Posted on 05/31/2005 7:47:49 PM PDT by quidnunc
Frankfurt, Germany – France's rejection of the European Union constitutional treaty by a majority of 54.9 percent is a severe blow to European integration and threatens to depress European economy back into eurosclerosis as in the 1980s, warns Deutsche Bank in a research analysis published Monday.
"Financial markets have put pressure on the euro. The new member states, and particularly Turkey, are at risk of being affected in terms of an increase in exchange rate volatility and a widening of interest rate spreads," warns the report by Germany's biggest bank.
"Financial markets were influenced by the prospect of a French no even in the run-up to the referendum, in particular in the form of a weaker euro vis-à-vis the dollar. While interest rates in the euro area are more or less stable after the French no, the exchange rate remains under pressure," Deutsche Bank says.
Speculation among some observers that the French no may put the European monetary union at stake are exaggerated, the bank emphasizes. All 12 member countries are firmly committed to the EMU. A break-up would not only involve enormous costs in terms of lower growth due to dampened trade and higher interest rates, but also in terms of the technical costs of changeover.
"The no vote is seen as strong opposition to further enlargement. This would hit above all Turkey," the reports adds. "The rejection weakens President Chirac and the French government. France is likely to keep a low profile on domestic and European policies until presidential elections in 2007. French-German relations will become less close and more complicated."
-snip-
(Excerpt) Read more at washingtontimes.com ...
He's their only hope!
Not Obi Wan Kenobi?
Western Europe must hire Arthur Laffer immediately. He's their only hope!
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Well, Karl Marx might help, but even the EU-DUs are not buying socialism and integration. They want their freedom, their soverignty, and their national culture. Gee, that would sure be nice RIGHT HERE AT HOME!!!
In other words, the Euro was created on a fiction, that Europe would not only inevitably, but on schedule, unite.
Not entirely. There is an advantage to having a common currency -- although there are problems, too, since the separate countries have to have a common fiscal approach.
It's the fault of the damn Anglos!
Sniff, sniff, waaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa...
Looks like French power is diminished and will continue to decline as long as Chiraq is in office.
It is a very chilling article really. They seem to be saying that Brussels should continue with integration, find some way to mollify the public and wait for better times. The notion that the public really does not want further integration does not seem to enter in to it.
They want their freedom, their soverignty, and their national culture
Gee, how novel. Afterall, the French sure didn't want the Afghans and Iraqi's to have that opportunity. Maybe they are getting a taste of what they wanted those folks to continue to live with.
But having a common fiscal approach in practice necessitates having a common political approach... at least in the implementation the socialists had in mind.
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