Plus ça change... | 33 comments (33 topical, editorial, 0 hidden)

Let's not forget what the Council Conclusions actally said: EURO AREA SUMMIT STATEMENT [PDF] - 29 June 2012 -

* We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present Proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these Proposals as a matter of urgency by the end of 2012. When an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly. ...

That's how the document started. Have we been had? Sunt Pacta Servanda?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 03:46:49 AM EST

Re: Plus ça change... (4.00 / 2)

We've been had.

But more to the point, they should realise that this will restart the crisis psychology all over again. Since they are ditching severing the link between banks and sovereigns, the sovereigns will come under renewed attack - probably starting with Spain.

by Metatone (metatone [a|t] gmail (dot) com) on Mon Jul 9th, 2012 at 04:30:56 AM EST
[ Parent ]

Re: Plus ça change... (none / 0)

afew quotes the evidence for this from Eurointelligence below...

by Metatone (metatone [a|t] gmail (dot) com) on Mon Jul 9th, 2012 at 04:31:57 AM EST
[ Parent ]

Re: Plus ça change... (none / 1)

They should realise they're undermining the credibility of the Council itself. Its conclusions are not worth the paper the PDFs are not printed on.

But they won't realise anything. I wonder what they think they're doing.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 04:35:18 AM EST
[ Parent ]

Re: Plus ça change... (none / 1)

Right - bad wording on my part.

I hope that when the attack on Spain intensifies, they realise that this set of misinformation gained them 3 days of relative calm at the cost of their credibility.

But, as you say, if they haven't realised anything is wrong with their approach so far, why would this time be different?

by Metatone (metatone [a|t] gmail (dot) com) on Mon Jul 9th, 2012 at 04:49:34 AM EST
[ Parent ]

Re: Plus ça change... (none / 1)

Hope springs eternal...

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 04:51:12 AM EST
[ Parent ]

Re: Plus ça change... (4.00 / 6)

Hm, lets see.

(A) the Council is unified and this was either (I) a boop-up or (II) a sinister move.

(B) the council is not unified (in effect a power-struggle is going on) and (I) the power has shifted since the decision or (II) whoever has the microphone claims their version to be true.

I would say B(II) is the case, mostly based on the anonymity of the eurozone official.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Mon Jul 9th, 2012 at 06:27:06 AM EST
[ Parent ]

Re: Plus ça change... (4.00 / 5)

(C) The council doesn't have the power to do anything but they need to put out a statement, so they do. Then the Commission or the ECB remind everyone that what the Council proposed cannot be achieved without treaty change, and the Council members are not willing to push before their electorates the policies they agreed to for their statement.

There was a revealing anecdote about the June 29 council meeting. Van Rompuy had scheduled two press conferences, a 7pm and at 10-11 pm. The first one was supposed to be about announcing the "growth compact". As Monti was blockading the growth compact with the banking issue 7pm came around and van Rompuy got up to give his press conference. Monti stopped him cold with "where do you think you're going?". Then at 10pm they decided he had to go out and give a progress report. He asked "what do I tell them?" and Hollande said "the truth", so van Rompuy had to come out and say that two countries were holding back the agreement on the growth compact.

The Council is the most dysfunctional institution in the EU. It's possibly worse than useless.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 07:02:53 AM EST
[ Parent ]

Re: Plus ça change... (none / 1)

It would seem that the purpose of the Council is to prevent the EU - that it is the antithesis of the dream of a functioning EU executive.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 9th, 2012 at 07:36:28 AM EST
[ Parent ]

Re: Plus ça change... (4.00 / 3)

Quite.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 09:08:43 AM EST
[ Parent ]

whoever has the microphone ... (4.00 / 3)

@SonyKapoor

"@SpiegelPeter: EU Commission briefing direct bank recaps will NOT need sovereign guarantees. Direct contradiction from earlier guidance."

