the eurofarce gets more surreal. Yesterday, Frau Merkel said this:
“The current crisis facing the euro is the biggest test Europe has faced in decades. If the euro fails, then Europe fails.”
What on earth does she mean by “Europe fails”? Why this recourse to sensationalism?
If the euro is sinking it is because people don’t think it is serious. If that is the
case, the only thing to do is MAKE it serious. This is not to be done by borrowing EVEN MORE money.
In the worst-case scenario (which Merkel’s antics are rapidly talking us into) the euro collapses and we go back to our old currencies. This would be a failure of the EURO, not of EUROPE.
Germany would return to being the economic powerhouse of Europe under the strong Deutschmark. Italy, Greece and other usual suspects would return to their quaint old ways with frequent devaluations.
So what? Better to be honest than go on suffering from a vast ego-bubble that will inevitably collapse in an explosion of hubris. (Thank you for the vocabulary, dear Greeks)
And once again, a country in trouble blames “the markets”. What sort of understanding of the real world IS this nonsense? A market is a place where things are bought and sold at a price to which everything sinks or rises according to what someone is willing to pay for it. Blaming “the markets” is frankly infantile. Yet Germany’s finance minister, Wolfgang Schaeuble, has done just that:
“I’m convinced the markets are really out of control. That is why we need really effective regulation, in the sense of creating a properly functioning market mechanism.”
What does he mean by “out of control”?
Is this to suggest that if they were “under control” everything would be OK? It’s potty. I haven’t noticed any “speculation” with the Swiss franc. I wonder why!
In a market, it’s supply and demand which controls, and this is the oldest control in the book. Selling the euro is because of European countries’ catastrophic debt, which Germany and France have just vastly increased with the bailout to Greece.
It is nothing to do with speculators. They are merely vultures, but these live off dead – or in the case of the euro dying – meat. The EU is obsessed by “control”, EXCEPT where it applies to their OWN FINANCES. You couldn’t make it up!
And Schäuble wants to rewrite the rulebook. Does he not see the stupendous IRONY in this? There already ARE rules about debt. Euro countries are NOT ALLOWED to go over a 3% budget deficit. But this rule is NOT OBEYED.
It has NEVER been obeyed by certain countries when it suited them, so what is the point of bringing in NEW rules if the OLD ones are disregarded?
He wants urgently to rewrite the rulebook of the eurozone to prevent any such crisis happening again, and at the same time to revive the momentum of international negotiations on tougher regulation of financial markets.
He has returned to the idea of an international financial transaction tax, to make financial institutions share in the costs of the crisis, even if it can be agreed only inside the European Union. Woffle. This is not the point at this time.
And to try to damage her battered image, Chancellor Merkel of Germany has unilaterally brought in a ban on naked short-selling (very noble) but WITHOUT consulting her European partners. Yet in the same speech she says that “Europe must act together”.
Christine Lagarde for one is miffed and denies Merkel’s hysterical “The euro is on the brink” rant. The impression of hysterical chaos is pervasive. Thanks Angela; things are bad enough without that.
This is a time for clear heads and calm. Unfortunately, we are not seeing either from Germany, the key player in Europe and especially in the euro. If the euro does “fail” – whatever that means – then Merkel, Sarkozy and the rest have only themselves to blame. Italy is looking very fragile and could be the “speculators’ next target, yet Italy’s chronic finances are hardly any surprise, are they?
In fact, why is anyone surprised by all this fiasco? Do the wrong things and you’ll eventually pay (or rather your long-suffering people will; you’ll be OK Angela, you have a very nice salary and perks). It’s a natural law of the universe. Newton could have said it.
Don’t ANY of our leaders understand this?
By Chris Snuggs