Emmanuel is the CEO of Financière de la Cité, a management company portfolio.
…… The European situation is the result of a historical error diagnosis on the nature economic shock. Financial turmoil originated in the United States1, uncontrolled expansion of money and credit. Crisis2 is the monetary and non-budgetary origin. This is the recovery of bad bank loans by the States which resulted in a surge in public debt in the eurozone.
Instead of acting on dette3, the United States and Great Bretagne4 growth5 favored the short term, at the risk of spinning monnaie6. Leaders Euro7 area preferred to engage in long-term policies by supporting the weight of the adjustment to households and domestic banks. This strategy today shows its limits: mass unemployment settles, credit contracts and debt is increasing in all countries in crisis. The prospect of unable to take over global growth weakened euro zone, and gives rise to growing divergence between the International Monetary Fund and European authorities.
A German renaissance echoed in France a spirit of decline particularly prevalent among the ruling classes.
In this drama, the French leaders on all sides have a special responsibility. After the shock of reunification, Allemagne8, to boost its exports, led a solo reform policy away from the single currency. Literally mesmerized by the "German model", the French politico-administrative elites supported the application of the same methods throughout Europe without seeing everything that Germany owed its partners.
At the German Renaissance echoed in France a spirit of decline particularly prevalent among the ruling classes. There so long that the people of Europe are locked in the gloom that disenchantment has become their second nature.
In this situation, what to do? Must first rebalance the European project. Europe, said a great writer, is a balance, a swarm of people. The European institutions are built around a post-war torn Germany, which naturally sought an alliance with the West facing the hegemonic pretensions of the Soviet Union. With reunification, return to the center of the continent from an economic and commercial power leading change, obviously, the meaning of the European project. RFA Adenauer looked westwards to Europe. Today's Germany is turning more towards the open sea, to China and the United States, where customers and their interests. This mercantilist orientation meets the aspirations of the electorate heritage of the major parties of government. But for the European continent, it is a "Holzweg" this beautiful German word for the paths that lead nowhere.
Europe is the world's largest economy. Its strength lies both in the dynamic domestic market in its trade with the world.
Europe is the world's largest economy easy payday loans. Its strength lies both in the dynamic domestic market in its trade with the world. It can not, without danger, sacrificing his future to foreign markets, moreover exposed to shifts in U.S. monetary policy. Rather than inviting all European countries to follow the same national model, rather to go towards reducing imbalances within the euro area, promoting the upturn in demand in northern Europe, releasing encalminées energies in France and Southern Europe.
For this strategy to succeed, it is necessary to give more leeway. Major European bankers continue to think that restrictive policies are the best answer to the "balance sheet recession" due to the financial crisis. The idea is that economic actors should go through a period of deleveraging, before growth becomes established on a sound basis.
European monetary authorities are often referred to as the "good deflation" that preceded the rebound Scandinavian economies at the turn of the 1980s. However, the crisis we are facing can not be compared to localized recessions of Suède9 or Denmark10. The general impoverishment left a huge stock of outstanding debt, the amount, a percentage, is equivalent to the situation after the two world wars. How can we imagine to bear this burden on future generations, for decades? How to persist in conduct deflationary policies in an open world where the major economic zones seek to depreciate their currency? Either the debt is worn for twenty years, at the risk of sacrificing the forces and jeopardize sanitation hoped; either we take our losses, by having the creditors down the road.
Europe needs a political power.
Mainland mentality, steeped in Roman law, traditionally hostile to the latter option. Yet at the level of a country, this solution is sometimes the only way to ensure the maintenance of social order, provided that the leeway obtained are not wasted. The stabilization of the franc in 1928, the monetary reform in Germany in 1947, the creation of "heavy franc" in 1960 are outstanding examples of successful stabilization.
Finally, Europe must have a political power. In terms of accounting and prudential standards, trade, she must assert its rights. Strategic and financial interests are not those of the United States, any more than those of Russia, it is obvious.
Men act, said Jean Monnet, when they are placed outside the realm of necessity. Classical federalism technocratic remedies will not suffice to rebuild confidence. If the elites do not make a step forward to provide concrete answers, the European institutions will collapse by themselves. Parties "sovereignist" can rejoice, however, marginalized states they will inherit will become satellites rising powers.