Greece. A Fighting Chance in an International World.

[MANICHAEAN]

I have read increasingly over the last couple of weeks regarding the concern raised by the potential of Greece leaving, or being forced out of the EEC. Well, the bogyman left wing party has just been democratically elected and I really do wonder that if they leave or are forced out, will it be the end of the world for either them or Europe in general?

You see, I’m old enough to be a survivor / observer of the European “Ancien Regime.” No not that one in France before the French Revolution of 1789, but of a post war Europe and the pre formation of the EEC.

Travelling around Europe in those days as a student was an adventure. Well for a start; there were passports that were stamped at every border, crossing the Channel by boat, alien foods like horse steak, schnitzel and something called “vinaigrette” instead of salad cream from a bottle. In Italy it was a mind blowing 1,643 lira to the pound, and the bigger the monetary denomination, the bigger the bank notes, in themselves works of art. The Deutschmark was strong as befitted the Germanic character, the French Franc confusing as there was the old franc and the “nouvelle franc”, and the Spanish bank notes were like tattered worn dirty fragments of the Dead Sea Scrolls.

But I digress into nostalgia once again. Back to Greece. If it leaves, what happens? Well if this Mediterranean race does not come to heel in an expedient manner, then the all-powerful Troika will not supply the bail out money, and Greece will be obliged to leave the euro and print drachmas again. If the new guy at the top gets his act together quickly to put in place restrictions on transferring money overseas, then it will mitigate against a run on the banks. But there will occur anyway a massive devaluation of the new/old national currency.

And then? Well, it might sound simplistic, but then market forces kick in as Greece at one stroke gains a big chunk of competitiveness over its neighbours. It becomes ultra-cheap for holidays and attracts tourists, its labour is cheap so it becomes almost another China, but most of all it turns round to the creditors and says “Can’t pay now / Pay later.” That was not working anyway, a bit like borrowing from Visa to pay MasterCard. The way ahead is still tough for the Greeks, but at least it gives them a fighting chance.

[kiki1982]

I hope this won't come too close to the no politics rules, but here goes.

To me, one thing is clear in this thing and that's that austerity can only go that far. If you have a deficit as a government and you have been throwing the money out through the windows and the doors, then you need to save money. But austerity goes too far if people resort in their droves to food banks, handouts and have to put their children in orphanages because they can't afford them anymore.

A. Goldman Sachs should be strung up because they thought out an accounting formula that allowed the Greek politicians to lie to their people and get into the euro. Not only putting their people before the block now (it's always they who pay for it), but also the rest of the euro countries. Never mind the fact that the euro should never have been got into without an integrated fiscal union, which will never happen. The US was formed in a time when there was almost nothing in terms of 'union', so it wasn't that hard and things developed over time (like income tax). European countries are fully-fledged entities. There is no way Belgium will lower its VAT rate or income tax rates to suit the ones of Luxembourg and vice versa. Luxembourg is not going to increase from 15 to 21% VAT just to please the EU. It's just not possible.

B. There has been some criticism on the IMF's austerity thing, because it would stifle economies. True. Think about it: if you take everyone's money by raising taxes and what have you, the result is that people can't consume and businesses go bankrupt, you've got more people unemployed, even fewer people to consume, you raise taxes again because you can't pay your civil servants, people have even less to consume and the whole thing becomes a downward spiral. Granted, some austerity was to be, but people having to huddle together with whole extended families in one house, queueing up for food in the square for lunch (their only meal) and things, is not how things should be. How long do they think organisations can keep this up from gifts from an impoverished public? 20 years, 50 years?

C. I think the greatest fear for the Eurocrats in Brussels is that Greece says, 'Good bye, we've had enough. Things can't be much worse anyway, so we might as well see what life brings us without this euro.' Then there is some pretty bad turmoil in the beginning (prices rising fast like in Ukraine when they switched to the Russian ruble), maybe Greece declares bankruptcy (which it can't do now), gets its debts (partly) written off, and then the place become attractive again and it will recover, if helped by the government (look at Georgia, it was virtually bankrupt and things have been somewhat improving). So the heavens won't fall on Greece's head and other countries in the euro will say, 'Hey, but you said the heavens would fall on Greece's head, and look they haven't. Maybe we should try this as well.' Germany in the beginning was vehemently against a 'Grexit', but now Angie has been saying that 'it wouldn't be too bad' after all. I wonder what's behind that...

Anyway, something has to happen in Greece before the thing gets to that low a point that it won't recover for the next 50 years. More austerity won't help at all. They might as well take the clothes off people's backs. The younger generation is 50% unemployed. In a normal situation 1 year unemployed at the very beginning of your career means you'll struggle with unemployment for the rest of your life. That's not sustainable. There was a lot of waste with hordes of civil servants who got paid but never went to work, corruption and things. The Olympic Park of 2006 (?) is rotting away and the underground system they refurbished was entirely airconditioned (!), wasting vast amounts of money. Why???

[Emil Miller]

It's an interesting scenario that may set the pattern for Spain, another country suffering massive austerity as a result of EU membership.
Of course, as always, there are two sides to the story. Jolly old Zorba was always good for a laugh and a dance; living life to the full and unlike those po-faced Germans who were too industrious for their own good. It was a pity that he dodged paying his income tax and did a bit of moonlighting on the side but why not? After all he had traded in his own currency for that nice shiny new Euro that was backed primarily by German economic prudence. But when the retsina wore off, he woke up to the reality of economic collapse and bankruptcy.
He had become so enamoured of the Euro that, even though it has become the basis of his present misfortune, he is terrified of returning to his own currency that would now be practically worthless, and so he remains at the mercy of his EU creditors.
It will be interesting to see if the new Greek government is able to get some of its debt written off but that would set a precedent for other EU members on the breadline and is fraught with danger for the powers that be.

For my own part, it's all grist to the mill because I'm also against the bland uniformity that awaits Europe if the Europhiles get their way.

[Pompey Bum]

It becomes ultra-cheap for holidays and attracts tourists, its labour is cheap so it becomes almost another China

I'm hitting the tread mill already. Mykonos here we come! :)

I'm just kidding (but only just). Actually I find a lot of this troubling in macro-historical terms. When you have the kind of situation Kiki describes, in which "The younger generation is 50% unemployed" and "people resort in their droves to food banks, handouts and have to put their children in orphanages because they can't afford them anymore," you have to wonder how long it's going to be until extremists on the left or right acquire a critical mass of the angry and desperate and come to power. (Given fears about European Islam these days, I suspect that it would be the right, but you never know). That could mean, at least in potential, a return to the things that went wrong with the 20th century and left Europe a smoking ruin (and Greece still a battlefield) by 1946.

Fortunately history doesn't really work like that. There are all kinds of last minute minutia that could always send the tumbling boulder one way or another. Nothing is settled. But the problems you mention do not bode well for the way it is going to work out. It's a different century, but remember (not to play the prophet of doom) that things could always be worse this time.

[Clopin]

Of course they need to get rid of the euro. And I believe Golden Dawn is one of Greece's largest parties at the moment, so the political climate is probably a little charged.

[Emil Miller]

IGermany in the beginning was vehemently against a 'Grexit', but now Angie has been saying that 'it wouldn't be too bad' after all. I wonder what's behind that...

Frau Merkel is bluffing because she knows that Greece is totally reliant on EU handouts and if it were to leave the Euro it would have nowhere else to go.
But as Le Figaro has pointed out today, any restructuring of Greece's 320 billion Euro debt would start a contagion in which Spain, Portugal and Ireland would demand similar treatment with catastrophic consequences for the EU.

