Greece debt crisis

[David Sedgwick]

Here's a link to a thoughful article currently getting huge exposure in the wider world.

http://www.project-syndicate.org/commen ... er-2015-07

Before the forum's moderators reflexively remove this as a racist anti-German rant, please bear in mind that the author was for seven years Germany's Foreign Minister.

As you say, it's a thoughtful article.

In the course of it, the author refers to "nonsensical propaganda about a Fourth Reich and asinine references to the Führer".

[Brian Towers]

Given the views of another German, Carl von Clausewitz, that "War is the continuation of politics by other means", the Greeks should be grateful that Germany is sticking with economic warfare for the moment.

[NickFaulks]

In the course of it, the author refers to "nonsensical propaganda about a Fourth Reich and asinine references to the Führer".

Yes, I noticed that. I assume that such a genuflection to political correctness is still necessary in order to avoid the fate I described, but it is encouraging that he is able to write it at all. There is nothing in the rest of the article which separates the current edition of German domination from its predecessors.

[John McKenna]

Given the views of another German, Carl von Clausewitz, that "War is the continuation of politics by other means", the Greeks should be grateful that Germany is sticking with economic warfare for the moment.

I don't think the Greeks have much to be grateful for at present.

A German-led financial blockade by the EU & IMF, subject to austerity strictures.
Coupled with an invasion of refugees from the Middle East, the Horn of Africa and beyond.

Still a great place to visit but not one to linger long in.

[Phil Neatherway]

John Humphrys wrote an interesting article on Greece recently (28th June) in the Sunday Times. Unfortunately, it's behind a paywall, but essentially he was saying that the cause of the current crisis is corruption in previous Greek Governments. If you get te chance, do read it.

http://www.thesundaytimes.co.uk/sto/new ... 573930.ece

[David Robertson]

There's a very interesting, and lengthy, piece in today's New Statesman by the Cambridge academic historian, Brendan Simms. It's all of a piece with his wonderful book, Europe: the Struggle for Supremacy in which he argues that the history of Europe since the Holy Roman Empire (HRE) has been, in effect, the history of Europe's relationship with Germany. If I remember, I'll post the link when the article comes online in a few days time. Which I have now done

But for now, the gist is that the EU has been an invention for the containment of Germany into which Germany has 'uploaded' (Simms' metaphor) its own cultural and political preference, not for political union, but for a German-dominated, HRE-style set of binding rules and procedures short of full political union. In such a model, it doesn't much matter who is in or out, provided they follow the rules laid down by the German hegemon. And it isn't a Kaiser-style German 'empire' either, though characteristics of a Germanic imperium are evident.

Simms' prognosis for the EU and the €uro(zone)? He's gloomy, I think. He thinks that, to achieve a looser fiscal accommodation with the economies of Greece, Italy, Spain and even France, Germany would need to quit the €uro! Or more probably, the €uro will implode under market pressure. Or the EU will split. Or, finally, the EU will have to adopt full political (and hence, fiscal) union. But for that to happen, he concludes waspishly, France will have to renounce its post-war policy of 'Europe for the Germans; but France for the French'

[NickFaulks]

http://www.telegraph.co.uk/finance/econ ... ystem.html

Excellent, now a show trial. Any comparison with the 1930s would of course be in very poor taste.

[Mick Norris]

Athens stock exchange due to reopen Monday

Interesting article, but warning about the shirt
varoufakis has odd shirts but didn't wreck Greece

[David Pardoe]

Can the Greeks find a sustainable deal to hold the EU together... the room for negotiation looks limited just now, but some major restructures are needed.

Next year we could be discussing a Brit exit....?
I cant see that Cameron is getting much by way of concessions so far, and the migration issues don't look good..
It will be interesting to see what develops..
Then we have the Scots Nats threatening to exit... with slippery Salmond playing the cards for another referendum in a few years...?

[NickFaulks]

Can the Greeks find a sustainable deal to hold the EU together...

Why is it even the job of the Greeks to do that?

[Paul McKeown]

f**k, there's nothing like a Euro crisis to bring out the raging xenophobes. It's enough to bring a tear to a brass eye, the lame dipsticks and their lame Hitler metaphors (at least that idiot bag lady Thatcher reportedly only resisted the Wiedervereiningung for fear of Otto von Bismarck). If it wasn't Germany on top, it would be France, and no doubt we would be deluged under a tsunami of dribble about Napoleon, Waterloo and Agincourt. They'll move on to spittle flecked diatribes about the Jocks, the Micks, the Septics, soon enough, as soon as Fake Fartrage and the contents of Dacre's Daily Toilet Bowl changes its diet. And all this fake concern for Greece, the same Berkshire Hunts would normally not give the steam of their pish for concern of their fellow Brits, never mind some poorer nation at the south eastern end of the continent they spend their time incontinently doling out their disdain for.

