José Manuel Barroso, President of the European Commission, Seán Barrett, Chairman of Dáil Éireann ( Irish Parliament Speaker), Martin Schulz, President of the European Parliament, Herman van Rompuy, President of the European Council, Anni Podimata, Vice-President of the EP and Maroš Šefčovič, Vice-President of the EC in charge of Inter-Institutional Relations and Administration, (from left to right). (EC Audiovisual Services).
“No, the euro is not overvalued, if the long-term tendencies are taken into account”, said yesterday Angela Merkel’s spokesman, Steffen Zaimpert, in Berlin, as if the rest of the Eurozone was not existing. He added that the long-term competitiveness cannot be achieved through monetary measures and accommodating exchange rate policy. Seemingly the European Sting was in his mind when George Pepper wrote yesterday that, “The German theory is that if the products are good, they will be selling all over the world. The monetary support can only be short-lived, creating more problems than it solves”.
This completely Teutonic statement by Angela Merkel’s press representative, with repeated references to “long-term” tendencies, reminds everybody that being a German is an ideology in itself. As if mainstream economic theories like “Keynesianism”, have never crossed the river Rhine and no German ever heard that “in the long-term we are all dead”. The Germans insist that we have to live for the future, forgetting the present. It’s the Hegelian ideology that still haunts them and forcing them to live in “the realm of pure thought”, that is nowhere!
Obsession with strong euro
After the comments by Zaimpert in favour of a strong euro, the European currency gained grounds and climbed to 1.3535 dollars from 1.3506. The spokesman went even further and brought…history into the discussion. He said that, “seen from a historical perspective the euro is not overvalued at the moment”.
Coming back down to earth this statement of the representative of the German Government is obviously a direct answer to the French President, Francois Hollande, who said yesterday that the European Central Bank must have an exchange rate policy, targeting a realistic euro parity with the rest of the major world currencies. In reality Hollande wanted to say that the euro is already overvalued and the rest of the Eurozone cannot cope with such an expensive monetary unit. Exports are becoming very expansive and imports cheap, thus ruining growth prospects for everybody else in Eurozone, than the Germans.
The Berlin intervention however had one more target. It’s today’s European Union Summit in Brussels. It goes without saying that the French will be very active today in the Belgian capital, promoting the discussion about what Francois Hollande said for the European Central Bank and the euro. Berlin tries in this way to pre-empt any French attempt, to make the euro an issue at least in the corridors of the Summit, if not at the main table.
The expensive euro threat
Paris is not alone in this. Rome, Madrid, Athens, Dublin, Lisbon along with The Hague, Vienna and Helsinki are also threatened by the expensive euro. Francois Hollande’s proposition that the Eurozone member states must agree on a “realistic” exchange rate for the euro’s parity with the rest of major currencies, found immediate support all over the single money zone.
The question is how to make Berlin understand that the common currency is not only for Germany, and its austere ideologies, but for all the 17 member states of the Eurozone.
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