What happens when L’Empereur has no clothes?

The miscalculation of Emmanuel Macron in calling a snap election is on a par with David Cameron’s decision to hold the Brexit referendum

RE: Eller Carl Bildts beslut att utlysa en folkomröstning om euron. Dock skall sägas till hans heder att han inte försökte införa euron utan en folkomröstning.

In fairness to Cameron, it should be recalled that he had long held out the promise of a referendum.

There are similarities, however. The first is the overconfidence of the leaders involved. 

Having won both the 2015 general election and the Scottish independence referendum, David Cameron had formed a high opinion of his own political shrewdness

Macron, the president who had come from nowhere in 2017 and won re-election in 2022, also overestimated his magical powers. This was partly to do with his own narcissistic character and partly with the office of the French President, which thinks like an imperial court.

In the French case, the immediate reaction of the defeated parties – Mr Macron’s and those of the Left – is to co-operate to prevent Le Pen forming a governmen

Since much of the impetus behind insurgent parties across Europe comes from frustration at not being listened to by elites, this is a bad tactic.

Charles Moore Telegraph 1 July 2024


Quelle Horreur! Could France Crash the Euro?

There are two key questions. 

First, what kind of government is most likely to result from Sunday’s second round? 

Second, how great is the risk of an existential crisis to the euro once it takes office?
Any “Stop Le Pen” coalition is going to be unwieldy and require literally everyone else — from Trotskyists through technocrats to Greens and Gaullists — to agree on everything. That’s unlikely. 

The nightmare scenario is that France creates a crisis for the euro analogous to the sovereign debt crisis from 2010 to 2012. At that time, peripheral countries including Greece, Portugal and Ireland were unable to keep their debt within the limits set out in the Maastricht Treaty that created the eurozone.
France, the argument goes, is much bigger than Greece. 

If you are Meloni or Le Pen, they’re thinking — either I could exit the euro or I could try to make a difference while I’m here. They’re politicians. You might not agree with them but they’re not stupid.

Christine Lagarde. The European Central Bank is the ultimate underwriter of the eurozone, which it proved in decisively promising to intervene to save the euro if necessary back in 2012. 

She is not going too allow her country to implode. And as European banks are in much better shape than in 2010, when their heavy holdings of government debt meant a real risk of a banking meltdown, she’s in a stronger position.

The ECB will only save you if you agree to austerity. Individual countries gave up some of their freedom over their budgets when they joined the euro.

There’s no longer any point playing brinkmanship, because we know how it ends.

John Authers Bloomberg 2 juli 2024


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