In a decades time, the Greek economy will have rebounded, Poles and Romanians will still be doing the jobs no one else wants to do, and the current worries about the stability of the Euro will long have been forgotten. But the saloon bar fruitcakes from the Shires will still have an irrational hatred of everything sufficiently foreign, whether that's from Sofia or Sheffield.

[NickFaulks]

In a decades time, the Greek economy will have rebounded... and the current worries about the stability of the Euro will long have been forgotten.

Sorry, but you are just wrong about that. You will struggle to find an economist who does not accept, at least privately, that the euro in its current form is over. Europe's leaders certainly understand this, and the current unpleasantness is all about the distribution of the pain which inevitably accompanies the end of a regime.

[Paul McKeown]

David Icke returns once again

[NickFaulks]

I think I've got it. We're playing "What's my Line" and you're a Goldman Sachs bond salesman.

[David Robertson]

Writing in today's FT, another academic historian, Mark Mazower takes up the points made by Brendan Simms in the article I mentioned up-thread

The proposed bailout settlement for Greece that Germany has crafted has been criticised in many quarters for its harshness. But it is a kind of harshness for which historical analogies are elusive. Yanis Varoufakis, the former finance minister of Greece, called it a kind of Versailles Treaty for the 21st century — only worse. But there was no war, at least not a real one. Others have described it as turning Greece into an economic protectorate or a new kind of colony. But the language of imperialism was woolly even when Lenin used it.

In fact, Germany’s dominance of the EU is based neither on its army nor on a colonising impulse but on rules. Rules matter, of course, but rarely have they become so synonymous with leadership. Why do they now matter so much?

In the past the nation’s might was associated less with crafting rules than with breaking them. Kaiser Wilhelm II’s generals took the military suspicion of legal constraints to extremes. Hitler went much further. He did not believe in sharing power at all. Contemporary German politics is built upon a deep revulsion from these ideas of leadership. Berlin’s commitment to Europe is heartfelt and so is its investment in institution-building. Constructing European institutions that make decisions jointly helps allay old suspicions and make the country’s economic supremacy more palatable.

The same reasoning lies behind its devotion to rules. There are two kinds of superpower: those, like the Third Reich, that see rules as fetters; and those that see them as useful tools of international management. The latter is how the US, following the British example, exercised power globally through the second half of the 20th century, and it is now Germany’s modus operandi in the eurozone. Because rules are by definition collective, they satisfy the second lesson that the disasters of the Third Reich taught contemporary German diplomacy: never stand alone. Nothing was more notable during the fraught discussions of the past months than the country’s desire not to find itself isolated. Fortunately for Berlin, other north and eastern European states were willing to sign up to its hard line. Germany simply cannot afford to let Europe look like a fig leaf for self-interest. Yet rules often do just that. As German conservative jurist Carl Schmitt once said, the hegemon’s power lies in its ability to set norms. And, we might add, to determine which apply to itself. Germany’s Federal Constitutional Court often has the last word on which rules will apply at home.

The fog that surrounds the politics of rules lifts, and the interests that they serve become visible, when the rules are no longer voluntarily obeyed and must instead be enforced. A century or so ago, enforcement was easier because democracy was limited and public opinion could often be disregarded. In Egypt in 1882, default brought gunboats, the toppling of monarchs and military occupation. When Greece went bust in 1893, an international financial control commission took control of big revenue streams for decades and turned them over directly to the country’s bondholders. Greek public reaction hardly entered into the equation.

None of these crude methods of enforcing compliance is acceptable today — least of all within the EU, where countries are far more interconnected than a century ago and far more democratically run. And, because the eurozone is a collection of states whose economic fortunes have varied widely under the single currency, obtaining any kind of consensus about the utility of its rules becomes almost impossible once the debate on them spills out of the small circles of technocrats in which they originated. In times of extreme crisis consensus is probably unobtainable. But these are precisely the moments at which confident leadership sets rules aside. As Winston Churchill said, sometimes humanity, not legality, should be our guide.

In the latest episode of the Grexit crisis, France and Italy invoked fundamental EU political values. Germany fought to keep an explicitly political debate at bay. Yet its inability to differentiate between when it is helpful to stick to the rules and when it is better to set it aside now threaten the legitimacy of the union itself.

It is time for Berlin to escape the shadow of the past, to think afresh about the meaning of leadership and to start to wield its influence in the eurozone differently. Otherwise the future is likely to be a Europe shrunken in power, membership and influence — a union ever more obviously a vehicle for German interest. Right now, that is surely the last thing Germany wants.