Okay, it wasn't said in so many words, and a lot has been made in the press of the end of the Franco-German Axis and the rise of Italy (and Spain) as the Third Power, making it look like Europe might be from now on run by a troika: Germany still, the biggest economy, France the second biggest, and Italy, the third and with Monti at the helm, the smartest.
Indeed Italy seems to have produced three "super Marios" lately: Mario Monti, the Prime Minister who's a serious economist and also happens to know the inner working of the European Commission since he was in it for years; Mario Draghi, the head of the ECB and someone who comes from both Goldman Sachs (you won't fool him on derivatives!) and the Italian Treasury (he can negotiate his way out of any political mess as he's shown when he handled the sale of the Italian State telecom system); and of course, the Italian soccer team, including "Big Mario" Balotelli, the soccer player who trounced Germany in the semi-finale of Euro 2012 with two unbeatable goals...only to be defeated on Sunday 1 July by Spain in a damming score: 4-0, historically the worst ever for Italy.
Still, that makes for three Super Marios. On Sunday neighbors of ours in Rome adorned their house with the Italian flag hoping for victory:
It didn't come to pass, but that flag could certainly stay there to celebrate the other two Marios, Monti who successfully cornered Merkel at the Euro Summit and Draghi who reaped the fruits of Monti's efforts.
Strangely enough, the press didn't perceive this right away. They just went for the usual interpretations of European political meetings: that Europe's political class can't take decisions, it's a circus, each clinging to his national sovereignty like a life-saving jacket - particularly the Germans who have yet to realize that they are Europeans too.
This of course is all blah blah that we've heard a million times. We've had to wait four days to finally get a decent analysis in the press of what really happened at the Euro Summit. In the New York Times of course, click here. There's nothing much I can add to this, except make a prognostic (if I dare!)
The European Central Bank is not yet the Federal Reserve but it's definitely on its way now.
In a nutshell: it's been given oversight over the European banking system - the institutional construction is (as usual in Europe) highly complex, but the people who have to monitor the banking system are placed within the ECB. Now much will depend on how Mario Draghi manages his relationship with the Germans, who as always, are resisting the notion that they must pick up the bill for the mistakes of their Southern neighbors. But I'm quite sure Draghi, given his proven negotiating ability, will find the words to make them understand that they have no choice, that the alternative (to let Grexit happen etc etc) is much, much worse and will cost them much more pain and suffering.
In short, for once I'm (almost) optimistic! But it's still a long way to go and it needs to pass through a solid period of economic growth if we're ever to come out of the Euro-crisis woods.
|Mario_Draghi (Photo credit: madmonk111)|
Now growth also starts at home, and I sincerely hope German consumers will remember that they ought to start spending.
How about a nice vacation in Greece?