[Sancho]

Trust in Mario

Agreed, Emil, Spain is certainly starting to sound off against austerity programs. And why not - austerity hasn't worked. And it hasn't worked for a long time. Too long, I'd say. So this year will interesting. Finally last week Mario Draghi announced a program of quantitative easing in the form of a trillion+ € bond buy-back by the ECB, which may breathe some life into the Eurozone, but we'll see, austerity went on for so long it may be the new normal. So, like I said, this year will be interesting.

As for Greece, I don't think they even qualify for QE until July. And unless the Central Bank writes down some of their debt, they'll probably default, which will precipitate their exit from the Eurozone, and that's something Tsipras said he didn't want, and neither does the ECB, or the European Commission, or the IMF for that matter.

So anyway, I'll apply the zero-one principle to this mess - what does that mean to me? From a small investor standpoint, I'm certainly not ready to buy Greek debt, but I'm thinking the Eurozone looks like a great value-buy.

"A THOUSAND DOLLARS ON A SIX - THE HARD WAY"
(to borrow a little lingo from the craps table)

[Emil Miller]

Trust in Mario

Agreed, Emil, Spain is certainly starting to sound off against austerity programs. And why not - austerity hasn't worked. And it hasn't worked for a long time. Too long, I'd say. So this year will interesting. Finally last week Mario Draghi announced a program of quantitative easing in the form of a trillion+ € bond buy-back by the ECB, which may breathe some life into the Eurozone, but we'll see, austerity went on for so long it may be the new normal. So, like I said, this year will be interesting.

As for Greece, I don't think they even qualify for QE until July. And unless the Central Bank writes down some of their debt, they'll probably default, which will precipitate their exit from the Eurozone, and that's something Tsipras said he didn't want, and neither does the ECB, or the European Commission, or the IMF for that matter.

So anyway, I'll apply the zero-one principle to this mess - what does that mean to me? From a small investor standpoint, I'm certainly not ready to buy Greek debt, but I'm thinking the Eurozone looks like a great value-buy.

"A THOUSAND DOLLARS ON A SIX - THE HARD WAY"
(to borrow a little lingo from the craps table)

Yes, European stock markets rose on news of the Euro bond but investors will be faced with in the old 'greed/fear' dichotomy.
On the one hand, the European Union looks too big to fail and therefore the bond seems like a good bet.
On the other hand, austerity has seen the rise of right-wing parties across Europe similar to events that preceded the rise of fascism when that other paragon of wishful-thinking, the League of Nations collapsed under the weight of its own inconsistences.
Perhaps a better parallel would be 1848 'The Year of Revolutions' that toppled governments across Europe and was also the year of the Communist Manifesto.
On a purely investment level, it's worth remembering that Germany is holding the whole ball game together, but cracks are beginning to show in its post-war political predictability. Recent events in Dresden and Leipzig regarding Moslem immigration point to an emergent nationalism with potentially big trouble for the Euro. Against this, however, the steamroller of globalisation doesn't look like being reversed in the near future; which might make the Euro bond worthwhile.

[MANICHAEAN]

One interesting, almost perverse aspect of this current Greek drama is that within an institution such as the EEC which is supposed to be a unifying force among sovereign members, old historical ill feelings are quickly escalating following the election of the new Greek administration.

I have in mind that Tsipras’s first act as prime minister following his investiture was to lay flowers at the Kaisariani shooting range in Athens, where dozens of Greek leftists were executed by German occupation troops in 1944. The men and women who were shot dead at dawn that day were killed in reprisal for the guerrilla ambush of a German general, Franz Krech, and three of his aides.

It seems that for a nation that regards itself battered and scorned by German-inspired austerity; standing up to Europe’s paymaster is a long awaited relief valve. Tsipras told supporters in a victory speech on Sunday that he would seek to restore “their lost dignity”. For Greek leftists, widely persecuted after their defeat in the bloody civil war that followed the Wehrmacht’s withdrawal from Greece, such gestures are hugely significant.

Leaving that to one side though, it is very likely that he is now even more aware that the toughest opposition he could face comes from the left of the party; the alternative of non-delivery of election promises being Red Dawn lurking in the background.

Tsipras knows he has little leverage in the upcoming negotiations about debt write off or renegotiation, but one potential weapon he does have, (and which has never been used in formal EEC negotiations before), is the argument regards either; the moral duty the Germans have to repay the forced wartime loan extracted during the period when they occupied the country, or at least soften their stance on negotiations.

It was Nazi policy to make the people they conquered pay for their own oppression and in 1942, a team of German and Italian lawyers, in the absence of any Greeks, signed an agreement obliging the Bank of Greece to provide Germany with an interest free ‘war loan’ of 476million Reichsmarks (a currency which preceded the Deutschmark). It was not just a huge sum – it weakened the currency and, aggravated inflation in the Greek economy because the Bank of Greece was forced to issue inflationary notes to cover these extraordinary expenses. And seventy years later none of it has been paid. There is another odd twist. If the Greeks were to refuse to relinquish their claim, they should also approach the Italian government for unpaid loans, for as Germany's Axis partner, Rome was a beneficiary of the same deal. That should really contribute to team spirit, especially as up to now it’s always been Britain regarded as the odd man out.

Economists have calculated that, allowing purely for inflation, Greece’s 1942 loan to Germany would today be worth £9bn, but if one adds even a modest rate of interest of say 3 per cent, then that debt would increase to nearly £60bn. That would be enough to cover Greece’s fiscal deficit for the next five years, giving the country time to restructure its economy and put government finances on a more sustainable footing.

This brings us to the topic of reparations, itself a complicated subject.The trouble with the Greek stance is that by the end of the war Germany itself was broke and in huge debt. It was not only unable to pay outstanding loans, but also unable to pay the reparations many countries wanted to cover the cost of all the damage wreaked by the Wehrmacht. France wanted reparations and so did the Benelux countries. So did Britain. They got their money, though not from Germany. Their recompense came from the US, which had come to the conclusion that punishing Germany, Japan and all the Axis nations would trigger a return to fascism. So it stepped in with large sums of cash from 1945 onwards, which in 1947 turned into the Marshall Plan.

Like most of Europe, Greece was a beneficiary of the Marshall plan. The sums were so large they replaced the money due from Germany and more. In effect, Washington paid Berlin's debt.

Much of the problem for Greece is that the money was wasted. First, Greece descended into civil war after 1945 when other countries were busy rebuilding and from 1947, when things settled down a bit, the corruption in public life and business sector meant much of the money went unspent, at least not on investment to re-tool a largely agricultural economy.

So what is the conclusion? On paper after five years austerity Greece's economy is back in the black as it has swung from a hefty deficit to a small surplus. But the front line reality is that five years ago the unemployment rate was about 12%. Last year it was more than double that at 26% with half of all young Greeks out of work. The crunch lies in the debt deluge. Net debt was around 130% of GDP in 2010 according to the IMF and now it's close to 170%. The economy has shrunk so the debt ratio has increased. Greece quite simply cannot possibly generate the level of income to pay back its debtors, ever.

Thus although one can talk about; perceived historical injustices, money having been wasted, rampant tax evasion, of setting an example to other members etc etc, it’s the ones at the bottom who are paying the price, and perhaps the Americans got it right by setting the example; a degree of humility and focus on the human aspects would not go astray when addressing this issue.

[Sancho]

I've also gotta think a huge factor for the future of the Greek economy is the brain drain. Some 200,000 young, educated Greeks have left the country during austerity for better opportunity, mostly to Germany and England. So when the best and the brightest of one country become productive, tax-paying members of another country, does the gaining country owe a debt of gratitude to the losing country? I think so.

