Frexit fever reaches heart of French establishment – Telegraph Blogs.
When the Euro was about to be launched a colleague and I were in Germany on business. Over drinks with our German business partners they teased us about it. In all previous such conversations with them we had been primarily concerned about the impact of EU policy on the UK's interests. As a global trading nation, we argued, these often diverge from those of the more parochial economies of mainland Europe. To their surprise, on this occasion we were more worried about Germany for whom we predicted the Euro would be a disaster.
I told them of overhearing the then Finance Minister of a less wealthy EU country explaining to a group of Economics students how he proposed to 'pump up' their currency in advance of joining the Euro. Once in, he told them, the marriage to the Deutsche Mark would give his citizens high purchasing power and increase their ability to borrow. My colleague pointed out that, because of their history, Germans are averse to debt and afraid of inflation, while other Europeans are not. They - and their governments - rather like the idea of large debt paid back in bad coin.
They scoffed, but history proved them wrong. The Greek government, for example, had lied through its teeth
in the run up to joining EMU and has been officially criticised for continuing to do so in the years following the adoption of the Euro. They statistically masked the effects of their orgy of spending and debt until there was nothing to do but prop them up if the currency was not to be jeopardised.
Our German business-friends were man enough to call my colleague last year and tell him that we had been right. I take no pleasure in that. History continues to vindicate commonsense over voodoo economics, without ever teaching the 'something for nothing' crowd to adjust their expectations to reality. I also feel no glee at the stirrings in the French Establishment about 'Frexit.' I would rather be rich than right. I would rather be free than either. This mess is going to hurt me in the end, however right I was.
Just look at the views of François Heisbourg
, as reported in the linked Telegraph Blog. He is a Knight of the Legion of Honour and holder of the French Order of Merit. He is also Chairman of the International Institute for Strategic Studies and an insider Énarque par excellence.
You will find little sign in his words of a new dawn of commonsense in the European élite.
The dream has given way to nightmare. We must face the reality that the EU itself is now threatened by the euro. The current efforts to save it are endangering the Union yet further
The retreat he proposes is merely tactical. He is still locked into the mad meme of 'ever closer union.' His only concern is that introducing the Euro too soon has threatened that objective.
In my view, the introduction of the Euro was a misjudged attempt to bounce Europe into political union. The federalists knew that a currency crisis would happen. If two middle-aged English lawyers could predict it over beer in Frankfurt, how could the great minds of the Énarques fail? I believe they anticipated the current crisis (or something like it) and believed it would force a concentration of political power, however little European citizens might want it.
It never made sense for nations with different economies, fiscal policies and approaches to state expenditure to be locked into a single currency without a single government. The crisis turned out to be a bug, but it was meant to be a feature. Even now most federalists, disappointed though they must be that Europeans' appetite for union has diminished in its wake, are still claiming all is well. Those, like Heisbourg, who say that;
God knows denial has been for a long time, by default, the operating mode of those in charge of EU institutions.
are simply concerned that the political miscalculation of premature currency union is now threatening the success of the whole project. None of them have learned a thing.
No less predictable, but far more chilling, are these words;
Money has to be at the service of the political structure, not the other way around
He says it to oppose those federalist politicians who, he claims, are trying to shape political structures to prop up the Euro. He is right to oppose that and might say, I suppose, that I am taking his words out of context. Still I think, in a Freudian way, they are incredibly revealing of the attitudes of our political elites.
Until our mad masters re-learn that money is a means of exchange at the service of the whole society there is no hope for our economic security. The users of a currency are the ones who matter, not the politicians administering it. We 'own' our money and the underlying value it represents, not them. The only true economic role of 'the political structure' is to ensure its soundness so that we can continue to trust it. That they now complain we don't trust them is very largely a product of their failure to perform that basic task. They have behaved like racketeers and cannot complain when that's how they are seen.
Political elites have got away so long with debasing money to serve their own ends that it now seems they have come at last to believe that this is its true purpose.