A Foursome On European Monetary Union

I repropose here a series of four articles I wrote just over a year ago on the European economy and European Monetary Union at a time when economic growth was basically flat, as it has been in some European countries, especially Italy, for almost a decade. Most recently, however, the pace of growth seems to have picked up.
Nevertheless, if the US goes into recession towards the latter part of 2006 or into 2007, then we will have a chance to witness a real first test of the robustness of the European economy and monetary union and its energy relationship with Russia, even against the backdrop of the latest flair up in the decades-long war in the eastern Mediterranean (and don't think that this has had no impact on Europe, especially the Mediterranean Europan countries).

Here goes.

mercoledì, 01 giugno 2005

1. Something Has To Give

Sandwiched between the competitive forces converging upon them from Asia and across the Atlantic, the Europeans paint themselves into a corner with contradictory economic and social policies. The French rejection of the proposed EU constitution, itself absurd as far as Constitutional documents ought to go, is an expression of utter confusion as how to lead and act in the face of demographic and social stagnation while major portions of the rest of the world industrialize, erasing the two-century or so headstart that the Europeans had.

Now there are reports of German leaders talking about trashing the euro as a failed experiment, acknowledging growth and inflation differentials across eurozone countries.

Something has to give and perhaps competitive devaluations are a less worse solution than contradiction and utter confusion, than subliminal slow decline, unperceptible to the majority of citizens because blinded by the spectacle posed to them by the two-headed monster, i.e. the contrived spectacle of petty party politics.

Many energetic, talented good-willed people would have given their hearts and souls, while still in their precious youth, to forming new economically and culturally creative enterprises on European soil.

But in the event they didn't.

Because the two-headed monster, affectionately known as Teitmeyer, said, "No".

venerdì, 03 giugno 2005

2. Something Has To Give II: future of euro

Italian labour minister Roberto Maroni added his voice to figures in Europe casting doubt on the utility of the euro going forward.

While actual scrapping of the euro is unlikely, these latest statements are tantamount to acknowledgment, at least to some extent, that the structural rigidities of the European economy are unsustainable.

The question is: will this acknowledgment spread to more senior figures among the ruling classes in Europe?

I'm going to ask Tietmeyer. And I bet you I know what Tietmeyer will say.

Tietmeyer will say, "No!"

martedì, 07 giugno 2005

3. Another Useless Mouth

European Central Bank governor Trichet says Europe needs reforms to grow.

Thanks.

His and other useless mouths of overpaid bureaucrats have been uttering this and similar platitudes in various European countries for some fifteen years now.

Europe does not need another several years of the same useless mouths repeating platitudes like "Europe needs reforms to grow".

Europe needs a dynamic, creative, courageous, forward-looking ruling class that talks less and actually implements reforms.

But even this is easy to say.

And Tietmeyer still says, "No!".

mercoledì, 22 giugno 2005

4. The Real Meaning of European Monetary Union

The recent back and forth between Chirac and Blair, Shroeder and Blair only serves to confirm what we already knew about monetary union in Europe back in 1997.

Back then we wrote ... "The purpose of monetary union in Europe is to give the ruling classes of Europe more time to manage some of the underlying fundamental moral and economic problems. There is no question of resolving them as a result of EMU, but just to give more time to manage them in the hope that some solution may evolve, assuming of course that the ruling classes even pose themselves the question or attempt to actually resolve them. History shows that this is not a given."

Indeed, politicians can be great actors, building merely their own careers and leaving it at that.

In the meantime, the best creative energies of millions of wide-eyed young people have been sapped away.

And Tietmeyer still says "No!".