At any rate, Emil, I am in no way interested in buying European debt, not with the 10 year yield well below 1%. My interest is in Eurozone equities, the theory being that QE will stimulate growth and pull the peninsula out of the recession or at least keep it from sliding into a deflationary spiral. So my interest is in a broadly diversified ETF, probably one that mimics the FTSE or the Eurozone S&P 350. Vanguard has a good one, VGK, also iShares IEV, I think. I'm not talking about betting the farm, just a percentage shift out of the S&P 500.

Roll them bones, baby.

[Pompey Bum]

On the other hand, austerity has seen the rise of right-wing parties across Europe similar to events that preceded the rise of fascism when that other paragon of wishful-thinking, the League of Nations collapsed under the weight of its own inconsistences. Perhaps a better parallel would be 1848 'The Year of Revolutions' that toppled governments across Europe and was also the year of the Communist Manifesto.

I confess that my assessment of the situation, as a non-European, is somewhat superficial; and I thank God for that, since my assessment is grim. Europe today reminds me of Weimar. Most of its elites effuse a modernist liberality, but increasingly, "those at the bottom, who are paying the price" (to quote Manichaean) are getting angry; while from East London to Dresden, across Europe and beyond into Russia, resentment of an ethnic bogy festers. Despite the common belief, history is not cyclical. But can show warning flags of trouble ahead, and several are furiously waving at the moment.


Recent events in Dresden and Leipzig regarding Moslem immigration point to an emergent nationalism with potentially big trouble for the Euro. Against this, however, the steamroller of globalisation doesn't look like being reversed in the near future; which might make the Euro bond worthwhile.

Well, as long as I'm playing Cassandra, let's not forget that the steamroller could always be co-opted. It seems unthinkable at the moment, but the apparatus of an EEC would be useful to a pan-European extremist regime, whether fascist or communist (or something new: tyrannical capitalism, a la Moscow and Peking). I know it sounds like "not on our lifetimes" speculation, and probably it is, but a series of really devastating terrorist strikes in Europe could reshuffle the deck quickly. Imagine, for example, massive and simultaneous releases of chemical weapons in London, Paris, and Berlin, with casualties exceeding a million (as God forbid, of course). Even a threat of limited European fascism might attract the intervention of Vlad the Mad next door--who seems keen on regaining the Baltic states, might not flinch at Poland, and obviously needs no encouragement in Ukraine. Obviously NATO provides a deterrent for now, but again, consider what might happen in the aftermath of a really devastating terrorist strike. Would Europe really return to the bipolarity of the Cold War? Or is it more likely that a second sort of Molotov-Ribbentrop Pact would be patched up so that East and West could deal with the perceived internal threat of European Islam together? (A difference with the 20th century being that Muslims would not go to the camps as non-violently as the Jews did).

Yikes, I'm scaring myself. And I feel a need to answer Scrooge's question to the Ghost of Christmas Yet to Come. Yes, these are things that may be; but no, they are not things that must be. But we are living in interesting times, as the Chinese are reputed to say. And it is not clear that we will have the luxury of awaking from the nightmare as Scrooge did.


Tsipras knows he has little leverage in the upcoming negotiations about debt write off or renegotiation, but one potential weapon he does have, (and which has never been used in formal EEC negotiations before), is the argument regards either; the moral duty the Germans have to repay the forced wartime loan extracted during the period when they occupied the country, or at least soften their stance on negotiations.

Good point. Now, ah, about Lend-Lease... :):):)

I'm just kidding, obviously. Lend-Lease was not forced (and should have lacked all pretense in any case). On the other hand, if it is to be standard practice to reimburse a conquered people who were made to "pay for their own oppression," then Britain may owe India a bit for all those "revenues." Your idea is interesting, even inspired, but such a policy might let a genie out of a bottle that many European former colonial powers can no longer afford--especially after accounting for inflation and interest.


Their recompense came from the US, which had come to the conclusion that punishing Germany, Japan and all the Axis nations would trigger a return to fascism. So it stepped in with large sums of cash from 1945 onwards, which in 1947 turned into the Marshall Plan...In effect, Washington paid Berlin's debt.

Mmmm. But unfortunately we're a little strapped this time. Maybe if some grateful party could see to paying our debt to China, though... :)

[MANICHAEAN]

Sancho:

Interesting point about paying for the brain drain, but although lots of mainly young Greeks with PhD’s in atomic fusion or whatever come to the UK, many are only too grateful to end up as waiters or waitresses, and a damm good job they do of it. Much more cheerful, efficient than our home grown variety, for whom there always seems to exist an undercurrent of anathema to serving anyone. But of course I must bring to your attention, as noted by Alf Garnet of the distinction in British society between “Your restaurant Greek and Prince Philip the Queens husband and a royal Greek.”

Pompey Bum:

Let’s just not go there. You are well conversant with the circumstances relating to Lend Lease. A sympathetic Roosevelt hampered by the Neutrality Acts, which forbade arms sales on credit or the loaning of money to belligerent nations, came up with the idea. As one Roosevelt biographer has characterized it: "If there was no practical alternative, there was certainly no moral one either. Britain and the Commonwealth were carrying the battle for all civilization, and the overwhelming majority of Americans, led in the late election by their president, wished to help them."

Regards India, we put in more than we took out. Look at that pre-potpourri mess of little states with all those Maharajas and Sultans, (linked with the invidious French I might add) prior to Britain making it the jewel in the Crown.

Is there at this point a tenuous linkage with where, in the States there were demands for an apology and reparations to be paid for slavery in the South?

We also have had our comedy moments. In Jamaica in 2004, a coalition of Rastafari movement groups argued that European countries formerly involved in the slave trade, especially Britain should pay 72.5 billion pounds sterling to resettle 500,000 Jamaican Rastafarians in Africa. As an old Africa hand and hopefully you may have been lucky enough to have spent some time in Jamaica, can you just imagine Rasta Man returning after six generations to the Promised Land of Zion and arriving in Addis Ababa airport to the emotional warmth and bonding welcome from customs and immigration, let alone the hustlers, hookers and taxi drivers outside.

As for your Cassandra take on Europe, it’s all a question of being comfortable with reality. What’s the alternative? The Japanese cut their domains off from external contact for 300 years, but Commodore Matthew Perry cured them of that; likewise the US tried isolationism but, (apart from Texas) did not succeed. When times are tough it is so much more comforting to identify a “bête noir”: the nobility, the Jews, the Irish, the colored’s, and now radical Muslims.

In fact perhaps we should have learnt from the Middle East states, in their policy of “You can come and work here, but you will never get nationality.” The Saudi’s at one stage even stopped foreign marriages, as too many Egyptians were getting KSA passports (and benefits) by taking wives in that country.

As for Vlad, he would relish another Cold War. It’s like mothers milk to him. That’s the reality.

[Emil Miller]

I've also gotta think a huge factor for the future of the Greek economy is the brain drain. Some 200,000 young, educated Greeks have left the country during austerity for better opportunity, mostly to Germany and England. So when the best and the brightest of one country become productive, tax-paying members of another country, does the gaining country owe a debt of gratitude to the losing country? I think so.

At any rate, Emil, I am in no way interested in buying European debt, not with the 10 year yield well below 1%. My interest is in Eurozone equities, the theory being that QE will stimulate growth and pull the peninsula out of the recession or at least keep it from sliding into a deflationary spiral. So my interest is in a broadly diversified ETF, probably one that mimics the FTSE or the Eurozone S&P 350. Vanguard has a good one, VGK, also iShares IEV, I think. I'm not talking about betting the farm, just a percentage shift out of the S&P 500.

