"Now
an intelligent policy must be quickly implemented: one that forces the
recapitalization of the banking sector; devises a consistent approach to the
exchange rate policies of the Chinese and Japanese; … and coordinates policy so
that economic recovery doesn't come to a halt. And at the same time, skeptical
voters must be convinced of the value of the endeavor."
Recently, a colleague from
outside Europe wrote to me after having conducted a series of interviews with
top European Union politicians. He was struck by the extremely aggressive tone
toward the U.S., toward China and particularly internally, France for example.
In view of how European diplomacy is much vaunted abroad, this came as a
surprise. That one would endure such brusque utterances in Berlin would
surprise no one, but in mild, outward-oriented Brussels?
Our financial crisis, which
is now over three years old, has gone through various phases. Now we're experiencing
exactly the same thing in politics. After the shock phase and hyperactive
bailout phase, we've now reached the anger phase. We are familiar with this
phenomenon from psychology, which describes the stages of grief and other
trauma. Anger comes at a late stage, when one becomes aware of one’s impotence
- which is precisely what happened to Messrs. Barroso and
Sarkozy and a host of other actors that are part of the Brussels power center.
They were all overwhelmed by
this crisis. To this day, the president of the European Commission [José Manuel
Barroso] fails to understand the causes of the crisis. Herman Van Rompuy, president
of the European Council, is about to propose an unambitious reform of the
European Monetary Union and its bodies. The otherwise hyperactive French president
now stands on the edge of the political abyss. His hyperactivity is now a
political drawback.
LONGING FOR AN ENEMY
Retaining power is now almost
impossible without a common enemy, and who is better suited to the role than
Brussels? French euro-skeptics are also considering Luxembourg.When a political friend of Sarkozy’s calls
the Grand Duchy's existence
into question in French media, it doesn’t bode well for Europe’s sense of
community. [Editor's Note: Brussels hosts the official seats of the European Commission, Council of the European Union, and European Council, as well as a second seat of the European Parliament 9in addition to Strasbourg, France). Luxembourg hosts the Secretariat of the European Parliament].
Despite the recent conciliatory
tone, Sarkozy’s rift with the E.U. over his Roma policy [deporting gypsies to
Romania] has left deep scars. This episode makes cooperation with France more
difficult. In a situation with so many conflicting variables, it’s no wonder
that politics are becoming more and more unpredictable, and that similar episodes
recur. We’ve also experienced elements of this unpredictability in Germany, with
a law on the issue of short-selling,
which originated in the gut rather than in the head. We too have a tendency to
lash out, albeit in a different way.
Posted
by WORLDMEETS.US
Overwhelmed and underprepared,
European policy is short-circuiting with increasing frequency. We threaten
China with trade sanctions but have completely forgotten to develop a coherent
trade and economic strategy for China in the first place.
Where
is German strategy given China’s emergence?
It’s one of the most striking
differences between Washington and Brussels: U.S. politicians and experts show
a very strong interest in trade and monetary policy and frequently discuss the
topic at conferences. Here in Europe, we rarely have such discussions - not
even behind closed doors. After a decade of introspection, discussions on
European treaties, deficit controls and sanctions, politicians have to start
looking beyond their narrow horizons.
In this column, I’ve written
several times about the misguided policy of protecting banks with unlimited bailouts
without imposing a simultaneous restructuring of the sector. During the crisis,
policy both here and elsewhere in Europe rather than shaping future
developments, was a reaction to events. Problems were put off until tomorrow
and now we're in the frustrating position of having to acknowledge that this supposedly
distant future is already here.
And now an intelligent policy
must be quickly implemented: one that forces the recapitalization of the
banking sector, devises a consistent approach to the exchange rate policies of
the Chinese and Japanese, advances the restructuring of international organizations,
offers solutions for the fight against global and regional imbalances, and
coordinates policy so that economic recovery doesn't come to a halt. And at the
same time, skeptical voters must be convinced of the value of the endeavor. The
combination of inactivity and anger makes this task increasingly difficult.
CALM, BUT UNINSPIRED
Angela Merkel’s stoic calm
appears to be a stabilizing force among the ranks of European heads of state.
In contrast to Sarkozy, she's too smart to isolate herself within the European
Council. But
her problems are not fundamentally different. She can’t be sure that she'll remain in power. Her expectations for
remaining in power are hinged on the hope of averting the anticipated catastrophe
outcome in the 2011 state elections. In view of this situation, those who hope
that Germany will fill Europe’s strategic vacuum are certain to be
disappointed. We can hardly catch our breath as we run from one crisis to another,
simply because there’s no time left for shaping international economic policy
that provides strategies for the future.
Just ask someone in Berlin
about the German strategy for an exchange rate and trade policy toward China. You’ll
get either the big relativists from the Foreign Office or free-market ideologues
from the Economic Ministry, but definitely no one who has even has a clue about
for an intelligent policy for Europe that defines objectives and alternative
routes to those objectives.
Our success in the
post-crisis period will critically depend on whether or not we're capable of
this type of strategic goal-setting. My confidence in European leaders has now
fallen so much that I see no solution in the foreseeable future, as long as
anger and helplessness prevail.
