The change of tone is striking. How long will it be before people understand that the EU is in a flurry of creative activity? The sheer scale of the projects under examination in the economic and financial domains is staggering. Economic governance is being introduced; a credit rating agency monitoring system is being prepared; new legislation is being drafted on director pay and bonuses in the financial world that will restrict stock options and golden parachutes; and the president of the European Commission has just announced new legislation on naked short-selling in October (Germany has already tightened up its rules). It is all in a state of flux.
I will not list the various projects and achievements as they are all reported upon in this newsletter on a regular basis. Instead, I will quote three leaders who explain why they are determined that a strong line has to be taken against the reckless behaviour of the world of finance. It is all in the pipeline, of course, but it is their change of tone that is striking.
1. Jean-Claude Trichet: values and terminology. The president of the European Central Bank (ECB), Jean-Claude Trichet, said recently: “I am keenly aware of the divorce between the values of our democracies and the values of the world of finance. The values of the world of finance have to change. The spirit of our time will not put up with them.” Asked about member state austerity programmes, he said: “There is a real problem of terminology here. What you call austerity, I call gradual return to wise budgets. Wise policies always foster growth because they boost the confidence of households, companies and investors - and confidence is vital for recovery.”
2. Valéry Giscard d'Estaing: Germany's decision. Commenting on Germany's decision to ban some forms of naked short selling (the speculative wheeze whereby it is possible to sell and make money on shares or securities one does not actually own), he said: “Germany has acted unilaterally and has come in for a lot of criticism. It had, however, made suggestions in this direction on several occasions in the last few weeks without getting any response. If the decision had been taken by the eurozone as a whole, it would have had a bigger impact.” Germany's finance minister, Wolfgang Schaüble, explained: “We have decided to take national measures until measures become possible at European level.” One awaits the Commission's measures.
3. Giulio Tremonti: virtual economy. Italy's finance minister commented: “For the first time in history, the virtual, paper economy has become more important than the real economy. In the past, only the real economy existed - manufacturing products, making discoveries and technical progress. Banks used to serve the real economy. This relationship existed virtually unchanged for two centuries of capitalism but has been smashed. The virtual economy started to take on a life of its own and financial transactions are now totally divorced from the real economy. The financial market has become global, shrugging off rules and controls. Europe was not prepared for this type of globalisation. We had a European market and a European currency but no form of economic governance.”
Economic governance is precisely what the EU is trying to set up. Things are not looking very hopeful at world level (the G20) at the moment, but Europe will make progress irrespective of what happens elsewhere - Europe in the eurozone that is.
Lorenzo Natali: the significance of ceremonies. The 20th anniversary of the death of Lorenzo Natali, erstwhile vice-president of the European Commission, provided an opportunity this week for a twin-pronged ceremony - the publication of a book of eye witness reports by people who knew him, headed by Jacques Delors, and a meeting of leading Europeans who worked with him, headed by other Commission vice-presidents (Etienne Davignon, Frans Andriessen and Manuel Marin), the current president of the Commission, José Manuel Barroso, MEPs, civil servants and journalists.
Why such a confluence of big names? Because Natali left behind an unusual legacy. He was the man who completed the accession talks with Greece, and then Spain and Portugal, enabling these three countries to join the European club (Marin and Barroso, young under-secretaries of state at the time, were on their countries' accession negotiating teams). Natali was the Commission's first official interlocutor of the European Parliament, the very first environment commissioner (the job had never existed in the past), and he spent the end of his time at the European Commission fostering closer ties with Africa, reflecting his vision of the world. A well-respected annual prize for journalism in the field of EU-African relations that he set up is still going strong. Jacques Delors saw him as his closest collaborator, often entrusting him with running the Commission while Delors focussed on big European initiatives. (F.R./transl.fl)