Bernard Connolly

The Rotten Heart of Europe: The Dirty War for Europe's Money
at Amazon

The euro is run in the interest of whichever country faces the biggest problems and
poses the biggest threat to the survival of monetary union at any particular time.
Right now that is Italy,”
Bernard Connolly, a hedge fund advisor and former currency chief for the European Commission, Ambrose Telegraph 22 February 2018

The euro has risen by 17pc to $1.2340 against the dollar over the last year, causing core inflation to fall back to 1pc. The side-effect is to tighten financial conditions in the currency bloc.

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Inte en enda valuta
Bernard Connollys kritik av den europeiska valutaunionen
Johan Hakelius, Timbro 1996

"Euron kommer att leda till ekonomisk katastrof och till att demokratierna i Europa går under.
Det anser brittiske ekonomen Bernard Connolly som bjudits in av nejorganisationen Medborgare mot EMU"
Expressen, 2003-08-25

Oskar Lafontaine, the German finance minister who launched the euro, calls for 'catastrophic' currency to be broken up
"The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt,"
"The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later,"
Daily Telegraph, 2013-05-05

Mr Lafontaine said he backed EMU but no longer believes it is sustainable.
"Hopes that the creation of the euro would force rational economic behaviour on all sides were in vain," he said,
adding that the policy of forcing Spain, Portugal, and Greece to carry out internal devaluations was a "catastrophe".

Mr Lafontaine was labelled "Europe's Most Dangerous Man" by The Sun after he called for a "united Europe" and the "end of the nation state" in 1998.

The euro was launched on January 1 1999, with bank notes following three years later.

He later left the Social Democrats to found the Left Party.

Den engelska ekonomen Bernard Connolly avskedades 1995 som EU-tjänsteman för att han skrivit en kritisk bok om den europeiska integrationen The Rotten Heart of Europe. Connolly hävdar att allt han sagt och skrivit skedde i enlighet med hans anställningskontrakt, eftersom han inte avslöjade någon hemlig information i samband med hans arbete vid kommissionen. Boken skrevs helt och hållet på hans fritid. Dessa fakta har inte ifrågasatts.
Målet har nu behandlats i alla instanser och EG-domstolen kom med det slutliga utslaget 2001 03 06. EU:s högsta rättsliga instans konstaterade i domslutet att kommissionen hade rätt att avskeda Connolly för hans kritik mot kommissionen i syfte att skydda andras rätt och att straffa individer som skadar institutionens anseende och rykte
Interpellation 2000/01:315 av Margit Gennser (m) till justitieminister Thomas Bodström om yttrandefriheten i EU (den 12 mars)

Mer om Bernard Conolly

Europe's Reckless Raid on Cyprus's Savings
Bloomberg, the Editors March 18, 2013

Such an attack on ordinary depositors is unjust, politically obtuse and economically destructive all at the same time. It has rightly fueled popular outrage.

Savers in Cyprus are being asked to give up 5.8 billion euros so that international creditors will provide the remaining 10 billion euros required for a bailout.

Thus will bondholders in London, Frankfurt and New York be spared a haircut.

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Bernard Connolly
Cyprus Isn't Taxing Deposits, It's Confiscating Them
The decision to seize private property means that all assets in the euro zone are at risk,
subject to the whims of politicians as they try to prevent their dream of a united Europe from shattering.
Caroline Baum, Bloomberg, March 18, 2013

In 1995, Bernard Connolly published "The Rotten Heart of Europe: The Dirty War for Europe's Money," a first-hand account of Brussels' bureaucrats attempt to create a monetary union in what was hardly an "optimal currency area," as described by Nobel laureate Robert Mundell.

Connolly, who was head of the exchange rates and monetary policy unit of the European Commission from 1989 to 1996, was summarily dismissed from his post. He's been an outspoken euro-skeptic ever since.

As the EU is rattled by its umpteenth crisis since Greece announced it was cooking its books in 2009 - this time by a country whose annual output is a mere 0.2 percent of the euro zone economy - he has proved to be prescient.

