Thursday, May 2, 2013

Guéant Caught in Web of Denials

Claude Guéant, who launched a major media offensive to defend himself against allegations of corruption, giving seven interviews in one day, seems to have rushed a bit too quickly into the breach, without covering his bases. He claimed to have earned €500,000 from the sale of two paintings to a foreign buyer, but he never obtained an export permit, as required when paintings valued above €150,000 are shipped out of France. Unless the buyer, who paid him with a transfer from a foreign bank account, actually lives in France, in which case the authorities will want to know the source of the funds in the offshore account. In addition, Le Monde has gathered new testimony denying the existence of the cash bonuses in the Ministry of the Interior from which Guéant claims to have paid some of his bills.

Habermas Speaks Out on EU

Jürgen Habermas envisions the future of the EU in a speech at Leuven University:

Habermas emphasises that solidarity is a political act and is in no way a form of moral selflessness. It is an attractive concept because it pays off in the long term. Habermas likens the concept to one’s ethical obligation to family: If a distant relative calls to ask for a favour, you will agree to help only if you can count on that relative to do the same for you in a similar situation. In other words, solidarity works according to the principle of “predictable reciprocity”. This, according to Habermas, can be extended to political communities bound by shared goals.

‪Habermas concludes that the monetary union can only be saved through solidarity: “‪Providing loans to over-indebted states is not enough. What is needed is a cooperative effort from a shared political perspective to promote growth and competitiveness in the euro zone as a whole." Such an effort would require Germany and several other countries to accept short- and medium-term losses, confident in the conviction that solidarity is in their – and our – long-term interest.

ECB Cuts Rate

The ECB, as widely expected, has cut its main interest rate by 25 basis points to 0.5 percent. This is a reaction to the austerity-induced recession that is currently afflicting Europe. It will not accomplish much. Read it as a gesture: "We care," or, rather, "We're not entirely oblivious to your suffering, but we still believe in our nostrums, our mandate limits what we can legally do, and in any case it's not up to us to bail out feckless politicians and the clueless citizens who elect them." Translated from CentralBankerspeak.