Monday, August 15, 2011

Lagarde Indulges in Newspeak

Christine Lagarde, at last liberated from Nicolas Sarkozy's tutelle, should be finding her own voice, but if today's pronouncement from the IMF director is any indication, she's singing falsetto, and the lyrics are in Newspeak:
There are no easy answers. ... slamming on the brakes too quickly will hurt the recovery ... what is needed is a dual focus ... that may sound contradictory ...
Will the markets buy such an approach? In some countries, they seem to be pushing for sharp fiscal adjustments. And some policymakers have decided that is the road to follow. But in many countries a short-term focus would be wrong. We should remember that markets can be of two minds: while they dislike high public debt – and may applaud sharp fiscal consolidation – as we saw last week they dislike low or negative growth even more.
Forgive me, but this sounds like the doctor in Molière prescribing la vertu dormitive, except in this case she's prescribing la vertu stimulative, mais pas trop. And how about naming names? "Some countries" indeed. Is Mme Lagarde out of her depth?

Libyan Rebels Are Talking to Qaddafi People

Reported here. And Libya's security chief has apparently defected to Egypt.

Two Eurozone Proposals for Sarkozy and Merkel to Consider

Here and here.

UPDATE: And, right on cue, we learn that Sarkozy and Merkel have taken off the table the core of both proposals, namely, the creation of a Eurobond. Hence anything they propose will be inadequate, and once again Europe will find itself behind the eight-ball in trying to resolve the lingering crisis.

Although the subject, Le Monde tells us, is "in the air" in Germany.