Guess what? The dynamic duo, or rather The Frau and her side kick le petit Nicholas are at it again!

Somehow, to their great surprise (if nobody else’s) their most recent Great Fix achieved just about what their earlier fixes achieved. Zero. No, that would be good! Minus zero, negative returns. The Italian bond spreads have gone up, despite the desperate efforts of Mario Draghi to buy up what he can. The Euro has gone down in value, which is good for exports but definitely Not what The Frau wanted. She demands and expects to have when she demands, a Strong Euro!

And worst of all for this fantastic scheme, little upstarts like Finland! (Of all the cheek, smack in the middle of the German sphere at that too!) has said it does not wish to lose it’s veto. And quite frankly why should anyone lose their veto power just because The Frau so demands?

Anyway, since, as she believes, whatever Merkel wants Merkel gets (like Lola in times gone by) the Merkozy has decided to hold YET ANOTHER SUMMIT! How about that? What a wonderful idea! Now this time, yes this time, they will get it right! Won’t they?

Perhaps Finland has shown the way. The Frau cannot impose her will like the school yard bully. Or if she does, there won’t even be a school yard left where she can throw her weight around.

Newsweek has published an extremely interesting article on Angela Merkel under the title Achtung Angela. Now why is it interesting? You might say same old, same old and anyway we know that The Frau is a typically German narrow minded, unimaginative, stubborn stickler for rules. Rules above all else. But this does highlight the question of the importance of the person in charge. And in this article, the comparison with Helmut Kohl is extremely enlightening.

There is the theory that historic trends and the current dynamic of the times are what determine the flow of history and indeed this is true. However, the trends and dynamics are influenced by the actual person holding the levers of power. Even if the trends and dynamics of history are what got him or her into that position in the first place.

But we could say that the trends and dynamics of history were what got, say, Barrack Obama into power in the US, yet he does not appear to have lived up to the expectations that swept him into the Oval Office. There is the gridlock in Congress to take into account and the power of the lobbyists and so on. Yet here too there was scope for different policies. For instance in Obama’s choice of his original economics team. Caution and adherence to the devil you know prevailed, so nothing was done about curtailing the power of financial institutions which is at the root of today’s global crisis. (And not, Angela please note, unbalanced budgets.) So, in this case too, a question of character, perhaps also a lack of experience?

As to the President of the French Republic we can surely not rule out that the man’s character has greatly affected the politics he has pursued. The counter argument is, again, had not the dynamics of history been such, a person like Nikolas Sarkozy would never have been elected President of the French Republic.

So how far does the character, personality, attitude of the person holding the levers of power affect the flow of history? There is, of course, also the historical precedent of crises throwing to the fore personalities who can cope with them. Such as, to take two random examples, Franklin Delano Roosevelt and Napoleon Bonaparte.

In most cases these turn out to be people who have guts and a vision.

I would love to hear your comments on this unresolved conundrum.

It’s hard to look on the bright side when you are living in a perpetual decline not only of your material world but of your very dignity, and in a daily erosion of hope. However, there is always a bright side and the worse conditions and crises always have a kernel of hope in them, a flicker of light in the dimness.

It was through the crisis that we started to hear some sane and sensible voices among all the foolish idiocy pertaining, particularly within the political classes of the whole of Europe. One such voice of clear and reasoned sanity that we were lucky to discover through this crisis, was that of Professor Yanis Varoufkis.

You don’t need to be an Economist to understand his arguments and realize, that hey! This guy knows what he’s talking about. His latest book, The Global Minotaur is a case in point. If you want to understand just why the world has not only spiraled out of kilter, but how (dare I say easily?) this could all change, I would recommend reading this book.

For a concise overview you could take a look at my review.

‘Europe is sleepwalking into a prolonged recession.’ This is how Larry Elliott in the Guardian opens his excellent article on the miserable little summit held by the Frau where she dictated her terms. Which were accepted by the 26, excluding Britain, possibly for the wrong reasons. In his excellent analysis he also goes on to say that whatever is being designed is to prevent the NEXT crisis and not the current one which is doomed to reach Depression proportions if the Frau continues getting her way and leading us up yet another ‘blind alley’ (Larry Elliott’s description again.)

Another very pertinent description of what is going in has been summed up succinctly and graphically by Josef Halevi, as passed on to us by Yanis Varoufakis. The Frau as the wily little village cafe owner manipulating everything to her advantage only without realising that here this is a classic case of ‘cutting off her nose to spite her face’

And a final thought. Could it be that Nikolas Sarkozy has not read his own country’s history at all? Did he never come across things like the Entente Cordiale ?  Does it not even cross his mind that perhaps there should be a balance of power in Europe? What quaint and anachronistic notions for a United Europe you may think. But are they? Germany bullying power always had to be balanced, usually by Franco British cooperation of one kind or another.

