Monday, October 27, 2008

Le Tout à l'Ego

Pierre Moscovici may have lost his bid to become the leader of the Socialist Party, but credit him and his two collaborators with a zinger to rank with Hollande's coup d'éclat permanent: see the title of today's Le Monde op-ed: "Nicolas Sarkozy en Europe: le tout à l'ego."*

Don't even think of branding Mosco a "sewer loser" or of descending to the level of "gutter politics." On the contrary, he seems "flush" with confidence.

(*Non French-speakers may wish to consult their dictionaries under tout à l'égout.)

Euro Bank Exposure to Emerging Markets

Tyler Cowen has a very interesting post on European bank exposure to emerging markets. Austrian banks, for instance, are exposed at a level of 85% of GDP, mostly to Hungary, Ukraine, and Serbia. Cowen's conclusion:

By the way, this is further evidence that the driving force behind the earlier boom was the global savings glut, and sheer giddiness, not the excessively loose monetary policy of Greenspan's Fed. The ECB has pursued a relatively tight monetary policy since its origin. It also will be interesting to see what trouble arises in Spain, since Spanish banking regulation has been considered a model of how to keep these problems under control.

End Run on Dati

President Sarkozy has invited the more moderate of two disgruntled unions of magistrates to meet with him, circumventing his own minister of justice, Rachida Dati. The Elysée is displeased not only with last week's massive strike of magistrates but also with the release of a convicted rapist owing to a clerical error on a court form and by the relatively mild ministerial response to this embarrassing episode. This latest move would seem to confirm the rumors that Dati has been steadily losing favor with the president and may be close to the end of her tenure in office, which has been turbulent from the beginning.

Munchau on Sarkozy's attempted "Coup d'Etat"

Thanks to Leo for the pointer to Wolfgang Munchau's piece on Sarkozy's proposal that he head the Eurogroup after France's EU presidency ends and why he might succeed despite Angela Merkel's opposition. In conjunction with this, read my previous posts on mounting tensions between France and Germany and France and the Czech Republic. It seems clear that, if the crisis does not fracture the EU beyond repair, it is going to lead to permanent institutional changes even in the absence of a new constitution.