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L’<i>Economist</i>: la moneta unica è mal gestita

L’euro non è in pericolo. Per ora

Sotto accusa la scarsa reattività della Bce e le mancate riforme economiche

di Andrea Marini - 10 giugno 2005

Parlare di un collasso dell’euro appare prematuro, tuttavia ciò non vuol dire che la moneta unica sia in questo momento ben gestita. Secondo l’Economist* tutti i discorsi che si fanno su una possibile reintroduzione delle valute nazionali dopo il no franco-olandese al Trattato costituzionale Ue sono esagerati.

Molti eurofili dicono che l’unione economica e monetaria dell’Europa non può sopravvivere senza l’unione politica, ma – afferma il settimanale inglese – costoro si sbagliano: molte unioni monetarie hanno funzionato senza l’unione politica, come nel caso della Gran Bretagna e dell’Irlanda per oltre 50 anni. Inoltre, l’esperienza dalla Germania dell’Est dopo il 1990 suggerisce che se l’unione politica significa solo armonizzazione dei benefici del welfare e delle retribuzioni nonostante il grande differenziale di produttività, l’unione monetaria funziona non meglio, ma peggio.

Secondo l’Economist, parte della colpa del malfunzionamento dell’euro risiede nella Banca centrale europea. A causa del venir meno della possibilità per i diversi Stati di intervenire sui tassi di interesse e sul cambio, spetta alla Bce attuare una politica monetaria reattiva e flessibile. Ma l’istituto è stato invece negli anni inspiegabilmente rigido e “pudico” a differenza, per esempio, della Federal Reserve. Se la Bce non cambia politica, aumenteranno le voci di una possibile crisi dell’euro.

Tuttavia – continua l’Economist – il problema di gran lunga più grave per l’area dell’euro, e quindi per la moneta unica, sta nel fallimento dei governi nazionali nel riformare le loro economie, in particolare incoraggiando una maggiore mobilità del lavoro e una maggiore flessibilità nella produzione.

Queste mancate riforme sono alla base delle cattive performance economiche di molti Paesi dell’area dell’euro, cattive performance che finiscono per rendere più gravosi i nuovi vincoli posti dalla moneta unica. Inoltre, la reticenza della Bce ad abbassare i tassi di interesse contribuisce a rendere più difficile la ripresa.

E’ sicuramente vero – come afferma il settimanale inglese – che le mancate riforme strutturali e l’immobilismo della Bce hanno colpe nella crisi dell’euro. Tuttavia per risolvere i problemi della moneta unica, l’unica soluzione è quella di giungere una volta per tutte alla creazione degli Stati Uniti d’Europa, con una visione strategica unitaria, una politica economica e industriale comune. Di certo, comunque, ha poco senso paragonare la complessità dell’area dell’euro con l’unione monetaria di Gran Bretagna e Irlanda o con quella della Germania dopo il 1990.

* Pubblichiamo il testo integrale dell'articolo

The European Union in crisis

And now, the euro
Jun 9th 2005
From The Economist print edition

The euro is not in danger of breaking up—yet

THE shock of the French and Dutch noes to the European Union's constitutional treaty will reverberate long after next week's EU summit in Brussels.

Clicca qui per aprire l'immagine collegata all'articolo

It is also unnerving many in financial markets, who are now fretting gloomily about the sustainability of Europe's single currency, the euro. Right on cue, one minor Italian politician (openly) and, according to a German magazine, several German officials (secretly) have been musing about whether the reintroduction of national currencies might be a good idea.

Market jitters had hit the euro even before the referendums, and it has since fallen further. Yet talk of the currency's collapse, or of some countries leaving, seems off-beam. Many europhiles once argued that Europe's economic and monetary union could not survive without political union. But they were wrong: plenty of currency unions have worked with no political union (Britain and Ireland had one for over 50 years). Indeed, the evidence from eastern Germany since 1990 suggests that political union, if it means harmonising welfare benefits and wages despite big productivity gaps, can make monetary union less, not more, workable. That suggests that central European countries should not rush into the euro.

