THE EU RUBIK'S CUBE

The nights in Brussels are long. The catfights between member states are worrisome. The Cyprus crisis ended by way of a faulty bailout package which is humiliating for Cyprus, objectionable in principle, and ultimately unfair for the middle income depositors. Cyprus is paying a huge price for allowing itself to become an off-shore murky financial safe haven (for mostly Russian interests). Besides, the almost moral shortcomings of an agreement which penalizes the average depositor for the sins of the big ones (who will suffer a big loss)laid bare underlying political fault-lines. Old antagonisms(Mittel-Europa) reappear. They are vicious because they are no longer contained within the Eurozone and set in motion peripheral actors, Turkey and Russia. The so-called German way is resented by some, swallowed by most. Serious problems are aggravated by almost personalized tensions which end up marginalizing the positive and highlighting the negative. One should bare in mind that the plusses still outweigh the minuses. Hardcore economies continue to underpin the credibility of the Euro but further squabbles might weaken this structural strength at a time when the US economy shows a steady, slow improvement. The dollar outshines the Euro while the bears seem to have left their Wall Street hangouts. The bulls are not back yet but they are pushing. The EU is an imperfect model in need of recalibration. It should also do some homework on the more psychological fringes. In the US, the Fed chairman maintains an almost daily routine of financial therapy geared to accommodate the mood in the land. It looked as if the ECB chairman would be following a similar path but lately it has been all politics and little long term vision or reassurance. In situations like this psychological factors play a major role. The public is no longer entertained by the ways of the Brussels bureaucracy and political backroom deals. The EU has to come forward with a Grand Plan, as Jacques Delors did in the past. If the smoke coming out of the EU chapel remains black for too long, the future will not brighten up. This could have very far reaching consequences I rather prefer not considering.