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The Euro Loses a Big Supporter and Gains a New Neo-Con

Posted By J.D. Foster, Ph.D. On May 10, 2013 @ 6:30 pm In Ongoing Priorities | Comments Disabled

Album / Oronoz/Newscom [1]

Album / Oronoz/Newscom

Definition of an American neo-conservative: A liberal mugged by reality.

The new poster child for the budding European neo-conservative: Oskar Lafontaine? Lafontaine, German history majors will recall, is the Social Democrat and former German finance minister who helped launch the European Monetary Union (EMU). He is also the latest European-style neo-conservative as reality has most certainly mugged him along with every other citizen of the Euro bloc.

Lafontaine has, in short, given up on the euro, admitting it was a big, big mistake. As he recently wrote, [2] “Hopes that the creation of the euro would force rational economic behavior on all sides were in vain.”

Obviously. Now, however, with the failure of the monetary experiment no longer in doubt and its torturous consequences spreading like kudzu, Lafontaine does not merely lament these developments. He has flipped his position entirely, calling for the breakup of the EMU to let the southern states recover, observing the obvious fact that Europe’s current course is “leading to disaster.” More accurately, Europe’s current course has already met with disaster as unemployment surges to depression levels in country after country.

Despite all the simple explanations, one still wonders how so much of Europe’s economic and political future could have been built on such flimsy hopes and shifting sands.

One wonders how it is so many of Lafontaine’s friends among Europe’s leadership in Germany and across the continent can continue to inflict such pain and suffering on the peoples of Greece, Italy, Portugal, Spain, and yes, even France, all to keep the experiment going one more year, one more month, one more day. As Lafontaine remarked, forcing these countries to continue using the euro forgo the normal process of a currency devaluation and instead remain in the euro to undergo an internal devaluation via mass unemployment is a “catastrophe.”

One wonders how, having proven beyond a shadow of a doubt their incapacities for economic policymaking, Europe’s elites continue to expect the voters to trust Brussels with even more centralized power to direct the continent’s economic affairs.

And one wonders how long the suffering people of Europe will put up with this Marquis de Sade monetary policy. On that point, too, Lafontaine is as clearheaded today following his mugging as he was muddleheaded 15 years ago: “[T]he economic situation is worsening month to month, and unemployment has reached a level that puts democratic structures ever more in doubt.” Translation: Never mind the European Union, national governments themselves are at risk.

As unemployment continues to push past catastrophe amidst Europe’s economic policy fumbling, Lafontaine no doubt will be joined by many in the new class of European neo-conservatives abandoning the Euro en masse, all mugged by the reality that wishful thinking is a poor substitute for sound policy.


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URL to article: http://blog.heritage.org/2013/05/10/the-euro-loses-a-big-supporter-and-gains-a-new-neo-con/

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[1] Image: http://blog.heritage.org/wp-content/uploads/Euro_Cash130510.jpg

[2] As he recently wrote,: http://www.telegraph.co.uk/finance/financialcrisis/10039329/German-euro-founder-calls-for-catastrophic-currency-to-be-broken-up.html

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