The euro crisis: Europe's 750 billion euro bazooka | The Economist
May 10th 2010 4:44 GMT
- Chère amie:
1. I like France and I am a big fan if the German-French "axis" (part of my family is french). But in some policy fields, we simply disagree - first and foremost economic policy. And as long a France doesn't deliver significantly better results than e.g. Germany (and it never has), we will rather follow our own model than yours.
2. "Self-centered" are a) those who live beyond their means and expect those who don't to subsidy them and, worse, b) those countries that join a Union, break the rules on purpose and in the end expect those whose trust they broke to bail them out.
3. So France has more "the sense of the world realities than Germany"? Very funny! Where I live and work (in Poland, for a German company, btw), I don't even see French people -hardly ever in business, seldom as tourists. And this is the biggest Eastern market... .
France so far hasn't been able to enact ANY of the social and economic reforms Sarkozy has promised, all of which, by the way, fall well short of what the center-left (!) Schröder government has achieved in Germany. No wonder France's economy is continuously loosing ground on the world markets, while Germany (and teh Netherlands) are staying their ground.
French market share, globally: 3.5% German market share: around 9%. We really need to take lessons from you in getting "more sense of the world relities", indeed... .
So what's the French answer to the Asian threat? Just ignoring it?
4. The German contribution is the highest in the Eurozne (up to 145 out of 750 billion Euros), not the French.
5. I am by god no fan of Merkel, but without her insistence:
- the IWF would have been neither included in the bail-out package for Greece, not in all of teh future cases;
- the EU Commission would habe been entitled to grant the credits to those in need and in turn have the more solvent member states guarantee them - an absolute worst-case scenario, as the creditors could not even have decided whether to engage or not. On top of it, it would have been illeagal, as it contravenes the no.bail-out clause of Art. 125 (1) Lisbon Treaty. Now there will be (coordinated) bilateral credits, which gives the creditor countries authority over their assignment.
6. The solution now found, is as usual a compromise: the french + mediterraneans pushed through that a package of this extent was pushed through so quickly; the Germans+ Dutch, that the strict rules applied to Greece will also be applied to all future cases.
7. On a more general level, you should ask yourself why the markets do not consider French obligations, but German obligations as the benchmark (last week, France had trouble finding investors for a bonds, while money is streaming into Germans bonds, and the German interest is as low as never before)? Because investors don't like it when a country politicizes its economic decision, as the French always do with great pleasure. You guys would just have thrown large sums of money at Athens, without stricter regulation and without the imposition of tough reforms. That is the policy that brought the French Franc down in the 1980s (afterwards, it was effectively pegged to the Deutsche Mark).
8. "That's the beginning of an economic government of Europe" (Sarkozy, again)? Forget it, baby, that's not going to happen, not now, not ever. If you want to work 35 hours and ruin your competivity on the world markets, go ahead. We won't.