This House Has No Confidence In Olli Rehn, Nor Anyone Else

So here we are again. A peripheral European economy is falling apart, because of its hugely overextended banks. The powers-that-be, being the European Commission’s EMU directorate-general, the European Central Bank, and the German ministry of finance, intervene. This time, rather than letting the government deal with the banks, destroy its credit, and then lend the government money on terms that basically preclude any prospect of recovery – and don’t ask me, ask Deutsche Bank and Edward Hugh about the impact of youth unemployment on long-run productivity – they’ve decided to bill the banks’ depositors under the bail-in directive, and to hit the insured depositors below €100,000 although they didn’t have to, and then anyway impose a structural-adjustment programme of the order of 5.75% of GDP in case the horse sings this time – don’t ask me, ask the IMF. Everyone’s now standing by for Monday and whatever may come.

But isn’t this a bit, you know, 2008? If there was any point to the policy of the European powers-that-be, surely it was that this stuff was meant to be over? Instead, we are landed with a sort of permanent state of emergency. Why isn’t anybody sorry? Why isn’t anybody responsible?

Instead, what do we get from the elite?

Attempts at ideological policing. A cocktail of whataboutery and racist dogwhistle – I’m sorry, Professor Sachs, you’re smart enough and ugly enough to know just what is meant by welfare in current US politics. The British prime minister flat-out lying about what his own pet pro-austerity committee says. And I call it that advisedly. We’ve had Olli Rehn’s spokesman descending into playground bullying. We’ve had British chancellor George Osborne telling himself recovery is but a Friedman unit away. We’ve had that American private-equity guy complaining that French workers work three hours a day, when he put them on short-time working at three hours a day. We’ve had Hans-Werner Sinn suddenly discovering intra-eurozone trade imbalances after all these years. Someone has invented a political party to demand that Germany leaves the Euro because it’s not been austeritarian enough.

Clearly, the powers-that-be are as bankrupt as the Cypriot Bank of Horsemeat, and they must go. Paul Krugman is entirely right that the whole story is foully reminiscent of Iraq. The great flabby mess of elite consensus rolled downhill, not so much William Cobbett’s Thing as 1950s B-movies’ Epic Blob, absorbing every punch that could be thrown at it.

So what’s with the most prominent representative of this feeling in Europe, Beppe Grillo? Well, when he’s not looking after his network of offshore companies, or rather, letting his secretary and wife look after them, at least in name, he’s demanding the elimination of trade unionists – that’s a must read piece, by the way. You’ll need to put up with slightly tiresome left-wing-art-collective stylings and I was quite pleased to identify “that lot who called themselves Luther Blissett because he was black, like” before finding out they are indeed the collective author, but it’s damning. Further, even UKIP manage to make sense in flashes.

And after the usual painful negotiations and baboon threat-displays, the intergovernmental leaders managed to agree a budget that zeroed-out EU investment in broadband infrastructure. Obviously! (I agree I’m talking my book professionally there, but you’ll struggle to find anyone who doesn’t think it will do at least some good.)

Clearly, the old motto can be adapted. Tous les mêmes. Tous pourris. Même moi!

But it’s not as if nothing can be done. We still have the economic policy team at the Commission we had in February, 2010. We still have the same Commission President we had in 2004. Evidently, the European public is entirely satisfied and the same broad strokes of policy from the property-boom years are OK. No. Whoops, I took a crazy pill.

So, if you want new methods you usually need new men. The European Parliament has, to its credit, knocked back the budget. Now, it must stand up to its responsibility and knock back the Commission. Amazingly enough, we still can’t just bin Rehn, it’s all or nothing. But it’s been done before, over issues that were far, far less important in their consequences. This quote is a classic:

“It was becoming increasingly difficult to find anyone who had the slightest sense of responsibility.”

12 thoughts on “This House Has No Confidence In Olli Rehn, Nor Anyone Else

  1. This bullying by the Troika is reminiscent of, “to the victors go the spoils.” The only problem is no war has yet to be fought that would allow the victors to force their will upon the failed governments of those who lost.

    One of the long-term causes of World War I was the resurgence of imperialism in the foreign policies of the great powers of Europe.Who today will assume the role of Archduke Ferdinand? To paraphrase from the novel, “The Quiet American,” written by the great author Graham Greene, “their comes a time when one is forced to choose a side if they desire to remain human.”

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  3. I too am so fed up with Rehn and this Commission’s economic policy. The worst thing is that Germany does simply not understand what it is doing (although Yanis Varoufakis would argue it does) – now it even pre-emptively starts austerity by announcing that it would not take any new loans from 2015 onwards. And guys like the blog Acting-Man are happy because of that.

    What kind of world is this? I am Dutch, I live in Finland, and I am not happy with either country’s policies. The ‘core’ is just killing the rest of Europe. I wonder what Fitch and Moody’s will say about this implication of depositors.,..probably not so much good.

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  5. The inclusion of Cameron etc is a bit bizarre because they have nothing to do with this fiasco, and of course the UK voters can choose a wide range of different policies at the next election, unlike their Euroland colleagues. But perhaps you feel the need not to look like a Eurosceptic? More importantly, re. this:

    “The powers-that-be, being the European Commission’s EMU directorate-general, the European Central Bank, and the German ministry of finance, intervene.”

    There is only one “power-that-be” here: the German government. The other two would spin on a dime if the German finance minister said, say, that a period of modest inflation would be welcome and that Europe-wide deposit insurance paid from common European funds on the FDIC model should be introduced tomorrow. And the German finance minister can’t be voted out other than by the Germans. To focus on Olli Rehn is to completely miss the point.

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  8. Dude, you’re unhinged on this… relax – the market is relaxed.

    Also, check your hearing – no racist dogwhistles in Sachs piece – in fact, the word welfare doesn’t appear – unless your hearing is so good you can hear sounds YOU think YOU ought to be hearing but just aren’t there …

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