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"Forcing Germanic stringency into PIGS’ bookkeeping is as utopian as turning a hyperactive child into a mime"

de Cristian Sima     HotNews.ro
Vineri, 28 mai 2010, 14:09 English | Top News

Many European countries are currently being faced with domestic and foreign debt crisis. The history of the twentieth century has taught us that there are only eight ways to get out of such crises: increasing the tax base, cutting expenditures, lowering interest rates, creating hyperinflation, rescheduling debt, securing foreign aid, demanding a moratorium, achieving rapid economic growth – or waging a war. 

In an interview with “Le Nouvel Observateur” magazine, Jacques Attali declares that every effort must be made to work our way out of the crisis by economic growth; but is there enough unity and, more importantly, enough solidarity within the United States of Europe to achieve such goal?

In an age of deep-going economic globalization, a Europe divided between the budgetary stringency of the North and the debt and deficit muddle of the South is not only a hotbed of instability but may also become the breeding ground for nationalist sentiment and action.
Solidarity within 21st-century Europe should by no means be understood as a new form of socialism where Northern savings should offset Southern prodigality so as to balance the 27 national budgets.

Forcing Germanic stringency into PIGS’ bookkeeping is as utopian as turning a hyperactive child into a mime. Solidarity should not be mistaken for egalitarianism. European people are not equally diligent and enterprising therefore they cannot all share the same standard of living. European unification had the new entrants mistake wishes for actual needs. We have an undeniable right to dream and set goals but also an unfailing duty to discern dreams from reality.

If we don’t want Mrs. Merkel to turn from Madame Europe into Frau Deutschland we need to undividedly agree that national sovereignty does not necessarily imply national budget sovereignty. We would make a good start by appointing the ECB president on expertise and performance criteria, overlooking any nationality reasons. (NB presedintele BCE este numit doar de guvernele membre ale zonei euro!) And the next logical step would be to have the next European Commissioner for Financial Programming and the Budget appointed not from among the most accommodating candidates, but among the most uncompromising ones.

To sum it up, solidarity starts where stark nationalism ends. If we want Poland or Slovakia to wholeheartedly come to the rescue of Greece or Spain we should just as well refrain from looking at the Germans and Greeks as the fools and knaves of Europe.
The prospects of a US-led global economy are becoming more and more obvious. G-20 is just a convivial stopover on the way from G-7 to G-2; and even with USA and China as the pair that make it to the finals, one of the partners should lead the dance. Under the circumstances Europe and its economy are in great need of their own pioneers – be they individuals or nations – prominent but not prevailing over their peers, to lead but not to rule/actual leaders, not rulers.

We stand in great need of a European anti-crisis plan but before conceiving it we must realize that by merely “rearranging the deck chairs on the Titanic”, as Joseph Stiglitz puts it in his latest book, we will not change destiny. What it takes is a different crew. “The New York Times” poses a capital question: have today’s leaders of the US and the European economies learned any lessons of the past? And if they have, which are those?

We stand in great need of a new vision of the financial markets, which cannot be regulated by the same people who deregulated them in the first place. Those currently in charge deliver speeches and give us the same warnings over and over again. We need regulators, not preachers.

There has recently been more and more involvement and commitment from the policymakers but so far they have only created some huge bailout funds instead of devising comprehensive plans and regulations. They have somehow been led to believe that the solutions that worked in the past may very well apply this time too. And just to illustrate the involvement theory in psychology, as soon as they have adopted a certain position, everybody starts defending it even though they don’t know yet if it is the right one. Cutting expenditures and increasing taxes, for instance, are among those measures that are fiercely advocated before producing even the slightest effects.

We are absolutely certain that we need rapid economic growth and that such growth can only be the result of a New European Deal; we lack, however, the 27 dealers able to envisage it in the turmoil and confusion of the European dealing room. And most of all we need that providential character? who can inspire the other 26; then all of them could go back home and persuade their peoples of the absolute necessity to implement such deal. If we want to prevent this New Deal from being imposed by financial or any other kind of force we must accept the idea of a deal before knowing what exactly it implies.

Europe can be saved not by charities turned into bailout funds but by solidarity funds managed with the wisdom and parsimony of those who have learned the lessons of the past.

There aren’t any TBTF European countries; there is a unified Europe that is too big to fail.  























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