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November 30, 2022

Euro-crisis: A conspiracy view

The decreasing of several eurozone states’ rating by US-based agencies – first of all Standard &Poor’s, but also with Fitch and Moody’s to follow soon, they say – has caused an obvious disquietude in Europe. Obviously, there is a concern about a possible deepening of the financial crisis which seemed overcome by the December 9 decision which was sealing – except the UK, the consensus for changing the constitutional treaty towards adopting a financial inflexibility (I avoid calling it austerity, a term that is already in the jargon of the ‘indignados’ everywhere). The fact that American rating agencies have resorted to such measure, anticipating a harshening of the financial situation in the EU and which may also have a negative impact on investors, therefore further deteriorating the financial conditions in the euro-zone, however shows that things are not yet put on the track leading to a solution to the eurozone crisis.

Apart from sober and applied analyses of the financial and economic circumstances of the EU in general and the eurozone in particular, noting that the crisis will continue to be felt also in 2012, a few rather extravagant positions have also emerged, which need to be explained, all the more so as their authors happen to be holding high-ranking political offices in the EU and their words have weight and influence on decision-making processes.

What was named the ‘conspiracy view’ on this eurozone sovereign debt crisis dossier raised a notably high profile on this occasion. A few months ago there was already a certain discomfort of the EU upper echelons about what could be called the ‘Anglo-Saxon part’ of the European project. Commenting on a statement by the Chancellor of the Exchequer of the United Kingdom, George Osborne, on the need for the UK to step up its accession to the eurozone, while he was known as a consistent eurosceptic, the commentator Gideon Rachman was writing on July 27, 2011: ‘If you are British and you are looking towards the end-game of the euro-crisis, it is vital to avoid too much of the blame (unfairly) coming Britain’s way. British officials are keenly aware that their EU counterparts are hyper-sensitive to anything that looks like British crowing, or any <I told you so> coming from London. As the Europeans thrash around, there will be voices who want to blame the whole crisis on some horrid Anglo-Saxon plot. So, for tactical reasons, the British government cannot oppose moves towards fiscal union – it has to let them play out. And we can all see where we are, this time next year. As a matter of fact, Rachman’s blog post title is very meaningful – ‘More on euro conspiracy theories. Britain accepts a United Europe’. First of all, the headline makes reference to the statements already circulating in Europe a few months ago, suggesting an Anglo-Saxon conspiracy against the euro, as well as the fact that Osborne’s unprecedented proposal meant a crucial shift of British foreign policy.  A comment on the forum of Rachman’s bloc note read as follows: ‘Changing foreign policy laid down by Elizabeth I [16th century] seems risky, precipitous and rushed. If the Europeans want to isolate themselves into a closer fiscal union they should be left alone to come to their own senses.’ It is exactly what British Prime-Minister David Cameron seems to have done on December 9, 2011, when opposing the decision made by the rest of the EU.

As a matter of fact, it looks like this decision by the British PM, coupled with the recent downgrading of several eurozone states including France and virtually only leaving Germany in possession of the maximum level of economic and financial effectiveness in the entire Europe, therefore a generalised European crisis, is at the foundation of this sustained come-back of conspiracy theories. On January 16, the following comment could be found on the previously mentioned blog: ‘In my last post, I quoted an anonymous German decision-maker saying that the ratings agencies were deliberately trying to destabilise the euro. But this kind of paranoia is now being spouted, on-the-record. This morning’s FT contained these two choice quotes. Martin Schulz, MEP, called the S&P downgrade ‘a targeted attack’ on the euro, designed to distract attention from the US budget deficit. (That would be the same S&P that downgraded the US itself, over the summer?) Elmar Brok, another German MEP, said the agencies were pursuing <Anglo-American interests>.’ Meanwhile, Martin Schulz has become the head of the European Parliament, therefore a character of maximum visibility in the EU. In fact, on the same day, German state-owned TV networks (ARD and ZDF), French ones (TF1 and 2), as well as international newspapers in Europe mentioned such an interpretation. The German  ‘Frankfurter Allegemeine Zeitung’ newspaper on the same day ran a story called  ‘Attack on the Euro’.

What interpretation could be given to such theories? It would be redundant to demonstrate, being a known fact, that the US, the Obama administration have a considerable interest in the absorption of the European crisis in order for the situation of American economy not to deteriorate in an election year. What could bring Obama before his voters for a new term? A high unemployment  – because the US and the EU share economic ties close to half of trillion of euros every year, therefore are economically interdependent. If such theories were true, it would mean that the White House is conducting a suicidal policy.

Actually, here is nothing to justify what a German expert on finance was stating on an internet forum hosted by German state-owned TV station ZDF on January 16: ‘I am certain that the American rating agencies are in close coordination with the American government, which in turn has been dominated for many years by Wall Street.’

We believe the best answer probably comes from the German ‘Der Spiegel’ magazine that, after pointing out that ‘The Germans love a good conspiracy theory. The latest is about the evil American rating agencies that want to destroy the wonderful euro. It is a viewpoint shared even in the highest political circles. But that doesn’t make it any less absurd,’ concludes: ‘Politicians, authors and bank analysts like to present rating agencies as bigger and more powerful than they really are. The beautiful conspiracy theories which result are useful in distracting attention from one’s own mistakes.
History, however, quite often unfolds based on the generalised perception of a phenomenon rather than on the truth/reality of its causes.

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