Posted by: Dr Pano Kroko | June 28, 2012

EURO 2012 European Union Summit — Euro Finance equals Euro Politics — Germany’s War

EURO 2012 isn’t about football at all…

Even though that’s what you see on the telly each and every night this week…

EURO 2012 is about the the European Union Summit raging these days in Brussels. Cause this is where the future of the Euro gets decided and this is where the Euro Finance equals Euro Politics and is actually the formal battleground where Germany’s War of words and banknotes has already begun.

A war for the supremacy of Europe, fought by someone fashioning herself much like Charlemagne — if not an outright Valkyrie from the Ring… and she is poised to win, no matter how many goals you spot on the telly.

And much like the German football team that has been experiencing a renaissance lately and is firmly on a winning streak…  the German Chancellor wants to have all European nations yield to her. Yield and obey her decisions in order to have the Euro zone partners lives, performance and economies depend on penalties imposed by Berlin and Frankfurt. Unfortunately, this being Europe and full of the messy smelly Continentals at that, we have the French too. And the Italians. And the Spaniards. And the great unwashed Portuguese. And lastly, the mysterious yet elusive Greeks too. The Greeks whose name no one dares to tread here.

And everybody has demands for the EURO 2012, European Union football game. So Sorry, European Union Summit I meant to say.

France wants a French referee. Italy wants to change the rules. Spain wants to take the bench permanently and smoke. Portugal naturally wants more wine and Fados. And then there is Greece…

Well Greece…

Somehow Greece thinks it’s playing another game altogether.

And the thing is nobody can figure out what’s the game they are playing.

Maybe they are playing ping pong with the Chinese, rugby with the Australians or even playing at synchronized swimming with the Czech girls team…

Who knows what they are playing.

They themselves don’t know… or maybe their game plan is to confuse, obfuscate and walk away with nothing… Precisely that. Nothin’ playing – nothin’ gaining. Because they are surely playing games — just what game — its a secret. Yet they are playing at something. Playing fuck all…

Maybe they are playing Russian Roulette.

They are playing fuck all, except playing footie with their European partners, as they should.

They are thinking so small… It makes me weep. And they are so out of touch — it’s scary. What the fuck is wrong with these people ? I wonder as only a thinking Greek can. Rodin’s statue philosophizing… in the Brussels sunshine seeing the couples cavorting in the park.

But that’s always the case with someone, or other. Not everyone plays the same game here. Because Euro Politics are such a messy murky job, that they make even the proverbial “Foggy bottom” look like crystal clear azure Caribbean waters.

As am attending the Euro-Summit today, am thinking of the Brussels bureaucrats serving up a dish composed of a bit of this and a bit of that — an insidious melange — cooked to death in an elaborate  french oven pot and with dripping sauce everywhere. Combined with a good stout German beer, this passes for nutrition here. A dish without any real taste, real substance or real guts. And am not talking about the food here — mind you…

 And here is the set up for the European Leadership Summit’s climate. And am not talking about the weather here either.
Because this morning, the Euro has sunk at it’s lowest in the last few months in news around here that things aren’t going good. Brussels is panicking. Mainly because the people and the markets have already priced out the LOSS and have figured out this Summit to be bust before it even begun. Therefore all the European stock markets have turned sharply South and gone negative. Starting with the FTSE down 40 points at 5483, a 0.7% drop and Germany’s Dax losing 20 points, or 0.3%, to 6208, while France’s CAC has shed more than 14 points, or 0.5%, to 3048 and Spain’s Ibex is off nearly 50 points, or 0.7%, at 6617 and Italy’s FTSE MiB has tumbled 145 points to 13158, a 1% fall, and please don’t ask me for the Greek Market because it is abysmally bad sunk in the depths of depression…

Today the early morning salvo first heard in the halls of the Euro Summit, and then went echoing around all of Europe and the world, is the opening gun salute by the Germans. The Germans, who in a clear jab aimed at the Greek, the Italian and the Spanish leaders who have warned their countries’ rising borrowing costs are unsustainable, the German government officially warns against “exaggerated panic mongering”over the surge in interest rates on Spanish and Italian government’s sovereign debt. More over, the German government expresses unwillingness to consider developing any new instrument in order to tackle Italy’s problems. This coming from the Fear Mongers and the Fear Financiers themselves is rich fodder. Still undaunted, the Germans reiterate that it’s up to the local [occupied countries] governments themselves to decide whether, when and how to use the available economic framework instruments of the Euro-Union.

Still seeking to dampen pre-summit expectations, — even though the weather does this fine by itself — in Brussels —  the Germans also said that “the question of progress towards a fiscal union cannot be resolved now. Yet it can be resolved in one day… Just kneel, because they simply want control of the Continent’s banks and reiterate Germany’s opposition to using bailout funds to recapitalize banks while supervisory controls remain at the national level. Simply put: Give up more or less your sovereignty to Berlin and we might throw you a bone…

Heel, kneel and obey and you might be allowed to become our bitch.

Horny bastards…

And this is the official agenda of things to solve before lunch:  Here the European leaders’ discussions will be divided into looking at both short-term and long-term fixes.

