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THE EURO - Media Comments and Reaction News & Commentary in German |
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News & Commentary in English Keynes rescues France and Germany; Club Med lost New geographical divide on the cards as twin motors of Euroland crawl out of recession but southern states remain in the wreckage By Ambrose Evans-Pritchard - published on 13/08/09 in the Daily Telegraph Economic legacy: fiscal stimuli have lifted France and Germany from the depths of recession Crass Keynesianism has done its job. A blast of fiscal stimulus and "cash-for-clunker" schemes have lifted France and Germany from the depths of recession. The twin motors of Europe each eked out 0.3pc growth in the second quarter, much to the consternation of their own governments and the International Monetary Fund. The eurozone as a whole shrank 0.1pc. Christine Lagarde, the French finance minister, interrupted her holiday to announce that "France was finally coming out of the red". Will the financial crisis strengthen or weaken the Euro? An overview from a European and transatlantic perspective Lecture by David Marsh - held on 19/06/09 at the Institute for Monetary and Financial Stability, Frankfurt It is a great pleasure to be here in Frankfurt this evening to give this lecture. I came to Frankfurt first in the 1970s when I became acquainted with the Bundesbank. In fact I lived here for several years and even the civil ceremony of my marriage was carried out in the rebuilt Römer, during a lunch break from my work with Reuters in 1974. As the focal point of medieval Frankfurt - the place for coronation banquets of the Holy Roman Empire – and also for the first meeting of the council of the European Monetary Institute as the forerunner of the European Central Bank, the Römer reminds us of the need to keep a historical perspective about the issues connected with Economic and Monetary Union - because this is a project that has been under development for many decades. The Euro’s prowess and resilience, too, have to be judged over the long term. And this is the question at the root of my lecture here tonight. Read full article Trichet needs help to deliver the bad news By David Marsh - published on 22/05/09 in Financial Times The omnipresent Jean-Claude Trichet brings apparent simplicity to the European Central Bank, where he has been president since 2003, by dominating its external policy representation. In reality, though, the ECB’s constitutional life is Byzantine in its complexity: the 22 central bankers on its decision-making council oversee a unified currency and interest rate policy for 16 countries, each with its own government, parliament and finance ministry. It is time for the ECB to put its governance and public image on to a broader footing. The bank should form a muscular six-person “committee for euro stability” to carry its policy messages to a wider public inside and outside economic and monetary union. Read full article European Central Bank falls into line and embraces quantitative easing Rearguard action by Germans to stave off 'undesirable option' dismissed by central bank's governing council By Ambrose Evans-Pritchard - published on 08/05/09 in the Daily Telegraph The European Central Bank is now following the policy first adopted by the Bank of England and America's Federal Reserve. The European Central Bank has cut interest rates a quarter point to a record low of 1pc and embraced quantitative easing (QE) for the first time, catching markets off guard with plans to buy €60bn (£53.5bn) of covered bonds. The hotly-disputed move to purchase assets brings the ECB into line with the central banks of the US, Britain, Japan, among others, that have begun "printing" money to stave off debt deflation. Read full article EMU imbalances face more tests Next 10 years hold tougher challenges for eurozone countries By David Marsh - published on 04/05/09 in Financial News There is now a broad consensus that, if the first 10 years of the European Economic and Monetary Union have produced their share of upheavals and challenges for the eurozone, the next 10 years will be much tougher. The present phase of deep economic downturn has been difficult enough but, following the European Central Bank’s initial indecision about its credit policies last summer, the Europewide policy response has been straightforward – cutting interest rates aggressively in line with action in the US and UK and allowing a substantial short-term deterioration in budget deficits to prevent the recession from becoming worse. European Monetary Union: Second honeymoon or pending divorce? Open Europe debate on European Monetary Union - 28/04/09 in Brussels Ignazio Angeloni, Advisor to the Executive Board, European Central Bank, gave an overview of economic data on the eurozone, saying that 6 to 7 million jobs have been created during the 10 years of the euro. He said that an important achievement was that labour markets had become more flexible, in particular in Italy, Spain and Portugal. He admitted that it was debatable whether this was due to the euro. “Quite frankly”, he said, “I don’t think economists have an answer to that. Most of the progress took place before 1999, but then again, one could argue that it is because of the euro. The important thing is that the labour market has changed in the positive direction.” Read full article Cracks in the Euro The economic downturn has exposed harsh differences between the European Union’s members, with the stronger states likely to have to bail out their weaker neighbours By Iain Dey and David Smith - published on 15/03/09 in The