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"The Rotten Heart of Europe: The Dirty War for Europe's Money," Ny upplaga


Bernard Connolly är en av vår tids hjältar.
I dag intervjuas Connolly i Wall Street Journal om hur han ser på eurons framtid.
Den akuta kris som utlöstes för några månader sedan berodde på att Europeiska centralbanken vägrade stödköpa italienska statsobligationer.
Skulle banken åter köpvägra är krisen här igen - innan Herman von Rumpoy hinner säga flasklock. 24 februari 2013

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Seventeen years ago, Bernard Connolly foretold the misery that awaited the European Union.
Given that he was an instrumental figure in the EU bureaucracy and publicly
expressed his doubts in a book called "The Rotten Heart of Europe," he was promptly fired.

Mr. Connolly takes no pleasure now in having seen his prediction come true.
Wall Street Journal 22 February 2013

And he takes no comfort in the view, prevalent in many quarters, that the EU has passed through the worst of its crisis and is on the cusp of revival.

As far as Mr. Connolly is concerned, Europe's heart is still rotting away.

The European political class, he says, believes that the crisis "hit its high point" last summer, "because that was when there was an imminent danger, from their point of view, that their wonderful dream would disappear."

But from the perspective "of real live people, and families and firms and economies," he says, the situation "is just getting worse and worse."

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What will happen to the euro?
The Stability Pact – intended to make EMU governments run prudent budgets – is losing its credibility.
This essay asks the question: what will happen if national debts start to rise again and some governments then have difficulty borrowing?
It suggests that there will be calls for bailout, that the EU’s political structures will not cope well with the resulting arguments
over which countries will pay,
and that the eventual and painful result will be the re-establishment of national currencies.
Bernard Connolly and John Whittaker, 3 October 2002, revised 6 November 2002

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Let us think the unthinkable:
Could the eurozone disintegrate?
The answer is yes.

If /Italy/ fails to rise to the challenge it confronts, a default or even a forced withdrawal
from the eurozone is perfectly conceivable.
Martin Wolf Financial Times 25/5 2005

Bernard Connolly, a notorious opponent of the monetary union, even argues that the debt ratio will explode upwards, given the low inflation Italy needs and the declining potential rate of growth that Italy also has
(Italy and monetary union: voyage of the damned, Banque AIG, May 18 2005.)

Circle of Barbed Wire
By Bernard Connolly (2004)
author of "The Rotten Heart of Europe: The Dirty War for Europe's Money"

The EU "constitution" has been put forward by a body known, in a deliberate and rather disgusting parody of the Philadelphia Constitutional Convention, as the European Convention. Its chairman was Valéry Giscard d'Estaing, a former French president so ineffectual that he was easily defeated in 1981 by Francois Mitterrand.

Giscard was one of the two men primarily responsible for that Doomsday Machine, the ERM, a mechanism both economically perverse and politically perverted, in 1978. And, together with its other progenitor, Helmut Schmidt, he had never cloaked his ambitions. When the two men visited Aachen, seat of the empire of Charlemagne, and set the seal on their personal agreement on the ERM, Giscard remarked, "Perhaps when we discussed monetary problems, the spirit of Charlemagne brooded over us."

The appeal to French élites of a technocratic, Franco-German economic cooperation, aimed at defeating what was seen as the threat of American hegemony, had been evident throughout the interwar years as well as during the Vichy period.

From the inspiring work of Michael Novak, the preeminent American Catholic neo-conservative political philosopher. In his 1991 book, The Spirit Of Democratic Capitalism, published just after the fall of Communism, he wrote that
"One of the most outstanding characteristics of our age is that ideas, even false and unworkable ideas, even ideas which are no longer believed in by their official guardians, rule the affairs of men and ride roughshod over stubborn facts.
Ideas of enormous destructiveness, cruelty, and impracticality retain the allegiance of elites that benefit from them. The empirical record seems not to jut through into consciousness to break their spell. The class of persons who earn their livelihood from the making of ideas and symbols seems both unusually bewitched by falsehoods and absurdities and uniquely empowered to impose them on hapless individuals."