The short-term proposals are expected to comprise six main measures:

1. Direct recapitalisation of banks – using the eurozone’s rescue fund, the European Stability Mechanism to recapitalize Spanish banks, thus breaking the ‘sovereign bnaking’ loop

2. Banking licence for ESM – would give the euro zone rescue fund access to European Central Bank funding, greatly increasing its firepower

3. Seniority – ending the seniority of official loans to Spain over other creditors’ claims

4. Bank supervision – Making the ECB the supervisor for systemically important banks

5. Bond-buying – Italy and Spain are desperate for euro zone intervention to reduce their sovereign borrowing costs, which are also hitting the real economy

6. The growth pact – To boost growth by redirecting structural funds and issuing project bonds to finance infrastructure spending

The long-term measures up for discussion are:

1. Banking union – moves towards centralised supervision, a common resolution fund and a single euro zone bank deposit guarantee scheme, possibly with a taxpayer backstop

2. Eurobonds or eurobills – Help lower sovereign borrowing costs through common issuance of debt

 By 9 AM — and in the intervening two hours since 7 AM — the Germans have already said what they needed to say in order to sink the Euro-Summit faster than the Titanic. To that end, by simply saying that with the EFSF and ESM bailout funds, the EU already has all the necessary instruments at its disposal to deal with the crisis, they averted any responsibility to come to the rescue of anyone else in the periphery and reserved all the lifeboats for themselves. Well Beggars can’t be choosy either, but this sets a new tone of Apathy within the “brotherly” Euro-Union. What happened to the gentleman’s’ compact and the sea man’s conduct of a good captain saying women and children first ?

On the other hand, the Good Germans also highlighted the need to come up with precise, quick, appropriate help and a reform programme for Spain…

Reading the lifeboat instructions in German for a lifeboat that you cannot board — unless you have a German passport — does little for one’s morale and confuses the hell out of those overly dramatic Iberians. … Think of Almadovar with his underwear in a tizzy giving himself a perpetual wedgie and you get the idea. Only the wedgie puller is a burly German. Ouch… Enough to make one suicidal.

Are you yet confused by this most peculiar Brussels cuisine on offer at the European Summit of the Leaders?

If so…

You are not alone.

No worries — the food on the menu isn’t even for you.

As a matter of fact there is no “FOOD” here for anyone. Especially for beggars from the South…

Only the Germans are allowed to eat in this New Order for Europe.

And in case that you are hungry — well then get on a diet — says the wise, old and wizened Mr Schauble.

No worries…

Angela will save from starvation. Eventually…

Understand ?

No ?

You are not alone.

Just hear our old friend the black swan Kassandra of Economics say it: Europe Situation May Turn Disorderly, Roubini Says.

And in these days of constant thoughtless advise from all comers, we don’t just need sunscreen for protection in this surprisingly hot & sunny clear skies over Brussels, but rather we need a suit of armour of stainless steel to protect us from the irresponsible leaders, their fearsome mouse demeanor, and their so called  bravado, when they are nothing more than spineless functionaries… Yet with Spain just formally asking for help to bailout their economy they are all screaming bloody murder…

And with Italy coming fast on the heels of Spain in their slide to oblivion, we need to go back to look further and more carefully examine this Euro zone failure of Leadership.

Because Europe is right now run by the “mouse who couldn’t roar”

Legions of “mice who couldn’t roar” — as a matter of fact — and there is no pied Piper around to lead them down the garden path and drown them in the river.

Case in point, the European Commission president who at the recent G20 meetings in Cabo, said that the European leaders have not come to Mexico to receive lessons on how to handle their economy from Americans. …  And yet he is asking for help in every turn.

Naturally the G20 summit deteriorated into a fractious row amongst Europartners, between euro zone countries and other non-European members of the G20, notably the US, and a free for all ensued with the EU commission president José Manuel Barroso insisting the origins of the economic crisis were because of the daft handling of US Wall Street crisis at the hands of the American regulators and their mishandling of the Lehman crisis.

Brave fighting words – when on a Mexican holiday laced with Tequila – but his actions at home belittle his stature.

Such “barking mouse” Euro zone finance ministers dine and wine themselves, while debating and gently sparring about the fate of the Greek People this week in Brussels too.

They share Bonhomie in gentle  surroundings and from a “warm breath” place pontificate over whether to allow more time for Greece to hit their unreasonably tough fiscal bailout targets … Or not.

These are the so called European leaders and these are their imposed deficit reduction targets, that Greece must hit as mandated by Germany and as spelled out in its €174bn bailout package agreement. The plush talks are populated, with Prime Ministers, Economic and Finance Ministers and representatives from all the triple-A rated economic ministers of the northern countries, vowing no leeway for Greece while the minority opinion is offered by the French minister alone, who simply indicates that his government is open to such a talk and the potential for a shift…

Some EU officials have said that the Greek programme could be put back on a realistic track by giving the new pro-Union Athens government more time to hit its budget targets and adding about €20bn to the bailout package for Greece’s growth. But pouring more money after the bad and especially “new money” is anathema in Germany and in the Netherlands. Holland, which is in the middle of a high-stakes national election where anti-bailout parties are gaining in the polls is particularly belligerent.

