Mario Draghi: “no doubt whatever about the strength of the euro, its permanence, its irreversibility…”

The Guardian reports the comments by European Central Bank president Mario Draghi that he has “no doubt whatever about the strength of the euro, its permanence, its irreversibility”.  But then, he would say that, wouldn’t he?

Meanwhile, some European countries have agreed to provide €150billion to the International Monetary Fund to cover eurozone countries’ debt – short of the €200billion they were aiming for.  The UK declined an invitation to contribute.  The Daily Telegraph’s Ambrose Evans-Pritchard lists 6 good reasons why.

And as the earlier linked Guardian report notes

In Beijing the IMF’s former managing director, Dominique Strauss-Kahn, castigated the euro area’s leaders for their poor leadership and said the zone had only a few weeks to provide solutions. Yet another crisis summit has already been pencilled in for late January. Draghi told the European parliament’s economic committee that €230bn of bank bonds, up to €300bn of sovereign bonds and more than €200bn of collateralised debt obligations will all become due in the first three months of 2012.

The ECB president said he had “no doubt whatever about the strength of the euro, its permanence, its irreversibility” but he reiterated his view that the central bank had no role to play in buying up sovereign bonds on a long-term and enhanced basis.

“We are trying to avoid a credit crunch, which might come from a lack of funding for banks,” he said. “The ECB cares about financial stability, it cares a lot, but this has to be done without undermining the credibility of the institutions.

Good luck with that…  Also worth noting are the comments by German Foreign Minister Guido Westerwelle.

“For Germany, the UK is an indispensable partner in the EU and there is no doubt for us that we want to make the next steps in the EU together as 27, and with Croatia as 28. We think we have a common destiny,” he said, adding later, “You count on us, and we count on you.”

Good luck with that one too…  But he didn’t stop there…

Drawing on his own past and that of Germany, Mr Westerwelle, who is 50 later this month, sought to explain to British public opinion the central importance of the European Union for his country: “Europe is more than just a currency.”

The EU had helped Germany deal “with the darkest chapter of our past”. Reunification, for Germans, was not just “reunification of Germany, but also the reunification of Europe”.

“For us Europe is not only our destiny, it’s also our desire, it’s a lesson we learned. And so, please understand, for us, Europe is much more than a currency or a single market.”

Mr Westerwelle said this was “not the first time that we have to find answers after a controversy and we will find answers once again, yes we will. This is our goal and this is our duty and we will make it.”

Mr Westerwelle told a story from his own experience, saying he had gone into a small shop in rural France during a camping holiday with some friends in Brittany in France when he was a teenager.

“I went into a single-room shop to buy something, together with my two school friends, 14-15 years old, and there was a lady, she was very old . . . and she started to cry.

“She saw me: very fair hair, blue eyes, slim,” he said, adding that he had spoken with “a horrible” French accent.

“When I tried to speak French, she started to cry and went back into the kitchen and then her daughter came out.

“She was about twentysomething, thirtysomething and she said to us young, three boys, this has nothing to do with you, it is because my father, her husband, was killed by the Germans in the second World War,” Mr Westerwelle said, to considerable effect on his listeners.

Hmmm…  As the Telegraph’s Benedict Brogan points out

Students of Basil Fawlty will know the perils of mentioning the war. But we should listen carefully. Mr Westerwelle’s sincerity is genuine, but also revealing. The point is that we do not share the same destiny, that we are not part of the project for national merger that Mitterand and Kohl launched and that the single currency is forcing. We should be grateful that democratic Germany has such a keen, even painful, awareness of the terrible historical burden it bears. But it does not follow that the answer lies in perpetuating a currency union that enforces austerity on the weakest, and protects the wealthiest from the fiscal consequences of that union. Whatever Europe is, it should not be something that the rest of the EU has to endure to help Germany assuage its guilt.

Indeed.  What’s needed is not so much a foreign policy, as a discussion, across Europe, of “the political trilemma”.

Because “anyone who claims to know what is about to happen to Europe is a fool.”

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  • thethoughtfulone

    With the greatest respect to Mr Westerwelle but I think his comments need directed more at the Merkozy alliance than anyone in the UK. Was it not them and various other eurocrats who have been consistently maintaining that without the euro there can be no EU while the UK has been making it plain that while not supporting the euro it is still very much behind the concept of the “common market”.

    Add this in with the German desire for the fiscal discipline being imposed in the UK to be replicated in other eurozone countries before they get the cheque book out and you can’t help but think that Germany and the UK probably DO already have more in common than most. Just another totally contrary situation within the EU itself.

    Despite the lull in proceedings (most traders off for a break) at present you can’t help but think there is going to be an almighty shit storm around this whole thing pretty early in January.

  • Cynic2

    “no doubt whatever about the strength of the euro, its permanence, its irreversibility”.

    http://www.youtube.com/watch?v=F6K8R8KqpCE

    Even the lyrics fit!

    http://www.metrolyrics.com/theres-a-guy-works-down-the-chip-shop-swears-hes-elvis-lyrics-kirsty-maccoll.html

  • “no doubt whatever about the strength of the euro, its permanence, its irreversibility…”

    Well, if it was so strong, there would be no need for a discussion about its strength or weakness.

    Only the Germans can decide if it is likely to be strong enough to withstand market forces. As long as the Germans remain uncommitted to the big Bazouka, that statement looks ridiculous.

  • Cynic2

    Sorry Seymour but the markets will decide.

    The Germans are simply playing the King Canute role – for the minute.