Posts Tagged ‘Angela Merkel’

greek flag

The “bad news is good news” principle has been running hot again in the last couple of weeks with all the interest in Greece and its sovereign debt crisis. Economics reporters from around the world have been banging the drum with ferocity signalling that the end of the world is nigh. Very nigh. People gulp their coffee nervously. Stock markets are jittery.

But is a Greek exit from the Euro really likely?

The short answer is No. Oxi, in fact.

That the problem requires resolving is undoubted. Greek banks are very strapped for cash, and the stage is set for people being unable to access their savings. This is the nightmare scenario as far as civil peace is concerned, let alone international trade and business confidence.

But some factors are being ignored in the breathless doom-laden reporting. We summarise the key ones here.

The debt is unsustainable, so some of it will end up being written off. The question is when.

In or out of the Euro, Greek debt has reached levels that are unsustainable by an economy of its size, under any circumstances. It just can’t generate enough trade or tax receipts to pay it back at any sort of meaningful rate. Why this has been allowed to happen is another story, but it doesn’t matter now. It is what it is.

parthenonThe IMF has recognised this, and said that some form of “debt relief” is required.

In other words, writing off debt. (Probably about half of it.)

This will have to happen whatever the future relationship of Greece to the Euro will be, because unsustainable debt levels will make the Greek currency effectively worthless, which would be to no one’s advantage and would cause much greater ripples through the world economy than writing off some of the debt would.

The problem is political, not economic.

The money is, in effect, “gone” already, dispersed throughout the Greek business community and general population in lending, social support payments and so on. There’s no getting it back, and no way to generate it. What Angela Merkel and others have to do is “sell” retiring the debt to their own taxpayers, which is going to be made more difficult by the hard-edged rhetoric they have employed in recent months. Nevertheless, it’s worse than the alternative, so they will bite the bullet and do it.

What will happen?

A portion of the debt will be forgiven – probably about half – but to make this politically acceptable in the rest of Europe some or all of it may be theoretically rescheduled on the “never never” – the debt pushed out by 20 or 30 years – in reality, never to be repaid.

No one wants Greece in turmoil again.

The Greek civil war was recent, and very bloody, Here right wing militia display the heads of their victims.

The Greek civil war was recent, and very bloody, Here right wing militia display the heads of their victims.

It is easily forgotten that for the “mother of democracy”, Greece is a relatively recent convert to democracy. It was a military dictatorship as recently as the 1960s, and endured an horrendous civil war in the immediate aftermath of World War II. To see the country descend into chaos again is unthinkable for both the “European project” and for the geo-political balance in the region.

Long embroiled in conflicts with their neighbours, an aggressive dictatorship of left or right could spread uncertainty and trouble to Cyprus (dangerously near the Middle East), Albania, Macedonia, and worst of all, Turkey.

None of the people that really run the Western world are going to stand idly by and watch that happen over a pot of money, no matter how big that pot is.

What will happen?

The Western powers will stumble haltingly towards a solution to the debt crisis that keeps Greece stable. Expect to see the rhetoric and the bombast toned down significantly on both sides in the next few days, ahead of a compromise that sees Greece stay in the Eurozone and reduces the fractiousness inside the country. The unexpected discarding of the combative Greek finance minister Yanis Varoufakis by Greek Prime Minister Tsipras is a symbol that this process is already underway in earnest.

The Russia factor

Everyone in the West knows that a newly aggressive Vladimir Putin would like nothing more than to bail out Greece (which he has the money to do), both to thumb his nose at Europe (with whom he is enduring real on-going problems over Ukraine), and by bailing them out win an ally where he could base his Red Sea fleet actually on the Med itself. Which would be his price for the support.

What will happen?

America will never let Russia make such a move. So the lines are running hot between America and Europe right now telling the Europeans that they’ve had their fun and to pull their heads in. “Settle it before it gets worse” will be the message.

