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Le réveil des démons: La crise de l'euro et comment nous en sortir
On croyait les démons assagis : à la faveur de la crise financière de 2008, les Etats avaient repris le dessus sur les marchés financiers ; avec et pour l’euro, les Européens avaient enterré l’égoïsme national ; face aux pires chocs, les politiques économiques savaient répondre et conjurer la dépression. Mais la tempête qui ébranle la zone euro depuis maintenant deux ans montre qu’ils n’étaient qu’assoupis. La crise européenne rappelle Lénine, pour qui la meilleure manière de détruire les fondements d’une société était de saper sa monnaie. Ce qui n’était au départ qu’une crise banale dans une petite économie périphérique, la Grèce, a gagné un pays après l’autre et menace aujourd’hui d’emporter tout l’édifice monétaire européen. Les citoyens s’interrogent : Peut-on encore sortir de cette tempête ? Certains pays devront-ils quitter l’euro ? A quel prix ? Cette monnaie sera-t-elle le fossoyeur de l’Europe ou l’accélérateur de sa transformation ? Les Etats vont-ils perdre leur autonomie budgétaire ? L'Allemagne est-elle en train de prendre le pouvoir ? Avec brio et clarté, Jean Pisani-Ferry donne toutes les clés pour comprendre ce qui se joue aujourd’hui autour de notre monnaie. Il donne à lire comme un thriller l’histoire d’une monnaie orpheline d’un Etat, mais surtout d’un projet politique. Il dénonce les manquements des dirigeants européens qui, face à la tourmente, ont toujours réagi trop peu et trop tard. Il déchiffre enfin les différents scénarios de sortie de crise, et évalue leurs chances de succès. Un essai brillant par l’un des meilleurs économistes contemporains pour comprendre pourquoi notre avenir se joue dans la crise de l’euro.
228 pages, Kindle Edition
First published November 16, 2011
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May 24, 2016UPDATES
24th May 2016
I've been wondering: after Brexit...a Frexit? and then ...????
February 2016
Tear gas, Molotov cocktails deployed during general strike in Greece
In:
https://www.rt.com/news/331265-greece...
Greece mayhem: Fierce street clashes, Molotov cocktails, rioting amid strike in Athens [against government austerity measures]
in:https://www.rt.com/news/321681-greece...
12 Nov, 2015
Elections of 20th of September 2015
As for results: a carbon-copy of the January results? Maybe.
13th July 2015
In the referendum last weekend, a majority of Greeks voted against the EU's proposed reform plan. But you support the EU's proposal. Why?
P.M. "A "yes" would not only have strengthened Greece in its negotiations
[...]
Note: the best part of this review just disappeared.
Sorry. Will try to get it back, somehow.
July 21, 2022
A solid and brief explanation of what happened, what is happening (as of the time of publication), and what should happen. A relatively easy book to read considering it was published by Oxford University Press.
November 11, 2016
The acknowledgments section of this book is a who-is-who of the European banking establishment. ECB council members Jorg Assmussen and Lorenzo Bini Smaghi, IMF economist (and MIT legend) Oliver Blanchard, Euro funding “Cerberus” Francesco Papadia and Eurocrat Olli Rehn all feature. Those who missed out in the acknowledgments feature in the endorsements on the back cover, with guest appearances from Charles Goodhart and Larry Summers who salute the author’s efforts from across the Channel and the Atlantic. Pisani-Ferry himself is, of course, the founder and former head of Bruegel.
So this was never going to be a book that would rock the boat. It is very much an account by somebody who is not only sold on the European Project, but pretty much embodies it.
That said, I bought the book for what it was, not for what it could have been if it was penned by somebody more prepared to criticize. This author was never going to ask the fundamental question, which of course is “do these guys actually belong together?” Nor was he ever going to ask “is the Euro an idea that had to be tried but perhaps did not work out?” But can he give a good account of the crisis?
The answer is a resounding “yes.” This is now the go-to book if you want to refresh your memories from the past five years or indeed if you want to learn about the Euro crisis from scratch. Everything is in here, not necessarily in chronological order, but there is a very good narrative in place, all the way from the founding of the European Union’s predecessors, to the logic that made currency union the latest and possibly last of its grand projects (page 25), through to the crisis and the manner in which its sundry phases were managed by the ECB, Angela Merkel and a gaggle of her sundry European counterparts.
As a person who followed the crisis from very close, I think the author is leaving some bits out deliberately. For example, the LTRO was put in place because weak peripheral banks had half a trillion Euros of debt to roll. That was the true reason. The author goes into some funky analogy from the fifteenth century, which amounts to believing Draghi’s excuse, and totally avoids mentioning this fact. I can give other examples. Regardless, the story is told well, it is given in context and it flows very naturally.
