Euro zone crisis and celebritology - twin pillars of modern European life


After a hard day testifying about tabloid intrusion into her personal life, Sienna Miller was on the red carpet at a fashion event in Paris.


Pascal Le Segretain

I really do wish there was something else to blog about besides the euro crisis - and I have a few links to another story below - but really, what else is there to write about if you live in Europa?
And if you want to have a sense of what life must have been like in the latest 1920's and early 1930's following the floundering of Europe's leaders is the best way to achieve it.
So yesterday, German Chancellor Angela Merkel and French President Nicolas Sarkozy and new Italian Prime Minister Mario Monti met to discuss the situation. Focus was as it has been for a couple of weeks, on whether the European Central Bank would step in aggressively and start providing liquidity to the euro system via large bond purchases. French foreign Minister Alain Juppe demanded as much just before the meeting began.
At the press conference afterwards Merkel said it not once, but twice with an icy smile, that would not happen, according to this report in the French newspaper Liberation. Italian Prime Minister Mario Monti smiled as well and agreed with the Chancellor. Those smiles put the bond markets in a tizzy and British commentators went into overdrive.
The German leader's insistence on fiscal reforms and treaty changes first before the ECB changes its role would be sensible if the bond markets moved at the same speed as daily politics and the processes of governance. They don't.
Sources tell me there has been a steady withdrawal of traditional institutional investors in European national sovereign debt markets. This explains why Britain's bond yield is now lower than Germany's - the money is going to the UK. Pretty soon the only big players left in the market for European debt will be some of the big hedge funds - and they have only one interest. Their own.
It doesn't matter to the speculators at these funds if a society is wrecked and millions of people are put out of work. So long as the bonus check clears, the players have justified their existence.

More on Germany at the bottom but first - a little celebritology


The Leveson Enquiry is underway in London. This judicial look into tabloid excesses is drawing a pretty serious crowd to the High Court to testify. Yesterday we heard, from Harry Potter author, JK Rowling and Jude Law's ex, Sienna Miller. Read all about it here.


This article by Herbert J. Gans in today's NYTimes is worth a lot of consideration. Gans has been writing since I was at college - and that was a very long time ago. His analysis of the jobless recovery is spot on.

What Gans doesn't mention is that one industrialized nation has managed to avoid the worst of the mass unemployment that has taken root since Lehman Brothers went bust: Germany. The Germans have created a social market economy that has smoothed out some of the rawer edges of Anglo-American style, hedge-fund take all capitalism.

Merkel and her team would do better to tout those successes, rather than simply saying no all the time to the obvious and necessary short-term corrective to the euro zone crisis: freeing up the ECB.

Will Merkel ultimately see sense on that issue? Can anything stop the crisis from spinning completely out of control? I quote analyst Stephen Gallo of Schneider FX.

"Nobody has a clue as to what is going to happen next – how good “it” is going to feel or how badly “it” is going to hurt."

That is precisely the way things were in 1931.