Music to read by:
I used to rule the world
Seas would rise when I gave the word
Now in the morning, I sleep alone
Sweep the streets I used to own
I used to roll the dice
Feel the fear in my enemy's eyes
Listen as the crowd would sing:
"Now the old king is dead! Long live the king!"
One minute I held the key
Next the walls were closed on me
And I discovered that my castles stand
Upon pillars of salt and pillars of sand
Seas would rise when I gave the word
Now in the morning, I sleep alone
Sweep the streets I used to own
I used to roll the dice
Feel the fear in my enemy's eyes
Listen as the crowd would sing:
"Now the old king is dead! Long live the king!"
One minute I held the key
Next the walls were closed on me
And I discovered that my castles stand
Upon pillars of salt and pillars of sand
Ancient stereotypes frame conversation about the crisis.
Germans are bossy and severe. Italians are idle. Greeks are
corrupt. Brits are arrogant. The French are vain. So much for 60
years of European unification.
Germany in particular is coming in for bashing, not just in
Greece, where cartoonists have brushed up on their swastikas,
but in Italy, Spain and other countries suffering the stress of
a German-directed drive to restore Europe’s public finances.
Walking Alone
Until recently, Germany could claim to be expressing the consensus of rich northern Europe, but no longer. In a union that was intended, not least by Germany’s own leaders, to bind and subdue Germany within a larger whole, it instead stands increasingly isolated.
Why did it all go wrong? Three main reasons: French
grandiosity, German shame and a universal law of bureaucratic
self-aggrandizement. These formed a European Union that was
poorly adapted to the stresses the project was sure to
encounter. The EU was unlucky that the crisis came when it did -
- before national loyalties had diminished and an emerging EU
identity had begun to take their place. Yet the EU’s designers
had some sense of the risk they were inevitably running. They
gambled and lost.
The overriding goal for a Europe in ruins after 1945 was to
create a secure zone of peace and prosperity. Reconciliation
between France and Germany, formerly bitter enemies and sure to
be the dominant economic entities in a new Europe, was vital. As
a matter of the highest priority, the two countries formed a
close alliance, and began building a new united Europe around
it. They started modestly in 1951 with the European Coal and
Steel Community, but entertained bigger ambitions at the outset.
As early as 1957, the Treaty of Rome enshrined the notion of
“ever closer union.” This became the organizing principle for
Europe’s subsequent evolution.
The path not taken was that of an enhanced free-trade area,
a zone of economic cooperation among sovereign states, a kind of
NAFTA-plus. According to France’s thinking, if Europe was to
compete and engage on equal terms with the U.S., it would need
to aim higher than that. Ultimately, a United States of Europe
was the goal.
From an early stage, Europe hoped to integrate politically
as well as through trade and commerce. As the European Economic
Community came into being, it took in new members and began to
develop a thin yet feverishly proliferating European layer of
government, complete with parliament and executive. These two
drives were in tension. Members of an ever-widening union had
less in common than countries in the advanced-economy core,
making political and economic integration ever harder.
A Bold Moment
Germany mainly wanted a broader union -- to surround itself with friendly states, even if they were at very different stages of economic development than those at the European core. France sought especially a deeper political union, one that would subdue German economic power and give Paris more reach. Compromising, the two former foes chose to broaden and deepen at once.
The critical juncture was reached in talks for the
Maastricht Treaty of 1992. This provided for European Monetary
Union, the boldest step yet.
As you would expect, France was keen on the new single
currency: This was deepening with a vengeance. Under then-
existing arrangements, French monetary policy was in practice
constrained by the choices of Germany’s mighty central bank.
France had no vote on the Bundesbank’s board, but its interests
would be recognized by the European Central Bank. Back then, it
saw monetary union as adding to, not subtracting from, its
monetary sovereignty.
More gloriously -- and what is France for, if not la
gloire? -- the single currency advanced the goal of a Europe fit
to contend with the U.S. in global affairs. The dollar needed a
rival. The euro would be it. A truly single European market,
which the EU had resolved to build, needed to eliminate
exchange-rate risk, and that required a single currency. What
better way to incubate a European sense of identity than to
create such a currency?
As before, Germany viewed deepening more skeptically. Polls
told the government that, had Germany’s constitution permitted a
referendum on dropping its esteemed mark, the country would have
rejected the idea. But Chancellor Helmut Kohl gave greater
weight to other considerations. Germany’s sudden enlargement to
the east was stirring concern. Kohl wanted to offer reassurance.
