Bluffing and burbling
NOW THE game of bluff has shifted to the French franc, and the stakes are rising. If played by central bankers' rules, this game would require the Banque de France to hoist its interest rates in defence of its cur- rency. France's economy, though, needs higher interest rates about as much as it needs a new ice age — or about as much as ours did at this time last year. So, instead, ministers are professing eternal loyalty to the current exchange rate and hoping that the Germans will bail them out. We tried that, too. How lucky we are to be out of it now. The scene has changed — though you would not think so to listen this week to the steady burbling of central bankers and finance ministers and sherpas and Euro- crats, all pretending that Europe is on the high road to monetary union as if nothing had happened. The European finance council (ministers) looked forward to wel- coming sterling back into the exchange rate mechanism. The European monetary com- mittee plans a meeting of sherpas on Mon- day, to work on preparations for the next stage of monetary union. The central bank governors solemnly warned that Europe's governments would risk undermining confi- dence in the process of monetary union as laid down at Maastricht, unless they kicked the habit of borrowing. Risk? Confidence? Maastricht? Come off it. How much trou- ble, though, the French could have saved themselves and the rest of us (including all those country noblemen who had to come up to the House of Lords on a Wednesday, thus messing up two week-ends) if their own referendum had edged the other way —or if all those oui votes had not been found on Reunion Island. R y a dix moil que j'ai dit au peuple francais: votez non, votez souvent. Quel dommage, quoi?
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