Friday, February 12, 2010

Foolishness to the Greeks

The euro was always a gamble, especially for the Hellenic branch of the Indo-European family.

Why they ever ditched their ancient drachma – the currency of Plato, Ptolemy and Alexander the Great – is a mystery, and evidence – if any were needed – that they don’t deserve the Elgin Marbles. A nation which squanders its sovereignty without regard for its unique heritage as the cradle of Western civilisation – the birthplace of democracy, the fount of Western philosophy and literature, the creator of the Olympic Games, the originator of historiography, political science, mathematical principles, and our dramatic traditions of tragedy and comedy – does not deserve much sympathy for its economic woes.

Why Greece ever joined the euro is all Greek to His Grace.

The introduction of the euro artificially decreased the interest rates of many EU members countries, in particular those with a weak currency. The countries who benefited the most from this decrease were Greece, Ireland, Portugal, Spain, and Italy.

And which countries are now suffering intolerable deficits, up to 10 per cent higher than the 3 per cent budget deficits permitted under the Maastricht criteria?

But the obvious solution appears to be all Greek to their prime minister.

Believe it or not (and Cranmer does not), there has been no EU agreement to support Greece financially, because they have not requested it.

Instead, they have appealed for ‘psychological and political support’.

Well, it’s too late for the couch – nine years too late in the case of Greece. If you deceive and lie your way into ‘the heart of Europe’ by concealing your character flaws and suppressing your true profligate nature, you can expect a little clinical depression and occasional suicidal feelings. It isn’t as though the psychologists did not warn of this.

President Van Rompuy is strutting his Gollum-like stuff and has declared: "Euro area member states will take determined and co-ordinated action if needed to safeguard stability in the euro area as a whole. The Greek government has not requested any financial support."

What he did not mention is that they do not have to.

Article 122.2 of the Lisbon Treaty states: Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional circumstances beyond its control, the Council, on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the Member State concerned.

And this burden falls on all member states, not simply the eurozone members.

So when Chancellor Merkel of Germany demands that Greece should put its own house in order, it is for her domestic audience: she is fully aware (as she has said) that ‘Greece won't be left alone’.

When Prime Minister Gordon Brown says there are arrangements for ‘global assistance’ which were agreed at the G20 summit, he is fully aware that a bailout for Greece will cost the British taxpayer.

When Chancellor of the Exchequer Alistair Darling says there is no plan to use UK taxpayers' money to support Greece, he knows full well the plans are already written and the consequences unavoidable.

As the Great Lady said, ‘You can’t buck the market’.

Financial traders simply have no confidence in French and German ‘psychological support’, and so they will continue speculating that Greece will fail to solve its financial woes.

If their bets continue, the problem will not simply be a matter for the Greeks, but also the Spanish, the Portuguese, the Irish and the Italians.

And then it becomes a problem for the eurozone.

And so it becomes a crisis for the European Union.

And the collective will bear the burden because the collective is legally obliged to do so.

And, bizarrely, while Greece now struggles to survive amidst public sector strikes, austerity measures including pay freezes, tax hikes and extensions to the official retirement age, soaring unemployment and civil unrest, Lord Mandelson still believes the UK should join the euro.

While David Cameron has said ‘never’: "I was in the Treasury when we were in the Exchange Rate mechanism, and I said to myself: 'Never again should we give up control of our domestic interest rates.' If I am Prime Minister and for as long as I would be Prime Minister, I would never take Britain into the euro, full stop, end of story. We should never have got ourselves into the financial mess that we are in but at least we have the flexibility of our own currency and our own interest rates."

Spoken like a true Whig.

28 Comments:

Anonymous martin sewell said...

The key phrase in Article 122.2 is "exceptional circumstances beyond its control".

Greece's circumstances are not "exceptional", being utterly foreseeable as the natural and inevitable consequences of following lax "progressive" fiscal policy, neither is it" beyond their control", there being a well attested alternative.

12 February 2010 at 10:21  
Blogger Sinful Soul said...

A nation which squanders its sovereignty without regard for its unique heritage as the cradle of Western civilisation – the birthplace of democracy, the fount of Western philosophy and literature, the creator of the Olympic Games, the originator of historiography, political science, mathematical principles, and our dramatic traditions of tragedy and comedy – does not deserve much sympathy for its economic woes.

Well said your Grace,what a Greek tradgedy they threw away their own identity to become what....grey gooo!

12 February 2010 at 10:25  
Blogger Gnostic said...

So, is Cameron's latest promise also cast iron then?

12 February 2010 at 10:40  
Anonymous bluedog said...

Your Grace

Your communicant fears there is very little Christian charity in the support for Greece, its all to do with saving the French and German banks. Greece is just an away game before the final with Real Madrid.

