Excerpted with permission from the publisher, John Wiley & Sons, from BUST by Matthew Lynn. Copyright 2011 by Matthew Lynn.
Now We Are TenOn January 13, 2009, Jean-Claude Trichet, president of theEuropean Central bank, traveled to the Strasbourg to givea lecture celebrating the tenth anniversary of the euro. It was apleasant, downbeat occasion. Over much of its short existence, Europe'ssingle currency had been a bitterly contested, viciously fought-overcreation. Over prolonged European summits it had been argued oversavagely by a whole generation of political leaders. Careers had beenmade and broken. Referenda had been played out across Europe, and,as the votes were counted, the fate of the project regularly hung inthe balance. As preparations were made for its introduction, the globalfinancial markets poured endless buckets of scorn on its prospects forsuccess. As the notes and coins were introduced from Bavaria to Lombardy,from Catalonia to Provence, shopkeepers turned up their nosesat this strange, foreign money, a garishly colored imposter creepinginto their tills. And as it made its debut on the markets, it was treatedmuch as the new fat boy might be at a rough school: an object to bekicked around and bullied, mainly for the amusement of the biggerand nastier children. And yet, even at the tender age of 10, it appeared to be approachinga kind of calm, middle-aged serenity. If it was possible for a currency topull on a cozy pair of slippers, make a cup of hot chocolate, pull itselfup by the fire, and start reading the gardening supplement in the newspaper,then that is what the euro would be doing. And that mood wasvery much reflected in the tone of Trichet's speech to the EuropeanParliament that afternoon. "For decades, the single European currency was merely an ideashared by a few people. Many others said that it could not be done, orthat it was bound to fail," said Trichet.
Today, the single currency is a reality for 329 million citizens.The creation of the euro will one day be seen as a decisivestep on the long path toward an "ever closer union" amongthe people of Europe.Since the introduction of the euro, fellow Europeans haveenjoyed a level of price stability which previously had beenachieved in only a few of the euro area countries. This pricestability is a direct benefit to all citizens. It protects incomesand savings, and it helps to bring down borrowing costs, thuspromoting investment, job creation and prosperity over themedium and long term. The single currency has been a factorof dynamism for the European economy. It has enhancedprice transparency, increased trade, and promoted economicand financial integration within the euro area and with the restof the world.Indeed so. Trichet is in many ways the perfect Mr. Euro. Asmooth, articulate French intellectual, he speaks with the calm authorityof a fiercely intelligent technocrat. You could interrogate the manfor weeks and not force him into a single error, slip, or gaffe. Over acareer spent pushing for the closer integration of the European nations,he sometimes appears to have transformed himself into a living embodimentof the ideals he strives to articulate: a kind of Franco-Germanunity turned, with surprising success, into flesh and bone. Like allFrench political and intellectual leaders, his speeches and press conferencesare often elaborately erudite, laden with cultural, historical, andliterary references. In the manner that only French officials can achieve,he is never afraid to make the connections between poetry and centralbanking (Goethe and Dante turn out to be among the influenceson the European Central Bank's decisions on interest rates, in caseyou were wondering). But he has also assumed a Teutonic rectitudeand sternness. He is never shy about imposing a very German viewof financial conservatism on Europe. He discusses thrift and balancedbudgets as matters of morality as well as economics and bookkeeping,in a way that plays better in Bavaria or Saxony than it does anywhereelse in Europe. He is well aware that money is as much a matter ofnational identity as a medium of exchange, and perhaps more so. Theeuro could have no better champion.