If European coordination doesn’t work… Draghi will look for “other ways”. But what does it mean?
Draghi stopped playing the sphinx and started talking. He opened the dance at a press conference on March 19 . Saying No to the Mes and No to the return of the Stability Pact, and then commenting: “This is the economic policy to be done today. And, therefore, enough ”. Positions we already knew, at least from his Rimini speech . But of which we did not know the outlet. Here, now we know him.
At the press conference on March 19:
“In my opinion, you have to be a little practical . We try to respond together, to be together. And, undoubtedly, European coordination has great added value, you know, in short, that I have always supported it in many aspects of our policy, both economic and other. But here, however, it is about health and, therefore, if European coordination works, European coordination is followed, if it does not work you have to go on your own . This is a bit of the pragmatism I referred to earlier (…) it takes pragmatism . We must first seek European coordination and then, otherwise, one does otherwise (…) we are a country founded on Europeanism and Atlanticism. Therefore, our relations, in the context of our international relations, are not in question … Now, the point is to be ready, as I said before, for if the European coordination does not work ( especially in this matter which is health), you have to be ready to do it yourself ".
In reply on March 14 in the Senate, in view of the European Council of March 25-26:
“As far as European coordination is concerned… I said it at the press conference last time: European coordination must always be sought, we must work continuously to strengthen it. If it doesn't work , in these dramatic moments where time is extremely precious, we also need to find answers on our own ”.
In reply on March 24 in the Chamber:
“More generally (I have already, I think, said this), European coordination must be sought, everything must be done to strengthen it, if it does not work, other ways must be found . So, in this sense I speak of pragmatism . But in a positive sense with regard to Europe, I do not put the search for other paths before Europe : there is no advantage in this because (I said at the beginning) the European choice was the right one ”.
At a press conference on March 26 , after the European Council:
“What I said last time I confirm it because, in short, the health of individuals is also at stake here, life and death. So we must always seek European coordination , we must do everything to strengthen it and, then, if a solution is not seen , it is clear that we will have to look for other paths ” .
In short, Europe is a coordination . That if it works, fine. If it doesn't work, we'll have to look for other avenues. What does it mean? Draghi had started with having to be ready to go it alone . Then, who knows perhaps mindful of the fate of the splendid Carlo Alberto di Savoia with his “Italy will do it by itself”, he corrected himself in finding answers for himself . More mature and less emphatic expression, then further softened to find other ways , not necessarily alone. Others from the European coordination , however. So not alone but in coordination with someone else… which is not Brussels.
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Was he referring to Health? Yes, directly yes. But, indirectly also no. In his speech to the Senate and the Chamber, he devoted a great deal of time to defending the internal market with the sword: “A single European market, cohesive, with the same standards ”… not with the same currency . He continued, "in essence, defending the unity of the market means defending the Italian companies that benefit greatly" … not defending the Euro means defending Italian companies .
But the internal market is, above all, a customs blockade and, thus, in a post-European council press conference , Draghi praised the new American president Biden for having shown "total confidence in the multilateral rules governing international trade", deserving "From the European Union … great satisfaction, great satisfaction that this dialogue has been resumed with all 27 countries": that is, Biden has shown that he wants to talk about trade with the Union and no longer with individual member states as he wished Trump. In short, European coordination in trade matters works. But he didn't talk about the Euro.
The meaning of these passages can be better understood in the light of his previous speech in Ljubljana, in 2017 and much more extensive: the internal market is a marvel, which enriches us and increases our commercial influence in the world. Ditto. He added that it had "led directly to the Euro" because of the unfair competition produced by the large devaluations, on which he dwelled. Then, however, he clearly specified that the Euro is neither an optimal currency area , nor a truly integrated financial market, nor a "complete monetary union, that is, one in which member states assume collective responsibility through common institutions". Two years passed and, in a subsequent and very short speech in Strasbourg , Draghi already glimpsed the abyss: "in some countries, not all the advantages of the euro have been fully realized … in part, since the economic and monetary union remains incomplete ". Thus, the observation that “the Euro has safeguarded the integrity of the internal market” now assumed the tone of the challenge. Today as then, Draghi is telling the Germans: if you have decided to keep the internal market alive without the Euro, tell us.
