Wednesday, October 22, 2008


The hyperpresident that was seems to want to become the once and future Europresident, that is, the durable leader of Euroland, which he believes needs permanent leadership at the head of state--and not just the minister of finance--level. Naturally he sees himself as filling the role perfectly and would like the other member states to pony up capital for a European Sovereign Wealth Fund whose mission would be to prevent other sovereign wealth funds from snapping up European firms at bargain prices in the coming period of recession.

All the earmarks of authentic Sarkozyan policymaking are here: the idea is bold; it circumvents existing constitutional roadblocks (or in this case, the absence of a constitution and therefore of a stable European executive, which itself is a roadblock to decisive action); it was announced without prior consultation; it is an affront to other powerful players (Angela Merkel foremost among them); and it is an inextricable mixture of good ideas (continuity of policy and centralized decision-making are probably needed in the present crisis if not always) and bad ones (the sovereign wealth fund idea, which Germany has already rejected, is traditional French-style "economic patriotism" writ large and dressed up as an antidote to economic collapse, which it is not; the absence of democratic controls at the EU level would pose a serious problem).

Still, Sarko's excesses have the virtue of getting the pot boiling. Something may come of his proposal, though it will no doubt have to be much modified before it becomes acceptable to all the veto players. The sheer chutzpah of appointing himself economic czar of the Eurozone takes the breath away, but his instinct that, if not a czar, then at least a coordinator with clout is essential is probably correct.

Maybe DSK will be the man for the job if the IMF decides to sack him (I think they won't).


Anonymous said...

Chutzpah! I love that word and it's so fitting for Sarkozy 2.0. I do wish he wouldn't seek to rub the Germans up the wrong way at every opportunity, though. He will need their help probably sooner than he thinks.

DSK: A truce?

"Other international officials, including the managing director of the International Monetary Fund [...]have also been invited to attend, the White House said."

Alexander Muir said...

I agree that sovereign wealth funds are probably a poor idea, and certainly counter-productive if globalization is the goal. Perhaps though they are the chip that can be compromised away in order to move towards his other proposal. It seems as though the Eurozone is in a similar situation to that of the early United States: a weak confederate gov't was unable to cope and eventually led to a strong federal gov't some ten years later.

Unknown said...

I'm not averse to a European superstate, and my colleague Glyn Morgan has written a book in which he makes a pretty good case for one--in the abstract. We're a long way from there in reality, however, and not even the current crisis will get us over the hump, in my opinion.