It is part of the eurocrat mindset that, on asking a referendum question and getting the wrong answer, they keep asking until they get the right one. In market research conducted by Brussels, however, there’s a different approach: if they get the wrong answer, they leave the question off the next survey.
I don’t know how many PRs the EU employs, but it must run into the thousands. And ever since the ‘eurocrisis’ started, every last man Jack of them has deliberately stuck with the process of asking what citizens feel about the euro – ie, the currency.
The short answer is that every ezone member but one loves the euro: it makes life easier, and (at first) it made hidden profiteering far easier. As a functional thing to make exporting within the zone more simple, it has clearly been a huge success. And for recreational cross-border shopping and travel, it has been a boon to most people.
The one State where the voters feel differently is…..Germany. There, over 70% of people think it’s been a license for lazy latins to have a real currency they somehow don’t deserve. Most to the point of all, the German nose says that they are going to wind up paying for profligacy; and they will crucify any politician or Party which helps that come to pass.
Anyway, the eurocrats are able to show (a) that 16 out of 17 countries in the zone want to save their currency and (b) the euro is thus what we must save.
But actually, what Brussels cares about is the EU, period. And when you ask citizens across all 27 members what they think about the EU, only a minority – around 45% – are in favour of it. The Commission long ago stopped using the word ‘Brussels’ in its research, because then people really do get angry about all the troughing, graft and ridiculous over-manning that is rife there. Further, without an EU needing a Commission in Brussels, silly as this sounds, Belgium would be in an even more parlous state. The whole centre of the City (which I do like by the way, whatever the French say about it smelling of chips) is dedicated to the needs of those ‘running’ the European Union: without the Commission based there, the Brussels economy would collapse.
So, in proclaiming that what we need is “not less Europe but more”, Angela Merkel is completely out of step with the majority of EU citizens. And in even half-heartedly trying to rescue the euro via stability-fund leveraging, she is totally out of step with her own countrymen. Looked at in this light, it seems hard to see how on Earth she can pull off this rescue without losing power in Berlin, and creating pretty serious riots in the ClubMed debtor countries.
This is, I think, where Wolfgang Schauble comes in. Schauble is a bloke who thinks one can sell gefillte fish in Tehran if it is positioned in a positive way. To his end goal of calming the markets while not alienating the People, the German finance minister has used two tactics. One, scaring people with talk of how the EFSF simply isn’t enough, and we need Asian/IMF help as well. And two, making the dizzying spectrum of funds, mechanisms, methodologies and leveraged liquidity so confusing, ordinary people give up in bafflement and go, “Yeh whatever”.
As the Bankfurt Maulwurf predicted earlier this week, nothing of any substance came of out the Ecofin sessions. And as I wrote yesterday, the CB coordinated cash-chucking contest announced yesterday is yet another example of (indirectly) throwing tax money at a wall put up by the private lenders. The stock market surges won’t last; and when they run out of steam again, we will have the same problem to solve….but with less cash available in the central banks to address it.
Wolfgang Schauble’s overall approach is both cunning and correct: sow confusion and fear, watch as the useful idots like Van Rompuy and Barroso get nowhere, let the finance ministers exhaust themselves going round in circles….and then – just as everyone is absolutely desperate for a solution – pounce with some development or another of the plan that GdF inner circle have been secretly discussing all week.
He is maneouvering into position well. I predicted he would start to say nice things about the IMF (whom he needs as part of his ‘cover’) and so he has. But note how densely-packed with options and approvals all his statements are…this one from late yesterday for example:
“We are prepared to increase the resources of the IMF through bilateral loans. If the IMF wants to widen its freedom to take action by increasing the special drawing rights, then we are prepared to talk about it. But, to be clear, this is about IMF instruments. I approve in principle, but there is much we must discuss before Germany will move on the issue”.
Observe also the “I don’t really want to do this” line. But after the news session, Garry Schinasi, a former IMF official observed that, “A bigger role for the IMF is necessary. Italy would feel that it’s not Germany monitoring its performance, it’s the IMF.”
Quite so: the IMF playing UN peacekeeping force (with German tanks kept well in the background) would also go down well in the BundesRepublik. But above all, it’s just another element to keep us all in the dark about the main intent: to come to an accommodation with the markets, and quietly get all of us down here in the chat-room forum to pay for it.