12 February 2010 at 10:47  
Anonymous graham Wood said...

ALL attempts in the past to artificially construct a unified currency have failed. Whether the Gold Standard, Bretton Woods, or more recently the ERM. All were failures, and that means inevitably that that euroland will fail also - sooner or later.
The reason? Because from the start the Euro was only a step in the greater political integration of the member states, and therefore the economic issues were simply not thought through.
What the EU has sown, it will continue to reap.
You may have one currency, but not one common economy in the disparite EU membership.
The ONLY answer when the Euro was launched was full political central control of each member state economy. (i.e. EU "government", totally independent of national governments).
In the end it will always be national economic interests which will take precedence over some theoretical EU "solidarity".
Hence the strikes in Greece this week.
Political integration will never happen and therefore the Euro is doomed.
The Godless artificial construct of the EU will fail with it.
For a realistic long term scenario - read Psalm 33:10,11.

12 February 2010 at 10:51  
Blogger Archbishop Cranmer said...

'Greece's circumstances are not "exceptional", being utterly foreseeable as the natural and inevitable consequences of following lax "progressive" fiscal policy, neither is it" beyond their control", there being a well attested alternative.'

Mr Martin Sewell,

His Grace is more than sure that these are but minor pedantic points of irrelevant semantic trivia as far as our Lords and Masters are concerned.

Since when as an illegal technicality prevented EU intervention?

Where there's a will...

Indeed, if the Greeks have a genetic predisposition to profligacy, i.e., if it is in their nature to be fiscally lax, then their exceptional plight is indeed beyond their control.

12 February 2010 at 10:55  
Blogger D. Singh said...

Your Grace

Die! Euro die! Thou foul fiendish agent of Beelzebub!

12 February 2010 at 11:04  
Blogger D. Singh said...

Your Grace - I couldn't resist this one:

‘A sound Conservative government,’ said taper, musingly. ‘I understand: Tory men and Whig measures.’

Disraeli (1804 – 1881) Coningsby (1844) bk 2 ch. 6

12 February 2010 at 11:23  
Blogger John.D said...

"Where there is a will there is a way"

Her Deutschland no longer has the will - I feel a Dear John coming through the post.

Dear John,

By the time you read this, I'll be hocking your jewelry. I am sorry for this but it's for the best. I know this might come as a bit of a brain aneurysm to you - especially because you're an emotional cripple, but I'm sorry - I just need freedom. I think you're swell, but I don't think we're right for each other. First of all, we're not compatible. You're a Republican, and I'm not. You like leather harnesses, you eat mayonnaise-based salads, and enjoy Aqua Velva, and I don't like any of these things. Your favourite band is Jefferson Starship and mine is Glitter. Do you even know what my favourite movie is? I once asked you what colour my eyes are and you said "round". Anyway, I want to date other people. But you know what? I still want to be friends. We can still talk once a year. We had some good times, or so I think. But please don't get all John Wayne Gacy like last time. That means no crying this time! And look - I won't even make an issue out of the billions you owe me, or the fact that you cheated on me. So take care of yourself - and choke on you're own vomit.

Yours in contempt,

Deutschland.

12 February 2010 at 11:38  
Anonymous Deutschland. said...

We Wilt not Baily out Ze Creeks!

12 February 2010 at 11:46  
Blogger D. Singh said...

Your Grace

There is something more to all this: why should we as taxpayers pay to correct the mistakes and black market economics of another government?

Ah. It is not another country (under the Federal Constitution). If California was going under Washington would assist.

And if the bankers gamble wildly – they too would not be permitted to go under.

And so? Greek, Portuguese and Spanish governments can carry on turning their countries into economic basket cases, safe in the knowledge that the British will continue to pay £106,000 per minute into the EU trough.

And the Irish? They are now paying for their membership of the EU as the unemployment queues lengthen; unable to devalue their currency: the euro – because they are no longer a people. For if they were a people they would be masters of their destiny.

12 February 2010 at 12:06  
Anonymous Is it just me? said...

Dear Mr. Singh thank you for saving me the trouble of saying everything I wanted to say - and much more eloquently than I would have done.

12 February 2010 at 12:50  
Blogger Sinful Soul said...

@Mr Singh-For if they were a people they would be masters of their destiny.

There in that one sentence the truth is revealed.

12 February 2010 at 13:00  
Blogger Frugal Dougal said...

The Elgin Marbles were taken (legally) to Britain to stop Greeks plundering them for building amterials. This time, let them stew in the juice they've been so careful to make.

12 February 2010 at 13:04  
Anonymous len said...

There will be a common currency in the E U , if not in the World.
Its all part of the 'globalization process that is going on , one religion, one currency, one Government.
The object, total control. "Give me control over a nations currency, and I care not who makes its laws.”
Baron M.A. Rothschild.

12 February 2010 at 13:16  
Blogger Anabaptist said...

When I was taken as a boy to see the Elgin Marbles I was very disappointed. I expected to see a spectacular presentation of brightly coloured glass spheres, like my own collection, but bigger, shinier and more subtle in their swirls and whirls.

Instead I just saw a load of old statues with their arms and noses broken off.

Talk about misrepresentation. I suppose that's Greeks for you...

12 February 2010 at 13:21  
Anonymous graham Wood said...

An excellent overview of the EU and the Euro and Germany's dilemma

Germany's Choice
February 8, 2010 | 2326 GMT
By Marko Papic and Peter Zeihan

"The situation in Europe is dire...."

