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You have to be hopeful, even if there appears to be no hope
Observation on the state of the Euro after the first round of the presidential elections in France, drafted and
posted on April 24, 2012
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We would certainly be lying if we weren’t to admit that last day’s events in Europe (demise of the minority
government in The Netherlands / result of the presidential election in France) have profoundly shaken our
otherwise solid pro-Euro convictions. And since everything is up in the air at this point, it probably makes sense to
establish once again what appears to be clear now:

  • There is no denying that a majority of citizens in Europe is unwilling to understand that the European
    welfare state needs to be considerably reduced if the Euro-zone wants to deal with the global market reality
    effectively. And since people are not prepared to accept there is a need for more private initiative and
    responsibility, it is equally clear that they won’t be willing to deal with their current hardship constructively.
    In other words, they will continue to waste their energy fighting a reality they don’t like rather than to
    embrace that. And that in turn will result in the fact that the lackluster economy of the Euro-zone is here to
    stay for quite some additional time to come.
  • Since it is the prime desire, however, of a majority of European citizens to be protected from the hardship
    of competition rather than to deal with it head-on, it is quite reasonable to presume that new economic
    stimulus programs won’t be successful in kick starting the economy. After all, it is true that these programs
    only work if they serve as a catalyst to what is already there (i.e. a desire to pro-actively tackle a perceived
    misery). In any other case, where people prefer to lick their wounds rather than to take the bull by its horns,
    this government spending which is hard to come by anyway, will result in a tremendous waste.
  • At the same time, it is also true that a return to the old national currencies of the pre-Euro age will only
    provide a short and mid-term relief for the pressures inside the Euro-zone. After all, it is quite reasonable to
    presume that a return to the old currencies will ultimately lead to an ever bigger prosperity gap between the
    Euro-zone’s North (in particular, Germany) and the South. And you do not have to be a visionary to
    understand that such an increased difference of productivity and competitiveness inside Europe will
    eventually come at the price of new, heightened tensions and frictions on the European continent.
  • Likewise, we should not fool ourselves thinking that a return to the old currencies of the past would always
    leave the door open to restart the Euro project at a later, more convenient date. No, if the Euro is going to
    be abandoned once it is quite likely that it will never be resuscitated again. After all, it is hard to see how
    the breach of mutual trust that would come with the dismantling of the Euro can ever be remedied
    sufficiently.
  • If countries should decide to leave the Euro behind then it should also be clear that Germany, with all its
    awful history, cannot be the instigator of this process. In other words, it is of utmost importance for the
    international reputation of Germany not to heap additional blame on its already overly burdened shoulders.
    After all, it would simply be too convenient for others to evade their own share of responsibility in the Euro’s
    failure by badmouthing their quite unsympathetic Teutonic neighbors.
  • So in summary, it seems clear to us, that the best position for any German government to take in this
    situation is to wait and see how the newly elected protectionist forces are going to deal with the harsh
    realities of the global marketplace. After all, there is still a slim but noteworthy chance that they will soon
    enough understand that there simply is no other way to deal with this world than to accept it as it is.
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Keywords:

French presidential election, Protectionism versus freedom, Protectionism versus free
market society, the fantasy land of protectionism, living with change, saving the EURO, future of the
EURO, state of the Euro after the French election