In a related effort, the leaders of France, Germany, Italy and Spain have agreed to push for a growth package worth up to 130 billion Euro, at this European Union summit and the talk about it is hushed in Brussels today. They are all quiet about it because that money that’s intended to kick-start the economy and safeguard the currency block is already sequestered in order to stop gap Spain…
President Francois Hollande of France, German Chancellor Angela Merkel, and the Spanish Prime Minister… came up with this too little too late action, to counteract the slowing of the  European economy and it’s imminent contraction.

Meanwhile, the International Monetary Fund this week challenged Berlin’s game plan for pulling the eurozone out of its crisis by advocating a series of short-term fixes that the German government has resisted. Christine Lagarde, the IMF chief, said eurozone leaders needed to prevent the single currency from deteriorating further by considering the resumption of bond buying by the European Central Bank and pumping bailout money directly into teetering banks…

In addition to the short-term measures, Ms Lagarde also called on the eurozone to complete a fiscal and banking union in the longer-term. Such stabilization structures – she said – should include a eurozone-wide bank deposit guarantee scheme and ‘gradual but limited’ mutualisation of eurozone sovereign debt.

She speaks of the Fiscal Union, even under the Berlin flag and of the Eurobonds, even under the German flag…

Both measures are resisted if not outright rejected by Berlin, until all the Euro-partners have agreed total capitulation to Berlin and have signed off their first born to Angela…

Now that Spain has sought officially help, as it struggles to ease investors’ fears that it needs a full-scale international bailout of its economy — Italy comes up for help. Both countries’ interest rates for their sovereign debt are unsustainable.

Still Spain is doing a rather poor job of propping up it’s image. Because it goes about doing so with gum, cloth-pins, duct tape and cardboard, when publishing and touting the two stress tests’ showing that Spanish banks need only between €16bn and €62bn in new capital to be “saved.” Saved for Now… Yet the estimates of how much extra capital its banks might need is clearly missing and largely unknown. The Spanish Chancellor says that the range of “need” will fall well within the sum of up to €100bn that Spain requested for its financial system from its eurozone partners earlier, this month, but nobody still sane, believes him. Fernando Restoy, deputy governor of the Bank of Spain, said the numbers were “a long way from the maximum” that the eurogroup agreed to make available to Spain. Still fewer sane people believed this parole. A long way from the maximum indeed. Maybe as long as the width of your eyelashes or the span of the Universe… Leave it to the Spaniards to give you accurate data and the whole Armada will sink hundreds if not thousands of miles off port and off course.

Additionally, and coincidentally with the European Summit, the European Central Bank announced today, that it is poised to relax its collateral rules for central-bank loans in a bid to ease strains on commercial banks in Spain, Italy and the rest of Southern Europe. That is Greece but nobody here mentions Greece anymore for fear of contagion. Greece has become like Lord Voldemort. Nobody dares mention the name of the undead…

Still ECB officials have broadly agreed to make more types of securities, including certain mortgage-backed and asset-backed securities, eligible as collateral at its lending facilities…A loosening of collateral rules would provide a lifeline to struggling banks in Spain, still dealing with the aftermath of that country’s property bubble… blowing up on everybody’s face.

Yet poor old Greece remains the only direct hit victim of the Euro bomb. Still unmentioned and undead. And right now in Brussels nobody is minding her because Greece is now considered safe.

“SAFE”

Safe as … Greece being “undead” in the land of the lazy Zombies?

Or safe as … we don’t want to talk about it anymore?

Safe of what?

Or safe for what?

SAFE as in destroyed and forgotten? Or SAFE as in we averted the Communists from taking over and radicalizing the Union with their “Fertile” Resistance?

Who knows how the Eurocrats are thinking…

However safe Greece is an ERROR and a gigantic FAIL on the part of the EURO and the EUROPEAN Powers that be.

Because SAFE GREECE is simply a misnomer and in my book, a rather scary oxymoron.

Greece is far from SAFE or saved or whatever means security. Maybe the offices of Parliament aren’t burning daily but the building where the regional offices of Microsoft and other Multinationals are, was attacked and set on fire this very morning that the Euro Summit opens up.

Is this considered SAFE?

And this is the direct aftermath of the country’s election, where New Democracy — the pro-bailout party — eked out a slim win, with plenty of German help. German economic help for the party, “fat” remittances from Berlin for the New Democracy party itself, direct electoral finance and money for advertising and candidate support to ND, and direct supporting talk as well as direct intervention !!! in Greece’s electoral democracy, and plenty of fear mongering from the “uber-Alles” Germans.

No need to go far… to see who favours New Democracy in Germany and what kind of financial support and other monetary help they received from Berlin. Just look at the headline of the German Financial Times who advocated that each and every Greek should vote for New Democracy. What’ unprecedented is that this Frankfurt based paper, has for the first time in it’s history written a front page headline article in Greek. No kidding. The German FT wrote a headline article in the Greek Language, admonishing Greeks to vote the German Way. Vote for New Democracy – they said – and you will be SAFE with us. This was the article’s clear & unambiguous message.

