The Ballad of Mario Draghi

When Draghi and Merkel were Pally
His words could create their own rally
But (keen not to spook her)
He hid the bazooka
And now he's just Comical Ali

That German growth plan in full...

Since Irish Govt. ministers seem to be spinning this weekend that they will return from Europe laden with a "growth pact" to go alongside the half-baked fiscal treaty which is being rammed down Ireland's collective throat on 31st May, it might be worth examining exactly what the Germans have in mind.

Guido Westerwelle laid out his thoughts in some detail in his policy statement on 11th May:

Westerwelle spoke in favor of a European growth pact, which would encompass six points as follows:

1. Firstly, Westerwelle said the European Union would have to use its funding “better than before”, without spending more. With the EU budget for the 2014-2020 period planned at more than a trillion euros, the structural funds contained in that sum would have to be directed towards encouraging growth and competition in Europe, he insisted. This, Westerwelle said, was about shaping the future, which was what politicians owed the taxpayers of Europe. The Government, he said, had therefore put forward an action plan for better spending in the budget negotiations in Brussels.
2. Secondly, he said, the European Commission had to take the remaining money from the European Funds – around 80 billion euros – and use the money now already to boost competitiveness in the member states.
3. The third point Westerwelle gave was that the credit crunch currently affecting small and medium-sized enterprises in Europe had to be overcome. SMEs, he said, needed better access to loans, and the European Investment Bank had the expertise to be useful in this regard.
4. Westerwelle’s fourth point involved developing Europe’s cross-border infrastructure, including the road, rail, energy and telecommunications networks. Doing so would mean exploring the option of funding through public-private partnerships, Westerwelle said.
5. Fifthly, Westerwelle said that the internal market had to be extended to include the digitized economy, online trade and the energy sector.
6. The Foreign Minister’s sixth point referred to strengthening free trade. Until progress towards a global free trade system could be made in the Doha Round, it was up to the EU, Westerwelle said, to conclude free trade agreements with the new and the long-established centres of power on the world stage.

All very admirable, no doubt, although not neccesarily enough to temper the unpleasant effects of mass hunger "structural change" already haunting Greece (the first to sign up to the fiscal pact) and threatening to make themselves felt in the rest of the periphery.

Cassius' own view is that the French will require something more substantial, possibly in the way of eurobonds or at least details of specific pork barrels projects to appease their voters. The catch? these 'extras' might appear, but I have a lingering feeling that the price of them will be a flat out Tobin tax or further measures towards tax harmonisation - both of which (ought) to be unacceptable to Ireland

Let's see what emerges

Cassius