Austerity will wreck Europe: Greece and the scary new European ultra-nationalism

[deutsey]

SNIP

German characterizations of Greece, in the press and in political speeches, range from patronizing to vicious—and they do not sound pretty in a German accent. One cosmopolitan German whom I know well, a man who has long lived in the United States, told me in 2012: “They should just dig a big hole, toss the Greeks in, and cover it over.”

SNIP

Germany acts in tandem with a deeply conservative European Commission permanent bureaucracy, with hedge funds as enforcers. In effect, without the broad consent or understanding of the European public, a huge amount of sovereignty has been transferred from nation-states to EU officials, who are beyond direct democratic accountability—and that authority is being used to enforce a perverse economic strategy. As the Nobel laureate Amartya Sen warned:

If democracy has been one of the strong commitments with which Europe emerged in the 1940s, an understanding of the necessity of social security and the avoidance of intense social deprivation was surely another. Even if savage cuts in the foundations of the European systems of social justice had been financially inescapable (I do not believe that they were), there was still a need to persuade people that this is indeed the case, rather than trying to carry out such cuts by fiat. The disdain for the public could hardly have been more transparent in many of the chosen ways of European policy-making.

More at:

http://www.salon.com/2015/07/16/austerity_will_wreck_europe_greece_and_the_scary_new_european_ultra_nationalism/

[hill2016]

1. i'm pretty sure

the German public would not have wanted to keep lending Greek money without any conditions

[DFW]

3. As one long married to a member of "the German public," and lives there

I can tell you that they all can add, and know full well that the money their government has "lent" Greece will never ever be repaid. They are also tired (my wife is a solid Green/SPD voter) of being called Nazis and seeing Merkel portrayed with a Hitler mustache by the Greeks because want their tax money spent on their own country and not another bailout of Greece (or Portugal or Italy or Spain). Spain, Italy and Portugal have all seemingly figured out that the well will someday run dry. Since joining the EU in 1981, Greece has had the option--though never the obligation--of conforming to the rest of the EU with their taxation, pension and structure policies. They not only chose not to, but continued to elect governments that preserved the status quo, which could only preserve the myth of solvency by maintaining a currency that could steadily be devalued. Instead, they got themselves into the Euro by stealth, continually spent way more than they took in, and now, a generation later, wonder why their own well is dry, and why the rest of the EU is reluctant to tell their own people to go without water.

My wife asks why her generation and our children's generation should have their retirement age bumped from 65 to 67 while paying for a Greek government worker (one in every four there!) to retire at 55? German voters are asking their leaders the same question, and don't feel like letting their government cough up another cent when said government gets Hitler mustaches painted on them on posters in Greece for the crime of listening to their own people. If the people of Haiti were painting Hitler Mustaches on posters of Obama, like the Teabaggers do, I'm sure we would be less eager to help them out, too. But the Haitians don't do that.

[hill2016]

5. yeah

I would really like a response from the pro-Greece crowd

[DFW]

6. Don't know if there is one here

Mostly looks just like an anti-German crowd. Lot of "anti-" everything on here these days. Used to be only anti-Republican, but now that's just for idiots like me, I guess.

[Warpy]

4. Perhaps the German public would be a lot more sensible than the leaders

and would insist on grabbing money back from everybody who stole it rather than trying to kill off the working class.

[DFW]

7. Right, just killing off that German working class

That German working class with health care paid for, education paid for, and six weeks paid vacation for all....that German working class that half of southern Europe (and huge numbers from Africa and Asia) are risking their careers if not their lives to join.

Reality beats slogans every time. I'm married to a recently retired member of the German working class. She only got to take home about 1650 euros a month of the 3000 she made gross pay, but at least her government made sure it delivered what it promised for taking the rest.

[Dwayne Hicks]

11. And?

Why should they agree to any conditions? The EU is solely responsible and should be granting money to Greece for free.

