Questo articolo è stato pubblicato il 28 settembre 2012 alle ore 05:56.
L'ultima modifica è del 28 settembre 2012 alle ore 04:19.
The re-intensification of the crisis can be explained in a rather simple way: we are realizing that, once again, as soon as the European Central Bank (ECB) steps in to calm the markets down, the national governments stop doing their part.
The entire tale of the yet unsolved European crisis can be told in the form of a prolonged and absurd tug-of-war between the ECB and national governments. A month ago, ECB President Mario Draghi offered the “unlimited” support of his bank in exchange for commitment by national governments. But in the last few days it has become clear that Madrid does not intend to be controlled by the so-called Troika (the ECB, the European Commission and the International Monetary Fund [IMF]), that Germany is not really serious about the banking sector unification and the state saving fund (the European Stability Mechanism, or ESM) was conceived with the hope it would never be used.
For some time now, the unspoken rule has been to not rub the Aladdin’s lamp of politics too much because you never know what kind of evil genie might come out. The Spanish request for assistance from the euro area partners, for instance, should have come after the November 6 American elections. Before then, any request for aid would raise tensions in the global economy, hampering the re-election of President Barack Obama, who is much more Euro-friendly than his Republican opponent, Mitt Romney.
Moreover, aid to Spain should be part of a package of measures regarding other countries too, like Greece and Cyprus, to prevent the German parliament—now obliged by its constitutional court to approve every aid request—from deliberating three separate times on an issue that gets hairier as the September 2013 German federal election gets closer. And now the perspective of a serious rise by separatist parties in the Catalonian and Basque regions makes the agenda on Spanish Premier Mariano Rajoy’s desk even more confusing. In fact he has already started to back down from a request for help by denying it altogether.
Even the Italian decision to not ask for assistance is tainted by an election next spring, the outcome of which is anything but self-evident. Also, the paradox here is that an electoral law that makes governance harder could be the best instrument to help governance itself as it would force the country to shift again to a kind of nonpartisan, pro-European government like the current one—able because of its pro-European nature to keep the helm of the country mostly in the hands of its citizens.
During this attempt at “political anesthesia” the European partners have time to activate the ESM fund, which by sharing financial resources could give a push to the sense of sharing when it comes to political responsibility. In fact the ESM grants financial aid on the basis of political conditions. But given the necessity of paradoxes to keep political paranoia in line with markets’ hysteria, governments are trying to limit the ESM’s possibilities for intervention. But how long can markets’ gullibility possibly last when the goal of governments, is blatantly, as recently demonstrated by Berlin Madrid and Helsinki, is that of non-intervention? As the numbers of the last few days clearly show, the answer is “not vey long.”
Authorities respond that once Spain makes a request for aid, even if the ESM does nothing at all, the ECB will keep the spreads down by buying bonds on the secondary market. But even if the ECB takes the solution entirely on its shoulders, it will not be a walk in the park. Even in the United States the Federal Reserve and the Treasury happen to intervene separately, but in reality not acting together always translates into a bad signal to the market. In addition, in this case the ECB will have to independently evaluate the country’s progress. Therefore the purchase of bonds will inevitably be proportional to judgments of an extremely political nature.
In theory the ECB will have to decide on the quality of a labor reform or the sufficiency of a round of privatizations and so on. Also it should pull the plug if it deems Rajoy’s policies unacceptable, aiding, in so doing, the fall of a government already under separatist pressure and ultimately jeopardizing the resistance and the actual integrity of a country.
The ECB has the capacity to pull the plug, and in the last four years it has done it several times. Given, however, that the ECB does not intend to burn its fingers with politics, it will end up requesting to do so to the IMF, an institution that has far fewer problems when it comes to taking on governmental functions.
Such a decision, however, adds nonstabilizing automatisms to the markets. If the situation worsens, a primary role by the IMF could further destabilize the markets as, with a “privileged creditor” in the game (in case of default, the IMF gets paid before anybody else), investing in bonds issued by an assisted country would become even more dangerous. Then the markets will wait for the Troika to express its opinion on Madrid’s compliance. During these three months, they will interpret aggressively all signals on how conditions are being met, therefore creating daily uncertainty.
It is a risky scenario. The IMF has extensive experience in helping less developed countries, but it is rare to see the Washington technicians at ease when dealing with systems where bureaucracy is complex and democracy advanced. But the European willingness to develop forms of shared political and economic responsibilities is still too scarce, and this will inevitably carry consequences for the quality of our democracies.
Europe's attention these days is totally devoted to Greece – and understandably so, given the critical stakes at hand. Quite aside from how this latest installment of the euro crisis will end, ...
I was in Delhi recently, where I spent most of my time in rooms full of people talking economics. But I did get out a bit to see some sights, and I found myself thinking about history. And I ...