Also, a forty thousand feet narrative is given. The one that says we won’t get to the bottom of the problem unless we start planning the future (as opposed to only reacting to disasters at the last minute); that austerity can only be one part of the solution; that the Euro actually succeeded enough in unifying the European market for borrowing and lending that if we abandon it we are guaranteed a massive financial disaster from the asymmetric effects of the benefits to those who will find they can pay in shekels versus those who will go bankrupt because they never got the Euros (so far so conventional). He also seems to think that we broke new ground with the banking union that was agreed upon recently, that it was a major turning point and perhaps a saving grace of the Euro. This last point is not at all the public wisdom. All newspaper articles I read claimed it was not workable.
So all this gets you to page 125 out of 177 and then the real book starts. It’s the chapter called “The Repair Agenda.” The message here is clear: the European Union must become a federation like the United States of America. That is the only way it will get the necessary budget to do fiscal policy and that’s the only way it can issue a common European bond, a safe asset, that the ECB will be allowed to buy. He makes one more time the case for the Bruegel two-tier bond system, whereby every country can issue up to an amount of 60% of GDP “blue bonds” guaranteed by the entire union and beyond that “red bonds” for which it will be responsible itself. Not a bad idea, of course.
Sadly, and the author admits this, the time for the European Federation idea has come and gone. The peoples of Europe do not want to live in a European Federation, they want to live in their individual countries and have expressed this wish through the ballot box on every occasion when they have had the chance.
So Pisani-Ferry proposes that we wait till the tide turns and hopes an aggressive ECB with help from the new banking union will prove enough of a support between now and then to prevent the Euro from exploding under the weight of slow growth, high debt, North-South imbalances and one-size-fits-all rates policy. Not too hopeful, then.
So this was never going to be a book that would rock the boat. It is very much an account by somebody who is not only sold on the European Project, but pretty much embodies it.
That said, I bought the book for what it was, not for what it could have been if it was penned by somebody more prepared to criticize. This author was never going to ask the fundamental question, which of course is “do these guys actually belong together?” Nor was he ever going to ask “is the Euro an idea that had to be tried but perhaps did not work out?” But can he give a good account of the crisis?
The answer is a resounding “yes.” This is now the go-to book if you want to refresh your memories from the past five years or indeed if you want to learn about the Euro crisis from scratch. Everything is in here, not necessarily in chronological order, but there is a very good narrative in place, all the way from the founding of the European Union’s predecessors, to the logic that made currency union the latest and possibly last of its grand projects (page 25), through to the crisis and the manner in which its sundry phases were managed by the ECB, Angela Merkel and a gaggle of her sundry European counterparts.
As a person who followed the crisis from very close, I think the author is leaving some bits out deliberately. For example, the LTRO was put in place because weak peripheral banks had half a trillion Euros of debt to roll. That was the true reason. The author goes into some funky analogy from the fifteenth century, which amounts to believing Draghi’s excuse, and totally avoids mentioning this fact. I can give other examples. Regardless, the story is told well, it is given in context and it flows very naturally.
Also, a forty thousand feet narrative is given. The one that says we won’t get to the bottom of the problem unless we start planning the future (as opposed to only reacting to disasters at the last minute); that austerity can only be one part of the solution; that the Euro actually succeeded enough in unifying the European market for borrowing and lending that if we abandon it we are guaranteed a massive financial disaster from the asymmetric effects of the benefits to those who will find they can pay in shekels versus those who will go bankrupt because they never got the Euros (so far so conventional). He also seems to think that we broke new ground with the banking union that was agreed upon recently, that it was a major turning point and perhaps a saving grace of the Euro. This last point is not at all the public wisdom. All newspaper articles I read claimed it was not workable.
So all this gets you to page 125 out of 177 and then the real book starts. It’s the chapter called “The Repair Agenda.” The message here is clear: the European Union must become a federation like the United States of America. That is the only way it will get the necessary budget to do fiscal policy and that’s the only way it can issue a common European bond, a safe asset, that the ECB will be allowed to buy. He makes one more time the case for the Bruegel two-tier bond system, whereby every country can issue up to an amount of 60% of GDP “blue bonds” guaranteed by the entire union and beyond that “red bonds” for which it will be responsible itself. Not a bad idea, of course.
Sadly, and the author admits this, the time for the European Federation idea has come and gone. The peoples of Europe do not want to live in a European Federation, they want to live in their individual countries and have expressed this wish through the ballot box on every occasion when they have had the chance.
So Pisani-Ferry proposes that we wait till the tide turns and hopes an aggressive ECB with help from the new banking union will prove enough of a support between now and then to prevent the Euro from exploding under the weight of slow growth, high debt, North-South imbalances and one-size-fits-all rates policy. Not too hopeful, then.
April 20, 2021
More Euro!
September 1, 2020
A must-read for those interested in the EGB market.
April 16, 2022
Good review of the bad perspective for the euro zone
June 9, 2014
An excellent overview of the history of the euro, the crisis, and policy recommendations for the way forward. Balanced, intelligent, comprehensive.
September 12, 2014
Great book on the crisis covers both early years of eurozone and policy going forward. very useful.
Displaying 1 - 8 of 8 reviews