EU economic summit: The delayed gratification of miracles


Italy said yesterday at the Milan summit that it would be putting off its reconstruction plan, and Greece that it needs only £12bn to reach basket-case escape velocity. Germany said the EU should put off any economic stimulus until it is clearer what needs to be stimulated, and where. Or even how…..although the Bundesbank suspects that Mario Draghi just might have a few ideas for later. And Francois Hollande put a tricoleur firmly on the summit’s peak by  saying unemployment was unacceptable, and everyone else should fork out for the welfare bill at some time in the future, probably around 2020. It was not so much a summit or peak, as a fit of pique.
The issue here is really very simple, but of course the group of renegade Bull Elephants in the room will remain unremarked, and thus no such issue will be tackled. It is this: Germany and France have fallen out, the British are obviously (at last) serious about secession from the Union, France will collapse without lots more EU money, and Italy stands a fair chance of beating the Fifth Republic to it. The euro in its current form is doomed, and no sane Euronaut could possibly hope to federalise the EU in that context. Sadly, the Euronauts are, as we know, all Eunatics.
The media both inside and beyond Europe do none of us any favours in the way they adopt a ‘business as usual’ attitude. I watched Die Üntergang again on BBC4 last night, and the scenes where Hitler directs nonexistent divisions to come to the rescue of disappeared armies (while in the background, Goebbels continues to insist on Final Victory) was disturbing given that this is the nation once more calling the shots in Europe seventy years later.
Herewith a classic of the genre from Bloomberg:
‘France and Italy are under pressure as lack of growth distances them from deficit-cutting commitments made earlier in the year’
And these fine examples of ‘world class journalism’ headlines from the FT:
‘ECB’s supply-side move can assuage German fears’
‘Bankers fear new rules will scare off talent’
‘Poland cuts interest rate to record low’
‘Easing imports into EU could boost World Trade’
Or this from The Guardian’s business pages:

‘Holger Sandte, euro economist at Nordea Markets, reckons Germany can avoid slipping into recession, if exports and private consumption rebound in September after the August slowdown’

It’s amazing, isn’t it? With just a little less pressure on the growth-distancing thing, and some judicious supply side nip n tuck plus blocking imports with just a dash of rebounding, all will be well.

The one bit missing from the analysis is how. This is a much used cartoon, but nothing sums up the eurobusiness mindset among the shovers and makers at the minute better:

 2miracleFrom the very first day that EMU was first tabled as an idea, the promise has always been of miracles tomorrow. Now some thirteen years old, the Single Currency’s process of delayed gratification has moved steadily forwards….from jam tomorrow, to cream next year, and then a Grand Marnier topping by 2020. The miracle, however, is accelerating away from us, and heading inevitably towards an obvious destination: never.