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Germans Have No Choice But to Pay: Wadhwa

So at last he speaks up! Maybe appropriately so in Aachen, where Charlemagne first formulated his vision of a united Europe twelve hundred years ago. Ok, ok, ol´Charly AD circa 800 had quite a different kind of Europe in mind than Jean-Claude AD 2011.

Jean-Claude Trichet
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Jean-Claude Trichet

If memory serves me right, he gave the peoples of Europe - especially the belligerent Saxons - a very straight choice about embracing Christianity and accepting his vision of a united Europe: "Convert or die". Literally. Heads were rolling for the unconvinced. And fast. I wonder whether modern-day euro politicians would sometimes wish they had such rough-and-ready policy accelerators at their disposal.

But I daresay the good people of Aachen had a more romantic and more peaceful vision of a united Europe in mind, when they set up this "Karlspreis" in the years after World War II. And, let's face it, as speeches go, the acceptance speech Jean-Claude Trichet for his "Karlspreis" (which the Aachen prize committee officially describes as a "Citizens’ prize for distinguished service on behalf of European unification") was a bold and visionary one. Charlemagne might have benevolently nodded from afar. Question really is: Will modern day euro politicians be equally enthused?

I wonder..... Already skeptics and die-hard anti-euro-ists are sniggering about Jean-Claude's euro visions and the likelihood of them becoming reality. But here's another "let's face it": whether we like it or not, whether we're the German or French tax payer who has to foot the bill or the Greek, Spanish or Irish citizen who feels the pain of austerity in his or her respective purse – there is no choice! None. Nix. Nada. Rien. For Europe, the EU and first of all the euro zone the alternative is very simply: Unite or die! And - see above – that's a motto Charles-Karl AD 800 understood only too well!

Europeans Are Pioneers

But here's Jean-Claude AD 2011: "In a long term historical perspective, Europe - which has invented the concept and the word of democracy (note by author: Both Greek actually!) is called upon to complete the design of what it already called a 'Union.' The future political institutional framework of the European Union will not be the simple imitation of existing models. On a personal basis, as a European citizen, I think that, like at the very moment of the birth of the concept of democracy, the Europeans will not be imitators but rather pioneers, settings examples with a Union that will be a confederation of sovereign states of an entirely new type."

Uhmm. Really? - I must admit, Monsieur Trichet is a lot more optimistic than yours truly, even though I am as convinced a European as he is. Honestly.

But hang on, we're not done yet. After his broad plea for a more conceptionally, politically and economically united Europe, he dropped the real euro bombshell: "This (the union of sovereign states) will naturally call for a very important change of the Treaty (or Rome) and will have consequences in all of the Union's responsibilities." Hold your breath! Here comes: "In this Union of tomorrow, or of the day after tomorrow, would it be too bold .... to envisage a ministry of finance of the Union?"

Mais oui, Jean-Claude! It would be too bold. Far too bold. But would it not be logical, nay, consequent and ultimately to envisage a single ministry of finance at least for the euro zone, if not for the whole Union? Isn't that the collateral "damage" or maybe the windfall profit from the present debt debacle? Beyond all the emergency measures and last-minute rescue packages to bail out the Greeces, Portugals and Irelands, surely there should be, MUST be a new architecture for this euro zone. An architecture that at least fixes some of the system-inherent flaws of "euro zone Mark I". And surely that can only mean closer "fiscal coordination". Another one of those nice, fluffy euro euphemisms, isn't it? Like "re-profiling" (= debt restructuring) or "enhanced credit support" (= quantitative easing).

Muddling Through

Now "fiscal coordination" could cover all manner of policy approaches - from a simply "let's all sit around in Brussels and chat about our respective national budgets and then go home and do whatever we please" to "let each individual budget be presented to the Eurogroup Finance Ministers or Heads of State Meeting and take home only what has been approved by the council". No doubt the former would be very much what most of our politicians have in mind, whereas the latter is what would REALLY be needed to get this euro ship away from the disastrous iceberg it's so dangerously scraping along right now.

So .... what's the likely outcome? Well, I say this with the appropriate degree of both Euro cynicism and optimism: Europe, the EU and the euro zone will muddle through. In the familiar "style". And guess what? That's not nearly as bad as it sounds. If the past half century of bumpy road to European unity have shown anything then it's that "muddling through" hasn't been so bad at all. Neither for the European citizens nor for the European cause. Or why else would countries line up to join this European Union or indeed the euro zone?

And as to the very basic knee-jerk resentment about handing over sovereignties from the respective national capitals to Brussels and the EU: Wake up and smell the coffee, folks! Whether you are just inside the EU or inside the euro - have a closer look at how much of your national legislation is decided or bound by Brussels and then have another look about how much of your budgets are bound by Brussels. Answer: MORE than you think. Much more. To be continued.... soon.

Contact Europe: Economy

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