Nor, contrary to some claims, is there a clear parallel between the euro area's struggling, debt-ridden economies, notably Italy, and Argentina before it was forced off its strict convertibility link to the dollar in 2001-02. Italy is in economic difficulties, and its debt is high—but its problems were not caused by the euro, and any temptation Italians may feel to follow Argentina's example should be tempered not just by the practical difficulties but also by looking at that country's grim experience since its default and devaluation. Italy and other stuttering economies might in fact now benefit from a period of euro weakness, as the euro's strength had been denting their exports. And if bond markets belatedly start to differentiate between more and less creditworthy euro members, that can only be helpful in importing more fiscal discipline.

Yet if talk of the euro's collapse or of an early exit by some members is mistaken, it would equally be wrong to assume that all is well with the currency's management. Because the euro necessarily abolished national interest-rate and exchange-rate policies, it behoved an independent European Central Bank to operate a collective monetary policy that was both responsive and flexible. In fact the ECB has been unduly rigid, even puritanical, compared with, say, America's Federal Reserve. Recently the rich-country OECD, normally highly reticent in commenting on such matters, declared that the case for monetary easing in the euro area was “rather compelling”. If the ECB remains unresponsive, it risks increasing the markets' talk of a currency in crisis.

The euro has also suffered from misconceived efforts to restrict countries' fiscal freedom. The recent emasculation of the stability and growth pact, which sought to limit euro members' budget deficits to 3% of GDP on pain of swingeing fines, is welcome. Even without the pact, countries such as Italy would have had only limited fiscal freedom, because of the scale of their debts; but Germany and France might have benefited over the past few years from a larger dose of fiscal expansion.

Physicians, heal yourselves

Yet by far the biggest blame for the euro area's problems, and thus for the travails of the currency, lies with governments' failure to reform their economies. When the euro was created, it was clear that its membership did not make up what economists call an optimal currency area (though nor, in many ways, does the United States). That made it essential for national governments to take measures to make the euro area more optimal—notably by fostering greater labour mobility and making labour and product markets more flexible.

The great hope of enthusiasts for Europe's single currency, as for its single market, was that it would unleash pressures that would force its members to reform their sclerotic economies to make them more flexible and competitive. The single market and the euro duly unleashed such pressures: but the core euro countries, especially France, Germany and Italy, have responded by resisting the reforms they made necessary. If euro-area governments now feel the need to restore confidence in their currency, as in the broader European project, they must find the courage to follow that course of economic reform. If they do not, the euro really could head into crisis—which is why reform remains more crucial to the EU's future than any amount of navel-gazing on the constitution.

Europe's monetary union
The euro and its troubles
Jun 9th 2005 | FRANKFURT
From The Economist print edition

Testing times for the single currency and its guardian, the European Central Bank

NOT many weeks ago, the question would have been almost risible: is the euro here to stay? Now the French and Dutch have rejected the European Union's constitution, and bad economic news about the euro area, especially its biggest economies, keeps trickling in. Jean-Claude Trichet, president of the European Central Bank (ECB), may dismiss the thought that Europe's monetary union might break up as “absurd”. For now, he is surely right: the euro zone is not about to fall apart, and with central and eastern European countries still keen to join, is more likely to grow than shrink in the next few years. Yet Europe's elite can no longer wave the idea away as mere impertinence.

Says who? For a start, 56% of the Germans polled for Stern, a weekly magazine, who want the D-mark back; the German officials and economists who discussed recently how, if push came to shove, a country might quit the euro; and Roberto Maroni, an Italian welfare minister, who said on June 3rd that his country would be better off with the old lira.

The idea also seems less silly than it did to financial markets. Currency traders, having pushed America's current-account deficit to the backs of their minds, have sold the euro down to about $1.22, from $1.35 at the start of the year. The idea that the euro area is becoming less cohesive is also reflected in bond markets: the spread between the yields on Italian and German ten-year government bonds is now around 17 basis points (hundredths of a percentage point), up from less than six at the end of January. Greek spreads have also widened.

A break-up of the euro area is still in the realm of small probability rather than likelihood. Take the big economy most under strain: Italy's. Relative to Germany's, Italy's unit labour costs have risen by around 20% since the euro was born, making its exports less competitive. Its GDP has shrunk in each of the past two quarters. It might be tempting, therefore, to imagine that, if the lira were revived, Italy could return to its old habit of trying to devalue its way out of trouble. Should the thought ever be seriously entertained, buyers of Italian government bonds would surely demand insurance against the risk of devaluation, in the form of higher bond yields. Spreads might be closer to the 650 basis points that they reached a decade ago than to today's 17. With Italian public debt over 100% of GDP, it is no wonder that politicians senior to Mr Maroni were quick to insist that they did not share his view.