And the sappy, romantic and emotional Greeks — wanting to believe in Fairy tales — believed it.

Still the New Democracy won the elections — eking a very narrow slim win against SYRIZA — and they have also managed to overcome their first potential hurdle — forming a shaky coalition government with PASOK and DIMAR minority partner parties.

So Greece can easily appear to be SAFE from the comfort of the Brussels brasserie…

For now.

And now Greece’s new three-party coalition government set out to renegotiate… with it’s brothers in Berlin. Or rather with the Big Sister in Germany.

In preparation, the new Greek government under PM Mr Samaras — also mouse that couldn’t roar — ruled out massive public-sector layoffs, in a move that could help pacify and engage trade unions. But this move could set Greece on a collision course with the international creditors demanding substantial cuts in public spending, reduced public sector, privatizations, laying off of public employees and across the board wage reductions and reductions in the overall standard of living.

Still the country’s new government confirmed that it aims to revise the terms of its latest, €173 billion ($218.6 billion) bailout, but without putting at risk its presence in the euro zone. …

SAFE BET?

You be the judge.

Cutting down the immense size of the public sector has always been a good idea. And it has stayed that for over forty long years. A good idea that nobody wants to implement. Yet now it is also the top demand of Greece’s creditors for continued lending and for slimming down the corpulent and mortally obese greek Public sector. And yet in Greece nobody’s listening. Even though all of the international creditors, from the IMF, the European Union, European Central Bank, the Germans, the Dutch, the Brussels bureaucrats, and even the very head of the International Monetary Fund and most important of all — the very same COMMON FUCKING SENSE — we all share, have asked successive Greek governments to reduce the size of the payroll of it’s public sector. And to reduce this public sector that is bigger than the old Soviet Union public state business apparatus ever was.  You know how good these “apparatchiks” had it. They were the Creme de la Creme of the old Soviet Union and see where this got them. Right, Pear shaped. Down six feet under looking up at the roots of the radishes from bellow. … And hoping they were potatoes.

So Greece needs to listen in order to reduce it’s costs of doing the business of running the country, and thus also help Greece meet its budget-deficit targets that need to be met, for the country to get more and continuous sustainable financing. So far, Greece has laid off just a few hundred workers and has patently failed to implement a so-called “labor reserve” method of public labour force reduction, all the way from last year, which foresaw the need for slashing the public sector by 30,000 workers at least. Instead the very same [Sane?] people running now the country, went on a hiring spree and hired another 70,000 people.

Get this.

SEVENTY THOUSAND PEOPLE WERE ADDED ON GREECE’S PAYROLL THIS YEAR.

Do you dig this?

Instead of cutting down the public sector workforce, they hired an additional seventy thousand folks. Seventy thousand more lazy government workers feeding off the empty public trough… Hoping against hope that the Good Germans will keep on dropping “manna” from the sky. Well, wandering aimlessly in the desert — isn’t good for the skin of non semitic people — only manna from the sky can save you from starvation and thirst. And by the way, let me break the news here to you:  Samaras isn’t Moses and  he has serious problems with his eyesight and can’t even see where to lead the people, without a German Compass – let alone – get you there.

Never mind that he hardly knows where to take Greece besides towards a rapid insolvency…

Yet we must give HOPE time and place to root in the hearts and minds of the Greek people. Because they deserve it more than anyone else in Europe right now. And because this isn’t their fault.

As our friend Paul Krugman – noted Nobel prize winning economist – wrote in an editorial in the New york TImes:  “Ever since Greece hit the skids, we’ve heard a lot about what’s wrong with everything Greek. Some of the accusations are true, some are false — but all of them are beside the point. Yes, there are big failings in Greece’s economy, its politics and no doubt its society. But those failings aren’t what caused the crisis that is tearing Greece apart, and threatens to spread across Europe.No, the origins of this disaster lie farther north, in Brussels, Frankfurt and Berlin, where officials created a deeply — perhaps fatally — flawed monetary system, then compounded the problems of that system by substituting moralizing for analysis. And the solution to the crisis, if there is one, will have to come from the same places.”

Still…

Things are tough. Seventy thousand people tough.

And the Germans are whittling down the stick…

Yes.

This cannot be called a tragedy.

Its too good for that.

This is comedy…

Comedy — at it’s finest.

Still undaunted by their comedic profile, the new Greek government warns today that it will bring up – here in the Euro-Summit – all the issues they want to renegotiate with Berlin and Brussels.

And this sends a signal that can be read either way…

SAFE or NOT SAFE ?

Or with my special powers purview, I can read the minds of the Germans thinking of this dilemma in a slightly different fashion:

SANE or NOT SANE ?

What do you read ?

Or better yet what do you think the German are reading here ?

A tough dilemma ?

