Germans think they would be better off outside the euro area

 

This is a depressing, but in our view accurate poll result that reflects the current mood in Germany, and that is reflected by German politics. The FT has commissioned an opinion poll from Harris, according to which a majority Germans oppose aid to Greece, want Greece to leave the euro area, and believe that Germany would be better off with the D-Mark. On all counts, the view of Germans contrast starkly with citizens of other EU countries

Here are the results:

 

 

On Sunday, Merkel gave a tough radio interview in which she made clear that Greece was not on the agenda of this week’s EU summit, adding that one should not expect an aid package to Greece to be agreed soon. The FT reports that this statement puts her at odds with Barroso, who called on the European Council to agree an aid package for Greece, but notes that the interview was pre-recorded.

 

Wolfgang Munchau

Wolfgang Munchau says in his FT comment the current mix of policies is simply not consistent with a sustainable euro. If policies remain unaltered, we are now witnessing the beginning of the end of the euro area. He said three specific reforms have to be agreed to assure sustainability: a crisis resolution mechanism, an agenda to reduce internal imbalances, and the establishment of a common eurozone banking system, starting with a single supervisor. On all three counts, the euro area has been moving in the wrong direction most recently, and the German position is still hardening.

 

Martin Taylor

Writing in the FT, Martin Taylor says the best solution is a split in the euro area into a northern and a southern zone. They are structurally different, especially in view of inflation processes. He starts off his column with an anecdote in Italy, where shop prices go up significantly each January, as has always been the case.

(There are some legal problems with his specific suggestion, especially the idea that every Euro citizen should receive 50% of the value of €1 in the form of two new currency, one likely to appreciate against the other. But we think that, overall, the present set of policies is unfortunately consistent with such a scenario).

 

Harold James

In a Project Syndicate column, Harold James says that the Europeans had made themselves the main victims of the financial crisis through the monetary union project. The root cause of the problem is a dysfunctional global monetary system, which requires a global macro co-ordination, and a degree of global economic governance. Europe’s problem is that it attempted to solve this global problem on a regional level.

 

 

Second round of regional elections confirm disaster for Sarkozy

The Socialist managed to gain all French metropolitan areas except Alsace, in an electoral route that gave them a victory of 54.3% on a national scale, against 36.1% for the presidential majority, according to Le Monde. Segolene Royal was reelected with a 63% majority in Poitou-Charentes.  

PM Francois Fillon is at the Elysee this morning, but the French press say that he will keep his post. Labour minister Xavier Darcos will be the first minister to leave the government as a direct result of the elections, according to a news flash this morning.

An increasing number of commentators wonder whether Sarkozy can still win the 2012 presidential elections. Le Monde says three issues affected the outcome. The first is Sarkozy himself, who appears not sufficiently presidential, for example, when he tried to help his son obtain an influential post. The second is the UMP’s opening to the Left, which a majority of the core UMP voters do not understand. The third is the result of a sole party on the right, which gave disillusioned conservative voters little alternative but to stay out home. Abstentions were high at 48% - in contrast to the 2004 regions, when abstentions were 34%.

 

 

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