ECB President Christine Lagarde risks having to incite French ruse over the euro, which includes giving the impression that Germany determines the choice of monetary policy, economist Philippe Simonnot said. Simonnot) explained at the “World” forum
stands. Christine Lagarde’s appointment as president of the European Central Bank (ECB) has prompted some derogatory comments about her abilities: she would not have possessed such an outstanding knowledge of monetary theory and practice, his two Former Jean-Claude Trichet and Mario Draghi. As a result, Ms Lagarde will lack the necessary authority to take on the euro’s fate in the difficult times ahead for the European currency.
This legality trial doesn’t make much sense. In short, Mr. Trichet and Draghi, the self-proclaimed connoisseurs of all currencies, submitted only the 2% inflation standard to the ECB (to ensure prices rise by 2% per year even in a deflationary scenario).
This “2% standard” sneakily succeeded the gold exchange standard, spreading across the face of the planet over a 25-year period, including in countries least willing to create money from scratch. It must be said that it has no theoretical or practical basis (Brendan Brown, The Case Against 2% Inflation. From Negative Interest Rates to the Gold Standard of the 21st Century, Palgrave Macmillan, 2018, untranslated). It will lead to more disasters.
In fact, Ms. Lagarde’s nationality creates problems. As the second Frenchman to lead the ECB after Jean-Claude Trichet, she took the risk and, through her appointment, exposed what should have been hidden, namely that the euro is a French trick. However, this trick will only work if it remains hidden. And, so far, we have succeeded in doing so, because “Popular” convinced the French and Europeans that the euro would be subject to Berlin’s “command”.
To understand this subtlety, it suffices to look back at the last decades of the French franc and the German mark. If there were German directives on currency issues, they would be issued at this time. Raising or lowering interest rates by the Bundesbank would be enough for the Banque de France to immediately be forced to follow suit.
Of course, the term diktat is incorrect. France suffers only from its eternal fiscal contradictions. Our country’s financial aristocracy is also embarrassed to take orders from the German financial circles. A confidential note from the French Ministry of Finance dated 13 February 1992, reproduced in my Nouvelles Leçons d’economie contemporaine (Folio, 2018), is very clear on this subject.