Roll them bones, baby.


Well there's nothing wrong with immigrants as long as they honour the laws and customs the host country and are in numbers that don't adversely impact on the indigenous population.
When I went to work in Germany, I knew that many Germans had a different outlook on self-reliance and other facets that the English had forgotten under their welfare state, and I accepted that without reserve. As a wage earner in Germany, I had to pay a small stipend to the government as reparation to Israel on account of Geman teatment of Jews during WWII; I accepted that without reserve also : even though it didn't have anything to do with me, but because it was the law of the land.

If you are considering a percentage shift from the Standard and Poors 500 into European shares, it might be as well to keep the percentage very low
in view of the overall situation in Europe right now.


I confess that my assessment of the situation, as a non-European, is somewhat superficial; and I thank God for that, since my assessment is grim. Europe today reminds me of Weimar. Most of its elites effuse a modernist liberality, but increasingly, "those at the bottom, who are paying the price" (to quote Manichaean) are getting angry; while from East London to Dresden, across Europe and beyond into Russia, resentment of an ethnic bogy festers. Despite the common belief, history is not cyclical. But can show signs of trouble ahead, and several are furiously waving at the moment.

It's true that European elites subscribe to liberal democracy but complacency renders it increasingly liberal and decreasingly democratic. This is best summed up in the ironic expression: 'You can say and do anything you like so long as it's liberal.'
Such a mentality allows for polices which, as you point out, hits the people a the bottom with the inevitable reaction that we now see spreading across the European continent


Well, as long as I'm playing Cassandra, let's not forget that the steamroller could always be co-opted. It seems unthinkable at the moment, but the apparatus of an EEC would be useful to a pan-European extremist regime, whether fascist or communist (or something new: tyrannical capitalism, a la Moscow and Peking). I know it sounds like "not on our lifetimes" speculation, and probably it is, but a series of really devastating terrorist strikes in Europe could reshuffle the deck quickly. Imagine, for example, massive and simultaneous releases of chemical weapons in London, Paris, and Berlin, with casualties exceeding a million (as God forbid, of course). Even a threat of limited European fascism might attract the intervention of Vlad the Mad next door--who seems keen on regaining the Baltic states, might not flinch at Poland, and obviously needs no encouragement in Ukraine. Obviously NATO provides a deterrent for now, but again, consider what might happen in the aftermath of a really devastating terrorist strike. Would Europe really return to the bipolarity of the Cold War? Or is it more likely that a second sort of Molotov-Ribbentrop Pact would be patched up so that East and West could deal with the perceived internal threat of European Islam together? (A difference with the 20th century being that Muslims would not go to the camps as non-violently as the Jews did).

Yikes, I'm scaring myself. And I feel a need to answer Scrooge's question to the Ghost of Christmas Yet to Come. Yes, these are things that may be; but no, they are not things that must be. But we are living in interesting times, as the Chinese are reputed to say. And it is not clear that we will have the luxury of awaking from the nightmare as Scrooge did.

There is a touch of deja vue about the EU in that it seeks to create a pan-European entity which both Napoleon and Hitler failed to do; the idea being that if it couldn't be achieved by force, perhaps it could achieve its goals by other means. Thus there was the European Coal and Steel Communtiy followed by the EEC and then the EU. These supra-national bodies that are the advance guard of a United States of Europe, are the bain of nationalists whose intention is to secede Viz. the Front National of France, Ukip and others whose support is grownig. Therefore, it would seem unlikly that they would favour future unification even under extreme terrorist provocation.
The Molotov-Ribbentrop pact was, with hindsight, a tacit agreement to give both Russia and Germany time to gear up for the big confrontation as much as a pact to ensure that their common dislike of France and Britain would throw those countries into disarray; although that certainly was the outcome.
There is little doubt that Russian power, that had diminished markedly on the collapse of the Soviet Union, has been restored under Putin and he has the support of the majority of Russians. However, despite the fact that Russia now has a greater nuclear capacity than the US, it is unlikely that it would interfere in Europe except with regard to its former Ukrainean satelite that it sees as essential to its security since the US/EU backed overthrow of the pro-Russian president.

[Pompey Bum]

As one Roosevelt biographer has characterized it: "If there was no practical alternative, there was certainly no moral one either. Britain and the Commonwealth were carrying the battle for all civilization, and the overwhelming majority of Americans, led in the late election by their president, wished to help them."

Well, it is certainly my opinion that standing by Britain was a moral necessity, and should have begun in more tangible ways earlier than it did. As I see it, my country's greatest friend is your country, "and this is much, and all which will not pass away." I do think your biographer of Roosevelt is fumbling with rose-colored glasses, though, in saying that "the overwhelming majority of Americans, led in the late election by their president" supported lend-lease. It would have been seen as preferable to sending combat troops, of course, but American sentiment was strongly isolationist right up to Pearl Harbor; and Roosevelt's reelection(s) had to do with His leadership in the Great Depression and not his wish to subsidize Britain's war effort. Had it been otherwise, there would have been no need to bamboozle Congress with presences like Lend-Lease. But okay, we don't need to go there.


Regards India, we put in more than we took out.

I can imagine that a smart Indian lawyer might make a good case to the contrary, but we don't necessarily have to go there either just now. My point was that asking Germany to pay back what the Nazis took from Greece might be self-defeating as a way to solve Europe's economic woes. Unless, that is, Belgium wants a bill from the Congo, France from most of West Africa (not to speak of Syria), and Britain from lands beyond which the sun sets. It is also an idea that deserves a bit more moral reflection.


Is there at this point a tenuous linkage with where, in the States there were demands for an apology and reparations to be paid for slavery in the South?

After you, Captain Hawkins. :)


We also have had our comedy moments. In Jamaica in 2004, a coalition of Rastafari movement groups argued that European countries formerly involved in the slave trade, especially Britain should pay 72.5 billion pounds sterling to resettle 500,000 Jamaican Rastafarians in Africa. As an old Africa hand and hopefully you may have been lucky enough to have spent some time in Jamaica, can you just imagine Rasta Man returning after six generations to the Promised Land of Zion and arriving in Addis Ababa airport to the emotional warmth and bonding welcome from customs and immigration, let alone the hustlers, hookers and taxi drivers outside.

I've never been to Jamaica, but I remember African-Americans with me on the Children's Crusade, who would try to explain to our hosts, with voices (and French) faltering with emotion, what it meant to them to be there; only to have the confused (or sometimes bemused) Gabonese respond, "But you are not an African. You are not even a real black." So in a way, I can imagine the problems. On the other hand, there were plenty of Africans living Rasta lifestyles in our town. I'm not sure how they would have gotten along with their Jamaican comrades. But Gabon is far from Ethiopia in any case.


As for your Cassandra take on Europe, it’s all a question of being comfortable with reality.

Do you know the famous story about the Confederate soldier who was hauled, terrified, into the presence of Robert E. Lee on a charge of running away under fire?

"Don't be afraid, son," Lee is supposed to have said, "You shall receive justice in my tent."

"I know I will, General," the boy is supposed to have stammered back, "That's what I'm a'scared of."


likewise the US tried isolationism but, (apart from Texas) did not succeed.

I can assure you that the ball is still in play where my country is concerned, especially among young voting males. The grown ups are still in control for the moment, but once the inevitabilities transpire--when you and I are knocking back jars in Heaven, trading anecdotes with Lincoln and witticisms with Churchill--who knows what mischief these little boys may make for themselves? On the other hand, I suppose there is just the chance that at that point we may no longer care.


It's true that European elites subscribe to liberal democracy but complacency renders it increasingly liberal and decreasingly democratic. This is best summed up in the ironic expression: 'You can say and do anything you like so long as it's liberal.'

