WASHINGTON, October 28, 2013 — The guardians of the economic universe sure are racking up the frequent flyer miles. Right after leaving the Washington meetings of the G20, G24 and IMF in a huff and a hurry, they apparently stayed home only long enough to get a change of clothes and then zipped right off to Brussels. They convened there, according to the Wall Street Journal, “to ensure the euro’s long-term survival by forging a deeper political union out of crisis.”
From the comfort of his armchair with beer mug in hand, an observer back in Washington might have only one question for them: “Have you all been drinking, too?”
They couldn’t forge a deeper political union during times of peace and prosperity. What makes them think they can accomplish it now?
This Euro summit in Brussels is reminiscent of a Chekhov play: Boris is having an existential crisis and wants to kill himself. Meanwhile, Natasha has lost her will to live and wants to kill herself. Watching this dreariness, the audience hopes the curtain will fall soon or it will want to kill itself too. That’s what it must be like sometimes to be a reporter on the Euro beat.
The eurozone is no family, except possibly a Chekhovian one. At best, it is a “family,” a dysfunctional agglomeration of humans rather like the Simpsons or the Bunkers, but without the comedy. Not that there isn’t unintentional humor.
For instance, last December, German Chancellor Angela Merkel called a report by Herman Van Rompuy — the president of the EU summits — on budgeting for Europe-wide unemployment insurance and stimulus spending to fight recessions, a mere “background document.” Hilarious. That’s some serious smack talk. President Van Rompuy should have come back with, “Gesundheit, meine dame.”
Here’s another EU thigh-slapper: Two Septembers ago, the finance ministers of Germany, Finland and the Netherlands released a statement about southern Europe’s banks saying that “Legacy assets should be under the responsibility of national authorities.” In other words, keep your garbage in your own yard. Ha!
Do you see the commonality? Germany is tired of doling out allowances until household chores get done. It would sound eminently responsible to my mother.
My mother once changed the rules of fiscal accommodation on me because I was buying too many comic books. Now, Chancellor Merkel is changing her tone on political union because the European Commission is too eager to spend Germany’s money. Same.
A Belgian think-tanker now concludes that “Germany thinks more and more that we should move back to a model where countries are responsible on their own.” Chancellor Merkel hasn’t said it in so many words but her demeanor certainly expresses that. I’m sure President Van Rompuy would agree. Said think-tanker suggests a future with a euro “that just survives, but not one that functions well.”
Come to think of it, that sounds like the Simpsons too.
Michael Justin Lee from the faculty of finance and the Center for East Asian Studies at the University of Maryland, teaches, speaks and writes at the intersection of global finance and matters Chinese (with occasional tangents off on one or the other). He is the author of “The Chinese Way to Wealth and Prosperity” (McGraw-Hill, 2012). A veteran Chartered Financial Analyst, he served as Financial Markets Expert-in-Residence in the U.S. Department of Labor. He can be followed at www.michaeljustinlee.com
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