A Latin lesson

cultura straripante

While newspapers and rags are piling up in telling us every single “NEIN” said by Ms Merkel, it’d be better to go back to a beloved concept for my Latin teacher – the analysis of a period must be based on the consecutio temporum. And the current period does keeps up…

English version thanks to Marion Sarah Tuggey
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On the reliable Intermarket&More I’ve found a very interesting Venn diagram created by Exane regarding the positions came out from the summit among Monti, Rajoy, Hollande and Merkel:

The thing we all can easily understand is that the positions held by the “strong” countries, with Germany first in the line, and the ones held by the “weak” countries are mainly undermined by consecutio temporum problems:

Germany is not saying NEIN to Eurobonds, it’s against their creation as first step of the process. Its position is that before having a shared debt with countries which, due to their structure, periodically generate problems, these national structures must conform to more rigorous behaviours. Before a “more active” ECB, able to hide troubles  with monetary interventions, it’s necessary to defuse the potential elements of trouble – which could require further monetary interventions or may not be corrected at all (thanks to the monetary coverage).

Weak countries, on the other hand, are exploiting the objective violence and speed of the markets judgment, and ask for immediate real help (more active ECB, Eurobond, empowerment of common protection structures such as EFSF, ESM, ERF…) promising the reorder of their public accounts structures. If these funds, as well as an increased expense margin, aren’t granted, then – they say – there won’t be time for any public accounts reordering.

Both the positions, seen by the side of their actors, are easily understandable – and sure they are irreconcilable.

A solution to this scenario might be a road map – just like the one I’ve created as a pure example into the now famous post The Last Feast – a long-term commitment, well described and detailed, signed by the weak countries, which could reassure the strong countries in signing the transformation of the monetary union into an actual political, fiscal and debt integration – with a consequent “retreat of the markets”. Markets would in fact understand that the problems of a single European country would be considered and managed as the problems of the entire Union. So, everything OK.

Duh, no.

Because there’s an inherent remarkable vulnus of the “road map scenario” – which otherwise would be so perfect to make us wonder why they haven’t already written it. Actually, how would it be possible to justify into each single Constitutions the idea that today, having good designs on the matter, these governments are going to sign binding agreements on economic and fiscal policies for the next twenty years? Well, now we could wonder how it’d be possible to write down a single line…

This was the concern shared by the “FabFour” – Draghi, Barroso, Juncker, Van Rompuy. The four Presidents represent the possible future unitary structures, and are working hard to help the European countries in finding common elements to be shared in order to create an actual and reliable project.

A report is available on the “Il Sole 24ore” website:


Which represents the work of the above mentioned “FabFour”, and proposes a vision for a stable and prosperous EMU based on four essential building blocks:

  • An integrated financial framework to ensure financial stability in particular in the Euro area and minimise the cost of bank failures to European citizens. Such a framework elevates responsibility for supervision to the European level, and provides for common mechanisms to resolve banks and guarantee customer deposits.
  • An integrated budgetary framework to ensure sound fiscal policy making at the national and European levels, encompassing coordination, joint decision-making, greater enforcement and commensurate steps towards common debt issuance. This framework could include also different forms of fiscal solidarity.
  • An integrated economic policy framework which has sufficient mechanisms to ensure that national and European policies are in place that promote sustainable growth, employment and competitiveness, and are compatible with the smooth functioning of EMU.
  • Ensuring the necessary democratic legitimacy and accountability of decision-making within the EMU, based on the joint exercise of sovereignty for common policies and solidarity.

With no decision being made on the 28th and 29th, we all could take a no return way: the victims are heavyweight such as Spain and Italy, and the challenge is demanding: to safeguard the common European wellness without trampling on the single national individualisms, respecting future governments. A multiple problem of consecutio temporum.

And then they say Latin has died and it’s useless in our everyday life…

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About bimboalieno

Operatore finanziario professionale dal 1998; ha collaborato con diverse banche italiane ed estere. Si può scoprire dell'altro cliccando qui. Oggi é responsabile di un centro di Private Banking. Professional financial trader since 1998; he has worked with several Italian and foreign banks. You can learn more here. Bimboalieno is currently in charge of a Private Banking centre.