It is now quite clear: European Union leaders do not understand the markets and the markets do not understand, certainly don't believe in, or trust EU leaders or how the 27-nation project works.
Less than a fortnight after the latest summit deal to save the euro and solve Europe's economic crisis, we have had further downgradings by the ratings agencies, the Euro has plummeted to its lowest ebb in months and the head of the IMF has predicted another depression worse than the one which swept across the globe in the 1930s. Even the deal reached by every EU country except the UK is starting to unravel with other member states taking a leaf out of London's book.
The reason why this latest attempt to rescue the euro from the crisis has failed to convince the markets is because the deal is too complicated, hypothetical and nobody understands how it will work. Moreover it is a deal based on politics, not economics.
But we have been here before too many times. Stocks and shares tick up a notch and the euro spikes when the markets open the day after a deal, only to nose-dive once the details have been absorbed and analysed by the dealers and traders. That's because after nearly 10 years on both sides of the EU decision-making process, I have learned that EU leaders don't do detail. They make political decisions, not economic ones.
So, like in Italy, is it time we allowed the technocrats to run the EU and Eurozone asylum and the diplomats and politicians left the Justus Lipsius building (where EU summits are held)?
Well in some ways this deal is supposed to do just that by giving more power to the European Commission -- the so-called EU executive arm. The only problem is that under EU treaties, this body is meant to be non-political, but its President and many of his cast of 26 Commissioners are anything but, and are constantly bullied by Berlin, Paris and other EU capitals.
In my view, it is time to wheel in the money men. Those people who really run the Europe's economy. People like Richard Branson, Alan Sugar, George Soros, Lakshmi Mittal or the CEOs of many successful European companies like Danone, Siemens, Tesco or Diageo.
The EU loves setting up groups of 'wise-men', so why not appoint one on how to solve the euro crisis? You could throw in a few economists for good measure, but then again, they only sit on the fence and speak in riddles. What the euro needs is plain, straight-talking.
How many EU leaders or EU finance ministers have created and/or run their own businesses? How many have made money in the markets? Few I would suggest. (Silvio Berlusconi aside!)
How many of the diplomats or bureaucrats that wielded the pen on the last summit deal can say the same or even boast of an economic background? Many come from their foreign ministries or the office of their Prime Ministers. (Interestingly David Cameron's advice came from his Treasury and he has appointed a former Treasury official to take over as EU ambassador -- a post traditionally coveted by the Foreign Office)
Of course the politicians will say that 'big business' had a role in creating the euro mess and are part of the problem, but they need to ask themselves: are they doing any better in solving it?
Darren Ennis is a Director at MHP Communications
Comments
Clr Ralph Baldwin / December 22 2011 3:55pm
Well we are in a pile of doggy doings aren't we?
The result of politicians and Civil Servants never have had worked for a living who rose through the ranks because they did not rock the boat but placated other parties and maintained a doomed political-economic settlement. Each way you look at it there are very serious risks attached, if politicians hide behind businessmen or technocrats from La la land you open the doors to democratic failure and raise whole new questions as to the role of democratically elected reps, On the other the political "elite" are hardly representative of their respective peoples and are hardly enlightened champions of fairness and democracy so there would be little loss in doing so.
Clr Ralph Baldwin / December 22 2011 3:56pm
Even as it stands the European unelected Executive, the Commission is not loved by the people and neither are it's figureheads who represent a decline. You cannot equate these people as being better than elected politicians when they are merely a component of the overall failure including their weakness to bullying.
The European Settlement needs to be redefined in the interests of the Member states and we can no longer have a situation where a "favored" sector that just happens to look after politicians in all sorts of dodgy ways is prevented from failing due to the economic failures and lack of a varied, competitive commercial environment. It is the task of democracy and Governments to prevent ANYONE having too much power for too long and the whole mess resides around the less than elite elites and their blatant self interest and corruption.
A time has come for a new political argument as the Left and the Right leave us with the same undemocratic, uncompetitive mess of giant self-harming institutions that attack any kind of fairness in society.
This change has to occur despite the political-bank class desperately clinging on using any means possible to do so and damn the consequence but then isn't that how we got into this mess in the first place?
Clr Ralph Baldwin / December 27 2011 8:38pm
http://www.dailymail.co.uk/money/markets/article-2079052/Eurozone-banks-deposit-record-funds-ECB-amid-lending-fears.html
So where has the money gone? Back to where it started...at a loss, We are now playing "elite" snakes and ladders, the only difference being when you get swallowed by the snake your counter shrinks.
So where is the trust? Where is the radical platform? Where is the resultant faith that Governments are being managed well once their credit rating is set by City Finance?
Lol