The European CommissionBELGIUM
18th January, 2012
Dear Hedge Funds, Financial Speculators and Bloggers,
Euro-Area members wish to thank you for your support through these difficult times.
As you know, thanks chiefly to munificently-expansive fiscal and monetary policies, in other regions (Japanese ZIRP, American near-ZIRP and their respective persistent fiscal yawns), compounded by the Chinese desire for reserve diversification and insuring an attractive quasi-pegged exchange rate, we Europeans have been living with a significantly overvalued currency for the better part of the past decade. This has undoubtedly been difficult for much of both labour and export related industries across the community (though not nearly as difficult as the eye-popping pain suffered by Swiss, Norwegian and Swedish non-commodity exporters. Your concerted actions against the Euro, in both words and positioning, have been unbelievably helpful in relieving some of the pressure from over-valuation, and for this we thank you.
Currency strength has not been without its benefits. We have been able to fill our shopping trollies with all manner of consumer goods, at prices and in quantities heretofore undreamt. It has allowed our enterprises to acquire assets, plant and equipment abroad at attractive prices that will serve our business' future production and distribution needs. Finally, as our Calvinist forefathers philosophized "What doesn't kill you makes you stronger", and trying to export out of the EU at USD1.50 indeed came very close to killing us (and sadly remains challenging for Urs, Lars and Sven respectively). But it did encourage meaningful leaps in productivity and efficiency gains in manufacturing processes and services. And thanks to high energy taxes, our sensitivity to energy prices is greatly reduced thanks to our alternative energy investments and higher efficiency vehicle fleets running on diesel. While the latter leaves us in a better position than had our industrial and energy policies been directed by rent-seeking interests and industries (as in the Anglo Saxon Countries), the time had clearly come to unshackle ourselves, and pursue more aggressive growth policies by every means possible.
We also wish to thank you for highlighting the flaws in our financial framework left unfinished from our first go at Maastricht. These were bound to be fleshed out at some point, and the Commissioners wish to express their gratitude for taking such a focused interest in our future monetary affairs. Your attention has been most welcome by helping us achieve what we, ourselves, have been unable to do: encourage the ECB to broaden its mandate and to move the exchange value of our common currency back towards more competitive levels - one that will help boost our growth and employment and find new markets which can afford our substantial selection of food, fine wines, well-made manufactured goods and first-rate services, in addition to making the Euro-Area a destination-of-choice for newly-minted tourists the world-over.
Indeed, far from being a nuisance as some now-departed civil servants might have let slip in haste, your aggressive intervention in our affairs has been of great assistance in helping us focus upon what needs to be done. Of course amongst the cacophony, there have been wing-nuts and the self-serving with much contradictory advice (urging us at once to borrow less, devalue, spend less, spend more, borrow more etc.). Confusing as this has been, it has helped us focus upon our issues and policy weaknesses, and what is important to us, helping us, finally, embark upon changes sorely needed such as those related to pension reform, fiscal adjustment, greater financial integration and significant labour market reform. In fact your attentions and the fear of the abyss where you've been herding us, has helped leaders rally a political support necessary to overcome parochial political opposition that has been the been a chief obstacle to change. Indeed, thanks to you, the EU will achieve first-mover status in many such reforms, which interestingly, neither Japan, nor the the American Union have been able to make either in reducing primary deficits or reining in future liabilities. Finally, your valuable input has kept us consistent with our new motto: "Doing the right thing for YOU....after exhausting all other possibilities!".
We recognize that for many of you, labels like "altruist", "communitarian", or even "do-gooder" are shunned lest they sully an otherwise pristine reputation for selfishness and greed. But in this case, there is no denying that in applying your version of "tough love", you have helped the people of Europe, and for this we wish to express our gratitude.
The European Commissioners
P.S. - While we are thankful, and hopeful of your continued support in
dissing the EUweakening the Euro further to levels more sympathetic with PPP, please do not think we will relent in trying our best to prevent you from gaming politically hard-fought solutions to our present difficulties.
P.S.S. - If you are a hedge fund manager buying Greek Debt and making a fuss to be paid 100% of face, please note irrespective of Schengen, we reserve the right to detain and cavity-search anyone suspected of trafficking. And even if you choose NEVER to come here, you never know when your London->GVA flight might unexpectedly be diverted to Frankfurt. Just saying....