They go on to explain why it is dire, and why Germany is now in a very difficult position.
The full article is available on Stratfor, and is the best analysis of the euro/Greek/German problem I have see.
Well worth a read.

12 February 2010 at 14:09  
Anonymous Mike Spilligan said...

Sorry to anyone who's already seen a similar comment of mine elsewhere; but Greece and her drachma were squeezed to fit the Euro currency criteria in the last weeks of 1998, not to please Greece or Brussels, but to embarrass the UK into joining; the message being "Even Greece can make it - why can't you?"
Now that scheming has backfired as it inevitably had to, and we should have nothing to do with "the rules" as they weren't framed around such an event as we now have - more related to Acts of God, than the misdeeds of man.

12 February 2010 at 15:14  
Anonymous Anonymous said...

So another step towards removing a nations sovereign right to make its own economic decisions is made. And now a new european order is coming into view. But lets not decieve or beguile for as you state yourself "they don’t deserve the Elgin Marbles" seemingly you agree that some deserve their fascisim? Prehaphs some should embrace their austerity?

Under "normal" circumstances the people of greece would rise up and take those within their state responsible for the mess and .. well .. reinvent the guillotine. However should such a revolt breakout then the treaty of Rome comes to save the day. The blue helmet boys immediatley move in with full authority to save the EU state from the nasty uncooth mob, im sure you will praise God for Elgin then also.


And btw your economic evaluation is obtuse. The short term fall in the Euro helps exports, the bailout of greece will stabalise the currency and eventualy rally a bit. It will never completley collapse since all these western fiat currencies, pound dollar ect are all in the same boat. The debt black hole is still there like a sword of damocles from which the western world can not escape.

12 February 2010 at 15:43  
Anonymous Mike Stallard said...

Please will someone tell me why I have to pay the huge salary of a Greek Satrap?
"No taxation without representation" anyone?

PS I have no intention of paying for a Spanish Grandee or an Italian Call Girl either.

12 February 2010 at 16:38  
Blogger Ingenieur said...

The track record of the European body politic is to proclaim every success and every disaster as proof that more control should be handed to Brussels.

Expect no less this time.

12 February 2010 at 16:48  
Blogger D. Singh said...

Mr Mike Stallard

'Please will someone tell me why I have to pay the huge salary of a Greek Satrap?'

Because in December 2009 you officially became a citizen of the EU in domestic and international law.

Therefore, you are required to support, through taxation, the federal authorities.

Further, the Federal Constitution demands your loyalty to the EU first and foremost.

12 February 2010 at 17:54  
Anonymous Anonymous said...

"I have no intention of paying for a Spanish Grandee or an Italian Call Girl either."

Yes but at least you would get something out of them, unlike bailing out the greeks.

12 February 2010 at 18:13  
Blogger Lord Lavendon said...

Your Grace, this is just the start of a wider crisis within the EU. Soon it will be Portugal's turn and the largest country so far to go under, Spain. Soon the Germans must decide if they really want the EUSSR or if they would rather not be the sugar daddy of the EU. When that time comes I believe the answer will be NEIN. The EU and the Euro will shortly collapse into the dustbin of history.

12 February 2010 at 22:28  
Anonymous Tancred said...

Just read Sir James Goldsmith's - The Trap. Its all forecast inside. It can be hard enough for one currency to function to the benefit of all in ONE nation - just look at our North/South divide.

If you expand that to include countries as disparate as the organised and intelligent Scandinavian/Germanic Northwest to the feckless and less intelligent Mediterranean South and SouthEast it is bound to fail.

Yet not only does Labour want to join the Euro they ALSO want to invite Turkey and the Muslim Balkan nations. They also have their eyes fixed on the Maghreb.

Madness. A nations Government has one overriding duty - to protect its citizens.

Unless of course that Government is composed of International Socialist, Marxists and crooks.

13 February 2010 at 07:01  
Anonymous Anonymous said...

The usual baloney.Greece is 2.5% of eurozone GDP.

Lisbon does not require Greece to be assisted by the others, it permits it,if such an action receives a majority in Council.

Even in thses unsettled days the Euro is worth 30% more against the pound than it was on the day of its launch.

14 February 2010 at 03:15  
Blogger Lord Lavendon said...

Anon it is not baloney and in fact if you are pro-EU you should be worried and if you are Anti-Eu, you should be delighted at the prospect of the Euro's collapse.

Whilst the Greek economy is 2.5% of the Eurozone, it has debts of 300 billion Euros. 9% is owed to Germany, but 23% to Britons.

Furthermore, at least one large Greek bank is owned by a French bank.

One final point is that this will not end with Greece. The next states which will have to deal with big deficits in the Eurozone are Portugal and even more importantly (because of its size) Spain. You might be able to dismiss Greece (but ignoring the contagion effect) but not Spain.

14 February 2010 at 11:01  
Anonymous Anonymous said...

Europe will bail out Greece, alas .
Or should that be "Hellas" ? :-)

I was amused to note that a bank issued a directive to staff , not to refer to the countries in turmoil-Portugal,Ireland,Italy,Greece and Spain - by the acronym "PIIGS".
One surmises that "GIPSI" would be similarly condemned.

14 February 2010 at 12:49  

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