My initial response to a comment of St Luke's about America's resemblance to ancient Rome was that at least we don't have Neronian restrictions on free speech. I later deleted the remark in the interests of continued brotherly love at LitNet (voluntary self-censorship being consistent with freedom of expression). Still it is striking the extent to which the social dogma of "right thinking people" goes unquestioned in societies that aspire to democracy.

I think that is a tangential issue, though. If National Socialism (or Communism) returns to Europe, it will not be by the slow change of the liberal democracies but by violent overthrow of the status quo by the angry and alienated at the bottom, in the wake of an unprecedented cataclysm. And on reflection, I don't think that is likely in our lifetimes. Not while NATO is there. But you never know.


There is a touch of deja vue about the EU in that it seeks to create a pan-European entity which both Napoleon and Hitler failed to do; the idea being that if it couldn't be achieved by force, perhaps it could achieve its goals by other means. Thus there was the European Coal and Steel Communtiy followed by the EEC and then the EU.

I remember, some time ago now, hearing a spokesperson for a trans-European Communist organization expressing enthusiastic approval for the idea of an EU. Just having a superstructure in place was seen as a kind of victory for the coming worker's paradise.


These supra-national bodies that are the advance guard of a United States of Europe, are the bain of nationalists whose intention is to secede Viz. the Front National of France, Ukip and others whose support is grownig. Therefore, it would seem unlikly that they would favour future unification even under extreme terrorist provocation.

Yes, right-wing ultra-nationalists might not like it, but who's to say whether it'll be Golden Dawn or Red Dawn (or Uncle Vlad) when the time comes? Or whether the right might not find a co-opted EU helpful in dealing with Islam. It sounds like a bloody mess in any case. Hopefully it will never happen.

[Emil Miller]

Yes, right-wing ultra-nationalists might not like it, but who's to say whether it'll be Golden Dawn or Red Dawn (or Uncle Vlad) when the time comes? Or whether the right might not find a co-opted EU helpful in dealing with Islam. It sounds like a bloody mess in any case. Hopefully it will never happen.


If governments' fear totalitarianism, they shouldn't create the conditions that open the door to it.

[Sancho]

Well...I'm not sure we're drawing the right conclusions from history by comparing the Eurozone to Bonaparte's adventures or to the Third Reich. And other than causing a few fervent right-wing nationalists to pop up like a recessive gene, the Greek debt and the Muslim immigration situation in Europe have little in common. The idea of Germany paying reparations to Greece, I'm sure, is a non-starter. It's an emotional argument rather than a serious economic plan, and only serves to get certain elements in both countries all riled up.

At any rate, financial markets largely look forwards not backwards, which is one reason why guys in South Manhattan (Wall Street) are rich and history professors in North Manhattan (Columbia) are poor, relatively speaking.

Financial markets are also good at kicking a guy when he's down. Markets don't care if it's fair or not. So if I had to think of an analogy for the situation down there by the Aegean and put it in Sancho-simple terms, I'd say Greece is like the guy down the street. He's a great guy, fun to have around, maybe drinks a little too much, plays the ponies sometimes, but he's a good solid dude, right? Comes from good people. Anyway, the factory closed down and he lost his job. He got behind on his payments and his car got repossessed. His wife got fed up, took the kids and moved in with the chiropractor down the road. Now the neighbors think he's lazy and good for nothing and they've turned their backs on him. He's got a friend with a big house the next neighborhood over who says he'd like to help, but all he's willing to offer is a hot stock tip. Now he's behind on the rent and owes money all over town and the only guy who'll lend him money is Vinnie down at the pool hall, and Vinnie charges 5 points a week. So at this point something's gotta give. Vinnie says all will be forgiven, but he needs little favor, see, involves a situation he's got with some friends of his, see?

[Pompey Bum]

Not bad, Sancho. I'd buy the book. :)

[Sancho]

Thanks, P.B. Mob-related stuff almost always sells, eh?

Anyway, I was channeling the Springsteen song, "Atlantic City". If you're not familiar, it's a melancholy little tune about a guy who's down on his luck and in order to get back on his feet agrees to do a "little favor" for a guy he'd met the other night. He's singing to his girl, who it seems he's on the outs with. He begs her to:

"Put your makeup on, fix your hair up pretty, and meet me tonight in Atlantic City".

He doesn't come right out and say it, but I get the sense that the "little favor" is a mob hit. It was written during a particularly violent time for the mafia in Philadelphia. The first line of the song is about the murder of Philly Mob Boss Philip Testa in 1981:

"Well they blew up the Chicken Man in Philly last night, and they blew up his house too."

http://youtu.be/M3eu1gW-bQ8

^just a tad off topic, sorry.

[Pompey Bum]

No, don't worry about it. I'm sure we'll be back to Greece soon. I know the song you mean well. The way I always interpreted it is that he was going to use his wife to set a "honey trap" to get the guy he needed to kill to take off his clothes (and gun), whereupon he would burst into the room, she would roll off the bed, and he'd let him have it. And he's trying to console her (and himself) by saying, "Hey, everything dies"--the irony being that his own soul and presumably their marriage is also dying (which is why it's "everything dies" and not "everyone dies").

We return now to European Armageddon...

[Emil Miller]

Thanks, P.B. Mob-related stuff almost always sells, eh?

Anyway, I was channeling the Springsteen song, "Atlantic City". If you're not familiar, it's a melancholy little tune about a guy who's down on his luck and in order to get back on his feet agrees to do a "little favor" for a guy he'd met the other night. He's singing to his girl, who it seems he's on the outs with. He begs her to:

"Put your makeup on, fix your hair up pretty, and meet me tonight in Atlantic City".

He doesn't come right out and say it, but I get the sense that the "little favor" is a mob hit. It was written during a particularly violent time for the mafia in Philadelphia. The first line of the song is about the murder of Philly Mob Boss Philip Testa in 1981:

"Well they blew up the Chicken Man in Philly last night, and they blew up his house too."

http://youtu.be/M3eu1gW-bQ8

^just a tad off topic, sorry.



:D Not a good advert for the city of 'brotherly love'.

"Put your makeup on, fix your hair up pretty, and meet me tonight in Atlantic City".

"Well they blew up the Chicken Man in Philly last night, and they blew up his house too."

Hmm..... I can't help wondering what Cole Porter would have made of it.

[Sancho]

^Haha, a close second for ironically-named cities in the US has got to be LA:

"They call Los Angeles the 'City Of Angels.' I didn't find it to be that, exactly."

-Sam Elliott as The Stranger in "The Big Lebowski"

[Pompey Bum]

To return to the Apocalypse for a moment, I notice that NATO just stepped up command units in Romania, Poland, and the Baltic States, apparently in response to bad vibes in the Ukraine. Time to get in the shelter yet?

[Emil Miller]

To return to the Apocalypse for a moment, I notice that NATO just stepped up command units in Romania, Poland, and the Baltic States, apparently in response to bad vibes in the Ukraine. Time to get in the shelter yet?

Not yet, but when Henry Kissinger talks about the 'sound of the drums of war being beaten' one has to wonder.
The 'bad vibes' in the Ukraine relate to the fighting in the strategic city of Mariupol and the ongoing battle for control of Donetsk airport.
The coup that overthrew President Viktor Yanukovych revived ancient animosities between Ukrainians and their large Russian population.
Despite denial, Russia is obviously providing military support to the pro-Russian forces who are gaining ground. Hence NATO's reaction elsewhere.
History shows that it is never a good idea to take on Russia but it also shows that Governments' seldom take notice of history.