The European ideal

It is often forgotten – most often by those on the Right – that the EU is about much more than economics.

Greece suffered as much as everyone else in WWII. In 1953, they

Greece suffered as much as everyone else in WWII. In 1953, they “forgave” the new-born German state the debts it owed them.

It always was designed as a device to impose stability on a region that had been at war for thousands of years, and most horribly within living memory in 1939-45. It was rarely sold to the voters like that – who tend to be much more amenable to hip-pocket issues like how much tax they’re paying and whether or not they’ve winning or losing from EU contributions – but that is nevertheless the driving morality behind the whole project.

And as recently as the Balkan conflict Europe has been reminded of the capacity of the area to dissolve into internecine feuding. Issues of economic security dominate over economic efficiency.

That’s why the EU project consistently ignores bleating about “loss of sovereignty” from political parties and national parliaments and stresses instead the role each country plays in “running” Europe. This makes the EU top-heavy, over-centralised, frequently the butt of satire about its tortuous legislative burden, and unpopular. Nevertheless the blow to the European ideal of seeing a “Grexit” (which might lead to similar problems from other small countries) would far outweigh the benefit of disciplining Greece further.

What will happen?

The European ideal will triumph over neo-con economics. It won’t be sold like that, but that’s what will happen.

There is no legal mechanism to force Greek out of the Euro.

greece euro xendpayOne of the oft-repeated canards in the last few weeks has been that Europe will “kick Greece out”. The problem is, they actually can’t. There is no legal mechanism by which a member of the Euro can be made to exit it against their will.

As no-one in Greece actually wants to leave the Euro, whatever their attitude to the austerity measures Europe seeks to impose, Europe is stuck with Greece as a member whether Europe likes it or not. This scholarly article explains the law behind the situation.

What will happen?

The only way Greece can exit the Euro is if it chooses to. Greece won’t, as it knows a “New Drachma” does not have the gold backing to survive as a viable currency in world economy. The new currency would devalue by 25-50% overnight, destroying savings and making trade with Greece virtually impossible. No external traders or countries would trust the new currency. What’s more the very first step would be the IMF having to lend what has been estimated as $25 billion of new money to support the currency, which really would be good money after bad. It’s one thing to write off debts you’ve already factored into the balance sheet, quite another to keep making the balance sheet looking worse.

So what’s in it for Greece to leave? Nothing. So they won’t.

Commonsense will prevail.

In or out of the Euro, Greece is going to default in its debts, whatever it ends up being called.

It’s a bit like an ordinary working individual borrowing a home mortgage of ten million bucks to build a palace, and then turning round and saying “Oops, sorry, can’t pay you back. But the money’s gone: the home is built.

Sure, the lender can take back possession, but they still have to sell it to get their money back. Then they discover the home is actually made of ticky tacky and it’s really only worth $500,000. They’re going to eat the $9.5 million.

The bank can rail all it likes about how unfair that is, but the guy who built the house has now died, and his son is only 18. He claims – fairly – that he is not responsible for the lunacy of his father, over which he had no control.

Sure, be angry at the now dead home builder. And sack the idiot who gave him the ten million in the first place. But it still doesn’t solve the problem, and the bank still wants the son as a customer.

The only question at stake is by how much will Greece default, and when.

What will happen?

Given that Greece out of the Euro is even worse for Europe than Greece in the Euro, the hard heads are currently saying to each other “Damn, they called our bluff, we’re out of options, we have to make a deal.” What you will see (probably tomorrow night) is is a few crumbs thrown by the Greeks to the Germans so that the central bankers and Angela Merkel can save face.

