Prague, 30 May 1997 (RFE/RL) -- The euro -- EU's answer to the "hegemony of the dollar" -- is in turmoil. And it doesn't even exist yet. Western press commentary mulls the matter over.
NEW YORK TIMES: France and Germany are going through convulsions
From Frankfurt, Edmund L. Andrews sums up the latest controversies in a few words in a news analysis today as follows: "France and Germany could hardly be more different, but it is no coincidence that both countries are going through their own convulsions in the same week. In France, the center-right government of President Jacques Chirac is fighting for survival after voters issued a stunning rebuke in last Sunday's first round of national elections. In Germany, the government of Chancellor Helmut Kohl plans to take the extraordinary step of using an obvious accounting gimmick -- booking a quick profit by revaluing gold reserves -- to reduce a ballooning deficit. Behind both events is one thing: the euro, the single European currency that is scheduled for 1999."
WALL STREET JOURNAL EUROPE: Is monetary union dead?
In en editorial today, the paper calls the French early elections and the German gold rush "two of the most colossal acts of political misjudgment in recent European history."
The editorial says: "Brussels basked in unusually warm weather yesterday. But that scent wafting through the air wasn't spring flowers, but sweating European Commission officials. Was monetary union, they worried, dead?"
INTERNATIONAL HERALD TRIBUNE: New doubts arise about the viability of monetary union
The paper carries today a news analysis by John Schmid in Frankfurt. Schmid's assessment is that euro advocates have real grounds for worrying. He writes: "The dispute over deploying the gold reserves of Mr. (Hans) Tietmeyer's Bundesbank appeared to have thrown Europe's single currency project into the deepest doubts yet."
Schmid writes: "In an unusually forceful statement, the Bundesbank late Wednesday warned that a revaluation of the gold reserves, accompanied by a transfer of the book profits into the government's accounts, risked 'a loss in trust in the stability of the future European currency.' "
The writer adds: "Because currency union has never had much support among ordinary Germans, any further weakening of public trust raises the specter that the government will be unable to muster support for monetary union and raises new doubts about the viability of the entire project."
WALL STREET JOURNAL EUROPE: The balance could tip in favor of European currencies
In another analysis in the same newspaper, Erik Ipsen writes: "Fresh doubts over the shape of Europe's planned economic and monetary union fueled strong speculation but little actual price movement yesterday, reflecting what traders say is a potentially volatile new polarization of sentiment within the currency markets."
Ipsen says: "The German government's preference for balancing its books with smoke and mirrors, rather than spending cuts and tax rises could indicate that the era of government belt-tightening has ended, some analysts said. If true, that would mean that interest rates on European bonds could be heading up, making Europe's currencies more attractive to hold. That argument could help to tip the balance in favor of the European currencies."
WALL STREET JOURNAL EUROPE: Germans are becoming Italian
Former Italian Foreign Minister Antonio Martino, an economist, quipped about the German accounting shuffle: "Virtue isn't contagious. On the contrary. We aren't becoming German. It's the Germans who are becoming Italian." He's quoted in today's edition.
LONDON INDEPENDENT: The Italian leadership is rubbing its hands in glee
"Europe Reels as Kohl Goes for German Gold," reads a headline in today's edition. In the ensuing news analysis, Sarah Helm writes from Europe that members of the European Commission are striving to sustain monetary union momentum. She says: "The commission has yet to make a ruling on whether the German plan to revalue gold reserves would contravene Maastricht (Treaty) rules." She writes: "The Italian leadership, though saying little in public yesterday, were reported to be rubbing their hands in glee, knowing that in the future it will be harder for Bonn to criticize Italian accounting maneuvers or to reject Italy's application for membership in the first wave."
LONDON INDEPENDENT: The German government is accused of creative accounting
There is such a universal need for the concept of schadenfreude -- the German compound word meaning taking pleasure in others' misfortune -- that may other languages have adopted. The paper today applies the description to the reaction of Mediterranean nations to the German discomfiture. The newspaper says in an editorial: "Break open a bottle of Best Schadenfreude and celebrate Helmut Kohl's troubles. It is impossible not to enjoy the comedy of national stereotypes confounded. The German government, which has been lecturing slippery Italians and slapdash Spaniards on the sober virtues of double-entry bookkeeping, has been accused by the Bundesbank of creative accounting."
LONDON DAILY TELEGRAPH: The Bundesbank probably killed the euro and Kohl's career
Writer Andrew Gimson comments today from Berlin that the very survival of the euro is threatened. The newspaper headlines his commentary, "The Devaluation of Kohl." Gimson writes: "On Wednesday night the Bundesbank probably killed the euro. It may well have killed Chancellor Helmut Kohl's political career, too."
Gimson comments that Germans "regard the Bundesbank as the finest incarnation of German self-government." He says: "That is why it is far more popular than the country's so-called democratic politicians, many of whom what to transfer power to Europe."
The writer constructs a colorful, if ungenteel, simile. He says: "The way the Bundesbank has defended itself is beyond praise. It has behaved like an alert and valiant old lady who tires to repel a rapist by appealing to his sense of honor, and shoots him only when he proved not to have one."
LONDON DAILY TELEGRAPH: The German government wants to revalue the gold reserves
In an editorial today, the same newspaper says bluntly: "EMU Must Die." The editorial says: "Germany, whose strong currency has been a benchmark for the rest of the Continent, is rocked by a dispute between the government, which wants to revalue the gold reserves in order to reduce the public deficit, and the Bundesbank, which argues that revaluation should be its prerogative alone."
LOS ANGELES TIMES: Germany is normally viewed as a bastion of fiscal probity
Mary Williams Walsh writes in a news analysis today that the German government's proposed revaluation is in trouble, not so much for its economics, which may be sound, but for its timing and execution. She says: "Mainstream economists say there is nothing inherently wrong with (German Finance Minister Theo) Waigel's proposal; in fact, Germany now uses gold valuation methods that are far more conservative than (those of) any other nation in Europe. But the finance minister's timing could not have been worse. He made his suggestion earlier this month, just after a commission reported that Germany's 1997 tax revenues would fall so far short of projections that Germany probably wouldn't qualify for the much-desired currency union. So he instantly aroused suspicion that Bonn was trying to cook the books, and tainted the international credibility of a country normally viewed as a bastion of fiscal probity."