Things are more difficult at the IMF… Paul Collowald and Jean-Guy Giraud have reacted approvingly to comments I made recently about the EU's approach to its presence at the United Nations (see issue 10185): Why not make a similar move at the International Monetary Fund? Paul Collowald, erstwhile spokesperson at the European Commission under various presidents, including Raymond Barre, points out that “for 40 years now, there has been nothing to prevent the European Community speaking with a single voice at the IMF, where its 27 member states' weighting is around 32%, compared with that of the United States, which is 17%.” He says “It is a question of political will and current reflections must get Europe out of its under-representation.”
Jean-Guy Giraud, who was for a long time the European Parliament's representative in Paris and who has been closely and critically monitoring developments in implementing the Lisbon Treaty, finds it odd that the EU's initiative at the United Nations has not been accompanied by similar moves by Eurogroup at the IMF, “a move that has long been discussed and is strongly recommended by Jacques de Larosière and the European Parliament and which falls into an area where the EU holds exclusive power (the euro) and that is formally announced in the Lisbon Treaty (Art 138, paragraph 2)”. And yet the Commission has not yet unveiled the “crucial proposal”…
I believe the reasons for the official silence lie in the different implications of the two moves. At the United Nations, it is more than anything a matter of visibility - who speaks on behalf of Europe, who suggests resolutions to the UN Assembly and changes to existing documents, and so on. The IMF directly manages massive sums of money and the member states that fund the IMF are simply not yet prepared to see it jointly managed…
Political autonomy in the eurozone? The idea of duplicating the European Council by setting up a Eurozone Council alongside the full EU27 grouping has been ruled out. Angela Merkel opposed the idea and Herman Van Rompuy says it is pointless because he himself has the power to convene meetings of heads of state of the eurozone. He has already done so on two occasions, in fact, meetings that made important decisions. The idea has therefore been dropped due to political expediency.
The most recent joint suggestions by France and Germany, however, in their joint submission to the taskforce headed by Herman Van Rompuy (see yesterday's newsletter) include measures already generally agreed upon like the “European Semester” alongside others that would increase the autonomy of the eurozone both politically and in practice. The Franco-German submission argues that while awaiting the next changes to the treaty, the eurozone member states should sign a political agreement to enable countries that fail to respect their commitments to be excluded from voting and decision-making in various areas or at least for their votes to count as null and void.
Even novelists… I have on several occasions quoted in my column various descriptions of the incredible machinations of the wacky world of finance, usually by leading politicians or economists. The intellectual world, however, has also discovered the lunacies of the financial world. Here is a comment by the famous US novelist Richard Powers, who described the situation recently in an interview with a French newspaper: “Little geniuses created a system of imaginary values. It is a virtual system on various levels - people buy and sell using electronic tools that invent capital moving from one point to another. This virtual economy has started to have an impact on the real world. Trading is done in an imaginary world, yet transfers of money on such a scale are not physically possible. At some point, the house of cards must tumble down.”
As we see, he makes no stinging rebuke of the users or even the players in this house of cards. Richard Powers does not condemn the individuals (apart from the one who cheated, I imagine). It is the system that bears no relationship to economic reality, gives rise to disasters and must inevitably collapse at some point in time. The system should be totally banned, even if no individual crimes were committed. There are no arguments that could justify failing to demolish a system that enables people to pledge money they do not have and to buy and sell goods that they does not own, to the detriment of the real economy and millions upon millions of human beings. No political leaders should even countenance preserving such a system and no compromises are possible about the fundamentals at stake here.
(F.R./transl.fl)