At any price, or maybe not…

I want to capture Mr Mystic’s thoughts of politicians just being good “for window dressing” but hardly able to handle really tough decisions.

Let’s recapitulate about the tough decisions our European politicians have taken in the last decades. Despite European regulations on the curvature of cucumbers, whether the left or right shoe has to be displayed in shops or the light-bulb ban there have been more tough decisions. Good examples are the Maastricht Treaty (aka the creation of the Euro), the Lisbon Treaty (aka the creation of the European Constitution) and the Euro Rescue (aka the creation of the debt union).

While the Maastricht Treaty’s intentions were quite solid in 1992, the final execution was not. EU politicians, led by Germany and France (Kohl and Mitterrand), took step two before step one. A political union would have been necessarily installed prior to installing a common currency. But the designers of the Euro thought they could get away with it. Reality today proves – they did not. When the Maastricht Treaty was finally needed the most and things got tough, it was quickly and mutually broken in May 2010.

But before hell broke loose over the EU, in 2004 our politicians have tried to install a certain political integration. The European-Constitution was a plan to reform the political structures and re-install the missed step one. However, the mistake was made to ask the French and Dutch for their opinions (usually EU politics cares little about people’s opinions). After their “Non” and “Nee” – the treaty had to be toughly mutilated. The result was the Lisbon Treaty and a constitution-like thing that had clearly been washed with fabric softener.

And finally the toughest nut to crack – the Euro Rescue. After more than 18 months of back and forth the situation today is still not clearer than in March 2010. Summit after summit came and went lots of talk but little tough action. I remember the German statements being made in spring last year “We will rescue Greece at any price” – today you can read “We will rescue Greece but not at any price”. One more rather wooly but tough statement.

So yes, European politicians have proven to be unable to handle tough decisions. On the one hand there is a lack of expertise (listening to lobbies therefore makes political life easier…) on the other hand there always needs to be some kind of soft compromise in order make all parties happy and avoid taking harsh and maybe painful decisions. When things get tough though politics just switch to a certain “talk a lot but say nothing” mode. Just listen to what Papandreou said today at the BDI-meeting in Berlin…

This mentality is now not accepted anymore by the markets and that is why the EU and EMU-governments have problems in handling this situation. German media thus proclaims “The end of solidarity” and the Merkel ARD-interview of Sunday (where she tried to explain her “Plan”) is running in an infinite loop on all public TV-stations. This all looks like the masters of window dressing are putting new posh curtains and flowers in just to hide that there is not much meaning behind…

What leaves us puzzled in the end is: Who if not politics will handle this situation then?