Very likely, the Dutch and French noes would not have triggered such fuss—and might not even have happened—had the euro area been in decent economic shape. Italy is struggling most. But Germany, despite its buoyant exports, is suffering from feeble domestic demand. The panel of forecasters polled monthly by The Economist expects its GDP to grow by only 1.1% this year (see article). In France, more than one worker in ten is unemployed.

This economic weakness brings Europe's political malaise to the door of the ECB. Couldn't it jolly demand along by cutting interest rates, as lots of politicians and quite a few economists think it should? There is little chance of that just yet. Last week, even as its own staff cut its growth forecast for the zone to just 1.1-1.7% this year, the ECB held rates at 2%, as it has for the past two years.

For much of this year, indeed, Mr Trichet has sounded much more likely to raise rates than to cut them. On June 7th, he told Reuters: “I am not preparing for a rate cut.” Inflation in the euro area is 2%—adjacent to the ECB's target of “close to, but below 2%”—and inflationary expectations, says the central bank, are 1.9%. Cutting rates, he fears, could fuel inflationary expectations and thus push up long-term interest rates. Bond yields, he pointed out this week, are at their lowest since the first world war.

A lot of the trouble lies in the half-hearted nature of structural reform in much of Europe. This has left the euro zone with less room to grow, and the ECB with less room for manoeuvre, than America's Federal Reserve. A new report** by the Centre for European Policy Studies, a Brussels think-tank, argues that on average European monetary policy has been roughly as accommodating as, but much less variable than, America's in the past six years. The Fed has had more scope to move rates up or down as circumstances change.

Constrained though the ECB might be, markets are pricing in a rate cut in the next few months. And some economists think that on past form the ECB might now be cutting rates. Last week David Walton, of Goldman Sachs, told a conference on the ECB, organised by the Centre for Financial Studies, a Frankfurt research institute, that the ECB's interest-rate decisions have, by and large, tracked economic activity. Only when the euro area's purchasing managers' index (PMI) has been above 55 has the bank raised rates; readings below 50 have been the cue for a cut. The PMI is now in the cut zone.

Similarly, Mr Walton—who is about to become a central banker himself, by joining the Bank of England's Monetary Policy Committee—has constructed a “forward-looking Taylor rule” for the ECB. This explains interest-rate changes in terms of revisions to forecasts of inflation rates and the gap between actual and potential output. The rule tracked the ECB's behaviour pretty well until recently. With activity faltering, it now predicts a cut of half a percentage point, but there has been none.

The reason for the apparent increase in hawkishness? In a word, money. The ECB, uniquely among leading central banks, has a “two-pillar” monetary strategy: under the first pillar, it looks at how economic activity might influence inflation; under the second, it focuses on monetary growth, to reflect the notion that inflation is a monetary phenomenon. For the past four years, money growth has been well above the bank's “reference value” of 4.5%.

At the same conference, Otmar Issing, the ECB's chief economist, explained how recent experience differs from the last time the ECB was cutting rates, in 2001-03. Then, rapid monetary growth could be explained away by investors shifting out of uncertain stockmarkets into cash. There seemed to be no risk that credit growth was getting out of hand. Since mid-2004, however, monetary growth has been fast, and so has lending. Although the real economy may look weak, the monetary warning lights have been flashing.

Such worries about monetary growth are not lightly dismissed, and are shared by some outside economists. Even if inflation remains low, excess liquidity could spill into asset markets. In some countries, this may have already happened: France, Ireland, Italy and Spain have all seen double-digit growth in housing prices. Cheaper money would risk a property-price boom and eventual bust. Germany's economy is arguably still labouring under the effects of just such an episode in the east of the country after reunification. German property prices are still flat.

Nevertheless, the euro area is wheezing. Domestic demand remains weak. The biggest economy, Germany, is on its back. The third-biggest, Italy, is shrinking. The ECB did not create the euro zone's troubles. But despite the monetary caveats, it could still ease them with a rate cut. Soon.

** “EMU at Risk”, by Daniel Gros, Thomas Mayer and Angel Ubide, June 2005

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