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Don’t throw away freedom to a Euro-superstate
Bernard Connolly The Irish Times, 2001-12-31

Interpellation 2000/01:315
av Margit Gennser (m) till justitieminister Thomas Bodström
om yttrandefriheten i EU
(den 12 mars)

Euro-court outlaws criticism of EU
By Ambrose Evans-Pritchard
in Brussels
Daily Telegraph 2001-03-07
THE European Court of Justice ruled yesterday that the European Union can lawfully suppress political criticism of its institutions and of leading figures, sweeping aside English Common Law and 50 years of European precedents on civil liberties.
The EU's top court found that the European Commission was entitled to sack Bernard Connolly, a British economist dismissed in 1995 for writing a critique of European monetary integration entitled The Rotten Heart of Europe.

Bernard Connolly, Europe’s most persistent prophet of doom
“The current policy of lending plus austerity will lead to social unrest,”
Mr. Connolly told at a conference held this spring, arguing the case that
Greece, Italy, Portugal and Spain could not simply cut their way to recovery.
New York Times, November 17, 2011

Mr. Connolly has been warning for years that Europe was heading for disaster. As a European Union economist in the early 1990s, he helped design the common currency’s framework, but then he was dismissed after he expressed turncoat views.

Now, as the European debt crisis that began in Greece threatens to engulf even France along with Italy and Spain, Mr. Connolly’s longstanding proposition that the foisting of a common currency upon so many disparate nations would end in ruin is getting a much wider hearing. Hedge funds looking to bet on a euro zone breakup scour his research reports for insights.

In 2008, Mark Carney, the governor of the Canadian central bank, cited the British-born Mr. Connolly, along with the far more prominent Nouriel Roubini of New York University and the Harvard economist Kenneth S. Rogoff, as having been among the few who foresaw the global financial crisis.

To be sure, Mr. Connolly was not the only analyst who raised early warning flags about the euro project. Economists like Martin Feldstein of Harvard and Paul Krugman, "a Princeton economist who writes an Op-Ed page column for The New York Times", have been longtime critics, as were many experts in Britain, which has long been skeptical of the euro.

But few have gone on to devote more or less their entire professional career to exposing Europe’s monetary fault lines.

The origins of that fear, as well as the anger and passion that drive him, date to 1995, when he took a leave from his job with the European Commission to write “The Rotten Heart of Europe.”

The book was an excoriating history of the failure of the euro’s predecessor, the European exchange rate mechanism.

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Don’t throw away freedom to a Euro-superstate
Bernard Connolly The Irish Times, 2001-12-31

Bernard Connolly is a former senior official in the EU Commission and author of The Rotten Heart of Europe which argued against the euro project.

So here they come, those bits of paper adorned with fictional bridges (what a splendid reminder of the roads and bridges from nowhere to nowhere on which EU taxpayers’ money is so shamefully and shamelessly wasted).

You’d better not try to forge them, for that would be a federal offence, and come 2004 the eurocops will come and get you, literally, and there would be nothing the Irish courts could do to protect you: no habeas corpus, no presumption of innocence, no evidence required before you are whisked off to the Continent for unlimited “investigative detention”, no trial by jury.

The euro is a part of the design to extinguish freedom in a European empire. The introduction of euro notes and coins has practically no economic significance. But its psychological importance will be considerable.

It will bring home to the Irish people that the Rubicon was crossed nine years ago when they were led blindfold into the Maastricht referendum trap, beguiled by the Yes campaign’s siren song of “six billion pounds”.

Ireland really did sell its birthright for a mess of pottage. It sold itself into euro-slavery that day. Now the euro notes, tokens of bondage, are here.

It’s ironic that this final humiliation should come just a few days after Argentina was reduced to riots, 27 deaths, debt default and a state of siege.

What Argentina is suffering now, Ireland will very likely suffer over the next two or three years.

Argentina in effect did in 1991 what Ireland has done. It gave up an independent currency (admittedly a hyperinflationary one, an excuse that the Irish government did not have), locking the peso one-to-one with the dollar.

