Trichet and the others
The deficit in political leadership that we witness on a daily basis is truly frightening and, unfortunately, not limited to Greece. We see it all over the world, and especially in Europe. For example, the cacophony over the past few weeks in regard to the very sensitive question of Greece restructuring its debt illustrates that something is awry. Prime ministers, ministers and central bankers are expressing conflicting opinions without once inspiring the belief that somewhere, in some dark room, a real plan, a systematic and long-term plan, is being drawn up. This leadership vacuum in the European Union heightens uncertainty over where the EU, the eurozone, the Schengen Agreement, this entire European construct, built with so much effort, is heading. The only certainty is that Germany will push developments in the direction it wants. Recent events in history, such as the manner in which the states that once comprised Yugoslavia were recognized or not, has taught us that decisions are often arrived at in a very coarse way. The present leadership of Germany, however, seems to place the EU’s fate below its domestic concerns. Chancellor Angela Merkel’s vision for a more competitive EU is without doubt the right one, but it requires political management and patience. In this climate of uncertainty, the only figure that ap- pears to know exactly what he wants is European Central Bank President Jean-Claude Trichet. First of all he only speaks publicly when he has to. He handled the international banking crisis perfectly and with a steady hand on the helm. He was the one who played a catalytic role in saving Greece by bailing out the country’s banks and buying bonds on the secondary market. Neither of these was the obvious thing to do, nor were they in absolute line with the ECB’s area of jurisdiction. When, however, the rest of Europe’s leadership maintained a stance of hesitation and was unable to reach a common decision, Trichet did the dirty work by acquainting himself with the ECB dealing room and following the progress of the bond markets. Maybe he is helped by the fact that he has years of experience in this dog-eat-dog world and that he’s not preoccupied with the chances of losing an election. What is certain is that in such an environment of insecurity and uncertainty, it’s good to know that there is one true institutional player who is using his head, acting behind the scenes and working systematically, therefore making the markets understand that the EU is not entirely without leadership in these critical times.