Which for some Germans and for the “deep state” of the Northern European Conservative ruling class decision makers, means it’s proof the time is ripe, in order to move onto “the next set of negotiations” — the harsh method. Shock and Awe — the harsh method — that could either reform the remaining euro economies, after forcing Greece out, or just get everyone become a mere German. No pretenses here. Unconditional Surrender is what they demand. All the flags flying in Europe will be sent to Berlin and replaced by the German tricolor.

But there is another possibility.

And that is that Shock & Awe and the harsh method, could clearly destroy the Eurozone, and devolve the European Union in a rather revolutionary, disorderly and messy fashion, and thus flatten all of the euro zone countries — Germany and her Norther allies included — and plunge the world into a miserable recession… as a gift that keeps on giving too. That way Mr Barrosso will return the favour to his hated Americans, for their mishandling of the Lehman crisis in the first place… And Angela will finally get to play the captain of the Titanic in a romantic film she so adores…

Regardless…

Today, time is nearing for the renegotiation of the Greek bailout between Greece and the European Union in Brussels and that is the first threshold of the play as seen by all astute observers. It is a game worth watching far more so that the Euro Football, at least according to the deep state of Germany and it’s extreme conservative leaders. They are a savvy sporting lot and enthuse easily over beers and footie about their aspirations even going so far as to sing nationalistic songs. Pretzels and lederhossen included and presto you arrive in a beerhall in Munich back in 1932.

This is Angela arriving today at the European Summit Conference in Brussels at the palais…

Have you noticed how much Angela starts looking like Adolf  lately ?

Even down to the colour and cut of the Vermacht type uniform she has chosen to wear — the message is clear.

The lady is prepared to do battle to the end.

YIELD, cause the barbarians are already inside the gates

Am I alone in noticing the incredible and eerily disturbing likeness… to Adolf ?

Or noticing the illusion that we are in some type of an undeclared war simply by her choice of garments… ?

Or that we are replaying 1936 ?

Probably not judging by the couple of friends I polled here in Brussels.

You’ll see it to. In time. We are really back in 1936.

Having a time machine or a Tardis box isn’t needed to transport yourself there.

Just look at Angela today or get yourself to Brussels and go and step into any beerhall, brasserie, or in the Euro Summit conference hall, to see this for yourself. You’ll feel you are n Berlin. People are already sending their kids to special schools where they are teaching their children German and are standing in line for a German passport. No need to travel far…

Because history has a way of replaying itself and ultimately the lessons we haven’t learned are borne home again.

And like a well worn groovy record — each time you replay it — the grooves get deeper, the music scratchier, the voices more shrill, and naturally, the resultant lesson more painful.

What to do.

Keep in mind that what you resist, persists…

Yet the Greeks clearly kept their part of the DEAL, hoping the Germans will do too. Alas it wasn’t to be so. They were fooled by fear…

Fear or no fear, still this time the Greek public voted in a subservient way to the Pro-German wishes of the European leaders and in a way to appease the “Beast.” This time… They voted so, fearing the proverbial beast that in this case is the deep German state and it’s erstwhile supporters across Northern Europe along with all the “Quislings” peppered throughout Europe — largely the beneficiaries of the German largesse. They’ve got Europe in a strangle hold.

So what was understood as “THE DEAL” is the explicit deal made between Germany and Greece, for the Greek people to vote the Pro German party into the government. And the Greeks DID this. But for the Germans “THE DEAL” was obviously just a soap bubble and not deal at all. Nothing more, and a soap bubble one needs special rose tinted glasses to see before it pops. Same like the Greek girls’ virginity lost in the pre dawn tussles … and still waiting for the call. And the Greeks are waiting for the other side to jointly honour the deal but right now, there is no chance of this. Even though the hapless Greeks went head over heels, to appease and please the mighty German.

Appeasement never really works…

Because the “deal” or at least “the agreed upon” behaviour expectation was that if the Greek people voted the “right way,” Germany would renegotiate the bailout agreement austerity terms to ease the Greek economy, uplift people’s hopes, and provide growth.

That is to say, that if the Greeks voted for the “New Democracy” Christian Democrat right wing party, which wanted to largely abide by the bailout agreements and austerity package. Voting for ND, rather than for “Syriza” communist party, which wanted to kick Germany in the shins and walk away from any and all agreements and from the Union and from the Eurozone altogether. So the DEAL was that Germany, “the Power” within the Eurozone would reward Greeks by loosening the terms of the austerity and loan bailout agreement imposed upon them. They would only do this of course if and when the country followed through in shrinking it’s public sector and only in order to allow the country to promote some growth and job creation in the free enterprise private sector. What the smart Greeks did to sink “THE DEAL”  is they preempted the goodwill of the lenders by hiring SEVENTY THOUSAND PEOPLE in the public sector and thus enlarging the public payroll significantly — instead of reducing it.

And of course Germany is pissed off about this. Largely because it feels deceived. Much like the ex-wife who found an old credit card and maxes it our at Tiffanny’s and then bats her eyelashes innocently and claims that you knew all about it and YOU have to pay for it anyway. Which in some cases you do. But not in the German Divorce proceedings instituted under Berlin rule against Greece…

And if that sends profligate divorcee Greece to Dubai to sell her charms to the Arabs and the Russian tourists — So be it.

