The Daily Telegraph’s Ambrose Evans-Pritchard has been reading Tim Geithner’s new book, and discovers that what Geithner has to reveal about the EU leadership’s attitude to democracy is not very pretty:
The former US Treasury Secretary says that EU officials approached him in the white heat of the EMU crisis in November 2011 with a plan to overthrow Silvio Berlusconi, Italy’s elected leader. “They wanted us to refuse to back IMF loans to Italy as long as he refused to go,” he writes.
Geithner told them this was unthinkable. The US could not misuse the machinery of the IMF to settle political disputes in this way. “We can’t have his blood on our hands”.
This concurs with we knew at the time about the backroom manoeuvres, and the action in the bond markets. It is a constitutional scandal of the first order. These officials decided for themselves that the sanctity of monetary union entitled them to overrule the parliamentary process, that means justify the end. It is the definition of a monetary dictatorship.
Mr Berlusconi has demanded a parliamentary inquiry. “It’s a clear violation of democratic rules and an assault on the sovereignty of our country. The plot is an extremely serious news which confirms what I’ve been saying for a long time,” he said.
There has been a drip-drip of revelations. Italy’s former member on the ECB’s executive board, Lorenzo Bini-Smaghi, suggested in his book last summer that the decision to topple Berlusconi (and replace him with ex-EU commissioner Mario Monti) was taken after he started threatening a return to the Lira in meetings with EU leaders.
I posted about this here and here last year.
While the situation in Italy was not as rosy as Evans-Pritchard goes on to suggest, it is worth remembering, as he points out, that Italy was then “one of the very few EMU (euro zone) states then near primary budget surplus. It was not in serious breach of deficit rules.”
Berlusconi may have burned a lot of bridges by his personal behavior, but his real offense was his willingness to question the suitability of the euro for Italy, something he had, to be fair, been doing for years, and with very good reason. That in turn brings up some rather awkward questions on the topic of how Italy was ever considered eligible to sign up for the single currency in the first place.
Evans-Pritchard then turns his attention to a recent account in the (europhile) Financial Times (itself also well worth a read) detailing how the Greek premier was forced out of office, and how close Greece came to being forced out out of the euro.
He also notes this:
David Marsh from the financial body OMFIF has called for a “Truth and Reconciliation Committee” to expose the abuses that have occurred in EMU affairs from the beginning. Something must be done to hold accountable those responsible for the fateful error of launching monetary union, and for the chronic mismanagement of the project thereafter.
Good idea. It appears likely that the EU parliament will have a much larger euroskeptic component after the election later this month. Those euroskeptics could do much worse than press hard for just that sort of inquiry.
With the lunatics still running the asylum, it might prove very helpful.