The wash up will be that the Greek Government will appear willing to continue to reform the Greek economy and live in a $500,000 house rather than a $10 million one. And there are signs that, on their own terms, they are willing to continue the reform process, especially as regards fixing tax avoidance, which is a national sport in Greece. Whether they will increase their consumption tax or give pensions a hit is imponderable, but some small ground may even be yielded on those sticking points to sweeten the pill. And the lenders will settle for that. They have no choice. The money’s gone. What they will do is dress it up so that every other indebted country in the EU will not then immediately say “OK, us too, please.”

protestThe crisis will have to be resolved in the next 48-72 hours. We expect it will be. With Greece inside the Eurozone.

Which will be very boring for those journos that like nothing more than to stir up panic because it sells papers – or hits on websites, today – but there it is.

The long-term damage to the concept of Europe for its citizens is more difficult to predict. This heartfelt article should make us all pause and consider.

Tony Benn

Those who think being “business friendly” (or “Conservative Lite” as I like to call it) is the way forward for the UK Liberal Democrats should keep a close eye on the German Federal Election this weekend.

The Lib-Dems’ long-term European ally the Free Democrats may be effectively wiped out at the election by failing to meet the 5% hurdle to enter Parliament and remain in the governing Coalition.

Essentially the FDP’s support has either drifted to the majority party with whom it has been in Coalition on and off for a generation (the CDU under Angela Merkel) or it has wandered off to a variety of other options on both left and right, according to whichever way members of the party’s somewhat amorphous supporter base lean.

The same fate applied to the Australian Democrats a while back, when they got too close to the then Conservative government and passed a regressive tax package, although leadership wrangling played just as much of a role in their demise.

Back to the future: the day Tony Benn predicted the Lib-Dem’s current crisis to me.

I well remember chatting for some time to Tony Benn at a Liberal Party conference at Harrogate deep in the last millennium, at which he was addressing a fringe meeting.

Opinions on Benn differ – I considered and still consider him a national treasure, and I read his famous diaries voraciously – in a discursive conversation that especially covered his views on the essential non-independence of elected Governments, which his Wikipedia entry summaries as follows:

By the end of the 1970s, Benn had migrated to the left wing of the Labour Party. He attributed this political shift to his experience as a Cabinet Minister in the 1964–1970 Labour Government.

Four lessons

Benn quoted four lessons:

1) how “the Civil Service can frustrate the policies and decisions of popularly elected governments”;

2) the centralised nature of the Labour Party allowing to the Leader to run “the Party almost as if it were his personal kingdom”;

3) “the power of industrialists and bankers to get their way by use of the crudest form of economic pressure, even blackmail, against a Labour Government”; and

4) the power of the media, which “like the power of the medieveal Church, ensures that events of the day are always presented from the point of the view of those who enjoy economic privilege.

As regards the power of industrialists and bankers, Benn remarked:

“Compared to this, the pressure brought to bear in industrial disputes by the unions is minuscule. This power was revealed even more clearly in 1976 when the IMF secured cuts in our public expenditure.

These [four] lessons led me to the conclusion that the UK is only superficially governed by MPs and the voters who elect them. Parliamentary democracy is, in truth, little more than a means of securing a periodical change in the management team, which is then allowed to preside over a system that remains in essence intact. If the British people were ever to ask themselves what power they truly enjoyed under our political system they would be amazed to discover how little it is, and some new Chartist agitation might be born and might quickly gather momentum.”

That was essentially Benn’s thesis as we talked. He shared a few examples which it would be inappropriate for me to repeat here, as it was a private conversation. I was left profoundly convinced that – even though I disagreed with much of his prescriptions to solve these obvious problems – his analysis of the hidden state-behind-the-state that influenced the public behaviour of governments was totally accurate.

I genuinely don’t think it was his obvious charisma and passion that led me to conclude he was correct, although Benn is undoubtedly a very attractive and convincing individual, especially for a young Parliamentary candidate in his twenties. It was more that the stories he told me simply “rang true”.

As I nursed a pint and Benn enjoyed his perennial mug of strong tea and a pipe – he has been both a lifelong teetotaller and longtime pipe smoker – the conversation moved onto the manner in which essentially left wing parties may nevertheless sometimes be required to enact unpopular social policies, specifically cutting public expenditure as the wider macro-economic situation demanded.

