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There's enough idiocy on display in Brussels, Frankfurt and Basel without needing to blame the City.

If the City (and Wall St) impinge on the Eurozone situation, should that be ignored? When it's pointed out that either rating is a superfluous function, or should not be in the hands of private City/Wall Street corporations, the response is invariably, "the rating agencies didn't cause the euro crisis". No, but they have arguably exacerbated it at every turn by publishing (often correct) analyses and consequent rating changes with an acuity and rigour that were so strikingly absent concerning American financial bubble-and-fraud in the lead-up to the first leg of this crisis. Is it absurd to find logical that US interests (and those of Britain, the GBP having been sidekick to the dollar for decades) lie in avoiding the loss, in the financial crisis, of the world-reserve-currency status of the dollar, and therefore in seizing an opportunity to weaken the relative status of the main contender for replacement? Or that global financial capitalism (to a considerable extent offshore but pre-eminently centred on New York and London, currently at least) abhors the regulatory tendency the EU represents at world level?

Why place a theoretical ring-fence round continental Europe (where, I'm not denying, our "leaders" bear huge responsibility for driving us over the cliff) and ignore global power struggles? If, tomorrow, the euro fell apart and our countries were severally sovereign, would those power struggles have no relevance?

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Mar 18th, 2012 at 06:27:23 AM EST
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There is a line beyond which pointing out malign foreign interests becomes an exercise in excuse-making for domestic collaborators and general idiocy, rather than analysis. And reasonable people can disagree on which side of that line Jerome's comment is on, given that it is made in response to the observation that the Euro elevates liberal (neo- or ordo-, doesn't matter - they agree on this particular delusion) fantasy world economics into the law of the land.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 18th, 2012 at 09:34:37 AM EST
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There may also be a line beyond which continually imputing defensiveness and excuse-making to other participants here may be improductive of debate and analysis.

I was not writing to defend Jerome's comment, he can do that himself, but to support the view that excluding global power struggles from the field truncates the discussion, which then appears to conclude that Europe's problems are solely self-inflicted and that sovereign nation-states will be either the inevitable result of those self-inflicted problems, or the correct response to them. Well-adapted macroeconomic policies for those states may be suggested (with great confidence, even), but it's legitimate to have doubts about, not their theoretical effectiveness, but their chances of being applied in real conditions - will global finance go away, will laissez-faire neoliberalism go away, will economists change their spots, will right-minded governments emerge from the polities we have, will global imbalances and their attendant pressure to race to the bottom disappear, because the euro is no more and we have independent nation-states? Luis's (self-admittedly) doomer scenario above has the merit of putting the subject on the table. It's not enough to reply (hyperbole for hyperbole) that what's happening within the euro is just as bad, or that all a government needs to do is this or that. A serious (probably multi-scenario) description of what might and what is likely to happen to our several nation-states in the event of leaving the euro or of a general euro collapse, is called for. Alongside which (though great doubts may be legitimate on this score too), the chances of a return to the '80s to re-debate and identify an acceptable construction sans Maastricht for what has become the EU (including what the outlines of an acceptable construction would be), need to be assessed. Vast programme.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Mar 18th, 2012 at 12:47:43 PM EST
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I'm not sure I fully understood all of that and so my point may be similar:  There is a distinction between academic and policy analysis.  Academic analysis should be wholly  objective/fact driven - but rarely is. Policy analysis focuses on the policy leavers and factors over which you actually have some influence/control. So it makes sense for those of engaged primarily in the EU policy/politics space to focus on the shortcomings of the EU/Eurozone itself. That is not to say anglo neo-liberal influences haven't exerted a baleful influence on EU policy/decision makers and may indeed be the cause for a lot of our ills. But it is easier to address the known and obvious defects in the design of the Eurozone project itself rather than to be tilting at generalised neo-lib shibboleths and windmills all the time... If we could fix the structural defects and lack of solidarity in the Eurozone architecture, we wouldn't have to worry over-much about what the City/Wall street are up to.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Mar 19th, 2012 at 11:11:46 AM EST
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