A nonexistent but indispensable parallelism. The people responsible for managing the eurozone, along with the honest experts and economists, are perfectly well aware of the fundamental reason preventing the effective management and stability of the single currency - it can be found in the absence of parallelism between, on the one hand, the giving of support to the countries in trouble and, on the other hand, the effective control of respect by these countries for the commitments they have undertaken. Greece's behaviour, which has never seriously respected the conditions to which the funding they received was linked, has strengthened the reticence; but other eurozone countries have also been at fault one way or another, which explains the reticence and distrust.
The result is that the financial support mechanisms for the euro countries in trouble will only be able to act automatically or totally effectively when the common monitoring systems are working. We can see this all around us. But getting these systems up and running is a long process. Mrs Merkel and her staff are currently working on a project including, in substance, yielding national governments' sovereignty to the European institutions; reciprocal control between national parliaments and the European Parliament on the budgets of the member states and EU; and automatic appeal (or almost) to the EU Court of Justice against countries that don't respect the agreed discipline. Some aspects of this project have been criticised and their accomplishment involves delicate negotiations and considerable lengths of time.
The gap between the urgency of intervening on the markets in case of necessity and the necessary time for institutional changes is clear. It is not only a question of changing the way the EU's own institutions work (a subject on which the Van Rompuy group's report is especially awaited) but also of taking into account the compatibility between the planned innovations and national constitutions.
The Greek example, and beyond. Indeed the very real complications I have mentioned are quietly forgotten in some controversial positions, and on both sides of the political spectrum.
It's just demagogy, for example, among those who demand that funds to Greece be continued with the timetable for this being prolonged, whilst there is absolutely no chance of the planned conditions being respected, even with two years longer! The conditions of Greece's economic recovery would be better fulfilled without the constraints of the eurozone, with Greece being an EU member state supported by Community policies. And the restrictions imposed on the population would be less harsh than those that are currently required.
Is it necessary to add that prolonging the Greek timetable would cost other countries of the eurozone dear - countries that are currently engaged in their own operations of economic recovery? Of course the demagogues who pretend to help Greece avoid mentioning this aspect or simply ignore its existence.
I wonder to what extent the world of finance might be involved in the opposition or the reticence with regard to Greece's leaving the eurozone. Banks which own Greek treasury bonds bought them while exercising particularly high interest rates, which can be justified exclusively by the existence of corresponding risk. These banks accepted this risk, they have to face it. It would not be acceptable for banks to exercise rates of usury, take advantage of them for as long as possible and reject the possibility that their credit might then lose value. The ECB (European Central Bank) has found itself in more or less the same situation. It seems ready to pay back the exaggerated interest received.
The control of commitments. Putting this particular case of Greece to one side, Germany and a few other member states believe that the eurozone countries appealing for existing support instruments must subscribe to strict commitments and provide substantial guarantees. Yet some figures in Germany can't hide their bafflement with regard to the project to make the ECB intervene in cases when the markets demand excessive interest rates to subscribe to a member state's treasury bonds, even if it is seriously committed to the reforms. Jens Weidmann, head of the Bundesbank (and so a member of the ECB governing council) said that reducing the debt of a country at fault results in the country slowing down its reforms: “It's like a drug”. He continues to fight for the ECB's intervention to be limited. And his colleagues make reference, beyond the Greek case, to the past behaviour of Italy when the prime minister was Mr Berlusconi. Mr Monti inspires confidence - but will he still be prime minister next spring?
Speaking to a brick wall. The result of the situation is often like speaking to a brick wall. On one side, we demand a system of automatic intervention of euro instruments in favour of the member states in trouble, without being concerned to explain how the effective use of the support funds would be guaranteed and monitored. On the other side, we ask for monitoring to work and be effective before the support mechanisms can come into play.
This situation prolongs the uncertainty and enables financial speculation to prosper. In the absence of reciprocal understanding and behaviour which proves it, the Finnish approach could make progress - which favours the single currency leaving aside the Mediterranean countries, except France which is in the process of relaunching and consolidating its cooperation with Germany. The next four months will be decisive and uncertainties persist. (FR/transl.fl)
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