“Markets had underestimated the political commitment that European leaders had to the Euro.” The “whatever” speech made the markets believe that the Euro was a firm political decision, in addition to the economic and monetary decision. And that European leaders, from governments to the governor of the European Central Bank, were in fact determined to maintain the single European currency. For political reasons, above all others. This lesson, which Mario Draghi told yesterday, on CNN Portugal’s anniversary, has another lesson, which we still don’t know if it was learned or not.
“The European Central Bank will do whatever is necessary to save the Euro.” The famous “whatever it takes” speech by Mario Draghi, in July 2012, is decisive for the outcome of the sovereign debt crisis. More than twelve years later, interviewed by Richard Quest, the former president of the European Central Bank, and former Italian prime minister and recent author of the Report that everyone is talking about in Brussels, he explained the most important fact about that speech. At the height of the Sovereign Debt Crisis, markets were betting against the Euro. There were law firms studying how contracts made with guarantees in Euros would be transferred to contracts guaranteed in other currencies. European governments, meeting at summits, announced the Banking Union, promised reforms, swore solidarity, but nothing convinced the markets. Until Mario Draghi’s short, clear and firm words made the markets believe that political decision-makers, including the President of the European Central Bank, were determined to preserve the Euro. It was, politicians knew, a matter of life and death. Not for the single currency, but for the European Union. The Ukraine war is no different. And yet no one says the same. And the “markets” notice it.
Twelve years later, in another crisis, we have already heard many vows to Ukraine, Khiev has already been told that his place is in Europe and Zelensky has already been promised that Europe will be with Ukraine as long as Ukraine wants it. The problem is that the “markets” don’t just see the speeches, they look a lot at the actions. And the actions are not empty, but they fall short of what is necessary. From day one, they always fall short. And therefore political markets doubt. In Europe and the rest of the world, there is no conviction that Europe will do everything, absolutely everything, whatever is necessary so that Russia does not win the war (I’m not even talking about losing). And it doesn’t exist, for three reasons: because Europe hasn’t done everything it can; because Europe is divided on what it is actually willing to do; and, above all, because no one managed to have the clarity, conviction and – not an irrelevant fact – the power that Draghi had and had when he said what he said.
After all these years, the most important thing about the story that the former president of the ECB told yesterday is that at the time there was clarity regarding the seriousness of the situation, there was determination as to what to do and what needed to be done was to convince the markets that whatever had to be done would be done. to be done. When Draghi said this, the markets believed it and stopped betting on the Euro falling.
In relation to the war in Ukraine, much of the same is happening. But on the contrary. Politicians guarantee that they are with Ukraine, that they know what is at stake (who determines the rules of security in Europe), that they are on Ukraine’s side as long as Ukraine wants to fight, and that Ukraine’s place is in the European Union. The markets, however, don’t completely believe it. The political markets, the markets where other world leaders haggle, do not believe that Europe will really do everything that is necessary. At best, Europe will do what appears to be all it can. But that’s not the same thing.
If Europeans, starting with European political leaders, think, and should think, that the outcome of the war is decisive for the definition of security rules in Europe, for whether the borders are stable, for European security, their determination should be absolute. But it’s not.
Since the first day of the war, the West has postponed, postponed, delayed sending weapons, ammunition, support, which the Ukrainians have said are necessary since the first day. And then the West rules, later. Why? Because the Europeans, the European leaders, know that a Russian victory will be tragic for Europe, but they don’t know what will happen if Russia loses, and they fear the result. That’s why they prolong the war. While there is war, Russia has not won. But he didn’t lose either. And there is always the possibility of negotiated peace imposed by circumstances.
It is not possible to say that you want to be less dependent on America, Trump or anyone else, that you want to be strategically autonomous in choosing your path, and then accept being Putin’s hostage, as if it were better than being Trump’s subject. . It is not. Being dependent on both would be the worst of all, but we are dangerously close.
Source: expresso.pt
