The long and short term on why the eurozone is doomed

Gallup (US) does quite a bit of interesting pan-European consumer research, but also some socio-economic stuff of a more general nature. It just published one about how easy or hard it is to start up a business in the various EU member States, and how (or if) the bureacratic culture helps or hinders in that process…in the eyes of ordinary citizens.

The results are telling and instructive. Drawn up on an attitude map of ease of setup versus bureaucratic corruption, all the Scanda States are seen as pretty clean, and all the ClubMeds as obstructive and corrupt. The nearest country to the Scandas on this basis is the UK.

As you can see (left) the perception of a correlation between ease of setup and lack of corruption is a direct one.

This isn’t what you’d call counter-intuitive, but it does show very clearly why the eurozone as is – and even more so, a Berlin-dragooned 21 or however many – is never going to work culturally.

75% of Spaniards and over 85% of Portuguese, Italians and Greeks think their governments to be so corrupt, only around 10% of them say it’s easy to be an entrepreneur. (These are probably the folks with a brother-in-law on the local Council). Lithuania also looks like who you know is pretty much everything – probably a hangover from the Soviet period.

The other extrapolation I make from this is that, if our dullard Coalition had the bottle, there is a ready-made Scanda trading area for us where (I suspect) the manic drive to create Ein EU, ein Volk und ein Reich is probably a lot less prevalent.

The main thing one can guarantee, however, is that the Sprouts won’t have read this – or if they have, it’ll be suppressed. For it makes a nonsense of the ‘compact’ ‘agreed’ in Brussels last Thursday week.

And it is indeed looking increasingly nonsensical. While the markets remain clear and consistent in asking, “Who’s the guarantor?” German leader Angela Merkel continues to answer, “There will be a Fiskalunion”. But this isn’t an answer at all. And as The Slog has been posting for over a week now, Germany’s banking community will only go so far in allowing the ECB to buy toxic State debt. Jurgen Stark – the Excom Central Bank chap who resigned earlier this year on that issue – has an interview with German magazine WirtschaftsWoche (out on Tuesday) in which he particularly criticises the the widespread purchase of sovereign bonds by the ECB. (German central banker Axel Weber dropped out of the nominations for head of the ECB last February on the same issue).

I very severely doubt – as does my Bankfurt mole – that Frau Merkel has quite the freedom of movement she claims on this matter. But either way, new ECB boss Mario Draghi has even less: having bought over 200 bn euros of junk ClubMed debt already (that we know about) Mario knows full well that the other anti-junk buying hawk in Germany, Lens Weidmann, is very much on his case.

You see, the interesting thing is….once you take the UK out of the argey-bargey, it doesn’t get any less. The fundamental split in fiscal outlook and business culture is there for all to see: the inability to square that circle meant an under-scrutinised euro from Day One – and that in turn sowed the seeds of self-destruction we see today.