At a speech in Ljubljana on Thursday, Mario Draghi, the president of the European Central Bank (ECB), attempted to counter growing nationalist sentiment with a positive vision of Europe. He initially acknowledged widespread doubt regarding European solidarity: "There is a growing feeling of uncertainty today," he said. "For some people, it no longer makes sense that a closer union is the response to that. One country has even decided that it is better to reverse the process," he added, without naming Great Britain.
In contrast, Mr. Draghi called for improved cooperation to prevent structural weaknesses, which are often obscured by public and private debt. He also said cooperation on fiscal policy should be improved, but he fell short of mentioning a fiscal union.
Mr. Draghi invoked Europe’s past, when increased cooperation brought both peace and prosperity.
Mr. Draghi invoked Europe’s past, when increased cooperation brought both peace and prosperity. He emphasized that the idea of a common currency did not emerge "out of thin air," but was created to solve the problems associated with fluctuating exchange rates. He cited studies that show welfare gains of 10 to 20 percent, and for new euro countries like Slovenia, he pointed out, and gains have been as high as 40 percent.
In his view, the euro is not the problem, but rather the resistance to reform in many countries.
"If a country has low productivity growth due to deep-seated structural problems, altering the exchange rate cannot be the answer," he stressed. He highlighted Germany – perhaps the most vocal critic of his policies – as a positive example. He also cited Ireland. Of course, both have strong export economies and can adjust more easily to crisis situations than countries where the economy is driven by consumption.
With his commitment to community, Mr. Draghi is filling a gap left open by many national and European politicians. He is also following in the tradition of his predecessor, Jean-Claude Trichet, who repeatedly invoked Europe's wealth of culture without using it as a xenophobic battle cry, as has become the fashion in recent years.
Accordingly, Mr. Draghi is fashioning himself as an anti-Trump of sorts. Where the U.S. president seeks to destroy cooperation among nations, Mr. Draghi wants to improve it. Where Mr. Trump uses populist arguments, Mr. Draghi analyzes historical and political relationships and tries to make them understandable beyond a narrow group of experts.
Can he succeed? That depends on how much support he receives – including from those critical of his monetary policy. Indeed, this is precisely what makes for a vibrant democracy. This also appears to be what the Americans have lost: the ability to continue to work together despite differences of opinion.
Frank Wiebe is a New York correspondent for Handelsblatt, covering finance policy. To contact the author: [email protected]