Should Europe’s top banker be comparing the euro to an Australian bird?
You’d think he would have learned from the Great Bumblebee Dustup of July 2012. In a speech in Milan on Thursday, European Central Bank chief Mario Draghi employed a rather odd metaphor in arguing that Europe’s monetary union will outlast the sovereign debt crisis. Invoking euro architect Tommaso Padoa-Schioppa, he likened the euro to the ...
You’d think he would have learned from the Great Bumblebee Dustup of July 2012.
In a speech in Milan on Thursday, European Central Bank chief Mario Draghi employed a rather odd metaphor in arguing that Europe’s monetary union will outlast the sovereign debt crisis. Invoking euro architect Tommaso Padoa-Schioppa, he likened the euro to the emu, an ostrich-like bird native to Australia:
As you know, in recent months I have repeatedly stressed the irreversibility of the euro. This was precisely the sentiment of one of Tommaso’s most noted quips. Speaking in 2004 about the "EMU," an abbreviation for Economic and Monetary Union, he remarked that it was also the name of an Australian bird rather like an ostrich. And he added: "Neither of them can go backwards."
It’s particularly surprising that Draghi would go down this path considering that back in July, he took a fair amount of heat for comparing the euro to a bumblebee (admittedly, his pledge in the same speech to do "whatever it takes" to save the euro got a bit more attention):
The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does. So the euro was a bumblebee that flew very well for several years. And now — and I think people ask "how come?" — probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what after the financial crisis. The bumblebee would have to graduate to a real bee. And that’s what it’s doing.
The remarks quickly spawned headlines like "Crash of the Bumblebee" and "Draghi and his magic bee." Worse still, Jonathan Neal, an insect expert at Purdue University, demystified bumblebee flight, noting that the insects fly because of their rapidly beating wings. And he argued that Draghi was unintentionally making a pretty pessimistic prediction about the debt crisis by awaiting the euro’s transformation into a "real bee."
Honey bees and bumblebees are different species. Species don’t magically transform. A better metaphor would be, "If we wait for a bumblebee to magically transform into a honey bee, we will wait a long time. Applying this metaphor to the Euro, "It will be a long run before the Euro magically transforms from a Bumblebee Euro to a "real bee" Euro." As economist John Maynard Keynes quipped, "In the long run we are all dead."
So did Draghi get the comparison right this time? The Australian government does note that the emu and kangaroo are included in the country’s coat of arms because of a "common belief that neither animal can move backwards easily." But even if the science checks out, emus can’t fly, which introduces a whole new element of confusion into the bumblebee metaphor.
Plus, we learned today that the eurozone has moved backwards — into recession.