Wednesday, July 14, 2010

Whither Euro?

Anatole Kaletsky's comments hidden behind the Time's paywall today are depressing but oh so likley. The fact is that the political will within the EU has no intention of lettuingthe financial crisis ringdown the Euro, and the only other option is, as Kaletsky puts it fundamentally undemocratic.
"Voters must not be asked to give their verdict directly on the euro programme. Even assuming substantial fiscal convergence, German taxpayers will never vote for their money to be spent on supporting Greece, Portugal and Spain.
But luckily for the euro's survival, German voters will never be asked this question. The construction of a federal Europe has never relied on democratic support, merely on acquiescence and the force of habit. The creation of a viable single currency, backed by a European federal budget, will merely be the next stage of this non-democratic process."
Some straws in the wind that back up this dismal prognostication can be found today,
The outgoing Spanish EU Presidency will be remembered for overseeing the first steps towards a ''necessary and absolutely essential'' evolution from monetary union to economic union, Rafael Dezcallar de Mazarredo, Spanish ambassador to Berlin
He then points out the only problem with this is democracy,
However, he noted the lack of political discourse accompanying the proposals and acknowledged that a huge obstacle to achieving economic union remains – member state governments thinking in national terms.
''These substantial steps are still not accompanied by a clear political discourse, a
positive political vision – not only of what Europe is avoiding by doing this, but of what it can achieve: much more solid economic performance, a better capacity to compete with other parts of the world, an awareness that our economic interests demand common answers and in the end, something which will have inevitable implications towards political integration,'' stated the ambassador.
Of course minor issues like national democracy can always be overcome, after all they always have in the past.

Then we have Angela Merkle telling us,
"The federal government is aware of Germany's role as an example in the euro area. We have an essential interest in a strong euro, because a stable currency is indispensable for citizens' trust in the social market economy,"

Make no bones about it, she and the rest of them have no intention in failing in their manifest destiny to ensure a Euro fit for Government.

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