This was not Deutschland ueber Alles, you understand. There’s no
going back to that shameful past. See, we’ll surrender the mark
to prove it. Germany acquiesced in the annihilation of its
currency out of meekness.
Yes. That’s ironic.
Central Banking Politics
There was another factor, almost as laughable in hindsight. A view had gained ground that central banking was above politics. The goal of monetary policy was simple -- price stability -- and the means purely technocratic. The old Keynesian idea that governments could trade a bit of inflation for a spurt of faster growth stood discredited. If choices like that ever arose, central banking would be political; but such choices don’t arise, so monetary policy should be held above the fray.
That’s why leaders weren’t too worried that Europe’s
democratic underpinnings, including its arrangements for fiscal
policy, were so much weaker than those of a typical currency-
issuing nation-state. Actually, they thought, this was a good
thing. The EU’s governance deficit would make the ECB all the
more independent. Left alone, it could do its job better and
without controversy.
Nice theory.
This crisis has proved that central banking is a branch of
politics. Under some extreme circumstances, such as the ones
we’re in, monetary policy is really just fiscal policy by other
means -- as when a central bank engages in “quantitative
easing” and takes government debt onto its books. Strictly
speaking, again to underline its independence, the ECB was
forbidden to do that, but out of necessity it has lately found
ways around the prohibition. Many economists are now calling for
more QE.
In addition, with economies across the euro area diverging,
the supposed simplicity of the stable-prices goal has
evaporated. Price stability in Germany means depression in
Greece. But the euro area can have only one monetary policy.
Setting it involves choices that are as political as they come -
- but no clear line of democratic accountability connects the
ECB and the EU’s citizens or governments.
Central-bank independence aside, economists drew attention
to the fragility of the euro system’s design from the start.
Most presciently, Harvard’s Martin Feldstein stressed that as
economic performance differed from one country to the next, a
single currency would pit winners against losers, and Europe
lacked both the political machinery and the democratic
legitimacy to mediate these disputes. How right he was.
Passing the Burden
The standoff between Germany and its allies with fiscal austerity on one side and the distressed peripheral economies of Greece, Ireland, Portugal and Spain on the other comes down to a fight about who bears what burden. German taxpayers are unwilling to subsidize what they see as their reckless and feckless EU partners. If this reluctance brings the ceiling down, it may do Germany more harm than good. You can understand it nonetheless. Since Europe’s national solidarities look more entrenched than ever, you can also understand resentment in Greece and elsewhere at being dictated to by Berlin.
One way of describing Europe’s dysfunction is to say that
economic integration, which sped up with the euro’s arrival, got
too far out in front of political integration. Although that’s
true, you would be wrong to conclude that political integration
could have moved much faster. Successive treaties have run into
mounting popular resistance to the transfer of decision-making
power to the EU. Across Europe, politics is still resolutely
national. To many Spaniards, Madrid seems remote, let alone
Brussels -- and a similar mindset applies to most other EU
members.
For that reason, adopting the single currency was always
going to be a risk, but it didn’t need to be as risky as it
proved. National governments understood what the economic
demands of the euro would be, then spent more than a decade
doing nothing about them. Successive Greek governments not only
overborrowed but also cooked the books to hide the fact. Greece
was an outlier only in that latter respect. Everywhere,
complacency about the safety of sovereign debt was total. For
years governments borrowed, and creditors lent, as though Greek
(or Italian or Spanish) debt was as safe as Germany’s.
That bad behavior was compounded by the failure to align
financial regulation with monetary union. The single currency
fostered deep financial integration across the EU -- one of the
things that make exiting the single currency so difficult. But
progress toward a consistent EU-wide system of financial
regulation has been slow.
Continental Drift
Labor markets also remain more national than continental, leaving workers and businesses at the mercy of the EU’s imperfectly synchronized business cycles. Migration is permitted in theory, but can be difficult in practice because pension arrangements and labor certifications aren’t easily portable. Anyway, how many Frenchmen want to live in Britain? Or vice versa?
Powerful unions and broken wage-setting systems let labor
costs get out of hand, and created a widening competitiveness
gap between Germany and southern Europe, the main underlying
cause of the peripheral countries’ current plight. Until the
crisis intervened, labor-market craziness as notorious as
Spain’s -- where a dual system of permanent and disposable
workers has driven the unemployment rate to 25 percent -- was
left unattended.
