That’s Angela Merkel, expressing the thought that many politicians have, but rarely speak out loud. There’s a lot of wishful thinking wrapped up in that statement:
“We must re-establish the primacy of politics over the market.” That sentence, spoken a little while ago by Germany’s Angela Merkel, sums up the startlingly unoriginal character of the approach adopted by most EU politicians as they seek to save the common currency from what even Paul Krugman seems to concede is its current trajectory towards immolation.
As every good European career politician (is there any other type?) knows, the euro project was never primarily about good economics, let alone a devious “neoliberal” conspiracy to let loose the dreaded market to wreck havoc upon unsuspecting Europeans. The euro was always essentially about the use of an economic tool to realize a political grand design: European unification. Major backers of the common currency back in the 1990s, such as Jacques Delors and Helmut Kohl, never hid the fact that this was their ultimate ambition. Nor did they trouble to hide their disdain of those who thought the whole enterprise would end in tears.
From the common currency project’s beginning, economic considerations were continually subordinated to the goal of using the euro to cement political bonds. That’s why most countries were allowed to enter the euro despite not having met some basic entry criteria. It also explains why no one really seemed to care too much when Greece admitted in 2004 that it had fudged, distorted, and lied its way into the euro club. Now, however, Europe is discovering what happens when political games diminish a currency’s ability to reflect economic facts on the ground.
H/T to “Monty” at Ace of Spades HQ, who commented:
This in a nutshell is everything that is wrong with the sovereign governments of both Europe and the United States (and China, and Russia, and…well, you get my point). The “market” is not a thing to be managed, or a process to be controlled. The market is just an aspect of the natural world, working on the creatures who move through it. Merkel’s comment reflects the combination of arrogance and ignorance that is at the root of so many of our economic problems.
Yes, well, we are talking about the same people who think they can control the climate.
Comment by Wallhouse Wart — November 24, 2011 @ 22:05