I have never forgotten these words

And Benn said something to me that I have never forgotten, and which I later heard him repeat on various occasions on TV in the coming years, especially as Labour sunk deeper and deeper into the Blairite fog.

I am paraphrasing, but it ran thus:

“We are not the bastards” he said, somewhat whimsically. “The public know we are not the bastards. When we try and act like bastards, we do a poor job of it, and the public know our heart is not really in it. If they want the bastards, they’ll vote for the real ones – the Tories. If we try and pretend to be Tories, they’ll simply kick us out and go get the real thing.”

This weekend, the FDP will pay the ultimate price for deserting their community-focused, small business friendly, “small is beautiful”, environmentally aware, co-operative roots. They will be decimated, and may well end up a footnote to history.

Nice Clegg

The Liberal Democrats led by Nick Clegg and the right-leaning cabal he has gathered around him – or the Lib Dems led by someone else – should listen and learn, or they will face the same fate – and frankly, what’s more, they will deserve to.

“They don’t want us to pretend to be the bastards.

If they want the bastards, they’ll vote for them.”

Liberal Democrats: you have been warned. Don’t say you weren’t.

UPDATE

"What's the similarity between Becks and the FDP? They've both got 4.9%."  Oh, those crazy whacky Germans.

“What’s the similarity between Becks and the FDP? They’ve both got 4.9%.” Oh, those crazy whacky Germans, eh? How cruel to say they don’t have a sense of humour.

Well, our direst forecasts have proven correct. As has Benn’s essential thesis. Some 2.2 million FDP voters switched directly from the FDP to Merkel’s ruling CDU to deliver her one of the biggest election victories since the war.

(An interesting aside: If she stays in power for the next four years, as she has said she intends to, she will pass Margaret Thatcher’s record as the longest serving female leader in modern European electoral history.)

The FDP’s vote collapsed to 4.9%, tantalisingly close to the 5% they needed to ensure survival, and denying it seats in the lower house of the Bundestag, effectively making them and the country’s Vice Chancellor Philipp Roesler (ironic, huh? Vice Chancellor … Deputy Prime Minister … geddit?) utterly irrelevant to Germany moving forward.

And by the by, denying Merkel a natural coalition partner despite her electoral triumph; she will now have to laboriously try and stitch together either a “Grand Coalition” with her natural rivals the SDP, or cobble together an arrangement with the Greens.

Both options look problematical. Ironically, Merkel now has both unparalleled authority in her country, and a real chance that she may struggle to govern effectively, which given Germany’s key role in re-shaping the Eurozone is hardly good news both for Europeans and the rest of the world who are hoping that the economies Greece, Ireland, Italy, Spain, Portugal et al are going to continue to avoid collapsing entirely, which would plunge the world back into a credit crisis.

Vince Cable - a burr under Clegg's saddle, but wisely so.

Vince Cable – a burr under Clegg’s saddle, but wisely so.

After four years of bickering and failure to deliver on its tax-cutting pledges German voters overwhelmingly bled to the “real bastards” (exactly as explained above) and for those who couldn’t make that switch there were a variety of more left-wing options to try. What they didn’t do was stay with a party that didn’t seem to know why it exists.

We maintain the Lib Dems need to work much harder on effectively differentiating themselves from their larger Coalition partner or face the same fate.

Buying the Tories’ free market schtick holus bolus is most certainly not the way to do that.

Senior economic spokesman Vince Cable is often criticised by those on the right of the party for his often mournful warnings that the Tories talk at least as much crap as they do good sense about reducing deficits and applying austerity measures to cure the country of its bloated welfare culture.

As Cable has appositely pointed out, Jeremiah might have been a miserable old curmurdgeon, but his famously depressing prophesies were correct.

Er ...

