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Saturday, September 11, 2010

His Holiness Jean-Claude Trichet

I am sure that Joseph Ratzinger truly believes in all of the mysteries and miracles of the Church. Similarly, I think that Trichet truly believes that all is well in the eurozone, and that the turmoil of the past year revealed no flaws in the design of the eurozone.

The FT had a big interview with Trichet in Friday’s paper, in which he is quoted a saying:
I don’t think that the euro area was close to disaster at all--seen from the inside. I know how Europe functions. It’s always difficult for external observers to judge and analyze correctly the capacity of Europe to face up to exceptional difficulties.

To his credit, Trichet does not invoke the doctrine of infallability, but one has to admire his condescending assertion that foreign observers, unindoctrinated into the Mysteries of the Eurozone, can never understand how Europe works. It almost feels as if we were back at the MoF in Tokyo in 1989: "Japanese stock market always goes up!"

You foreigners cannot understand how smooth and uncontentitious the Greek bailout was! You are focusing too much on credit spreads! Those are foreign metrics! Go back to your fact-based Anglo-Saxon mentality and fix your own problems.

The FT slyly published alongside the interview Eurozone government bond yields, showing the Hellenic Republic in deep-junk territory at 12%, versus the Federal Republic at 2%. I wonder why those spreads are so divergent when the crisis is behind us and the Greek problem has been solved?

Unfortunately, being a foreigner (and an Anglo-Saxon one at that), I will never be able to understand these mysteries. As the nuns used to teach in religion class “Mysteries require faith.”

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