See my signature re Michel Houellebecq's statement.

Getting back to the subject of Greek debt, Mrs Merkel has just ruled out any reduction, and German finance minister Wolfgang Schäuble has warned Greece about blackmail.

[kiki1982]

I just read that Greece's new minister of finance has told the president of the Eurogroup Dijsselbloem that they will no longer work together with the trojka (EU, IMF and ECB), because they are not recognised by anyone. Of course that isn't true and it's on the same level as the Greek PM's snub earlier this week of an agreement between the EU states (or euro states) under the pretence that 'the Greek government wasn't asked for their agreement.' Therefore it wouldn't have come from the Greek government by default. He forgets to mention that any outgoing government fills in ad interim for a new government until that one is sworn in. Maybe they can't take any policy decisions, but I doubt whether this one was a policy decision made within the period that the parliament was disbanded for the election. It's just bluff, but maybe they can get something from it. Things can't be much worse anyway.

Wolfgang Schäuble is an old German politician, which says enough. And he doesn't want to change anything because Germany is going to benefit massively from this in the long run. They delivered the largest part of the loans to Greece and therefore also get most of the interest. It's a kind of long-term investment. If you were to buy a bond from a bank at secure interest, you wouldn't allow the bank to renegotiate your interest rate, would you?
To add to the problem, Germans are not small-business oriented. When you tell people here that you are self-employed they stare at you as if you are an alien. They want their safe job, they want to know when they can get home and when they have to be there and they want to know that they can have paid holidays. They don't want not knowing how much money is going to come in and they definitely want everything at a price they can pay for. The result is that everything is kind of affordable (though for those that earn above average), but at the same time it also means that there are people working part-time 'mini-jobs' for 400 EUR per month with no tax, but also no health insurance or pension build-up. In this particular town there is no child daycare after 3 pm and when a British lady thought 'hey, it would be great if we could organise something like this' and she went to the council to ask how to go about it, she was told she was a bad mother :confused:. Childcare is incredibly expensive and children come home from school around lunch. What is one to do? You see how it is that Germany has a decreasing population.
Small businesses face a tax rate of 30%, like all businesses. If you are just self-employed you face health insurance of 15% on your earnings (which is way too much for the service you get, downright disgusting) and 15% pension pot, giving you a full pension after 40 years (!) and you can't take your pension contributions off your tax. To set up a limited company you need 25,000 EUR and if you haven't you are obliged to put aside 25% of your profits every year until you have built up that 25,000. You can see why this wouldn't work. If I'm starting out, I need all my cash. I can't afford to give 30% to the tax PLUS put 25% aside. That means 55% of my money is gone! How am I going to build up a business that way if my customers want it cheap? This means Germany probably can't understand the 'willy-nilly' existence of southern countries.

I think there is a profound problem with the mindset of the industrious German who does everything the way his parents used to do 'because that'll be best' and the mindset of southern nations. Frugal Germans only go out for coffee and cake (which is cheap) and spending 50 EUR on a meal is entirely beyond their imagination. Despite this town having a population of 6,000, there are 7 restaurants most of which are struggling to survive as there's no-one in there apart from during the tourist season and there are no cafés open after 9 pm. OK, maybe 1 and that's one where the teenage population and a few weird oldies assemble.. It's utterly mind-boggling. There's even more life in a hamlet of 200 in the UK.
You can see how they think Greeks should be kind of 'punished' for their good life on Saturdays while Germans got up at 6 in the morning to do hard graft in the garden.
I think good on Greece, see who blinks first. At least Schäuble admits that it's squeakey bum time. I'm interested in who will blink first.

[Emil Miller]

The German government are in a cleft stick. They are against any alleviation of Greek debt but want to keep Greece in the EU because its departure might lead to a rush for the exit. This is obviously the key to Syriza's demands. Today, there is a march against austerity organsed by Podemos, Siriza's Spanish equivalent that has seen similar support in recent months and like Ukip in the UK is out to break the two party system that supports the EU.
Personally I would never vote for left-wing parties like Syriza and Podemos but if it helps to bring down the EU it might be the lesser of two evils.

[kiki1982]

Yes, the question is how you get someone out of such great debt other than by declaring bankruptcy (which isn't possible in this case). I personally think people are voting for UKIP, and these (new) left parties because politicians have been proving that a) they lie and don't care what happens to their people afterwards because it's not their problem (the short-term neo-liberal stuff from the late 1990s; different than it used to be and why the House of Lords should stay that way: either they don't turn up or they do and they don't have any interest in being elected so in theory they do what is good in the long-term; that might be a bit naïve though) and b) they don't know what's going on half the time and it's all an act of 'look how I'm interested in what's happening.' Basically modern management techniques. It's no longer about the content, it's about what the outside sees.
Maybe people like Tsipras and Nigel Farage are just talk and no content (that remains to be seen), but they may wake up the politics crowd in that it isn't enough to look interested, you need to BE interested and politics should be a career, it should be a mission.
That gaffe with the Spanish health minister and the nurse who got infected with ebola said it all: she gets infected due to poor training and possibly poor equipment (compared to those aide workers from the NHS and the army who went to Sierra Leone? who were literally drilled) and then the minister wants 'hourly updates'. It's too late, man! Not to mention they killed the dog for no other reason than to show that they were doing something.
Or Gordon Brown and his Freudian slip about the bigot thing during the election campaign of 2010 (?).
I just mainly think that people feel like something new because the other choice isn't worth it, these new guys might as well 'have a go'. Whether that 'new' will pay off is the big question, but I think they're prepared to take the risk. They won't be able to stop it.

The EU should have stayed what it was in the first place: a trading community. That was a noble aim and a good thing. Though at the risk of sounding like a conspiracy theorist, I believe they have been trying to cement their own existence in that they have been trying to make themselves indispensable. The euro being the cherry on the cake: you give people one currency and then drum it into them that getting out of that currency will be the abyss. Then you proceed to levy taxes and so you get a system where getting out basically means declaring independence like Montenegro. Although nothing is indispensable and eventually the thing will implode because all over the place people are starting to ask questions about the spending and some policies. At this rate it's only a matter of when and not of if, I reckon. They could probably save themselves, if they realised they are there by the virtue of their people and not by the grace of God almost, but obviously they haven't realised that yet. Charles I also thought he was untouchable and look what happened. Not that it will come to something bloody like that, but it will come to a more moderate system in the end.

[Clopin]

I just read that Greece's new minister of finance has told the president of the Eurogroup Dijsselbloem that they will no longer work together with the trojka (EU, IMF and ECB), because they are not recognised by anyone. Of course that isn't true and it's on the same level as the Greek PM's snub earlier this week of an agreement between the EU states (or euro states) under the pretence that 'the Greek government wasn't asked for their agreement.' Therefore it wouldn't have come from the Greek government by default. He forgets to mention that any outgoing government fills in ad interim for a new government until that one is sworn in. Maybe they can't take any policy decisions, but I doubt whether this one was a policy decision made within the period that the parliament was disbanded for the election. It's just bluff, but maybe they can get something from it. Things can't be much worse anyway.