[magical thyme]

13. then the Troika shouldn't have turned *private* bank losses into *public* debt

and they should not have implemented austerity without debt relief. The IMF and the Eurozone made a ton of mistakes, but one thing the IMF got right was when they warned from the start that austerity without debt relief would fail.

[GliderGuider]

14. +100 nt

[magical thyme]

16. Sahra Wagenknecht, deputy chairperson of the Left Party, says it best

"Madam Chancellor, change your policy. Before it is too late."

Open letter by Sahra Wagenknecht to Angela Merkel, published in BILD on 10 July 2015


Madam Chancellor,

Europe is in a bad condition. All over Europe it is the hard-working people with ordinary wages who pay most taxes while the rich people duck away. Many wage-earners are not able to live off their job income. Also in Germany. After a life of hard work, often enough, a miserable pension looms. The wealth of millionaires, however, has reached new peaks. In all of Europe the states are highly indebted because they have taken over the losses of irresponsible bankers and speculators. Greece´s debt is particularly high. Here, a corrupt political class together with Greek oligarchs and the international banks has shamelessly accumulated wealth for years and years. Since the introduction of the Euro especially, the party was on. Many small and medium-sized enterprises on the other hand were swept from the market by the new currency which was way too hard for Greece.

In the year 2010 Greece was bankrupt. It was clear already then that it would not be able to repay its debt. Yet despite that, Madam Chancellor, in 2010 you set the course for Germany and the other Euro countries to accept the liability for the Greek debt. By so doing you protected banks and hedge funds from losses in the billions. For the European tax payer who was never asked, however, this decision was a fatal error. It was clear from the beginning that a high amount of our money would be lost. Together with other parliamentarians of the Left I pointed this out to you in the Bundestag. You would not listen to it.

In the meantime Germany has more than 60 billion Euros at stake in Greece. Ever more credits were handed out in order to enable Greece to pay old debts – only because you, Madam Chancellor, did not want to acknowledge your mistake. That way the illusion of Greek solvency was upheld. In an enterprise this would be called delaying bankruptcy. The credits were given on conditions that led Greece even deeper into the crisis. The small people suffered, the Greek oligarchs became even richer. Today production in Greece is 25 per cent less as compared to 2010. There are no investments, the young generation has no perspective. Even though the Greek state has cut its expenses by almost a quarter which is more than any other European country has done, the debt has not shrunk. It is higher than it ever was. Still, Madam Chancellor, before the Greek referendum you wanted to spend another 15 billion Euro of European taxpayers´ money to have Athens pay for old debt. By taking on a new debt. The only condition you had was to oblige the Greek government to continue with the policy of the last years. The taxpayers in Germany, too, can be grateful to the Greek people that this proposal was swept from the table by their sovereign "No".

It is time to come clean with the people. Stop burning more and more taxpayers´ money in order to disguise that a major part of the money we have already spent is gone. One day the truth will come out. The later it is the more expensive it is going to be for all of us.

Greece does not need a new "aid package" only in order to pay off old debt with new debt. Greece needs a haircut. It must be relieved, at least for three to five years, from the pressure to pay interest and repayment which it cannot shoulder by its own means anyway. Greece also does not need more social cuts but investments and a hefty levy on wealth at the expense of its oligarchs. What is necessary is an unbundling of the Greek economy in which today roundabout 800 immensely rich family clans hold solid monopolies and dictate the prices. Those are the reforms that would set the country on track, and not more pension cuts, VAT increase and privatizations.

You ought to remember: also the German reconstruction became possible by means of a generous debt haircut. After the Second World War Germany was granted a reduction of two thirds of its old debt. Only that way the economic miracle could have a full start. At that time we were indebted also to the Greeks, a debt that was never repaid. Madam Chancellor, change your policy. Before it is too late.

Sahra Wagenknecht
http://www.sahra-wagenknecht.de/en/topic/2.english.html

[HooptieWagon]

2. Russia would welcome Greece with open arms.

If Germany keeps it up, it's only a matter of time.

