Rapid dynamics were never a strong feature in the European Union’s institutional coup de force, in the same way a snail isn’t particularly fast. In any case, that is what mainstream media think about the resolution of the European crisis. On the other hand, Eurocrats do not wish to have to be accountable for gross negligence if they can avoid it. Present PMs and Ministers during the Conseil de Ministres at la Place de Schuman in Brussels do not either. Nobody likes wishy-washy amendments after all.
Frustrating as it might be for present Europeans, households but especially companies, at the seemingly never-ending whirlpool towards doom, it is essential to comprehend the need to take a decision considering four major prospects: meditation, time, consensus and solidarity. The latter is an old-time European specialty, dating from the Schuman Declaration the 9th of May 1950, at the Seine-admiring Quai d’Orsay in Paris, which we should make most of:
“L’Europe ne se fera pas d’un coup, ni dans une construction d’ensemble : elle se fera par des réalisations concrètes, créant d’abord une solidarité de fait”.
This solidarité de fait is one of the main keys that distinguishes other international organizations from the EU, which is more of a supranational institution. Another key difference, possibly an irrelevant digression to the key issue of this text, is the EU’s compromise and interest in its Foreign Action to defend and propagate the core values of its institutions defined by the latest Lisbon Treaty across the World (a sort of Truman Doctrine, dare we call it Schuman Doctrine then?).
As we proceed in peaceful connaissance of the recently abovementioned concept of solidarité de fait to the main subject of discussion, the presence of the media has had a twofold influence on the crisis: on one hand, it has transparently informed the people of the world of what is going on in the present Eurocrisis; on the other hand, it has enticed banks and speculators to create sometimes fictional high-risk scenarios in their profit (the example of CDS products; it is also worth mentioning the prohibition of certain short-selling operations with these products in the EU as a countermeasure).
The latter managed to fuel what started being a banking-subprime crisis into what turned out to be a venerable sovereign carnage. Yes, States must be liable and responsible for having saved the banks (exception: Iceland) and the pros and cons of this matter would further digress this forthcoming article. And yes, risk assessment must take into account the new risky assets and liabilities acquired by Member States. But this process should not provoke an exaggerated criticism by the media because it is untrustworthy to do so and it is influencing investors and savers to not trust each other’s moves. The liquidity crisis, before the sovereign crisis, could have been avoided had there been enough water from EU institutions to extinguish the fire that swept through the editing rooms of media corporations.
Of lately, however, the general media has veneered the tactfulness of the most recent meeting of Eurogroup Ministers in Brussels, whereby it was finally discussed that mechanisms in order to not mix the concepts of banking risk and sovereign risk were to be mises en place. A European Bank Union has been necessary in order to cool down these provoked fires as a consequence of a possible misinterpretation of terms between these two types of crisis, among other things. One may provoke the other, but incendiary journalism should not have been used as fuel to make this happen.
In a context where most countries in the EMU do not respect the four commandments (Maastricht convergence rules, especially those related to public deficit and debt) due to a full-blown, unexpected crisis provoking great thirst of liquidity between banks, the media should take responsibility of its actions. What is meant by this is that their psychological influence is so great over the people that the misinterpretation or the agrandissement of a piece of news can only cause a wave of panic and ignorance. It is indeed very delicate business and no self-respected editor would like to end up like the recently deceased News of the World (in terms of news manipulation).
Speaking of the Maastricht Treaty in terms of permanent conditions in order to assure the stability of the current currency, one may think that in today’s circumstances it is not only an unpractical but also an unpleasant truth. Researching on the number of Members using the common currency actually respecting its terms, I discovered that only a handful of countries really respected Maastricht’s deficit limit of 3% (let alone a balanced budget…). Countries like the UK, USA or Japan which have no restrictions in this sense have more tools at hand to fight against the crisis instead of the obsessively inflation-prudent and restrictive-budget measures almost imposed by German officials (Trichet’s interest rate increase can only be explained by this, since today the ECB cut its interest rates to a record low of 0.75%). François Hollande’s alliance with Spain and Italy to declare a halt to this process may not be as bad for the EU as was expected. His policy sees the need to establish expansionist measures in place in order to fight the recession and to create a common Eurozone confidence zeal of invulnerability with the Eurobonds.
Another issue in the present European Crisis is the forgotten spirit of what I stressed before: the solidarité de fait. Merkel’s recent menacing statement towards Eurobonds is clearly not within the European spirit. Other claims in newspapers stating that the “Germans pay for PIGS mess” are so stereotypical that it is both an example ad nauseam and something truly nauseating to hear at this stage of European integration. Headlines such as “L’effroi du retraité allemande face à l’épouvantail grec” is simply revolting and out of date.
Being in the EU, we should make use of the acquirement of mutual “best practices” (excuse my Eurojargon) and of the main values that define the Union (my insistence on one in particular renders it almost ad nauseam to mention again). Only like this can we prosper and continue to be one of the leading powers in the World. So then Europe, avançons vers la victoire! Slowly but surely, that is.
Le Monde Diplomatique