Sunday Times AS 3,000 blue and yellow balloons launched into the grey Brussels sky, Europe’s financial leaders popped corks on 9-litre champagne bottles. It was January 1, 1999, and the euro had just been born. “We are standing at the dawn of a new era in history,” said Rudolf Erlinger, then Austrian finance minister and chairman of the EU group of finance ministers, who summed up the triumphant mood. Portugal declared itself delighted, Finland honoured. Germany urged everyone to work harder, while Italy pleaded for ever closer union. Will Britain ever need the euro? For all the severity of the economic downturn, Britain's monetary independence could help it recover from recession faster than many of its continental neighbours, writes David Marsh By David Marsh - published on 12/03/09 in www.publicservice.co.uk The 16 nations joined by Economic and Monetary Union (EMU) are going through a torrid time. The three leading nations in the 10-year-old Euro – Germany, France and Italy – are all suffering downturns that are as severe as if not worse than Britain's. The world's economic downturn has exposed some powerful if uncomfortable truths about Europe's fixed exchange rate system. Britain is no nearer joining the single currency than it has ever been. However, important elements of political and economic solidarity – not least, issues of regulating financial markets – are drawing the UK closer to the rest of Europe. Read full article The fear of printing too much money By Chris Bowlby - published on 05/03/09 in BBC Radio Current Affairs Amid all the talk of solving the global economic crisis, there is one phrase the bankers and politicians try to avoid. "Nobody is talking about printing money" insisted the Chancellor in January. Much safer to deal in baffling jargon such as "quantitative easing" that few outside a financial elite really understand. For Mr Darling knows that talk of emergency money printing conjures the most disturbing of ancient and modern anxieties - of politicians ruining a currency, and thereby utterly undermining a society's stability. Read full article Can the Euro save the UK Economy? Lecture by David Marsh at Aston University on 04/03/09 The newly launched Aston Centre for Europe (ACE) is inviting the general public to Aston University to listen to the views of economic expert, author and former FT editor, David Marsh, on whether the ‘Euro can save the UK economy’. Having spent 17 years at the Financial Times, of which the last four were as European Editor, David Marsh CBE, is today one of the UK’s foremost experts on the European economy and one of the best-informed commentators on Germany. Read full articleYesterday's heroes must come back from Bretton Woods to save us By William Keegan - published on 01/03/09 in The Observer Keynes was no socialist. He had seen Soviet communism at work first hand, and, unlike some of his contemporaries, drew the right conclusions. In common with Joseph Schumpeter - one of his many intellectual sparring partners - Keynes wished to save capitalism from itself. Schumpeter was a greater believer than Keynes in the so-called "creative destruction" of capitalism but, interestingly, more gloomy about its future. For decades after the second world war, what were loosely termed "Keynesian" economic policies reigned supreme. These involved reasonably enlightened attempts to tame the excesses of the business cycle (to mitigate the harmful effects of boom and bust, not necessarily to eliminate them) and a serious effort at international co-operation, always under the aegis of the strongest economy by far: the US. Read full article Das Bookfest The German ambassador, Georg Boomgaarden, hosted a jolly Anglo-German evening celebrating the launch of London and Oxford Group chairman David Marsh's book The Euro. By Emiko Terazono - published on 28/02/09 in Financial Times A stellar cast gathered for the former FT journalist, including former Deutsche Bank boss Rolf Breuer, author and eurosceptic Freddie Forsyth, a gaggle of lords including Terry Burns, Douglas Hurd, Norman Lamont and Nigel Lawson, and members of the Marsh family including Mr Marsh's mother, Marguerite. Read full article Poehl Says German Euro Rescue Would Be Pandora’s Box By Brian Swint - published on 27/02/09 in Bloomberg Former Bundesbank President Karl Otto Poehl said Germany should resist increasing pressure to rescue other euro-area countries as the financial crisis brings some of them to the brink of default. “A bailout of a debtor country from a surplus country like Germany would be like opening the box of Pandora,” he said yesterday at an event at the London School of Economics. “It’s a very dangerous course that we will enter” and “I’m very much against it, many people in Germany are against it, but the political pressure will increase, it’s obvious.” Read full article Merkel/Steinbrück destabilising weaker EMU credits WE SUGGEST: Bunds yields too high, Irish too high vis-à-vis Greek By Charles Dumas - published on 27/02/09 in Lombard Street Research SUMMARY: There is no danger of crowding-out disrupting world government bond markets, which are doing fine without any co-ordination from Mrs Merkel or any other self-serving politician. The rank ignorance of economics amongst continental commentators is beginning to look like a serious global economic threat. It is probably not out of malice that high-placed politicians from the stronger Euroland economies keep chattering about an entirely illusory crowding-out threat in world bond markets – what Dutch Finance Minister Bos recently referred to as “free-riders” with large government deficits. Read full article France’s struggle