Edwin Drood's Column - Let them eat quiche!

“It’s just a jump to the left” is how The Rocky Horror Picture Show’s narrative voice, the criminologist played by Charles Grey, recommends that we begin to dance the ‘Time Warp’. His advice, like much else that has been time-warped, is neither timely nor appropriate in 2012. However, this does not prevent it from being most heartily followed, first by France, with the election of boutique socialist François Hollande, then the UK, as the Tory/Lib-Dem alliance takes a cold bath at local elections and then – of course, how could it be otherwise – Greece, which has managed the political parlour trick of rewarding just about anyone who opposes reform, whether from the extreme left, extreme right or extremely soggy centre. Horses for courses, my aunt Fanny!

Because, at least on the surface of things, one would be hard-pressed to find a worse time for propounding the soft doctrine of welfare socialism, but people are bleeding to death and such broad and comforting ideas offer solace. Though Monsieur Hollande, with his Bennish pedigree, his airbrushed-on Mitterand gestures and his bland, wonkish manner, hardly seems the type to throw cake to the howling masses, he may very well manage a tray or three of quiche before la Grande Nation finally goes bottom up and joins Spain in relegation to the little league.

Europeans jumping en-masse to the left to bring in those parties who traditionally public-spend their way out of everything is surely a sorry sight for anyone who still wants to believe that parliamentary democracy, as currently practiced, may yet have a future. For it is abundantly clear to even the most optimistic observer that nothing less than a heavy dose of salts and any amount of elbow grease is going to do the trick, if indeed there is even a trick left to be done. Meanwhile, the only purveyors of salts and elbow grease are all on the right, some of them very far, and they are beginning to get out the enema syringes and pull their rubber gloves on.

Mary Poppins would say “spit spot” and tell us that the only way to get a nasty job done is to turn it into a game we can all enjoy: ‘National Central Bank Rounders’ or ‘Pass the Debt Parcel’. Unfortunately, Angela Merkel looks not a whit like Mary Poppins and is not about to go dispensing any spoons of sugar with her medicine. The Greeks are well aware of this and for once are keeping their mouths firmly shut. One thing is certain, if Merkel is trounced at the polls as brutally as Cameron and Clegg’s provincial colleagues, they’ll be dancing the Time Warp all night long in Syntagma Square. After which, the deluge: for not only will Greece be the death of modern democracy in Europe if they default and leave the Euro, but they will also take the entire system down with them. To imagine that the single currency can survive when every major stakeholder is already hedging his bets is a foolish illusion.

My friend Jean-Michel, who exercises his keen mind in retirement with questions of economy in the largest sense, takes an uncharacteristically relaxed view of all this. He argues that since most of the European governments privatized almost everything that was formerly considered res publica in the 1980s, thereby rendering null and void the complex social contract that was the pride of successive socialist administrations, and since these same governments have, at least in recent years, effectively nationalized many of the great but tottering financial edifices that were formerly private, keeping them afloat, nay, even rewarding them with our hard-earned taxes and thus reneging on the fiscal conservative idea of a balanced budget as the sole laudable goal of monetary policy, then it matters not whether we are ostensibly ruled by the left or the right or the centre, as the gargantuan tail will continue to wag the dog until that poor animal dies of shaken baby syndrome.

As for the possible collapse of the Euro, J-M has come up with a wizard ruse for overcoming or warding off that peril. He argues that, beginning in the days when the gold standard proved too restrictive for international growth and we all freed up our money supplies at Bretton Woods, the ‘pass the parcel’ method of financial management has grown to become the panacea for all monetary inadequacies. However, that panacea is no longer a universal healer, but is increasingly seen today as little more than a placebo: relying on everybody else’s good health for its medicinal value and only effective so long as all concerned, whether sick or healthy, firmly believe in it. Since the current system is woefully inadequate and a return to the gold standard would be unthinkable in the face of today’s ferocious global economy and over-extended capital supply, J-M thinks we need to find a new ‘middle way’. His suggestion would be to launch a parallel “hard” Euro in silver and gold coins of 250 and 750 Euro denominations. This second front would work as a reserve or “bankable asset currency” to back up and hedge the soft Euro that we all still need to use as our daily exchange medium.

Neither socialist Polyanna nor reformist Poppins, Jean-Michel’s plan might just have the legs to stave off the demise of a currency that still represents the ideal of a strong Europe and, moreover, it may offer an alternative reserve to both the floundering US Dollar, laden with dark political cargo, and the Pirates of Penzance Pound Sterling of those buccaneer Brits. As the world’s largest public gold reserve holder, these latter would anyway stand to gain from the proposal. Jean-Michel’s half-hard, half-soft Eurolution could considerably slow down the capital flight of those investor nations and multinational companies (even European ones!) who are currently falling over each other to disburse their Euro-credited assets and transfer their Euro accounts to safer harbours.