It’s rather an irony of fate that Europe is going to come crashing down only because in 1923 hyper inflation ran amok in Weimar Germany. Now, the Weimar Republic as we all know only too well, found itself in this plight through the harsh reparations policy imposed on it by the victors, a policy of squeezing the Republic so hard that it would ?make the pips squeak?. A policy today?s Germany has found it in her heart to impose primarily on Greece but gradually and by degrees on the rest of Europe too.

Do you think it’s a case of revenge being savoured cold? Quite likely, cold being the operative word. The other way of describing this d?j? vue is a total lack of imagination on the part of the Germans.

Anyway, Germany’s refusal to agree to any kind of remedy that could relieve this crisis, particularly with regard to the part the ECB could and should play, is what will make the Euro explode into smithereens. Of course if it is a case of revenge for the awful reparations the rest of Europe imposed on them after the first world war, it is a rather Kamikazi way of doing it, isn?t it? And Kamikazi tactics are not really something the Germans are renowned for (nor are the Japanese for that matter in matters of finance).

No, unfortunately it appears to be sheer bloody mindedness on the part of the Germans who can?t or won?t see beyond their nose and the utter ineptitude of all the rest, particularly France, whose President appears to be suffering from some kind of disorder in his spine, or something.

But be that as it may, Italy, now coming down with a bad case of flu owing to the drafts favoured by Germany, is having austerity imposed on it when that country’s problem is not a budget deficit but a lack of growth!!! So when austerity will have achieved its object and pushed Italy into recession, then The Markets (you know, like God with a Capital Letter) will decide Italy isn?t a good bet any more, and so spreads will rise and credit ratings go down. Which is what the austerity package was supposed to avert. Or wasn?t it?

Revenge? Well, is there any other rational explanation?

 

We hoped we would get a new government here in Greece. We were to be disappointed. We have the same old catastrophic team, particularly in the Ministry of Finance, and only a new Prime Minister. Well, the good side is that at least this new man in charge, Loukas Papademos is intelligent, honest, methodical and as an ex vice governor of the European Central Bank and more, knows his stuff (whereas the previous lot didn?t have a clue about anything) and, we hope, will be better able to handle a modicum of negotiations.

The bad side is that as long as Frau Merkel insists on her one way street austerity (as David Harvey puts it in his excellent book, The Enigma of Capital: Save the banks screw the people!) things will continue getting worse and worse. I have also said and continue to believe, that the way things are now, if God himself (or even Zeus come to think of it except he was always more wily) took charge of the Greek government today, it would be impossible to carry out the Merkel dictates.

The whole of the public sector is in a state of disintegration and hardly anything is running any more, nor will it when the employees are continually being threatened with the sack on the one hand and further reductions in salaries, indiscriminately.

This is also a wonderful recipe for the self destruction of the Banking System (with capital letters), because it doesn’t take an economist to see (of course the economists are the ones who don’t ever see) that if you ?save” the banks through austerity which leads to recession which leads to the destruction of the economy (as is happening here in Greece and has begun in the rest of Europe too), then how will the banks have been saved when there is so little economic activity that they fail anyway through lack of business? You would have thought that would be simple enough to work out. But no, alas, it seems not to be so.

Something else I can’t help grinning at is the following: The Euro geeks were so terrified of Greece holding a referendum because for all Papandreou’s being in denial of what the result would have been, they at least knew well enough that we would have returned a resounding NO! Which is also why they don’t want elections now either. A democratic right now denied Italy as well. Interesting.

However, they cannot do any more than try to keep putting the inevitable off by, as has so often been said, kicking the can further down the road. But time is running out for us all. The funny thing is (in a tragicomic way that is) that since elections appear to have been scheduled for Feb (i.e. when the present government will have safely ratified the new loan ‘package’ and even harsher austerity measures that go with it) the left as a whole will have won a good deal more of the votes than Frau Merkel would find comfortable for one. And this is probably the best case scenario. As for the worst case scenario, well. Traditionally Europe has endeavoured to solve its differences in less civilized ways than elections. Lets hope we have at least grown out of the play ground brawl.

Our ex and still floating over us Prim Minister keeps insisting that he has ?saved? Greece. A boast repeated at nauseum and usually every time things get worse, and then a lot worse after that and so on. However, if we have been “saved” at all so far, it has been at the cost of our economy. The IMF EU rescue package was only given at the cost of extremely harsh austerity measures. Salaries, wages and pensions slashed, taxation raised to extortion levels, and if we don’t pay we shall have our electricity cut off. And many people don’t have the money to pay at all and will certainly go bust if this taxation keeps up. As if that were all not enough, our unemployment rate has risen to something like 17% and is rising. We have been pushed into a deep recession which is going to continue. People are literally going hungry. There have been cases of kids fainting in schools and people have been organizing soup kitchens. Furthermore all that this is expected to accomplish is that by 2020 we might just get back to conditions of 2009 which were the abysmal conditions that pushed us into this mess in the first place. I.e. we will still go bust in the end. So, the new bail out is to be given in exchange for a continuation of this policy with even harsher terms and also a group of Europeans coming in to run the country, sort of like colonial governors who know best and sneer at the primitive natives. So is it surprising the Greek population is lacking enthusiasm for this nice little plan? But this is in fact the policy the Germans have been imposing over the whole of Europe, in a sort of nanny knows best way. Austerity to death! And in fact they have pushed Europe into stagnation with recession just round the corner if not already here for the EU as a whole.

By cutting back budgets destroying health services halving pensions etc, they expect to save money to pay the banks. OK. However, if you ruin your economies, I.e. stop producing and earning as much, you’ll never pay back the banks whatever you do, and then where will the precious banks be? Going bust like the rest of us among the ashes and runs of what once used to be the European Union. That is what appears to evade them. Mind you Cameron is just as nuts but I have seen articles in the Guardian demanding a change of policy!