to escape Bundesbank ‘brutality’ By David Marsh - published on 23/02/09 in Financial News In the final part of the serialisation of his new book, The Euro – The Politics of the New Global Currency, Financial News columnist David Marsh reveals how the fiercely guarded independence of Germany’s central bank nearly forced France’s exit from the exchange rate mechanism in the week following Britain’s ignominious departure on Black Wednesday in September 1992. Only impassioned 11th-hour talks between German and French political leaders averted disaster and kept the grand project of monetary union in Europe from coming off the rails When the larger-than-life frame of German Chancellor Helmut Kohl bustled into the Elysée Palace on the afternoon of Tuesday September 22 1992, a sense of impending calamity hung in the air. Read full article Only the strong may survive in the euro area By David Marsh - published on 23/02/09 in Daily Mail Any illusions that the 16 nations of Economic and Monetary Union (EMU) would be shielded from the ravages of the world recession have been dashed. The EMU area's economy contracted 1.5 per cent in the final three months of 2008. The three leading nations in the euro - Germany, France and Italy - are all suffering downturns that are as severe if not worse than Britain's. Many of the Euro nations are suffering economically just as much as Britain's. Read full article Looking beyond the euro's first decade The euro’s second decade: status quo and perspectives Speech by Lorenzo Bini Smaghi, Member of the Executive Board of the ECB - British Embassy, Berlin, 18/02/09 It is a great pleasure to be here today. The publication of David Marsh’s new book, shortly after the euro’s tenth anniversary, is a good opportunity to review the status of the currency and its prospects in the coming decade. It’s a real “Marsh book” – a pleasure to read, even though some quotes and statements might sometimes be controversial. In any case, David Marsh seems to have taken to heart the main lesson of the current financial crisis: avoid excessive risk. Indeed, he is walking along a kind of tightrope, often quoting people or presenting views in such a way that they contradict or contrast with each other. That way, he is likely to come out on the right side of things, whatever happens. Read full article Euro's 10th anniversary: High noon in Paris as tensions flare over EMU build-up by David Marsh - published on 16/02/09 in Financial News In the first of a two-part serialisation of his new book, The Euro – The Politics of the New Global Currency, Financial News columnist David Marsh exposes the rivalries that threatened to derail the long journey to a single European currency. Drawing on narrative accounts from the euro’s architects, Marsh looks at how intrigues hatched behind closed doors helped overcome thorny differences between German and French political ideology A secret meeting in Paris in December 1988 between Jacques de Larosière, Governor of the Banque de France, and President François Mitterrand set the path to Economic and Monetary Union in Europe – 11 months before the fall of the Berlin Wall. The 30-minute exchange in the Elysée Palace enshrined the goal of central banking independence in the mind of de Larosière, a long-time monetary civil servant whose courtly disposition and patrician demeanour hid nerves of steel. Read full article UK likely to make a swift recovery British tortoise may look friskier than the German hare in a year’s time by David Marsh - published on 02/02/09 in Financial News The international race to climb out of the financial morass is increasingly resembling the contest between the tortoise and the hare – where the animals are deeply and messily enmired in economic mud. Each leading European country is intent on playing to its strengths. The nation that appears at present to be plodding well to the rear, Britain, entered the recession earlier than the others. It may be heading for a deeper, but also quicker, slowdown than the countries in the eurozone. The economic stimulus generated by sterling’s weakness, together with the flexibility of Britain’s labour markets, may bring the UK out of the quagmire quicker than the others. Read full article EMU on the rocks and all exits closed by Edward Chancellor - published on 01/02/09 in Financial Times The euro was created to bring economic stability to Europe. However, the politicians who promoted European Monetary Union ignored inherent flaws in the project. The credit crisis has exposed these flaws. As a result, a number of the weaker eurozone members are facing severe deflation and a quite desperate economic outlook. The leading European politicians behind the euro project, such as former French president Francois Mitterrand, weren’t much interested in economics. In a new book, The Euro: The Politics of the New Global Currency (Yale) David Marsh shows how these politicians brushed aside the concerns of their advisers as they rushed eagerly towards monetary union. Read full article Euro doesn't need Britain, ECB's Wellink says By Marc Jones - published on 14/01/09 by Reuters FRANKFURT, Jan 14 (Reuters) - The euro doesn't need Britain and decision makers in the bloc are reluctant to cooperate with the UK, which has refused to adopt the currency, according to European Central Bank policymaker Nout Wellink. "In the (ECB) Governing Council we almost never discuss the UK. We more often discuss China, the U.S., Japan," said Wellink, who is one of the Council's longest-serving members. Read full article The Euro marks its tenth anniversary Senior officials from the European Central Bank and the European parliament