Contratulations to Andrea Terzi for highlighting the fact that Mario Draghi, president of the European Central Bank believes in the confidence fairy. He also seems to believe (equally ridiculous) that Europe can export its way out of trouble.
For the uninitiated, the “confidence fairy” is a somewhat sarcastic name given to a common belief amongst economic conservatives, namely that a stiff dose of fiscal responsibility will result in such a surge of confidence in a country, that its problems will be solved in short order.
Yes, you can see the beneficial effects of the confidence fairy in Greece – I don’t think.
But it gets better: Draghi also thinks employment will rise in Europe if Europe becomes more competitive. Er . . . that will just destroy jobs elsewhere in the world won’t it? Or more likely, the result of increased exports from Europe to the rest of the world will raise the value of the Euro relative to other currencies which will bring trade between Europe and the rest of the world back into balance. The words “back”, “where” and “started” spring to mind.
Still, if you are captain of a sinking ship, I suppose you have to sound cheerful. Though what good that does, God knows. Being realistic would do more good, I’d have thought.