Wolfgang Schäuble is an old German politician, which says enough. And he doesn't want to change anything because Germany is going to benefit massively from this in the long run. They delivered the largest part of the loans to Greece and therefore also get most of the interest. It's a kind of long-term investment. If you were to buy a bond from a bank at secure interest, you wouldn't allow the bank to renegotiate your interest rate, would you?
To add to the problem, Germans are not small-business oriented. When you tell people here that you are self-employed they stare at you as if you are an alien. They want their safe job, they want to know when they can get home and when they have to be there and they want to know that they can have paid holidays. They don't want not knowing how much money is going to come in and they definitely want everything at a price they can pay for. The result is that everything is kind of affordable (though for those that earn above average), but at the same time it also means that there are people working part-time 'mini-jobs' for 400 EUR per month with no tax, but also no health insurance or pension build-up. In this particular town there is no child daycare after 3 pm and when a British lady thought 'hey, it would be great if we could organise something like this' and she went to the council to ask how to go about it, she was told she was a bad mother :confused:. Childcare is incredibly expensive and children come home from school around lunch. What is one to do? You see how it is that Germany has a decreasing population.
Small businesses face a tax rate of 30%, like all businesses. If you are just self-employed you face health insurance of 15% on your earnings (which is way too much for the service you get, downright disgusting) and 15% pension pot, giving you a full pension after 40 years (!) and you can't take your pension contributions off your tax. To set up a limited company you need 25,000 EUR and if you haven't you are obliged to put aside 25% of your profits every year until you have built up that 25,000. You can see why this wouldn't work. If I'm starting out, I need all my cash. I can't afford to give 30% to the tax PLUS put 25% aside. That means 55% of my money is gone! How am I going to build up a business that way if my customers want it cheap? This means Germany probably can't understand the 'willy-nilly' existence of southern countries.

I think there is a profound problem with the mindset of the industrious German who does everything the way his parents used to do 'because that'll be best' and the mindset of southern nations. Frugal Germans only go out for coffee and cake (which is cheap) and spending 50 EUR on a meal is entirely beyond their imagination. Despite this town having a population of 6,000, there are 7 restaurants most of which are struggling to survive as there's no-one in there apart from during the tourist season and there are no cafés open after 9 pm. OK, maybe 1 and that's one where the teenage population and a few weird oldies assemble.. It's utterly mind-boggling. There's even more life in a hamlet of 200 in the UK.
You can see how they think Greeks should be kind of 'punished' for their good life on Saturdays while Germans got up at 6 in the morning to do hard graft in the garden.
I think good on Greece, see who blinks first. At least Schäuble admits that it's squeakey bum time. I'm interested in who will blink first.

Great post. It's funny, I live in Alberta and people I know just won't shut up about the wonders of state provided services in Europe. My province only has a flat income tax of 10%, plenty of people wish it would be raised to 60%, well... provided 'the rich' will be the people expected to actually pay it. There's also no sales tax here. I wish we could secede already before experiencing the European wonders you're describing.

[Emil Miller]

It's important to realize that the EEC was meant to be the stepping stone to a United States of Europe, so that's how things are intended. Unfortunately, the road to hell being paved with good intentions seemed to have slipped the mind of its founder members with the results that we see today.
If the Europhiles had bothered to look at the history of Europe, they would have seen that earlier attempts at unification, from the pax Romana to Charlemagne's realm,
Napoleon's Empire and Hitler's third Reich had all been held together by force. This is because the various peoples of Europe have a deep rooted allegiance to their individual countries. Economic blandishments like the Euro, the allowing of free movement within Europe and the weakening of the nation state by mass immigration from without, has been unable to prevent a recrudescence of the kind of nationalism that the Europhiles set out to destroy.
In short, thousands of years of history cannot be swept away in less than a hundred years. If any more proof were needed, the collapse of the USSR is a further case in point.

[Clopin]

Well assimilation really is impossible, you can genocode ninety percent of a population, send their children to European schools, teach them all English and hundreds of years later First Nations communties retain their own culture. Quebec likewise is culturally distinct from Anglo Canada despite being under the yoke of the same federal government for hundreds of years. Germany could conquer Europe but its French subjects would remain French, the English, English, and so on until whatever empire is dissolved. Nobody, anywhere wants to assimilate and nobody ever will.

[Sancho]

I've gotta think the Swiss just gave the Euro a great big no-confidence vote when they unpegged the franc. Or perhaps they had no choice once the ECB began its program of QE. I may be mistaken but isn't the Swiss Franc a specie-based currency, and wouldn't that make it hugely problematic to peg it to a fiat currency. I realize of course that I've trod into an area where I have no idea what I'm talking about.

[Emil Miller]

I've gotta think the Swiss just gave the Euro a great big no-confidence vote when they unpegged the franc. Or perhaps they had no choice once the ECB began its program of QE. I may be mistaken but isn't the Swiss Franc a specie-based currency, and wouldn't that make it hugely problematic to peg it to a fiat currency. I realize of course that I've trod into an area where I have no idea what I'm talking about.


The link below is from 2011 and shows that the Swiss franc is a fiat currency but the unpegging of it from the Euro is a very wise move in my view
given its current state and the creaky foundations it's built on. Whether Switzerland returns to the gold standard, as indicated, remains to be seen but with China now officially the World's No1 economy, investors might take heart that they don't have to rely solely on the massively indebted US dollar for global economic security.


http://www.marketwatch.com/story/swiss-parliament-to-discuss-gold-franc-2011-07-07

[Sancho]

Yep. That might have something to do with why last year I could buy a 10 dollar cheese burger in Zurich and now it costs me 20 dollars.

[Emil Miller]

Yep. That might have something to do with why last year I could buy a 10 dollar cheese burger in Zurich and now it costs me 20 dollars.


I suppose the question being, how much it might eventually cost. At least you're not in the position I found found myself in back in the days of Harold Wilson's Labour government when holidaymakers found the Swiss banks were refusing to take the pound sterling as it was in precipitous decline against major currencies.
When someone has been put in that embarrassing situation, it does at least tell them who not to vote for.

[MANICHAEAN]

Meanwhile back to a certain country in the Med.

The new Greek Finance Minister on a charm offensive to the UK, ( smart casual in a black leather jacket) visits Chancellor George Osborne, ( suited and booted)

Wonder if he will visit Germany and what his wardrobe will be there??

[Emil Miller]

Meanwhile back to a certain country in the Med.

The new Greek Finance Minister on a charm offensive to the UK, ( smart casual in a black leather jacket) visits Chancellor George Osborne, ( suited and booted)

Wonder if he will visit Germany and what his wardrobe will be there??

If he does.it probably won't be from choice, given what his finance minister had to say about not accepting any terms at the behest of Frau Merkel.

[free]

I like the idea of unification of the entire world, not only Europe. But... is it possible?

[Emil Miller]

I like the idea of unification of the entire world, not only Europe. But... is it possible?

I doubt it also despite the globalisation that's being actively pursued by technologists and certain political castes.
However, be careful of what you wish for and understand that such a situation places all the power and wealth into fewer
hands. Remember 1984.

[free]

I doubt it also despite the globalisation that's being actively pursued by technologists and certain political castes.
However, be careful of what you wish for and understand that such a situation places all the power and wealth into fewer
hands. Remember 1984.

I don't think it is possible - all the power and wealth into fewer hands - in reality. At least, not for long. It would inevitably lead into crisis. Change is the only constant thing in the world we know.

[kiki1982]

Interesting detail: BBC Newsnight yesterday said Greece was probably gooing to run out of money around the 21st of this month. Because, wait for it, Tsipras had scrapped or was going a scrap a few taxes adn people had stopped paying them in anticipation, so his revenue has gone down. And the ECB announced yesterday that Greek banks will now have to get emergency funding instead of bonds and that's more expensive.

The fight is on. It's bluffin' time. I wonder who will win.

Seriously, though, I think it's a downright disgrace that a country can't even get through the 2nd month out of 12. If that happened to a family, they would be eligible for debt resettlement, because it's not sustainable. How long will the EU keep this up? Or do they secretly want Greece to leave anyway?

