That's the title ("Neue und alte Versprechen" in German) of an article that appeared on August 25th on the Frankfurter Allgemeine Zeitung (FAZ). Its writer, Tobbias Piller was or lives in Rome. This article has the potential of becoming a milestone for those bewildered by the Eurozone crisis. It explains -in a short text- the German understanding of European politics, economics and finance.
One -among many- interesting points in this article is that the words "Italy" and "Italians" could be replaced by "Greece" and "Greeks" without the need to rephrase a single word! That said, the primary thesis is that the Italians or the "South" does not follow rules, does not keep promises and fails to execute balanced state budgets.
So the implied message is: "Why should the Germans guarantee and eventually pay for Eurobonds" if Italians continually fail to accomplish what they promised before?". The article sites several causes such as bureaucracy, inefficient juridical system, hurdles on SMEs, as well as an antique syndicalist status for labor.
The analysis is absolutely correct, but there is something missing. What is proposed as a solution, has nothing to do with Europe, European Union or even the Euro! The writer speaks of "Italians" and "Germans" as if we still lived in any of the pre-World War eras. Quite often I hear discussions about ethnic origins, whereas we forget that 17 out of the 27 member states use a common currency. We should never forget our ethnicity; nevertheless can we please remember that we are partners and not rivals? We should rather promote healthy competition and excellence, not just criticize the weakest links.
Does anybody still remember the German re-unification? Would Germany make the sacrifice of spending so much money, over-evaluating the eastern D-Mark with a relation One to One(!) had their neighbors be not Germans? Rather not. However I'm not implying that the Germans should pay for southern Europe the price they paid for their reunification. It doesn't make sense, because the South won't be politically absorbed nor integrated into the German Federal Republic. But the Germans need to understand that the common currency also brought several positive effects to their intra-EU trade. Therefore, as they do well, they need somehow to pay the price of a fault in the design of the Euro.
When a BMW customer complains about problems with his car antenna, the German factory won't point to the Italian subcontractor that designs and manufactures these antennas for the Bavarian company. BMW will admit the fault, will correct it and will keep the customer satisfied. Although the analogy is not 100% direct, it seems though that the Germans do not want to admit that the Euro was poorly designed. Its visionaries allowed the markets to consider that a Spanish, Italian or Greek Euro coin has a different value than a German one! This major flaw needs to be corrected sooner or later. The Eurobond is the first step. Not because it will let the Italians continue with their habits, but because it is missing from the initial design.
But what to do with the south? Difficult to say in a paragraph. What Tobbias Piller writes is true. But the outcome is due to a mentality well rooted in the micro-scale first. This micro-scale needs to adapt to a new way of thinking. The way of understanding that the state is corrupt exactly as much corrupt its citizens and residents are. And for this to happen, we have still a way to go.
No comments:
Post a Comment