By: Mr.Fog on Venerdì 28 Settembre 2007 21:57
Con l'euro lanciato ci sara' ben qualcuno che comincia ad ica@zarsi...
Senza far nomi..la Francia potrebbe alzare un poco piu' la voce e non credo che la Germania sia poi cosi' immune da questa situazione.
Su Stratford c'e' un bell'articolo per chi ha un poco di tempo da dedicarealla lettura...(lo incollo perche' e' a pagamento)
Europe's Interest Rate Clash
After a midsummer spat between German Chancellor Angela Merkel and French President Nicolas Sarkozy over the direction of the European Central Bank (ECB), Merkel said Sept. 20 that Germany will fight any attempts to "challenge the central bank's independence." This dispute highlights the geopolitical realities that make a single eurozone monetary policy intrinsically unstable.
Continental Europe's major economies agreed in 1992 to establish the ECB as part of the Maastricht Treaty, which led to the creation of the European Union as we know it. The ECB came into being in 1998 to further integrate the economic policies of 11 nations that would then participate in the eurozone. (Thirteen nations now use the euro as currency.) Its primary mandate is to maintain price stability, which generally includes keeping inflation low. It does this by shrinking or expanding the money supply, much like the U.S. Federal Reserve, by altering interest rates. Lower rates expand the money supply and increase loan availability to businesses. This typically results in greater economic growth, but risks inflation, whereas higher rates contract the money supply and the availability of loans for businesses and consumers but increase price stability and a currency's purchasing power.
In order to fully bring Germany into France's vision of a politically and economically united Europe, France agreed to Germany's demand that the ECB be modeled on Germany's own central bank, the Bundesbank, which has a long history of independence from government interference and places a high priority on keeping inflation low. This is at odds with the French banking system, which traditionally features government involvement and inflation-prone economic policies. France agreed to base the ECB on the German model because, at the time, Paris felt that German integration into the European Union was worth giving up some economic sovereignty.
As a result of this agreement, Sarkozy's current attempts at liberalizing economic reforms in France are running headfirst into an EU monetary policy that mostly reflects German interests. In response, Sarkozy is calling for the ECB to focus more on the economic growth goals of eurozone nations, as opposed to inflation targets. Primarily, he wants the ECB to lower interest rates, which would weaken the euro and increase inflation but increase French exports by making them cheaper on the world market. Although Sarkozy's recent criticism that ECB policies are harming France's economy might be political -- his intent could be to use the central bank as a scapegoat for France's ills as he pushes through controversial reforms -- the current mandate of the Frankfurt-based ECB does favor Germany's economy over France's.
France has frequently proposed reforming the ECB and has recently advocated enshrining changes in the EU constitution that would decrease the central bank's independence. Constitutionally changing the ECB would require a unanimous vote among eurozone nations; Germany could veto any changes, ultimately forcing France to negotiate directly with Germany if it is serious about reforms. Still, France might seek an alliance with other eurozone nations that have qualms with the ECB in order to pressure Germany on the issue, and could even threaten to withhold support for a new EU treaty on the issue.
A German-Friendly Monetary Policy
ECB policy will always reflect the needs of the largest member economy -- Germany, which represents one-third of the eurozone economy. This is not necessarily because of direct political influence on Germany's part, but rather because the bank must address the largest factor affecting inflation first in order to meet its inflation-fighting mandate; pumping money into or out of the eurozone based on the Netherlands' economic situation would be quite futile. Thus, Germany is in the driver's seat of EU monetary policy, with support from many Eastern European countries that are happy with foreign investment-inducing and currency-stabilizing high interest rates.
Geopolitically, Germany -- a nation with few natural resources and a large population -- perpetually will have to be an innovative and financially disciplined economy. France, while not a high-tech or industrial laggard, will always be a less efficient and more agriculture-oriented economy and will depend less on a strong currency to import resources. Germany will want less government interference in the economy, lower inflation, a stronger currency and higher interest rates, since it is more dependent on import provisions because it has a larger population and a less productive agriculture sector than France.
High ECB interest rates also help attract capital inflows to the European Union from other lower-interest rate investment destinations such as the United States. This works well for Germany's innovation-based industrial technocracy economy, which is ever-hungry for more capital.
The ECB's current focus is on keeping inflation in line and maintaining a strong euro, which has favored -- and continues to favor -- the German economy, as Germany produces goods that are high-quality, less-price sensitive and in higher demand than other EU member nations' exports. Even with a stronger currency, an importing nation outside the eurozone would not be able to find substitutes for specialized industrial and high-tech German goods easily, but it would be simpler to find replacements for relatively low-quality and agricultural exports from France (and from other eurozone economies, such as Italy and Spain).