[Emil Miller]

Today's meeting between the German finance minister and his Greek opposite number appears to have been completely unproductive
according to the BBC with Wolfgang Schäuble saying that his response was deliberately diplomatic. It appears that the IMF are going
to withhold the next tranche of bailout funds which are vital to Greece's economic survival.
An interesting sidelight on this issue is that the Russians have significantly invested in Greece and were it not for the current economic
decline in Russia due the falling oil price and sanctions, which ironically are beginning to hurt those who imposed them, the Russians could
conceivably underwrite a departure of Greece from the Euro and a return to the drachma.

[MANICHAEAN]

Perhaps Qatar will buy the country.

They seem to have brought everything else.

[MANICHAEAN]

One of the options that I’ve heard put forward to solve the current Greek financial crisis is the issue by that government of “consols.” To those of you not familiar with this instrument, they generally refer to government bonds or gilts of a perpetual nature redeemable at the option of the government that issues them. Thus in theory the principle need never be paid, only the interest. This at first sight would seem to fit in admirably with the Greek proposal to pay only when growth is achieved.

In 1927 Chancellor Winston Churchill issued a new government stock, 4% Consols, as a partial refinancing of the National War Bonds issued in 1917 during World War One, and it was only late last year announced that the UK Government would redeem these in full early 2015.

An investment in gilts has long been considered about as safe as investing gets. The British Government has never defaulted on its debts in its several hundred years of raising money. Only US Treasuries and the bonds of a few other countries are considered as secure. This perceived security is reflected in the UK’s AAA-rating for its debt and this rating has so far survived even the sharp deterioration of the UK’s financial strength in the wake of the credit crisis and recession of 2008/09, as well as quantitative easing.

But then, that’s just the crunch for Greece; both its credit rating and a belief that it will manage the public finances in such a way that high inflation won’t erode the value of the investment.

Leaving the harsh reality to one side for the moment, I must confess a certain admiration for the way this self-acknowledged left wing bogy man of a new administration has; both gone on the PR offensive and also been straight up, especially with the Germans and the Troika on the facts of life.

1. Yes we are a bankrupt country.

2. Yes we have deep rooted problems, with a history of: corruption, tax avoidance, and money wasted, but are prepared to tackle it.

3. No we are not asking for more of the same medicine, as its not working.

4. We have moved from an economic crisis to a humanitarian one.

5. Yes, you can screw us economically, but, in the wings is the Nazi party who, if they come to power can open up a whole Pandora’s Box of instability, that could likely spread to many EEC countries, especially in France, and even Germany itself.

At the moment it appears that the PR campaign undertaken was in some aspects a success; at least it got a sympathetic hearing in; the UK, France, and Italy. This PR success would be even more so if the powers that be let Greece go down the pan. They would come across as; petulant, vindictive and hard hearted.

But then perhaps, this is the Greek end game plan? There is already a groundswell of international feeling against the; unemployment, food banks, children going hungry, even the oldest profession in the world being supplemented by ordinary housewives endeavoring to put food on the table.

If Greece is forced out of the EU, banks close, a barter economy emerges, hunger stalks the streets, the far right emerges, the scapegoat of immigrants results in racial attacks, will all this not be portrayed night by night on the television screens raising public sympathy further.

Is the concept of “I am my brother’s keeper” that alien to us today?

[kiki1982]

And the question is if Germany can long keep up that idea of 'only we are right' in the face of the economic growth from the UK.

The Germans well know what a bartering economy is like. It's in their history books: just after the war (we're talking days/weeks) trains and trains of people from Berlin leaving for the countryside to get anything they could to trade with. There were even brokers phoning around like the scouts 'if I trade you a dozen eggs, will you take a ham, because I need the ham to get steak'. They solved it themselves back then... by tax cuts and lifting price controls.

If only they had some visionaries now.

[MANICHAEAN]

Its amazing kiki how these historical events are so engrained in German political / economic thinking after all these years. I remember reading about the incredible inflation that swept Germany after the First World War such that money basically became worthless. That, and the belief, (sometimes justified) that Germany was always "surrounded" by hostile states seeking to invade.

One slightly funny aside from worthless money to that of money shortage. At one time as a student I was in Italy, and the coins were so appreciatively crafted that many were used in rings and other ornaments, resulting in a shortage. So if you brought something in a shop and there was no change, there was no embarrassment; they just gave you a gelati instead.

[MANICHAEAN]

So the charm offensive is over and now it’s a case of last man standing. I’m not sure if that is a fair assessment of the latest news from Greece but it is certainly interesting. The Germans and the EU bureaucrats won’t respond to charm so let’s raise the stakes:

1. If we go down, sooner or later we take you with us. Interestingly Alan Greenspan recently noted that the demise of the euro is inevitable unless there is complete political union within the EU. Not the kind of guy whose advice you ignore.

2. You won’t help us, then we cuddle up to Putin, even though being a member of NATO. Alarm bells ringing the other side of the pond with Obama saying to Merkel reconsider all this austerity you are insisting on.

3. Oh and by the way, we will implement every measure in the Syriza’s pre-electoral Thessaloniki Program “in its entirety” with no ifs and buts. This even includes a legal demand for €11bn of war reparations from Germany, a full 71 years after the last Wehrmacht soldier left Greek soil.

Who will blink or will they blink? I think time has run out but we will see. If not, within a very short time frame the new Greek government will be obliged to: impose capital controls, nationalize the banks and start printing the drachma. More pain ahead but I get the impression that the Greeks will be holding their heads higher, while the spotlight switches to Italy and Spain. It certainly is getting interesting.

[kiki1982]

And BBC news yesterday said that David Cameron had had a cabinet meting (?) about the Grexit and how Greece's exit from the euro would affect Britain.

Hmm, maybe start putting stuff into pound sterling, dollars or anything else BUT the euro in the near future?

[kiki1982]

Oh, oh, and I just read in Belgian newspaper De Standaard that Crete houses a NATO naval base and... drum role... there is oil and gas in the Mediterranean Sea which Israel, Cyprus and Russia are arguing over. Hence why the US is loath to be nasty to Greece. :D

And the Greeks know they've got Roosevelt's proverbial big stick. Only the Germans don't know it yet. :D At any rate, they're alright because they've got Russia's gas.

[MANICHAEAN]

So, who blinked?

Neither I suppose as it was just the latest fudge. If the technocrats had had their way I think Greece would have been cast out ( politely of course.)

But Angela & Francoise have already been given a recent snow job by Putin over the Ukraine cease fire. To have that swiftly followed by an accusation of not looking after one of their own in the EU meant a bit of arm twisting of other ranks.

The interesting thing now will be to see how effective the Greek government is. There is more than just collecting some back taxes from the fat cats to sort that economy out.

[Emil Miller]

Oh, oh, and I just read in Belgian newspaper De Standaard that Crete houses a NATO naval base and... drum role... there is oil and gas in the Mediterranean Sea which Israel, Cyprus and Russia are arguing over. Hence why the US is loath to be nasty to Greece. :D

And the Greeks know they've got Roosevelt's proverbial big stick. Only the Germans don't know it yet. :D At any rate, they're alright because they've got Russia's gas.

Germany may have Russia's gas but they are in a cleft stick. On the one hand they may find the gas being turned off if they remain at the forefront of EU attempts to undermine Russia's influence in the Ukraine but, on the other, they are under pressure from the US who are making the bullets for the EU to fire.The US won't be directly affected by energy restrictions in Europe but it would seem their strategy is to rile the Russians into further military action which will give them an excuse to bring in NATO forces in an attempt to force Russia to stand down. A very dangerous policy that could end with the US and its allies getting into very deep water indeed.