Cameron may be blundering but Sarkozy’s rude gesture of brushing him aside and not even greeting him seems like another case of rabid bravado going terribly wrong. Besides, does he really think that his own country’s Economy should indeed be squeezed into the Frau’s strait jacket? Or is it that he just enjoys strutting around as an imitation of Le President  de La Republique?

He who laughs last. Says the age old proverb. And we know it wont be Merkel. However, by the time she has got her come uppanace Europe may well be nearing the devastation her predecessor left it almost seventy years ago.

Unless France wakes up. Allons enfants de la patrie!  

Apart from David Cameron?s glorious Charge of the Light Brigade, what else happened at this umpteenth serious critical summit in Brussels? Well? nothing much really.

Okay, so somewhere down the line the Maastricht requirements for economic ratios shall be imposed more strictly. Yes. Though not quite as strictly as the Frau wanted. And the member states have undertaken to enshrine the golden rule pertaining to balanced budgets in their Constitutions. Okay. For what that?s worth. And?? Well that seems to be about it.

No Eurobond issue. No quantitative easing. No provisions for growth of any kind. Nothing at all that might help with the immediate problem facing indebted European countries (which is most of them, including Germany whose debt is above the Maastricht ratio too).

Regardless of the time span needed to implement any of this (Ireland for one needs a referendum! Watch this space.) what on earth does our splendid European leadership hope to achieve by this? Reassure The Markets? Lower the spreads? Reduce sovereign debt? Hmm?

At the risk of sounding horribly boring, if there is no growth, there is no money, if there is no money, there is no debt reduction, if there is no debt reduction, there is no deficit reduction either?

Oh dear. Rather than enshrining golden rules pertaining to balancing budgets in our respective Constitutions, wouldn?t it be more productive to enshrine a commitment to growth in them? Leaving quite aside the idiocy of wanting to solve the economic crisis through legal means anyway!

Oh Merkel and Sarkozy with the spine impediment. You?ve done it again! Congratulations! And can you even blame poor David now?

As we know, Generals are notorious for planning meticulously for the last war, totally failing to plan for the next one. Now Frau Merkel, being a smarter woman than all those Generals, has decided to reverse the process and plan meticulously for the war after next… With equally abysmal results.

Why? Well it’s all very well planning for the next war, but if you are in the midst of a current war and being bombed by credit agencies and hedge funds and growing recession, well if you don’t solve the current crisis there won’t even be a next one because there won’t even be a EU left to defend any more!

Merkel’s plan, condoned by Sarkozy (still suffering painfully from spinal disorders) has a lot of good sense in it, not devoid of some glaring idiocies. However, as Larry Elliott has pointed out in the Guardian, there is no provision for growth anywhere! And as Professor Yanis Varoufakis stressed in his address to the European Parliament, stabilization (which is what Merkel hopes to achieve through her plan) is not enough, and will achieve nothing without growth. Which is what Europe needs. Growth. And that is the one thing Merkel’s plan not only doesn’t provide for, but positively stifles!

This obsession with austerity is not only counter productive but absolutely catastrophic. It’s like having a fat lady in a room and you want to get her out. Now, the only way you think you can get her out of the room is by pushing her through the key hole. To do that, however, you have to get her to be able to fit.

So what do you do? You start off by starving her, then whipping her into shape and insist on abusing her for still not being able to fit through the key hole even though she has been reduced to an anorexic figure and keeps jumping the hoop. Answer. You’re never going to get her through the key hole because it simply isn’t feasible whatever you do to her.

So, rather than starving and torturing and abusing her wouldn’t it be more humane (and a damn sight more sensible!) simply to open the door and let her through? And the door that needs opening is growth. Wouldn’t it be more humane, sensible and effective to put all that energy Merkel is expending into imposing austerity and now sanctions, into creating growth instead?

Just a thought. But then what do I know when it is Frau Merkel who has the Final Solution ready to ram down the collective European throat. Just like… No. We won’t say it. But then that one didn’t work either. Did it?

An interesting article in the New York Times:

http://www.nytimes.com/2011/12/07/world/europe/angela-merkel-nears-a-remaking-of-euro-zone.html?_r=1&hp

So is she dumb or is she sneaky? Let the deviants have to pay interest through the nose to be forced into reforming their delinquent economies? Or is she just plodding along to the destruction of the Eurozone and perhaps even the European Union itself out of ignorance and incompetence?

Time will tell, but we’ll never know which one it is. If she’s being sneaky and ends up destroying Europe anyway, it will have backfired into her own face. If she’s dumb and it happens anyway, then it really makes no difference which she is.

And if she manages to turn Europe into a German Empire with her colonies cringing at her every barked order?

