CITY AND SUBURBAN
Europe's rude markets relish the collapse of its governments' policies
CHRISTOPHER FILDES
0 h, dear, oh dear, look at the stock markets. They are quite disrespectfully cheerful. In London, share prices have gone through the roof. Even in Paris, sur- rounded by an economy in deepening recession — things are now so bad at EuroDisney that the customers are to be allowed to take to drink — the Bourse has been breaking records. Whence this unseemly levity? Well, markets are notori- ously susceptible to cheaper money. It tick- les them in sensitive places, and as a plea- sure to be anticipated it is at its best. Now they can see it and sense it spreading across frontiers. They live by anticipation — not, of course, always successfully, but it is their metier, and before you disagree with them, you need to know what they think. They now think that they can look forward to the end of the recession in Europe. This time last year, Professor Tim Congdon was asked when we could expect the end of the recession in Britain. 'On present policies,' he said, 'never.' Mercifully, our policies were changed for us by irresistible pressure on our currency. This has now happened to Continental currencies, led by the French franc, and Edouard Balladur, France's Prime Minister, thinks it deplorable. (It has, of course, obliged him to blow all of France's reserves of foreign currencies, and to mortgage the gold reserves, thus falsely alarming the bullion market and horrifying all Frenchmen whose sound natural instinct is that nothing is as good as gold.) So does Philippe Maystadt, Belgium's kingmaker. They blame an Anglo-Saxon conspiracy in the foreign exchanges, and want to see them curbed. Exchange controls? Contrary, of course, to every tenet of the single mar- ket, but the French kept them until Mar- garet Thatcher bullied them out of it, and seem to hanker for them now. Any stick will do to beat a speculative dog with, espe- cially when bitten. I suppose that the Wall Street house of Morgan Stanley must admit to being Anglo-Saxon — positively Waspish, in fact — and here is David Roche, their global strategist, speaking up for an unloved breed.
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