The EU and Greece: What can one say? I'm certainly not going to repeat my long-held views that the EU will eventually collapse under the weight of its internal incongruities. And that it's always been a war-inspired political vision with little weight given to either democracy or, worse, real-world macroeconomics. So, leaving them aside, here and here are the coruscating views of two US economists. And, at the end of this post, there's an article from today's Times. Enough said.
You're not going to believe it but one of the highlights of living in an area rampant with drug smuggling is that, from time to time, the narcotraficos leave behind such unwanted baubles as helicopters or hyper-fast launches. I guess it reflects the profits to be made and it reminds me of the wine-makers in New Zealand who make so much dosh they can afford to hire choppers to hover over their vines in hot weather.
On British TV yesterday, the point was made that there's a Good Islam (the mainstream) and Bad Islam (Islamists such as ISIS). It reminded me I'd read the Koran - for the second time - about 10 years ago - and drawn this conclusion: The Koran is both inconsistent and ambiguous (even avowedly so at one point), so there is ample scope for GoodMuslims to come up with a tolerant, peace-loving religion and BadMuslims to come up with a hate-filled, violent, proselytising religion. Nice to find the rest of the commentariat catching up with me . . . .
Spanish: A new (to me) idiomatic phrase: Tener mono. Literally - 'To have monkey'. Means 'To crave'. As in Tiene mono de fama: 'He/she craves fame'.
Finally . . .In a lovely book about a year in the life of England's 14th century poet, Chaucer, author Paul Strohm gives the origin of the word 'gossip'. It derives, he says, from the phrase god-sib/god-sibling, or good friend. I see no reason to disbelieve him
The dream of closer union is melting away: Ed Conway. The Times.
The euro’s founders believed it would supplant the dollar as a reserve currency and knit Europe together. It has failed at both.
In more than a decade of reporting on the euro, I can’t recall anything like the scene in the press room of the European Council building on Saturday. One journalist was in tears; another was swearing down his phone; others just walked around in a daze. An EU official, her voice cracking with emotion, said her devastation was on the same scale as the euphoria she felt the day the Berlin Wall came down.
One can understand why: June 27 is now widely regarded as the day the euro died. Certainly, it was the moment Greece was cut loose and effectively expelled from the eurogroup, which became the first major European forum to meet intentionally without one of its members. This may indeed be the beginning of the end of the euro, but if Saturday marked the rupture, there is a case for saying the currency’s fate was set in stone five days earlier, on Monday last week.
For whatever happens to Greece in the coming weeks, the bigger question is what its travails imply for the rest of the eurozone. If the single currency is no longer irreversible, what is to stop speculators betting on a Spanish or Italian departure the next time there is a fiscal crisis? Granted, there was less contagion in European debt markets yesterday than some had feared: after a brief spike, Italian and Spanish bond yields — a barometer of sovereign debt stress — settled barely a fraction of a percentage point higher. Some suspect that the European Central Bank may be deploying calming countermeasures behind the scenes.
But such emergency measures will not ensure the euro’s long-term survival. If it has a future, it is as a fully functioning currency with a fiscal union, shared debt and a truly common market, with money and people able to move from country to country at will. And that is where last Monday comes in.
Though it was barely reported at the time, that was when Jean-Claude Juncker issued Brussels’ blueprint for the future of the euro. The subtitle of the five presidents’ report, as it was named (after the heads of the commission, the parliament, the council, the ECB and the eurogroup), was: “Completing Europe’s Economic and Monetary Union”.
In its 24 pages you’ll find many familiar buzzphrases (the euro is “like a house that was built over decades but only partially finished . . . It is now high time to reinforce its foundations”) and some bold-sounding plans, including a “euro area treasury”, a common banking deposit insurance scheme and a European fiscal watchdog similar to Britain’s Office for Budget Responsibility. Were you in any doubt that this is intended as the euro’s best bulwark against a Greek departure, look no further than the date it all comes into force: tomorrow, the day after Greece’s bailout is due to expire.
The problem is, it’s frankly not all that ambitious. Gone are the plans for mutualising the continent’s debt; gone is the idea of supranational bank deposit insurance; gone is the notion of treaty change to bring about a genuine two-speed European Union (much to David Cameron’s chagrin). As is often the case in Europe, the bold language is only a façade, masking squabbling and pusillanimity beneath the surface.
Like it or not, over the past three years (the last analogous report was written in 2012) Europe has become markedly less committed to deeper union. For further evidence, you need only recall the row over dinner at the European Council last Thursday, as leaders failed to agree a plan to resettle 40,000 asylum seekers from north Africa.
Tempting as it is to view this as the disintegration of the European dream, it is more likely just evidence of another phenomenon we see all over the world — a retreat from internationalism. The EU is not the only multilateral institution facing decay; consider the United Nations, the International Monetary Fund and the World Trade Organisation, to take just three. Yesterday, George Osborne signed the articles of agreement setting up the Asian Infrastructure Investment Bank, China’s answer to the World Bank. It may well end up lending Greece money if it slides out of the euro.
The reality is that the euro was a dream borne out of a world that no longer exists. It was a response to the collapse of the postwar Bretton Woods system, a currency devised to challenge the dollar’s supremacy as the world’s reserve currency. It was designed to constrain Berlin’s dominance of the continent and to knit its warmongering nations closer together. Today the dollar remains the world’s reserve currency and, as recent years have shown, Berlin dominates Europe more than ever.
When the euro coins and notes were launched in 2002, Wim Duisenberg, then the ECB president, declared that it was “the first currency that has not only severed its link to gold but also its link to the nation-state”.
However, as the Greek crisis has shown, the euro has done anything but. All it did was to round up a ragtag bunch of nations — some fiscally sensible, some routinely inclined to deficits and devaluations — and strap them in the straitjacket of monetary union. Now, in its first major test, nation statehood has reasserted itself, in the form of Greece’s referendum.
Far more prescient than Duisenberg was another of the euro’s progenitors, the former German chancellor Helmut Schmidt. In late 2010 he predicted that within 20 years the euro’s membership would have been whittled down to a “hard core” of France, Germany and the Netherlands.
Unless this crisis forces the euro’s members to really embrace the fiscal union that they’ve been rabbiting on about for so long, one suspects he will be proved right.