It wont last and it never has. Europe is supposed to have stood for democracy, social security and citizen’s rights. And Europe has shed blood sweat and tears to uphold these values, not least the last time around between 1940 – 1945. Remember? Lets not forget so easily.  If anything, we have shown that we  won’t go down without a fight!

Mario Monti, Italy’s new unelected technocrat Prime Minister announced his government’s planned harsh austerity measures. He said we must take these measures not to become another Greece. However he got it the wrong way around.

That is, unfortunately Signor Monti, if you DO take these austerity measures that is what will make Italy ‘another Greece’.

We hear that the neophyte ex communist countries of the EU, Poland, The Czech Republic, Slovenia etc are going bananas at all that money being thrown at Greece, for which they say they have to foot the bill!

But all those billions thrown at Greece do not go to Greece. They go straight to the banks to prop them up. In fact the EU is ‘laundering’ money through Greece to keep the insolvent banks afloat. Greece is not being ‘given’ this money by anyone, least of all by German and Czech taxpayers. On the contrary this recycling of the Greek debt has proved a nice little earner for the lending countries, particularly Germany. These lenders are charging a higher rate than the IMF with spreads in the region of at least 4%.

And the second and worst aspect of this is that not only is none of this money going to the Greek economy but the price for this money is the complete draining of the Greek economy through austerity, extortionist taxation, slashing of social benefits and welfare creating a recession of enormous proportions and rising unemployment. In short the destruction of the Greek Economy.

That is what will happen to Italy if it insists on imposing the Merkozy punishing austerity program.

The Italian Minister Elsa Fornero was right to burst into tears.

We thank her for it.

You know something? This great big bazooka that is to solve all the EU’s problems is pointing the wrong way!

If it existed at all, it should not be pointing at countries’ economies and blasting them with more and more austerity in order to balance budgets! I mean, for God’s sake, all this stringent austerity is only leading to deeper and deeper recession which in its turn leads to lower and lower tax revenues. I mean so what if you’ve raised VAT to exorbitant rates? If it’s been put up say by 5% and as a result of higher prices demand goes down by say 6%,  you’ve lost not gained. Not to mention how much faster demand goes down when wages and unemployment keep spiraling upward. But that is Merkel’s magic recipe for fixing the sovereign debt crisis.

She is determined that it will work. Sort of like sending people to debtor’s prison and expecting them to be able to raise the money while taking away their ability to work and earn it! I thought that had been abolished quite a time ago. And back to revenue: remember elasticity of demand Frau Merkel? No? Never heard of it? I thought not. As to the multiplier effect… Never heard of that one either.

So really, the bazooka should be turned the other way. It’s about time someone or something… (ominous that!) blasted all these leading lights who have no idea how the economy works completely out of the water. Since they insist pig headedly  on prescribing the same poison that is killing Europe at  a faster and faster pace, this is really the only solution left for us!

Turn the bazooka round! Quick! Before the whole of Europe is blown to smithereens. By…. yet another German? 

Are we going to go straight to hell? Well no, actually. If you think about it, philosophically speaking that is, we are already in the heart of hell.

Over the past thirty years, roughly speaking, the gap between rich and poor has grown exponentially, wealth has been concentrated in the hands of a very few while all social welfare benefits have been eroded to a greater and greater extent.

With the absolute horrors of the Second World War not really in living memory any more, and the total failure of the communist experiment, we have reverted to our bad old ways. Add to this the creation of the outlandish fictional wealth of what is known as finance capitalism, and we have landed ourselves in quite a hell spot already.

Do we really like the world we have allowed to materialize with the rich getting richer and the poor getting poorer? All attempts to put things ?right? from enhancing competitiveness to balancing budgets, translating exclusively into cutting the wages and benefits of the worse off while enriching and empowering the top few?

Now, you may say that all attempts to save the Euro and save the world economic system and so on, are ALL based on more of the same bad destructive policies, and surely that means going deeper and deeper into hell. Indeed.

But there is humour in this (if you can stomach it). All these attempts, and summits and panics and great ideas coming and going, and Merkel?s hegemonic posturing are not going to achieve anything at all. At least not what they are trying to achieve. Which is the perpetuation of the hell they are basking in.

The great Merkel Sarkozy Francogerman alliance may well be greatly enjoying itself going drunk with the power it perceives it has. However, any ?victory? they may be achieving with regard to their idiotic way of trying to deal with the crisis to their exclusive perceived benefit, is irrelevant. Totally irrelevant and has nothing at all to do with what is going to happen.

That is the joke. Everything and anything they do or say or machinate is irrelevant. Now the joke is sick because it is not just on them but on all of us, of course. This great shake up of the tectonic plates of the whole world system prevailing will be devastating.

But eventually, it will lead us finally out of this horrible hell we?ve made for ourselves. In ways not even imagined by all these irrelevant puppets strutting all over the stage under the illusion that they wield the power.