Re: The rapid fall of euro-area governments in recent days demonstrates the enormous influence Germany and the ECB have gained over sovereign nations.
But if Germany was such a monetary hawk, she'd have vetoed the appointment of Mario Draghi as ECB chairman! Mario Draghi is the Italian fox set to guard the euro henhouse... Of course, he's not foolish to the point of flaunting his inflationary sympathies (beyond his first decision to lower ECB interest rate from 1.5% to 1.25%).
I suspect, however, that Germany will have no other choice than to let the ECB loose... to buy ever more sovereign European debt. And that means ever more money printing --and a cheaper euro (vs dollars).
The euro's current exchange rate is way overvalued, anyway... The US keeps blaming the Chinese about the yuan, calling China a "currency manipulator" --ROFL! The US Federal Reserve is actually the biggest currency manipulator on earth!! It's because the Fed, in cahoots with the Bank of England, the Bank of Japan, the Russian Central Bank and the Banque Nationale Suisse, keeps buying euros that, against all common sense, the euro still fetches an exchange rate of $1.35 per €... The euro is no longer a market-driven currency, ever since 2009, the euro is but the plaything of the aforementioned central banks.
Re: ...the euro, itself a linchpin in a broader unification project designed to ensure that the horrors of two wars will never happen again.
I think that the WWII bogey is a bit overplayed... Although I agree that Europe --just like the US or China or...-- is not immune to future (civil, internecine) wars, I don't expect European powers to wage war against each other like they did in the past centuries... European geopolitics has changed a lot since Napoleon, Bismarck, Lloyd George, Chamberlain, Daladier, Mussolini, Hitler and Stalin... Somehow, Europe's gradual if messy unification mirrors the unification of Italy in 1870: nobody seriously expects the former Italian city-states to fight each other like they did in the Middle Ages (Genoa vs Venice, the Papal states vs Florence, etc).
Gus |