In the early years of this regime, the dollar was falling, making Argentina’s exports competitive, and US interest rates were low, boosting Argentine spending.

This created several years of boom and allowed the country’s public debt to fall to levels lower than, for instance, Ireland’s.

But when the dollar turned around from 1995 onwards as the US began strong, technology-driven growth, the Argentine economy, which had practically nothing in common with the US, began to suffer horribly.

Three-and-a-half years of recession and ballooning debt preceded financial collapse, social distress and political upheaval.

Why could Argentina not simply devalue its currency, as Ireland did so successfully in 1993? Because most Argentine firms and families had taken out loans in dollars. Devaluing the peso would make it much harder for them to repay those loans, bankrupting many.

From January 1st, 2002, even the blindest will be able to see that Ireland has no way out.

Because its economy behaves so differently from the continental economies, sharing a currency and monetary policy with them will, after creating an uncontrollable boom and rising inflation over the past few years, now bring bust, rising unemployment, deflation, falling house prices and bankruptcy.

Even the Commission has just admitted this in its Annual Economic Review.

But even if the lawyers were to say that Ireland could leave the single currency and allow a new Irish pound to depreciate, everyone’s debts would be in euros.

Monetary union in Europe makes potential Argentinas of all the small eurozone countries; those that, unlike Germany and France, do not have the political clout to get the ECB to set monetary policy for their benefit.

Romano Prodi spilt the beans a couple of weeks ago: the euro would create a crisis that would allow the EU to grab a whole set of economic policy weapons that it has so far been politically unacceptable to advocate.

Forget about the Irish people’s rejection of Nice: the EU behaves as though that treaty were ratified. After all, it is only Ireland that has said No, and Ireland can be disregarded.

And in any case the 2004 treaty will simply leapfrog Nice. It will create a European superstate.

That superstate of course, will not be a federation. Blair, France and, though not openly, Germany all favour an intergovernmental political union.

In such a union policies are decided for the whole of the EU by the big three, with a locally-powerful vassal role as local colonial administrators for compliant politicians from the small countries and no place for democracy anywhere.

There is nothing new in this.

The autocratic Charles de Gaulle proposed it in the early 1960s. Germany accepted it; so - enthusiastically - did Macmillan, who had just applied for membership of “Europe” as, he thought, the only way of recovering the privileges of Great Power status for the members of his class.

But the Netherlands vetoed the plan, knowing that an intergovernmental union would mean that the country would again be bossed around by the big boys.

At that time, the Dutch government was run by people who remembered what it was like to have your country ruled by outsiders.

Just think, the decisions on EU arrest warrants will mean that by 2004 Irish citizens will be subject to the laws of every other EU country (and that could include several “former” communist regimes), laws that their own parliament had no hand in making.

Irish freedom was hard-won. It has lasted only 80 years. It is now being thrown away, in defiance of the will of the people expressed in the Nice referendum, so that politicians and bureaucrats can have a share, however tiny, in the intoxicating power of empire.


Ambrose Evans-Pritchard in The Spectator 2000-11-18

The EU is going to extraordinary lengths to protect itself against criticism, writes Ambrose Evans-Pritchard, and at Nice next month will seek new ways of eroding our freedoms

This article is blasphemous. It contains irreverential criticism of the European Union. It brings the European Court of Justice into disrepute, or tries to. It subjects Señor Damaso Ruiz-Jarabo Colomer, the Court’s Spanish advocate-general, to particular ridicule, and does so mischievously in the knowledge that he has a very thin skin.

On the Richter scale of disrespect it is a seven or an eight, and undoubtedly falls under the European Court’s emerging blasphemy doctrine. This deems that political criticism of the European Union and its leading figures can be akin to the most extreme forms of religious blasphemy. It can therefore be suppressed — and punished — without violating protected freedom of speech.

Ruiz-Jarabo Colomer ventured into blasphemy law in an opinion delivered on 19 October in a landmark free-speech case — number C-274/99 P. It involves a British economist, Bernard Connolly, who argues that he was unlawfully sacked from the European Commission for writing The Rotten Heart of Europe.