[DFW]

8. Sure, the big bad Germans are sending Greece right into the new Soviet orbit.

Putin has access to calculators, too. He saw how much the EU blew propping up Greece's finances in recent years. You think he'll spend Russia's resources doing a repeat performance? All he wants is warm water ports for Russian warships. Tsipiras may not be much of an economist, but he knows how to use a calculator, too, and he definitely knows how to read a map, and how to spell Куба.

[HooptieWagon]

9. Not just any old warm water ports.

Strategic ones, in the eastern Med. Close to Syria. Next to Turkey. Air bases. Pipeline terminals.
Propping up Greeces economy won't be nearly as bad once Grexit. It'll practically be a barter...food, natural gas, and oil. And it will be a nice vacation spot for wealthy Russian tourists, who will invest in hotels and vacation homes.

[DFW]

10. The wealthy Russians are already there

They have been buying up choice Balkan coastal real estate for over ten years. They will not appreciate Putin coming in building military bases all over their playground. And now that he grabbed Crimea, Putin has warm water Black Sea ports he can use to intimidate Turkey, Romania and Bulgaria if he so chooses. Plus, NATO won't risk war just to deny Russian warships transit rights through the Bosporus. Putin might not have grabbed Crimea if he saw a shot at getting Piraeus cheaper than Sevastopol, but he did that before this crisis was full-blown.

[bemildred]

12. "Has", not "will", the damage is done.

Just a matter of watching it flip end-over-end and bounce off the walls until it stops now.

[magical thyme]

15. it's a war of the 1% on the 99%. and the 1%, as usual, are winning.

This is the result when net importers don't control their own currency, which is structured to favor net exporters:

Italy: debt 2.7T+ as of now
Debt:GDP ratio: 141%
Italian public debt has risen upwards of 2.2 trillion euros in May, new data showed Tuesday....Italy’s debt is now at 132 percent of GDP...far from the 60 percent debt-to-GDP ratio target set by the European Commission...

The consequences of an Italian debt crisis would however be more dire - it’s the third largest economy in the eurozone.
http://www.dw.com/en/italys-sovereign-debt-hits-record-high/a-18583683

Portugal: debt $282B+ as of now
Debt:GDP ratio 129.4%
Unemployment remains stubbornly high however, especially among the young. Many young people have left Portugal in search of work.....Restaurants are far less busy, for example, as people have switched to home cooking to save money...However the distribution of free meals to the poor has exploded, and that is not all four years of hardship have changed.
http://www.euronews.com/tag/portugal-s-debt/

On an aggregate level, Portugal’s overall debt level — at 381% of GDP when also including private households and non-financial corporations — is well above Greece’s total debt level (286% of GDP).

At the same time, debt continues to grow much faster than the Portuguese economy. Between 2008 and 2013, aggregate debt grew by 69 percentage points. In order to stop the debt growing faster than the country’s economy, the government sector alone would have to improve its fiscal position by 3.6% of GDP.
http://www.theglobalist.com/the-fairy-tale-of-portugals-successful-turnaround/


Ireland: debt 216B+ as of now
Debt:GDP ratio 116.7%

Belgium: $391+B as of now
Debt:GDP ratio 105.1%


Spain: debt $1.069+T (yes, trillion) as of now
Debt:GDP ratio 100.3% (2015 estimate)
Interest per Year: 51,258,049,070€
http://www.nationaldebtclocks.org/debtclock/spain

France: debt $2.5+T as of now
Debt:GDP ratio 100% (2015 estimate)
In regards to France, Laurent Bigorgne, director of the Institut Montaigne, predict that French liabilities will not stabilize, but will continue to progress.
http://globaleconomicanalysis.blogspot.com/2015/02/six-eurozone-countries-debt-exceeds-100.html

http://www.nationaldebtclocks.org/
*http://awaken-longford.com/2015/03/04/debt-laundering-and-theft-reality-of-greece-ireland-spain-and-portugal/

[Emelina]

17. Austerity: Rich run up debt, make poor pay off debt.

Never vote for anyone with ties to Goldman Sachs.

http://www.thenation.com/article/goldmans-greek-gambit/