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The Europa Disconcordia heads for the rocks

by Chris Graeme [email protected]

‘In My View’ is written by freelance journalist and photographer, Chris Graeme, who lives in Lisbon and enjoys subjects such as world economics and politics.  He is also Editorial Director of People & Business magazine.

On the face of it, there is absolutely nothing in common with a state-of-the-art luxury passenger liner hitting the rocks off the coast of Italy and the news that France lost its prized AAA credit rating on Friday 13th.

But then there was nothing particularly metaphorical at the time the Titanic struck an iceberg on a cold April night in 1912 with the loss of over 1,500 lives.

Since then, that emblematic unsinkable liner, which represented the aspirations of all classes in a brave new world, driven by the wonders of electricity and industrial technology, has come to be a byword for the universal folly of mankind and the blind stupidity of a rigid and structured class system, an overconfident business generation and its leaders which, within two years, were embroiled in the worst conflict the world had ever seen – World War I.

They say that history never exactly repeats itself, but some interesting parallels can be drawn from that ill-fated Italian cruise in the Mediterranean on Friday last week, this year’s anniversary of the sinking of the Titanic, and the current ambivalence and lack of coherent strategy shown by the leaders of the European Union over the past 18 months.

The Costa Concordia seems a fitting metaphor for everything that is facing the Eurozone and its captains right now.

A seemingly unsinkable ocean liner, representing various European nations and aspirations – nearly every EU nation was represented on board – charting a seemingly calm and tranquil sea, oblivious to the fact it is steaming on to the rocks.

Once again neither the captain nor the crew have an exit strategy, there are insufficient lifeboats, and those that the ship does have are overcrowded beyond their capacity.

No one on board is prepared for the disaster – all are dressed in evening gowns and tuxedos – and those in charge of the ill-fated liner try and calm themselves and their passengers with a string of lies.

The Eurozone and its single currency were meant to create a solid economic block of trading prosperity, a fortress strong and impermeable to the shocks of currency speculation and market turmoil.

An ambitious project for a brave new world linking the various European ‘ports’ and an oceangoing capacity to strike out into new markets worldwide.

Above all, the Euro project was designed at a geopolitical level to provide a check on any one member of the club becoming too dominating and therefore avoiding another war in Europe.

But just like the preamble to World War I, with its complicated Bismarkian treaties, checks and balances designed to prevent a further war in Europe proved fatally flawed, so the Eurozone and its single crisis too has proved fatally damaged from the beginning.

It is true that many European Union members have instituted a round of bold austerity cuts and budget controls in an attempt to restore market confidence and there have been more serious noises and efforts from European capitals of late.

But the international ratings agencies have not been fooled. While they applaud the efforts to reduce expenditure, they cannot see any concrete efforts at a European-wide level to stimulate growth, productivity and competitiveness.  Hence France’s downgrade on Friday.

No one is seriously fooled, either within France or without, that it has either made the necessary structural changes and reforms to become competitive on the world stage.

And I got so irritated by the Portuguese conspiracy analysts on the news over the weekend claiming that the ratings attacks are some kind of diabolical compact dreamt up by the American and United Kingdom government to scupper the Euro and strengthen the Pound and the Dollar.

The agencies are looking at the growth figures which are almost non-existent in the main Eurozone countries. Without growth there’s no money coming in, and without money coming in, it gets increasingly difficult to service debts. It’s as simple as that.

The Eurozone missed a golden opportunity on December 9, at the European summit, to move forward swiftly to greater European integration and calmer waters. Instead it missed the boat which is fast heading towards the rocks on an uneven keel.

In the drama that unfolded on Friday night and Saturday on the stricken Costa Concordia, we saw almost the same tragedies being played out in the Eurozone. The shining unsinkable project, the ambivalence and lies, the crash, the alarm which came too late, the panic, pure disorganisation dressed up as a rescue plan, and now the threat of passengers being tossed overboard (read Greece and Portugal).

Perhaps the British Foreign & Commonwealth Office might just need an evacuation plan after all.

Do you have a view on this subject? Please email Editor Inês Lopes at [email protected]