Er …

Meanwhile, Merkel’s continuing onward march gives us an excuse to tell again our very favourite completely politically incorrect joke.

So Angela Merkel turns up in her stretched Mercedes at the border with Greece.

An Immigration Officer wanders over to the car. “Name?”

“Angela Merkel,” says the Chancellor as she passes over her passport.

“Occupation?” asks the officer, as he flips through the pages.

“No, ” smiles Merkel sweetly, “just a holiday this time.”

FOOTNOTE: We were saddened to see that the seemingly indomitable Tony Benn was admitted to hospital this week after feeling unwell. Let us hope he recovers fully and our thoughts are with him and his family. Agree with him or not, his contribution to modern political debate in the UK and beyond has been colossal. We are also reminded of his famous quip in 2001 that he was retiring as an MP “to concentrate on politics”. Maybe Nick Clegg should view the Deputy Prime ministership with similar askance humour sometime soon.

Funny thing to do because you are perfectly capable, Dear Reader, in looking round the blog yourself. But with 270 new blogs in a year that’s a lot of searching, so all the “Blogging Basics” sites say I must give you a guide that you can go look through, so here it is.

Er, nope. Never happened. Nice painting though.

Er, nope. Never happened. Nice painting though.

By far the most popular blog of the year on any one day was https://wellthisiswhatithink.wordpress.com/2012/10/01/its-official-adam-and-eve-er-werent/ which garnered nearly 5,000 hits in one day (out of an annual total of more than 77,000 in 2012) when a very senior Archbishop in the Roman Catholic Church revealed what the rest of us with brains have known forever and a day anyway, which is that Genesis is true only in the sense that is is a moral fable, and not in the sense that the world was created in 7 days, or that Eve came from Adam’s rib, or that all the horrors of the world arose from munching a forbidden apple.

The really interesting thing about this story, of course, is that theologically speaking when we allow any part of the Bible text to be considered mythological then we have no argument that any other part of the Bible might not also be mythological.

Hence, just to pick a few major ones – bye bye Noah and capturing two of every living creature on the earth (including all bacteria, all 8000 species of ants, etc.), cya later Lot offering his virgin daughters to the crowd, not to mention the fact that Joshua collapsing the walls of Jericho couldn’t have happened because archaeology reveals the place was deserted when Joshua was around. Great story – good song – historical nonsense.

It seems we will just have to do what the 19th and 20th century “modernist” or “critical” theologians wanted us to do, which is read the Bible with the benefit of modern textual analysis, studying the original languages not the translations, (which, for example, can be used to argue that the Bible actually says nothing at all about gays) and taking full advantage of archaeology when we can.

The article on Adam and Eve was also the second most popular article overall of the whole year.

I think we have more to worry about than whether a Secret Serviceman did or did not employ a prostitute. Like: HIV, violence, drug addiction, social dislocation.

I think we have more to worry about than whether a Secret Serviceman did or did not employ a prostitute. Like: HIV, violence, drug addiction, social dislocation. And more.

The most popular article for the whole year was https://wellthisiswhatithink.wordpress.com/2012/04/22/the-secret-serviceman-and-the-prostitute-whats-the-real-scandal/.

I’d like to think this was all about my thoughtful analysis of hypocrisy in American moral values, the role of prostitution in modern society, the role of the media in drumming up salacious gossip, and the relationship between poverty and the sex trade.

However checking out my stats closely I suspect it’s just because the word prostitute is often typed into search engines, and the story duly pops up.

Similar big scores have been gathered with articles about tits, and even bum.

One would despair, were it not for the fact that I know that some people read the article seriously.

Similarly, promising to ignore injunctions and show people Princess Catherine of Wales (aka Kate Middleton) topless and then bottomless worked well to drum up passing trade, though I doubt many of the people who clicked on the links got the point of my tongue in cheek effort.

