Monday, November 21, 2011
Dear Mr/Mrs/Miss European Politician.
Nearly 13 years ago you implemented a system of monetary union in Europe which, you told us, would be the framework on which to hang future prosperity and cohesion, allowing Europe to take the next step towards unity. At the time we pointed out that a common currency should be the last piece of the merger jigsaw to fall into place and not the first. Analogies of putting a fence around 2 TGVs as they crossed each other in opposite directions assuming that the fence would hold them together were pooh-poohed as the sign of a lacking of understanding as to how Europe worked. Since the introduction of the Euro, you have maintained that nothing could or would rent the Euro asunder as it is at the heart of what IS Europe. Yet here we are, hearing that distinguished institutions are now planning for the break up of the monetary zone and watching confidence in your grand plan evaporate. Yet what are you doing to defend this beating heart of Europe? Nothing. In fact, worse, you have positively rejected any solution that has been suggested to you. As such we would be grateful if you would answer the following questions
1) What has changed to make you realise that the Euro may not work?
2) Why are you doing so little to make it work?
3) Whose fault is it that we are in such a mess and what will be done to those responsible?
With respect to your answer to no 3, we would imagine that despite your "Buck stops here" status, you will try to blame anyone apart from yourselves. We also suspect you will try to blame bankers, but we would advise you to think carefully about your response. The banks may well have taken ridiculous advantage of sets of rules they were given by you, the regulator and the accountants, but in the case of Europe the world is beginning to suspect that the arrogance of the political classes is at the core of the problem. So perhaps humility after your hubris would be a better recourse.
Yours Team Macro Man