Eurocrash: there was a young lady in Riga

09/06/2012

Assuming Lagarde is truly revealing her inner thoughts, we instantly gain an insight into why the eurocrisis will never be resolved. "If I was able to do one thing", she says, "I would lock them in a room, take the key and let them come up with a comprehensive plan".

The point, of course, is that this crisis is too big, too messy and too scary for a "comprehensive plan". More to the point, it was the "comprehensive plan" mentality which got us into this trouble in the first place.

Seemingly unaware of this, Freeland ignores the fantasy and asks Lagarde for more fantasy, a "fantasy scenario" for Europe. Unconscious of the irony, the tax-free IMF chief responds: "I'm sure they can make it. I know the fundamentals are solid. The numbers on an aggregate basis are good. And, as I said, we have to take the key because they cannot escape unless and until they've firmed up the plan. But they can do it".

Next is the turn of Jörg Asmussen. And if you were worried about Lagarde, now the bowels begin to turn to water. Outlining what "Europe" needs to do, the man airily says: "It's very simple". And this "simple" is:

We need a more integrated monetary union, because the monetary area that we have now is incomplete. And we have to complement it in a way to make it more stable. One point is a fiscal union. The second one is a financial market union with three key elements: A resolution regime; second element, a deposit guarantee insurance; and third, we need a centralised supervision for the large 25 banks in Europe.

The focus recently might have been on Berlin, Merkel, Cameron and others, but there is pure, unadulterated monster – and it's coming from the ECB, temporarily based in Riga. This is what we will see (or a version of it) in Brussels at the end of the month.

But then, to chill the heart, we have Asmussen say: "We need a democratically legitimised political union". He then adds. "We need to start this speedily".

Here is the stuff of lengthy and learned dissertations, but the upshot is that you cannot legitimise decisions such as these ex post facto. Even if you could - and you can't – how could it be done "speedily"?

Declaring that this was "a plan the overwhelming majority of European leaders would agree to in principle", Asmussen at least had the grace to admit that there was a problem … "putting it into practice".

But it was Olli Rehn who had a cheery little tale to illustrate the predicament: "Prime Minister Jean-Claude Juncker put it quite well some years ago by saying that we all know what needs to be done, but we do not know how to get re-elected after that".

Fortunately for Juncker, as chairman of the eurogroup, he has solved that problem, having assumed a well-paid and powerful position that does not depend on popular election.

Now stand by for some input from our dear Chrystia. Rehn's "wry comment", she writes, "is a reminder of the real tragedy at the heart of Europe's troubles today".

The tragedy, we are loftily informed, is that it was: "An idealistic political experiment, founded above all on the principles of democracy, peace and social inclusion".  It is now failing, "because élites are unable to sell their vision to the public it was meant to serve".

This is the sort of garbage that drips from Reuters and sundry, profoundly ignorant europhilia, believed by many but scorned by the dwindling few who have any knowledge of European Union history.

With one bound, Freeland wipes out the entire corpus of the Monnet method, as she brainlessly chirps:

Part of the problem is that the European idea, which really is a gauzy, high-concept confection, long ago devolved into a profoundly uninspiring affair of EU directives, painstakingly translated into 23 languages, and the Brussels apparatchiks, remote from the everyday life of their nations, doing the translating.

This is one seriously stupid woman, yet she is the editor of Thomson Reuters Digital, having formerly been the US managing editor at the Financial Times, based in New York City. She is the classic example of how far you can travel on a little knowledge, and one of the (many) reasons why we are in so much trouble.

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