The EU’s executive arm, the European Commission, is much to
blame for this neglect. For years it focused on enlarging and
complicating its areas of competence (I’m using the term in its
technical sense) but failed to prioritize the issues that would
make or break the currency union. Its pathological zeal to
standardize product-market regulation fueled resistance to more
rule from Brussels -- resistance it then deflected by spraying
regional development funds hither and yon. Its intrusiveness
contrived to be both threatening and absurd. The commission
thrived on tasks that neither made the euro system safer nor
prepared the EU for the economic stresses of the crash.
The ultimate result is the fateful choice that confronts
Europe in the coming days and weeks. Already this month, a
breakup of the euro system has gone from being unthinkable to
becoming a planned-for contingency. The immediate question is
whether Greece will exit. Europe’s leaders would hope to stop
the rot there. But if a “Grexit” happens, attention will turn
instantly to which country goes next. To stop the system
unraveling with who knows what consequences, the EU may have to
take the strides toward deeper union that Germany has been
resisting since this crisis exploded: joint guarantees of
sovereign debt and unlimited intervention by the ECB.
The problem is, that’s fiscal union. It commits the EU to
potentially enormous transfers among its members, and makes them
explicit. Can there be fiscal union of that sort without
political union? And do Europe’s divided nations -- the bossy
Germans, idle Italians, arrogant Brits and vain French --
actually want to be one country? Back in Maastricht in 1992, the
Treaty of European Union arranged things so that those questions
would one day have to be answered. Sooner than anybody bargained
for, and before Europe was anything like ready, that day has
come.
Related Reading:
Voting For Yesterday In France
Europe, 2012
Uber Alles After All
Bambino, My Cash Money
Europe's Demographic Deficit Grows Wider By The Day
The callous cruelty of the EU is destroying Greece, a once-proud country
When I Ruled The World - Coldplay
I used to rule the world
Seas would rise when I gave the word
Now in the morning, I sleep alone
Sweep the streets I used to own
I used to roll the dice
Feel the fear in my enemy's eyes
Listen as the crowd would sing:
"Now the old king is dead! Long live the king!"
One minute I held the key
Next the walls were closed on me
And I discovered that my castles stand
Upon pillars of salt and pillars of sand
I hear Jerusalem bells a ringing
Roman Cavalry choirs are singing
Be my mirror, my sword and shield
My missionaries in a foreign field
For some reason I can't explain
Once you go there was never, never an honest word
That was when I ruled the world
It was a wicked and wild wind
Blew down the doors to let me in
Shattered windows and the sound of drums
People couldn't believe what I'd become
Revolutionaries wait
For my head on a silver plate
Just a puppet on a lonely string
Oh who would ever want to be king?
[Chorus]
I hear Jerusalem bells a ringing
Roman Calvary choirs are singing
Be my mirror, my sword and shield
My missionaries in a foreign field
For some reason I can't explain
I know Saint Peter won't call my name
Never rule this world
But that was when I ruled the world
Oh, oh, oh, oh, oh
Seas would rise when I gave the word
Now in the morning, I sleep alone
Sweep the streets I used to own
I used to roll the dice
Feel the fear in my enemy's eyes
Listen as the crowd would sing:
"Now the old king is dead! Long live the king!"
One minute I held the key
Next the walls were closed on me
And I discovered that my castles stand
Upon pillars of salt and pillars of sand
I hear Jerusalem bells a ringing
Roman Cavalry choirs are singing
Be my mirror, my sword and shield
My missionaries in a foreign field
For some reason I can't explain
Once you go there was never, never an honest word
That was when I ruled the world
It was a wicked and wild wind
Blew down the doors to let me in
Shattered windows and the sound of drums
People couldn't believe what I'd become
Revolutionaries wait
For my head on a silver plate
Just a puppet on a lonely string
Oh who would ever want to be king?
[Chorus]
I hear Jerusalem bells a ringing
Roman Calvary choirs are singing
Be my mirror, my sword and shield
My missionaries in a foreign field
For some reason I can't explain
I know Saint Peter won't call my name
Never rule this world
But that was when I ruled the world
Oh, oh, oh, oh, oh
1 comment:
Great song...
"Never ruled this world, and that was when I ruled the world..."
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