France's generally weaker economy -- the European Commission announced in early September that it expects Germany's economy to grow 2.4 percent in 2007, while France's growth is expected to be 1.9 percent -- would benefit from lower interest rates and a weaker currency. However, Germany has little interest in changing a monetary policy that helped it grow and maintain a very large share of total eurozone exports -- the value of extra-eurozone exports (trade outside of the eurozone) totaled roughly $1.96 trillion in 2006, with Germany representing $724 billion (36.9 percent) of that total.
Diverging Interests
Setting a single monetary policy for France and Germany, not to mention the 11 other eurozone nations, will always be difficult since their economies are quite different in composition. Within the eurozone, there are large and small technocracies; large and small industrial economies; and large and small agrarian economies. Each will experience business cycles of demand and supply that do not overlap, meaning an expansionary monetary policy designed to spur demand in one country will threaten business competitiveness and heighten inflation in another. Contrast this with the United States, a large, complex economy with 50 state governments and a single monetary policy. The U.S. Federal Reserve has endless problems fashioning a single monetary policy for a country with regions that are very diverse in wealth and economic structure; Europe's more rigid labor laws and cultural and linguistic differences make the ECB's job even harder than the Fed's.
France signed onto the Maastricht Treaty as a political project under Gaullist leadership in order to control German national ambitions and further French political interests on the Continent. France has brought Germany into the fold of the European community and thus increased its own security, but it has spurred German economic growth and political dominance on the Continent. Germany is usurping French political dominance in Europe, so the newly assertive French government is seeking to redefine its role in Europe and the world. Meanwhile, the French public is increasingly wary of losing control over not only its economy but also its culture and national sovereignty to further EU integration.
Sarkozy wants strong economic growth in France to reduce unemployment and allow him to propose economic reforms while his popularity is still high. A lower eurozone interest rate would weaken the euro and make euro exports more competitive while increasing domestic business activity by making it easier for consumers and businesses to take out loans. Sarkozy has repeatedly called on the ECB to pursue a more pro-growth strategy beyond the bank's treaty mandate of maintaining low inflation; during his election campaign Sarkozy advocated amending the ECB mandate to redirect the bank's policies toward job creation and economic growth.
In the short term, when the ECB Board of Governors meets in early October, it will likely dig in its heels and fight any further pressure from Sarkozy. And unless the ECB is altered -- which is not likely any time soon and will probably only happen if the issue becomes a deal-breaker for agreement on a new EU treaty -- it will continue to pursue policies that are generally to Germany's benefit. As long as the French economy does not slow significantly, Sarkozy could be able to continue his rhetoric and pass economic reforms.
Larger problems loom if Sarkozy is serious about tying ECB reform to support for a new EU treaty. France is pushing to list the ECB in the EU treaty as an EU institution and delete any emphasis on the bank's independence. Other countries, such as Italy and Spain, have made similar though less strident criticisms of ECB policy in the past. They will generally align with France on this issue, though recent remarks from Italy and Spain diverge on the issue: Spanish Prime Minister Jose Luis Rodriguez Zapatero said in September that interest rates have reached their peak, while Italian Finance Minister Tommaso Padoa-Schioppa said that a strong currency would force Italy to make much-needed economic reforms. Both comments reflect the different temporal economic realities of each nation and underscore the perpetual conflict that will persist if the status quo continues.
However, holding the EU treaty hostage over ECB reform could ultimately be a moot point if the desired changes are lost among myriad other unresolved issues, such as the larger questions of sovereignty and voting rights.
Current European political and economic integration has proceeded as far as it can without fundamental changes in the character of Europe's nation-states; the differences between Germany and France over interest rate moves represent the fundamental difficulty of coordinating economic policy for many quite different economies -- a dilemma that will hamper further EU negotiations and expansion. If France can establish alliances with other eurozone nations interested in reforming the ECB, deliberations over a new EU treaty will be further complicated, and a fundamental reassessment of the economic sovereignty of member-nations will be in order.
Much as European political integration was seriously derailed in 2005 when France and the Netherlands rejected the EU constitution, further economic integration will not proceed unless France gets its way in reforming the ECB or the French economy does indeed liberalize, as Sarkozy is proposing, and align more closely with Germany's economy. France's strategy will become clearer in the summer of 2008, when it assumes the European Union's rotating presidency.