Of course, too many in Italy still confuse the single currency with the single market. Thus, in reply to the Senate, Draghi conceded that "the single market is not the answer to all problems … it has not cured inequalities". And he added that the remedy can be national: "there is a national level and it is there that action must be prevalent, not so much that it must come from our partners" (he also gave an example: "if the labor market it is dual, that is a national responsibility, not a European one "). But only after having said well that “at the European level perhaps we will begin to see something when we start talking about fiscal union seriously”… that is, never. And, since in Ljubljana and Strasbourg he had well explained that the Euro can only survive as a complete monetary union … Dear Germans: if you have decided to keep the internal market alive without the Euro, that's fine by us.
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A little more explicit words with regard to foreign policy have been allowed: “Italy defends… almost everywhere its national interests and international cooperation in the field of security with its strategic partners. If there were conflicting interests , Italy must obviously have no doubt in defending its national interests. Nor must he have awe towards any partner either ”. And, with the partners , there are undeniable conflicting interests on the Euro.
Of course, he commented: "It seems to me, in the course of my life, that I have always shown extreme independence in the defense of fundamental values, of Europe and of the nation". Leaving the listener uncertain of what the hell "values" have to do with "interests". But then he clarified, in a post-European council press conference: with China, Russia and Turkey, "the differences remain profound, as far as human rights are concerned and Biden insisted a lot on the frankness with which this difference must be pointed out … this was essentially Biden's intervention… this was a bit of Biden's thread of considerations ”. That is, Europe's core values are foreign policy issues: interests . The current interest of our ultimate sovereign power. Which is currently interested in human rights… not the euro. The Euro is not a human right, quite the contrary.
Fundamental values of which, moreover, he makes an instrumental use. As noted by Francesco Galietti , with regard to Russia. On our own, we will add the curtain held by Draghi about Poland and Hungary: after having said, in reply to the Senate, that "Europe must continue, must work and continue also towards some of its members, even towards some Countries of the European Union ", then, in the press conference after the summit, to a specific question about Poland and Hungary, he replied:" I cannot answer, that there was no talk of it yesterday. So I don't know what to say ". The Great Lord eats human rights for breakfast and gets a student served in DAD for dinner. There are 350 varieties of sharks, not counting the bankers.
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And "good Europe" that saves us? And the legendary "209 euro billion"? What about the legendary Recovery Fund ? Well, he put them in the “industrial policy initiatives” chapter, “digital transformation” paragraph. Having taken care to place them outside the “exit from the pandemic” part. Of relevance, it only has to announce that the Biden presidency has shown "a certain what openness, a certain availability" towards "a global and consensual solution on international digital taxation", that is, the main Union tax that should finance the Recovery Fund . In a press conference after the European Council, he once again emphasized it: this is “something… very important… a big change”. That is, we will talk about the Recovery Fund when we understand how to finance it. By eye, the right man, in the right place, at the right time.
Enough to leave the senators of the "Die for Maastricht" party lost. Thus, in reply, Draghi got his foot on the accelerator: "The progress of the European Union and, indeed, of the Euro area, towards a more integrated union with the adoption of a common budget or, in any case , the beginning of a journey towards fiscal union, the discussion of the rules of the stability pact: it is not included in the agenda of this council "," the only hint that is made to this is the fact that the safeguard clauses that suspend the procedures of the stability pact (they do not suspend the stability pact, they suspend the procedures of the stability pact) are (they say) will have to be reactivated in 2023 ". Stop. Ludibrio.
It even escaped him to mention that he wants "a different stability pact … different rules, which by now everyone feels the need for them to be different". But it is a nod from the escaped sen. It escaped him. He did not delve into it. He didn't need to rage. Indeed, to the "Dying for Maastricht" he dedicated the usual cazzabubboli on "a Social Summit that will be organized on May 7-8 by the Portuguese Presidency", as well as the "Conference on the Future of Europe that will start on May 9 ": They are entrusted with the fate of" young people and youth employment ". Sarcasm.
