Friday, June 3, 2005

European markets shrug off constitution vote - and advocate ignoring its result

/ EU / must / be / kidding /
The IHT on the consequences of the referenda on the markets, noting that despite the dire predictions, the foretold catastrophe did not occur:

..."If we believed the warnings of politicians about the effects of a no vote, then the European Union would be on the verge of a terrible catastrophe," Robert Carnell, an economist at ING, wrote Monday after French voters refused to ratify the EU constitution. "Fortunately, these dire warnings were never a reality, and the European Union is not a rubble-strewn wasteland this morning"...
...The French stock market opened lower Monday, but began to rise in late morning and by the end of Paris trading, the CAC-40, the benchmark index, was up a bit for the day. Perhaps of more significance, the index is more than 2 percent above where it was March 17, the day before the first poll indicated that French voters might reject the constitution...

The article goes on to make these rather fascinating remarks:

...If governments are seen to be promoting economic growth and competitiveness, both vis-a-vis each other and the rest of the world, the euro and the stock markets may do better than if it appears that governments read the referendum as a rejection of their efforts to make labor markets more competitive and pension systems less generous.

"If there are going to be setbacks, it's going to be because of a rise of a very unsavory populism with its protectionist tendencies," said Maria Livanos Cattaui, the secretary general of the International Chamber of Commerce, which is based in Paris...

This, freely translated, says that everything will be alright if we dismiss the most obvious message that the electorates have sent to the European elites, namely a rejection of the march towards a blairite Europe and endorse exactly what they were voting against. It is, I think, a fair testimony to the cynicism and dismissiveness with which the European elites regard anything resembling democracy and democratic decision making. In a similar vein Timothy Garton Ash in the Guardian advocates a pan-european Blairism, through the mediation of the Sarkozy-Merkel duo. (After overdosing on TGA's Blairite triumphalism, head over to Meaders' for a rather bleaker of the UK economy)

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