The third most popular post of the year was this “Gratuitously Offensive Politically Incorrect Joke”, which I still think is very funny, (it’s also a paraprosdokian by the way, and there are some more of them here, which is probably why I like it so much), and scores very highly with anyone searching for Angela Merkel in Google and so on, so the Bundesnachrichtendienst have probably given me the once-over, but decided I am harmless.

Snookie, Chelsea the Borgias and Big Tits was the fourth most popular article of the year, and has been in the Top Ten most popular almost every day of the year. I a eagerly awaiting the next series of the Borgias, not to mention the next series of Downton Abbey and Throne of Kings. I don’t mind crap TV, so long as it’s good quality crap. A lot of you seemed to agree with me that Jeremy Irons and the Crew give good crap. Snookie and the Crew? Not so much. I wish, actually, I had been a TV reviewer, which is, of course, one of the most sought after positions in journalism. Do we think it is too late, Dear Reader? Hell, no!

Last but by no means least – in fifth place – was what I have decided was the WINNER of Advertising F*** Up of the Year, in fact the very first of the series which proved incredibly popular with readers. To save you clicking back to last January, here it is:

The first poster is for a road safety campaign where Daddy has crashed his car and died. The one right next to it is for a notorious lap dancing club. I mean, really?

The first poster is for a road safety campaign where Daddy has crashed his car and died. The one right next to it is for a notorious lap dancing club. I mean, really? Really?

The Advertising F*** Up series were undoubtedly the most popular series of articles in the year. To access them, just type “F***” into the search box and they’ll all be listed for you. (Saves me doing it.)

I am enormously grateful for all the supporters of the Blog, all those who have commented, who have argued, who have provided elucidation, and who have laughed and loved. It is most popular in the USA, in the UK, and in my home country of Australia, and I guess that is inevitable. But in all, people in 172 countries read the blog, which I personally find quite humbling and astonishing, and the free spread of ideas and opinions must surely be the greatest boon the Internet has given the world.

I am especially proud, in the year just gone, for the work we were able to do on awareness to do with bullying, and Alzheimer’s, on clean water for the poor of the world, and on women’s rights. I am also very glad my feverish campaigning for Obama came out on the right side of history, and I hope his second term is more impressive than his first, which is often the case. Let us hope and pray for wisdom for all our political leaders, as the world is a long way from being out of the woods yet – economically, and politically.

I bitterly regret that my warnings on Syria, which predated most commentators in the world, were ignored, but I only have a very small lectern and it is a big world. And anyway, the world only listens when it wants to. Yesterday the United Nations estimated that 60,000 have died in this completely avoidable conflict thus far, and unless Assad’s Alawite regime can be persuaded to decamp to the safe haven of Iran pretty damn quickly that figure could still rise exponentially.  It was – and is – all so unnecessary, and so awfully, inexorably predictable.

I am also grateful for the opportunity to showcase my poetry and creative writing. Thank you for all the kind comments.

I am Bradley Manning. Are you?

I am Bradley Manning. Are you?

As the blog tipped over from 2011 into 2012, I was still deeply distressed by the murderous execution of Troy Davis, campaigning against which had occupied – unsuccessfully – so much of the start of the blog. This year, I have watched with increasing horror as the might of the modern American state has born down relentlessly on Bradley Manning, the well-meaning and honourable serviceman who set off the Wikileaks scandal by releasing for public gaze tens of thousands of classified snippets of information. Expect to hear a lot more about his case in the coming weeks, not least why I believe the man is a modern hero who should be feted, not crucified.

I am still Troy Davis. I am now Bradley Manning.

Happy New Year, Dear Reader.

Angela Merkel

"Ve haf vays of rescuing your economy ..."

So, Angela Merkel arrives at Passport Control at Athens airport.

“Nationality?” asks the immigration officer.

“German,” she replies.

“Occupation?”

“No, just here for a few days.”

Oh come ON – admit you laughed.

(Thank you, Dario)