And rightfully so because after the long five years of the current profligate public sector, causing a severe downturn and depression in the Greek economy, there is hardly any “blood” or  “water” left to save the “healthy plants” businesses, and the remaining free enterprises. So all comers are now welcome. Arabs, Russians, Chinese… Anybody.  Something like Cyprus which prefers burly Russians to timid Brussels bureaucrats… when making her bed to lay into.

Either way Greece is hurting. This beastly statist succession of thieving governments and more than five years and counting, of Economic Depression are the reason why there is a “desert” out there.

But all jokes aside, Greece needs honest help for economic growth right now.

That’s it.

It needs the renegotiation of it’s financing to make it sustainable — Simple as that.

And it needs “water” for it’s economy thirsting for growth and jobs…

And Europe needs the renegotiation too. Mainly aside from countering the German uber-nationalism, it needs the Union to survive. Simple as that.

And in the final analysis, Greece is more important for Europe than Europe is for Greece…

Because when you build a tree for systems analysis things get suddenly enlightened.

The Union needs Greece —  More than what Greece needs the Union.

This was proven in the American Civil War.

The Union needed the South more than what the South needed the Union.

Simple as that.

Remember History. It has a way of confiding to you the answers to the most daunting of questions…

The renegotiated terms could include more time for Greece to hit its deficit targets, lower interest rates on their loans, more money to bolster their budget, or even some kind of external stimulus. And although France is open to some or all of those targets, Germany, the Netherlands, and some of the other Northern European nations saying they are not… — the sign on the wall says that they are here to bargain.

And BARGAIN they shall.

And even the “Deep State” of Germany that is pretending that it is in favour of renegotiation — some time down the road — whereas it wants no more of Greece in the Union and will opt to drag on things, until Greece is simply exhausted and falls off the European Union train — is fearful. It is scared shitless. Never mind all these Bratwursts, pretzels and beer. It can’t shit… for lack of fresh ideas and fear of the coming wholesale economic collapse.

So in this European Summit, things are as simple as a good game of Who scores the most wins. And the Goalie needs good eyesight. Sadly the Greek team’s goalie hasn’t got this either. Yet this like every other game is “de novo” and “tabula raza” — it is new and nothing is written. Thus the slate is clean. Because if the German Pro-European deep state prevails, the odds that Greece will manage to keep to tis timetable are nil, and the odds that the new, New Democracy led coalition government of Greece, will survive are infinitesimal.

If Greece wins, the odds that the coalition government will manage to stick to the plan are infinitesimally small. Yet Miracles do happen in Greece often. As a matter of fact, they happen in Greece, more often than in any other place on this beautiful God’s Earth. Just see all the devotional churches dotting the landscape of all the post cards you ever received from Greece. God’s country indeed. And God rewards his people with frequent miracles…

Yet you can’t build a government program based on miracles alone. For the coalition government to survive and to keep to it’s word — the odds are nil. And thus the German financed New Democracy party will sink anyway.

And will be replaced by another German financed Greek party…

What?

So?

What next?

Elections again…

In Greece.

In the next elections the communists of “Syriza” will surely win and the speeding train wreck scenario — as visualized and as was financed by the Germans — will simply be put on Fast Forward. The Germans here win again — or so they think — if they manage to contain the crisis within Greece’s borders.

And the Greeks disgusted with the “DEAL” that wasn’t, will choose the tragic end. Because the road to perdition will suddenly seem rather patriotic. After all any voters – not just Greeks – do not tend to like parties that aren’t able to deliver anything more than a ringing endorsement of crushing defeat, surrender and poverty at the hands of the vastly more powerful occupiers. Countries like that are not countries for too long. Because these “Vichy type” governments aren’t the flavour of the month for more than that. A month. And fear isn’t a long term council either.

So people will vote for Syriza, thinking that they are voting against Germany, little knowing that they are voting the way the deep German state wants them to. And as for the people of New Democracy – they already know their party is financed by the Reichstag, and after all it doesn’t matter, because they can’t deliver economic growth anyway. So they will let them go down the tubes and all will turn towards SYRIZA hoping against hope for a Miracle.

And a MIRACLE is surely due to  appear.

It has to happen.

And it has got to happen here and now in Brussels.

Yet this miracle isn’t raising its head here in Brussels.

Because like in many other EU summits over the past couple of years, the European Council meeting in Brussels today and tomorrow, has been billed as a ‘last chance’ to save the euro. Yet what with the situation in Greece, Spain and Italy causing alarm, and all the EU leaders frozen, it could not present a credible plan to convince financial markets that they are serious about saving the euro. The Germans are unwilling to do so and there is nobody else except the Chinese who can afford it. And although there will probably be another last chance, time is starting to run out. So unless France and Germany can agree on a grand bargain, disaster may loom. Disaster not like the burnt souffle type of disaster, but the real deal disaster for Greece, Italy, Spain and France but also for the European Union. So now urgently, the European Commission, the IMF and the Obama administration are urging Germany to accept ‘eurobonds’ as a collective eurozone bond mechanism for borrowing at lower common cost, and to accept bigger bail-out funds that can intervene in sovereign bond markets. And most sane people advise her to accept a ‘banking union’ that would include common deposit insurance and bank recapitalisation schemes.