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 07:10:52 AM EST
[ Parent ]

Re: Plus ça change... (none / 1)

Lot of "when"s, "could"s, and "possibility"s in there.

by tjbuff (timhess@adelphia.net) on Mon Jul 9th, 2012 at 10:28:16 AM EST
[ Parent ]

Re: Plus ça change... (none / 0)

Shorter Council:

We affirm that it is imperative to break the vicious circle between banks and sovereigns. Waffle waffle, if, but, maybe, possibly, could, yatta yatta bing bing

Good job, guys.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 10:32:29 AM EST
[ Parent ]

Re: Plus ça change... (none / 1)

They're running out of road. No matter how Serious they are...
The market has a better nose for BS than The Serious Ones have talent to produce it and declare it smells like roses.
So the kabuki continues... Anything rather than admit the banks' little gambling problem and resultant insolvency. For that would be to admit that their God Is Dead, and they are Zombies.
Prediction: the € will implode this autumn, collapsing under the strain of its baked-in contradictions.
Draghi will deliver the euthanasia.

The power of knowledge is in mortal combat with the knowledge of power. It really is that simple... That's the Edenic apple we are all munching on.

by melo (melometa4(at)gmail.com) on Mon Jul 9th, 2012 at 02:09:28 PM EST
[ Parent ]

Re: Plus ça change... (3.67 / 3)

Prediction: the € will implode this autumn, collapsing under the strain of its baked-in contradictions.
Draghi will deliver the euthanasia.

No, the ECB will not commit suicide as an institution.

More likely Germany or some other surplus country will quit the Euro. I'd put my money on the Netherlands, actually, rather than Germany.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 02:30:07 PM EST
[ Parent ]

Re: Plus ça change... (4.00 / 2)

This might be a good time to resurrect Le Monde last summer's political fiction series, after all...

Berlin gets ready to leave the euro | Presseurop (English)

On the night of his re-election, Nicolas Sarkozy learns that Angela Merkel is about to be overthrown by a faction in her party that wants to leave the euro. A short time later, Germany's constitutional court invalidates the euro stability mechanism. In this political fiction, Le Monde examines a possible scenario -- which may be more likely than it seems -- for the end of the single currency.

OK, with a couple of different twists here and there...

Europeans think a hundred miles is a long way. Americans think a hundred years is a long time.

by Bernard on Mon Jul 9th, 2012 at 02:38:53 PM EST
[ Parent ]

Dutch disease, take two (n/t) (4.00 / 3)

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 9th, 2012 at 03:08:35 PM EST
[ Parent ]

Re: Plus ça change... (4.00 / 2)

I'm not certain that even the kool-aid contingent leading surplus countries are ignorant of the risks of currency appreciation, export market deterioration, and a host of ancillary effects of leaving the Euro.

Although, after a decade here, i'm not certain of anything.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Jul 9th, 2012 at 03:43:48 PM EST
[ Parent ]

Re: Plus ça change... (4.00 / 2)

Just last week the Finnish finance minister said they would rather leave the Euro than "pay for others' debts"...

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 9th, 2012 at 03:48:16 PM EST
[ Parent ]

Re: Plus ça change... (none / 1)

He had better be careful what he would rather do. After he had done it he might rather he had not.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 9th, 2012 at 04:06:07 PM EST
[ Parent ]

Re: Plus ça change... (none / 0)

Migeru:

No, the ECB will not commit suicide as an institution.

isn't that exactly what it is doing?

and taking down the rest of us too, as max keiser puts it 'financial terrorists'-

The power of knowledge is in mortal combat with the knowledge of power. It really is that simple... That's the Edenic apple we are all munching on.

by melo (melometa4(at)gmail.com) on Mon Jul 16th, 2012 at 02:56:09 PM EST
[ Parent ]

Plus ça change... | 33 comments (33 topical, 0 editorial, 0 hidden)

Top Diaries

A short note on extreme flooding (wonkish)

Catholic Bishops fighting losing battle in Ireland

A shift of sexual mores

Tour of the German offshore wind sector

Record flood on the Danube

Utopian Ideas - Digital Infrastructure

Histories of Neoliberalism?

Woolwich killing: responses

Recent Diaries

French Bac philosophy - Russian roulette

Catholic Bishops fighting losing battle in Ireland

A short note on extreme flooding (wonkish)

A shift of sexual mores

Tuesday Open Thread

Utopian Ideas - Digital Infrastructure

Tour of the German offshore wind sector

Record flood on the Danube

Histories of Neoliberalism?

No Desertec for Europe

The metro revolution

Woolwich killing: responses

Methane Cell Phone Sniffers

What price, Irish recovery?

How the "riots" in Stockholm started

One lone paper?

Fiscal and Organizational Capacity of States and Sovereignty

Austrians finally discover hyperinflation - in Diablo III

Rail News Blogging #25

Pentecost steam

Occasional Series