Gekko

YOU know the moment when the Bond villain suddenly realizes that his plan for world domination might not work after all? When he pushes a button in his gigantic control room and the machines don’t respond as they should? Something like that happened to the Deutsche Bundesbank at the end of August. The German central bank unexpectedly lowered a key interest rate by 30 basis points. This sort of good news should have caused a rally in the German bond market, which in turn should have taken some pressure off the French. Instead, the German bond, the once mighty Bund, sold off on the “good news.” What happened?

Master plans have often gone badly in Europe at the end of August, and this year was a good example. No armies are wheeling into Belgium. But the hope that European political unity, and the postwar European model of the state, would be saved by European monetary union has suffered serious wounds.

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YOU know the moment when the Bond villain suddenly realizes that his plan for world domination might not work after all? When he pushes a button in his gigantic control room and the machines don’t respond as they should? Something like that happened to the Deutsche Bundesbank at the end of August. The German central bank unexpectedly lowered a key interest rate by 30 basis points. This sort of good news should have caused a rally in the German bond market, which in turn should have taken some pressure off the French. Instead, the German bond, the once mighty Bund, sold off on the “good news.” What happened?

Master plans have often gone badly in Europe at the end of August, and this year was a good example. No armies are wheeling into Belgium. But the hope that European political unity, and the postwar European model of the state, would be saved by European monetary union has suffered serious wounds.