The bomb was reserved for later. Launched by Reuters on March 25 , during the European Council, then detonated by Draghi in the press conference on March 26 , where he listed the seven ways to say Eurobonds . [1] The first is the Eurobond of the international role of the Euro : “What determines the international role of the dollar? It determines that US Treasury debt is the most traded financial security in the world. We have the debt of the various countries, but the debt of the various countries does not have that characteristic of the American treasury debt: that is, that it is completely risk-free ”. [2] The second is the Eurobond of the banking union (SRF- Single Resolution Fund , EDIS- European deposit insurance scheme ): "We have a banking union that was started a few years ago with great efforts, but still faces various obstacles ". [3] The third is the Eurobond of the capital union (of which a safe asset is an indispensable ingredient): the US "has a gigantic capital market … we do not have a capital union, a united capital market" . [4] The fourth is the Eurobond of the small budget of the European Union: “The United States has a federal budget and we don't. We have a small budget that… is not used in a counter-cyclical function, that is to stabilize the economy ”. [5] The fifth is the Eurobond of the Recovery Fund : “It would be a middle ground: there is no budget, but the commission is financed”, but it would be relevant only if the initiative really started and was then repeated. [6] The sixth is the Eurobond of the Mes (the EuroMesBond of Quadrio Curzio , the reformed Mes of the Delors Center in Letta ): Draghi did not mention it on the 26th, but on the 19th he had already said that "the Mes is not a priority". [7] The seventh is the Eurobond of the European fiscal union (ie of the Federation, of the Super-State): which "is not only a bond issued, but is subject to a common budget, therefore the creation of an institution" .
The first six are “irrelevant answers to the problems”: “We strive not to face the right answer, which requires, however, a massive political investment by some countries”. Only the seventh would be "the essential answer". Unfortunately, for more than a decade, the Germans have replied that there is no mention of it: Nein!
Draghi knows it well: “You can get to Eurobond when everyone wants to get there… We are a bit far from this. There are some countries that still [sic] . So I can't make a prediction ”,“ the journey is very long and it is also very very difficult. Because the various countries think differently… I don't know how many generations it will take ”.
Many generations. And in the meantime? In the meantime, he said he wanted to be satisfied with "a political commitment, which is not concrete tomorrow … a political commitment that Europe is moving in that direction" and that shows the "general conviction of all … in the continuation of economic integration , which sees in this instrument a fundamental step ". But he immediately made it clear that he was joking: “We have a huge public debt, to continue to support and to continue to be used for our investment programs. Here, it is necessary to keep both things in mind here, here ”. What if the Germans don't keep them in mind? Well, he has already explained it: we will have to find other ways , not necessarily on our own.
Faced with all this, to guess where Ambassador Massolo could glimpse "a non-unrealistic reaffirmation of European sovereignty", to sense where Stefano Folli could perceive "the beginning of a long path in Europe, the outcome of which will be to transform the equilibrium of the continent ”, would require esoteric and kabbalistic skills that do not belong to us.
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Only on a Eurobond Draghi has shown that he is a possibility, but only in theory: the middle ground of the Recovery Fund , "the commission has seen its financial means expand today, so it is likely that this type of financing will also be used for other things ". Yet he is not comforted by it. And why? Well, because he knows the cards and he knows Karlsruhe . We will talk about both of them in the next article.
The post If European coordination doesn't work… Draghi will look for “other ways”. But what does it mean? appeared first on Atlantico Quotidiano .
This is a machine translation from Italian language of a post published on Atlantico Quotidiano at the URL http://www.atlanticoquotidiano.it/quotidiano/se-il-coordinamento-europeo-non-funziona-draghi-cerchera-altre-strade-ma-cosa-vuol-dire/ on Thu, 01 Apr 2021 04:00:00 +0000.