This is Part 7 of an 8-part series of short articles by EWI's Head of Global Research, Murray Gunn. Murray is based in London, where he documents European hot-button issues in great detail. Murray also views the world and forms his conclusions from a social-mood perspective. It's an eye-witness series you don't want to miss.
A Decisive Moment for Europe: Part 7
Draghi’s Parting Shot
by Murray Gunn
Updated: May 22, 2019
The outgoing ECB President has a message for his successor.
As the European Union prepares for elections, the horse-trading for top European positions is in full swing. Key roles, such as the European Commission president and also the president of the European Central Bank are decided, not by voters, but by the movers and shakers of Europe's top brass. This leads to all sorts of political infighting with an unwritten rule that the positions must be split between nationalities. Having an E.U. president and an ECB president from the same country would be seen as unacceptable. Sigh. And therein lies the essence of the problem with Europe. At the end of the day, people still see themselves as German, French or Italian, rather than European. And that has really been the main stumbling block in building what the European project needs in order to last -- fiscal union.
The outgoing ECB President, Mario Draghi, said in a speech today that Europe needs to get over this impasse which "...has been perpetuated by two alleged dichotomies -- the first is the notion that to complete banking union, risk-reduction needs to precede risk-sharing. The second is the idea that deepening risk-sharing through the private sector should take precedence over increasing public risk-sharing." Draghi believes that the public sectors of European countries can and should share risks in order to move Europe forward.
That might be seen as a shot at his potential successor, current German Bundesbank president, Jens Weidmann, who is a monetary hawk and harsh critic of the ECB's bailout of southern Europe. Weidmann is one of the front-runners for the ECB presidency but his appointment depends on whether another German, Manfred Weber, becomes president of the European Commission. Having two Germans in these top jobs is anathema to the European elite.
Which brings us back to the problem. The Eurozone has been underperforming the rest of the world for over a decade and, at this juncture, that trend shows no sign of reversing.
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