Guido Salerno Aletta
Columnist of the Teleborsa Agency
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The euro, an act of stupid pride
That ofeuro it is a history, both ancient and recent, studded with errors. And the BCECentral bank without history and without culture, at the helm of a currency without a state, he is collecting catastrophic ones, one after the other.
We have been paying dearly for it for twenty years, because History always presents the bill.
It was an act of extraordinary, as much as stupid political pride, the establishment of the Euro. The common currency was intended to finally free Europe from the double tyranny: that of the Dollar on one side and that of the Mark on the other.
Free yourself from the double tyranny of the Dollar and the Mark
We have to go back in time to understand the reasons for that risky decision.
Always, US monetary policy decisions heavily influenced Europe as a whole: starting from that of ’71, to unilaterally withdraw from the commitment to convert its negative balance in dollars in the trade balance into gold. From that moment on, those who had an active trade balance with the US could not do anything other than diligently keep the paper dollars in their safes: previously, they gave back the paper dollars and received gold, at the ratio of 34 dollars per ounce. of up.
To make matters worse, in 1980to combat stagflation, the Fed decided to raise interest rates to stellar levels: even in that case, the European financial system had to adapt by increasing its rates, because too wide a gap between economies that were already very interconnected at the time was not sustainable: speculative capital left the European currencies to change into dollars, and invest in that currency . The rise in interest rates in Italy had devastating consequences: public debt skyrocketed and large companies that had made multi-year investment plans relying on negative real interest rates closed their doors.
As if the tyranny of the dollaralso the marco maramaldizzava: at the end of ’90, when it was decided to opt for the single currency during the informal Council of Rome, with the decision therefore to renounce each State in perspective to its own national currency instead of turning to the common currency that would be added to the national ones as requested by Great Britain, there was a violent revaluation of the German mark underway, induced by a decisive increase in interest rates by the Bundesbank which in this way encouraged European capital to invest in the German currency which offered conditions of most favorable employment. Germany, which was facing the delicate phase of Reunification, was in dire need of resources to invest in the Eastern Lander and to sell the huge public properties of the GDR.
That is why, not only did we have to defend ourselves all together in Europe from the tyranny of the dollar, but within Europe itself we also had to defend ourselves from the tyranny of the mark.
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