are meeting in Strasbourg to mark the tenth anniversary of the common European currency, the euro. David Marsh appears in BBC World Service - first broadcast on 13/01/09 Meanwhile, Germany is the latest European country to announce the details its own economic stimulus package to tackle the global downturn. With Europe facing what is probably the worst recession since the Second World War, could latent nationalism within the single currency area lead to the euro's demise? Or does the recent relative strength of the currency show that the euro's first ten years have been a triumph? Listen to David Marsh France, Germany and fissures in the eurozone By David Marsh - published on 12/01/09 in the Financial Times International challenges spell good and bad news for the European Central Bank. On the positive side, the credit crisis has given the independent ECB and Jean-Claude Trichet, its president, unexpected authority on the world stage. Most observers agree the 10-year-old economic and monetary union has so far moderated the direct fall-out of the financial crisis for eurozone members. On the negative side, Europe this year faces probably the worst recession since the second world war. Depending on how Emu members react, latent nationalism within the single currency area may emerge as a disruptive force. Read full article Letting the pound take the strain History has taught us that fluctuations in the currency may be no bad thing By David Marsh - published on 05/01/09 in the Daily Telegraph The former Labour Chancellor of the Exchequer Roy Jenkins ranks as one of the fathers of the European single currency. Partly as a result of Jenkins’ inspiration as President of the European Commission (so far, the only Briton to have held this post), German Chancellor Helmut Schmidt and French President Valéry Giscard d’Estaing invented the European Monetary System in 1978 – the forerunner of Economic and Monetary Union that started in January 1999. In his final years Jenkins – who died six years ago today – lamented Britain’s non-membership of EMU and warned that sterling would be squeezed between two world currencies, the dollar and the euro. Read full article European U-turn on interest rates shrouded in secrecy The European Central Bank's skyscraper headquarters in Frankfurt has been buzzing with unusual activity of late By David Marsh - published on 09/12/08 in the Daily Telegraph The European Central Bank's skyscraper headquarters in Frankfurt has been buzzing with unusual activity of late. Galvanised by what looks likely to become Europe's worst recession since the Second World War, the institution that sets credit conditions for the 15 nations of the Economic and Monetary Union (EMU) has reduced interest rates three times since October – and more cuts look likely in the New Year. Read full article Germany's 30-year-old EMS secret is revealed By David Marsh - published on 30/11/08 in The Observer and guardian.co.uk An extraordinary insight into the creation of European monetary union is given in the minutes of an historic meeting exactly 30 years ago between Helmut Schmidt, the West German Chancellor, and the Bundesbank, revealed for the first time today by The Observer Schmidt arrived at the Bundesbank's Frankfurt headquarters in a military helicopter, on 30 November 1978, to seal a clandestine agreement on setting up the European Monetary System (EMS), which paved the way for monetary union in 1999. Read full article Joining euro would be no panacea Flexibility in economic and monetary policy is of inestimable value By David Marsh - published on 24/11/08 in Financial News At a dinner in London in July 2007, I asked Axel Weber, president of the German Bundesbank, whether Britain was a secret member of Economic and Monetary Union. The reason was that the pound had remained for several years at the stable rate of about 1.48 – exceedingly close to the old pre-EMU rate of DM2.95 at which sterling was pegged for 23 months in the Exchange Rate Mechanism before it was forced to leave in disastrous circumstances in September 1992. Weber replied that, if the UK was a clandestine member, then it really must be a big secret because nobody had told him about it. Read full article The dollar and dominance David Marsh appears on BBC Radio 4's Current Affairs programme Broadcast on 23/10/08 The Euro at 10 - A historical analysis By David Marsh - published by the European Association for Banking and Financial History A currency for Europe is a design long in its pedigree, enrapturing in its endeavour. The dream of a common unit of money to invigorate and unify disparate peoples, and imbue national economies with wealth and dynamism, has sporadically captured attention throughout centuries of political thought. The search for the monetary equivalent of the Holy Grail has frequently been tinged with idealistic fervour, co-existing with a strong dose of political and economic self-interest. George Podiebrad, a fifteenth-century king of Bohemia, suggested a European Federation that would issue a common currency for use by a European armed force raised to fight the Turks. Read full article For further details including book purchases, bulk copies and news on book launch events, please contact: Wiebke Räber, London and Oxford Group, + 44 (0)20 7796 9911, wiebke.raeber@londonandoxford.com For all other questions about the book, including reviews, please contact: For English edition: Katie Harris, Yale University Press, + 44 (0)20 7079 4900, katie.harris@yaleup.co.uk For German edition: Dagmar Landgrebe, Murmann Verlag, +49 (0)40 3980 8313, landgrebe@murmann-verlag.de
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