For now, however, big Mama bear Angela, is not budging from her Reichstag throne. Sorry my bad. My mistake, Bundestag. I meant to say…

 So the Miracle isn’t coming today or tomorrow…

Or anytime soon.

So let’s just hope for the other miracle that we can bring about ourselves. Because the people of Europe can create jobs and economic growth without Berlin’s help or approval. It’s called creativity. And that has to be harnessed in order to create the miraculous economic growth Greece and the periphery need.

It’s the only hope. Do it yourself. A powerful force of ingenuity. DIY is empowering and liberating and the only hope ultimately for survival…

Otherwise, looking at the Macroeconomic numbers, it’s not possible to discern where the growth will come from. Either for Greece or for anyone else in the Eurozone — for that matter. Because all business activity in the euro zone has contracted sharply in June – a closely watched survey showed – underscoring the currency bloc’s deepening economic malaise as it confronts an escalating debt crisis along its southern fringe. A pronounced drop in German manufacturing activity raised fears that the region’s largest economy, and primary financial backer, is beginning to buckle from the region’s debt crisis. The euro’s recent slide, which helped boost exports in German and other economies two years ago, is unlikely to provide much support now, economists and business leaders said…

The euro-zone purchasing managers’ index was 46 in June, unchanged from May’s three-year low and well below the break-even threshold of 50 between expansion and contraction, according to data-services firm Markit, which compiles the figures based on a survey of purchasing executives from all types of companies, along with public and state enterprises.

The Germanic Northern Europeans know that, of course.

So you might ask why they seem so intent on cracking Greece in half right about now?

What I hear and observe with my special powers, is that an increasing number of German led  modern day “Quislings’ across Europe and  the “Deep German State” leaders have allied themselves and are now leading Europe’s balance of POWER. So much so, that they are even micromanaging Brussels and European Union policy to the extent that wanting to stave off and crush any opposition within the euro zone — they are actually going to drive Greece out… as an example.

The basic idea, is to do a “Lehman type kill” for Greece.

Ostensibly, this is because Greece is such an unsalvageable basket case, and its economy is so much weaker than anyone else’s, and its governments have been so much more dishonest and difficult to deal with, that solving Greece’s problems would mean rewarding irresponsibility while not solving them would mean an endless cycle of crisis. At some point, it’s better just to cut them off and cauterize the wound.

And this obviously will send out a serious “macho” message to the rest of the jungle.

Because at that point, having shown how serious they are about punishing wayward members, the euro zone leaders can extend more support to the remaining, and more responsible, countries remaining within the Eurozone currency union. These modern “Masters of the Universe” types; reason that having made an example out of Greece, and having forced everyone to stare into the abyss, they will have more support for financing and thus “save” the rest of the “periphery” of the Eurozone, and still put the fear of God to those other countries who might think they can flout the economic rules of the German led Union, without consequences. Punish one — teach everyone a lesson.

Therefore almost all current policy discussion in the Euro-Summit, is concerning the eurozone area austerity. Most people, particularly in German government circles, are pushing for tighter fiscal policies in troubled countries (i.e., higher taxes and lower government spending). Others, including the new French government, are more inclined to push for a more expansive fiscal policy where possible and to resist fiscal contraction elsewhere…

But both sides of this debate are missing the important issue…

The “Lehman kill” didn’t work.

Well… it worked.

Sort of.

While it worked in killing off Lehman, it also killed all others to a certain degree…

And at least it didn’t work as thought of by those other Masters of the Universe across the pond. Because Paulson, Bernake and Company, and all those large swinging dicks, failed to comprehend and quantify, was that when they dropped Lehman into the abyss, they also dropped all the interlocked, intertwined and systemic risk partner financial institutions right there next to them. And they unleashed the Greatest Recession ever…

How is that for the thinking of big fat swinging dicks?

Because in retrospect it was the stupidest move they could have made…

Yesterdays’ apples you say?

Maybe but it’s not a good place to be when you are contemplating dong the same to a country and hoping to avoid the consequences…

Yet as Darwin said: “Humans aren’t necessarily an intelligent species”

Because we forget the missing link. The Monetary Policy itself that has been squandered…

Because the most basic underlying problem in the eurozone area and for the wider European Union, is the exchange rate system itself.

The fact that all these European countries locked themselves into an initial exchange rate [i.e., the relative price of their currencies] and promised never to change that exchange rate. This amounted to a very big bet that their economies would converge in productivity – that the Greeks (and others in what we now call the ‘periphery’) would, in effect, become more like the Germans.

A bet that has been called and lost. A bet that is based on a faulty thinking that has been roundly defeated.

And now we are gong to place an even more enormously erroneous bet:

Or so the current European Masters of the Universe want us to do: “Let Greece wither and fall off the European vine, and let the Eurozone train go on healthy.”

