New York Times verbreekt stilzwijgen over divergentie binnen Eurozone

[Dr. Marc-Alexander Fluks]

REPLY TO: D66 at nic.surfnet.nl

[Voor wie dat ontgaan is: de financiele wereld zat al een week te wachten
 op een commentaar van The New York Times op het instorten van de Euro.
 (die zal volgens analisten op korte termijn onder de $1.20 duikelen) Maar
 vandaag is het dan eindelijk zover....


Bron:  The New York Times
Datum: 9 juni 2005
URL:   http://www.nytimes.com/2005/06/09/business/worldbusiness/09euro.html


Europe's Latest Economic Scapegoat: The Euro
--------------------------------------------
By Floyd Norris

PARIS, June 8 - Is the euro in danger of dying before it reaches its
seventh birthday?

A suggestion by Italian cabinet ministers that the country hold a
referendum on withdrawing from the common currency drew denunciations from
much of Europe, as finance ministers met in Luxembourg this week. But the
fact that they were discussing the issue at all highlighted the notion
that Europe's common currency is taking part of the blame for the
Continent's economic woes.

Few, if any, think the euro will stop being the legal currency of much of
Europe. But after French and Dutch voters stunned the political
establishment by rejecting the proposed European constitution, those
opposed to other European institutions have been emboldened.

"It is just inconceivable that a country could envisage dropping out of
the euro," said Jean-Claude Juncker, the Luxembourg premier and current
president of the European Union. Hans Eichel, the German finance minister,
said the very idea of a country withdrawing was "nonsense," and Pedro
Solbes, the Spanish economy minister, called the common currency
"irreversible."

The row was started when two Italian cabinet ministers from the Northern
League, which is tenuously allied with Prime Minister Silvio Berlusconi,
suggested a referendum on returning to the lira. Mr. Berlusconi did not
endorse the idea, but neither did he denounce it. For the last year, he
has said the blame for many of Italy's economic woes lies with the
European Central Bank, for keeping interest rates too high and for
allowing the euro to gain against the dollar.

Nostalgia for national currencies has risen in the last year as European
unemployment has remained stubbornly high and growth has trailed that of
the United States and Asia. A poll taken late last month by the Forsa
organization for Stern magazine found 56 percent of Germans preferred to
return to the mark. The magazine said the margin of error was three
percentage points.

On one level, the euro has been a great success. Travel among the 12
countries that use it is far easier, and companies in those countries can
contract with others knowing there is no currency risk involved. The euro
was officially created at the beginning of 1999, but actual euro coins and
bills did not become legal currency until the beginning of 2002.

But economic integration of the euro zone has not come as rapidly as some
had hoped and that has created stresses. "You cannot succeed over any
length of time with one monetary policy and 12 fiscal policies," said
Robert Barbera, the chief economist of ITG Inc.

Europe tried to finesse that fact with an agreement that no government
using the euro would allow its budget deficit to exceed more than 3
percent of gross domestic product, but in fact a number of countries have
exceeded that limit. Rather than levy fines, as was envisioned, the
response thus far has been to weaken the rule while encouraging countries
to do better.

To the extent that Europe does pursue excessively easy fiscal policies,
the response would probably be a weakening of the currency, as has
happened in recent weeks. That has aroused concern in Europe even though
some, including Mr. Berlusconi, have been loudly calling for a weaker euro
for many months.

When the euro was being designed, some economists forecast that European
countries would be forced to liberalize their economies because
devaluation within the euro zone would be impossible. In that context,
liberalization refers to making an economy more flexible, with workers
easier to hire and fire. Most European governments have tried to follow
that prescription in one way or another, but anger from voters and unions
has forced retreats, and in some countries liberalization has become very
unpopular.

Before the euro was cast in stone, Italy periodically allowed its currency
to depreciate against the German mark. Such devaluations were often
turbulent, and were accompanied by pledges that it would not happen again.
But they served to allow the Italian economy to regain competitiveness
with other European economies where inflation was lower and productivity
growth greater. Since the euro was introduced, those trends have continued,
but devaluation is out of the question. Italy is now in recession.

Blaming Europe for national problems has happened in countries besides
Italy and pressure has been growing on the European Central Bank to lower
its short-term interest rate, now at 2 percent. Jean-Claude Trichet, the
president of the central bank, has backed away from statements ruling out
a rate cut, though he has not endorsed one.

Lower interest rates might help stimulate European economies, and a lower
euro could help exporters, but neither would address issues of Italy's
competitive position with other parts of Europe. Its position has also
been hurt because some of its traditional industries, like textiles, have
been damaged by Chinese competition.

It is not clear how Italy, or any other country in the euro, could withdraw
if it wished to do so. The Maastricht Treaty that established the currency
has no withdrawal provision.

If a country were to insist on withdrawing, presumably it could. But there
would be the risk of higher interest rates and a greater reluctance of
foreigners to invest. There would also be issues of whether debts
contracted in euros could be converted to national currencies that might
then depreciate against the euro.

For now, it is unlikely that talk of countries getting out of the euro
will advance very far. But the talk highlights that the financial
unification of Europe is a work in progress, one that has not advanced as
rapidly as its advocates expected.

"We are proceeding too slowly," Mr. Trichet said this week in Beijing,
where he was attending a conference of central bankers, "but we are
proceeding with unifying the market."

--------
(c) 2005 The New York Times

**********
Dit bericht is verzonden via de informele D66 discussielijst (D66 at nic.surfnet.nl).
Aanmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SUBSCRIBE D66 uwvoornaam uwachternaam
Afmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SIGNOFF D66
Het on-line archief is te vinden op: http://listserv.surfnet.nl/archives/d66.html
**********