What a stupidity…

Methinks this looks increasingly like a train wreck in the works. You know when you know an accident is happening and time slows down and your voice cannot come out of your throat to warn the driver to avoid the inevitable…

Such is the sad State of the European Union presently. And they have staged a big balluhoo type event here in Brussels, in order to celebrate the so called European Union Summit. A celebration of cluelessness. And of forgetfulness.

Additionally these masterful leaders forget that the basic Monetary policy is the ultimate “BIRTHRIGHT”  of every independent nation and yet it was given away without any negotiation. It was given wholesale to the German Bundesbank and to their servants the Brussels bureaucrats. Because apparently the Euro-technocrats knew what they were doing…

This important birthright and the heritage Economic Power that stems from it, are tantamount to NATIONAL SOVEREIGNTY and yet this immense power was summarily given up. It was given up without recourse, by thoughtless Greek leaders and other national leaders when they entered the fiscal union under the Eurozone terms, enamored by the Siren Song of the German nymphs…

They hadn’t seen the ring of Nibelungen apparently to see how it ends…

These were no leaders at all.

No wonder, some people call these folks, fools, traitors… or worse.

As for those thinking that China might save their cake, we have news. China sent a strong signal that it intends to push towards a freely tradable yuan [or renminbi], announcing plans for a test zone for the currency’s convertibility in Shenzhen, the same city that first tried out China’s broader economic reforms some 30 years ago.  So China internationalizing its currency isn’t good news for the Eurozone either. And although the Information Office of the State Council, of China  gave no details on the yuan [or renminbi] convertibility plans, and rates, the Hong Kong government has said officials from China’s National Development and Reform Commission, will hold a news conference on policies concerning the Qianhai zone on Friday, ahead of a visit to Hong Kong by Chinese President Hu Jintao.

And a lot of people here are talking referencing the “Euromess” article by Paul Krugman, so it is important to note that because it states: “while the world has interest rates close to zero … interest rates are only high in some eurozone countries”.  That is to say, now we have very high real interest rates where it is depression [Greece, Italy, Spain] and ludicrously low interest rates [zero] where it is growth as in Germany. Which is an abomination, as money must become cheaper as economies are collapsing, and the ECB is not supposed to blow it’s wad, like blowing kiddie soap bubbles — same as it does today — by doing nothing.

Yours,

Pano

PS:

And so is the Euro Saga playing for now and the plot if anything slims down towards the inevitable conclusion.

But, of course, the euro zone can’t be seen to actually cut any countries off.

All they can do is make it impossible for Greece to remain within.

Which appears to be what they’re surely doing.

It almost goes without saying, of course, that if this is the plan, the chances for it to go awry and wreck the world economy as the euro zone collapses under a series of unmanageable dry-runs are very, very high…

Proof of it was offered this month when Banks were downgraded wholesale, because they offer more systemic risk than was thought possible before. This was largely due to their own shenanigans.

Regulators and investors are really concerned that European banks are artificially boosting a key measure of their financial health, a worry that is further eroding market confidence in the Continent’s banks.

At issue is the way banks calculate and disclose their capital ratios. The ratios are comprised of certain types of equity expressed as a percentage of the bank’s ‘risk-weighted assets’ – an admittedly fuzzy measure of risk, that an increasing number of regulators and investors fear is abused by most banks.

And rightfully so because some Banks abuse the fuzzy line of principle and want to appear healthier than they really are…

Yet the abuser “par excellence” might be the European Central Bank itself. Because now we know for sure.
This is not about saving the euro, but about saving the Leviathans established on the zone where the euro is legal tender. Just see what the ECB president Duisenberg said in Aachen back in 2002: He said that the euro has severed the link to these Leviathans.
Indeed, in his 9 May 2002 Acceptance speech of the International Charlemagne Prize of Aachen for 2002, Duisenberg asked: “What is money?”
And he replied:
“Economists know that money is defined by the functions it performs, as a means of exchange, a unit of account and a store of value. But, just as importantly, money is also defined by the community for whom it performs these functions. Because it is an economic instrument for each of its users, it is also a political and cultural bond between them. Consider this simple fact: we engage in an exchange of goods and services everyday by using money as the means of exchange; and we offer our labour in exchange for money, which, in itself, has no value. We only do this because we believe that we will, in turn, be able to exchange that money for more goods or services. This fact tells us much about the CONFIDENCE [capitalisation mine] that we place in money itself. And it tells us much more about the confidence that we place in each other. Hence, money is, in essence, a social contract.”

Duisenberg went on to clarify this by saying:
The euro, probably more than any other currency, represents the mutual confidence at the heart of our community. It is the first currency that has not only severed its link to gold, but also its link to the nation-state.
It is not backed by the durability of the metal or by the authority of the state.

Behavioral Economics?

Maybe.

But that’s human nature after all.

You tell me…

Why do we eat ice cream when we are sick?


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

Follow

Get every new post delivered to your Inbox.

Join 3,558 other followers

%d bloggers like this: