I know the Titanic metaphor is getting to be rather tiresome, but the more we sink deeper and deeper (excuse the pun!) into the mess of the collapse of the financial capitalist bubble, the more apt this metaphor becomes.
Eurozone economic confidence (which is an abstract) is up! Even though European production (which is a tangible) is down and set to fall another 1% (by official forecasts which are notoriously over optimistic).
The Greek Prime Minister has totally lost his head. (Not that he ever had much of that in the first place but still). He went to the hubristic lengths of making a video of himself as the great thinker and the great helmsman who has now achieved all the preconditions for growth and prosperity in Greece.
Since this was again all rather too abstract, and in any case based on no facts whatsoever (actually counter to facts), the Minister of Finances felt he must chip in I suppose, and when pressed to answer where growth would come from, he said consumption. And he didn’t even blush! (He may have thrown up with all the nonsense he spouted, after the interview, but perhaps I am being too charitable.)
So the Greek Prime Minister and government are recklessly rejoicing and promising a new beginning for Greece with growth and jobs (and perhaps piles of rice in the sky and fifteen virgins for each man) just when they have enacted the worse, most severe austerity measures ever to have been passed in a democracy in peacetime. All income is to be severely cut and what income cannot be cut will be so severely and unjustly taxed that people will not only be unable to consume anything other than basic necessities to keep alive, but not even those.
Recession is forecast by the government in its budget to be a further 4.5%. Which means it will more likely be in the range of a further 7% to 8%. Does one need to say any more about the actual state of an economy not only in free fall but set for total melt down in 2013 to realise that the Greek government is not only totally out of touch but completely reprehensible in all its statements and even worse, jubilation?
It is, after all, one thing to be taking dreadful, debilitating measures in the genuine belief that you have to do this in order to get the economy back on track (even if you are totally wrong about your policy) and quite another to think you have really achieved success and worse to actually believe that the people think you are so wonderful, that you have the audacity to make and show a video of yourself as hero of the day! Illusions of grandeur? Narcissism? Abysmal advisors? Or just the band playing on with gusto as the ship sinks?
And back to the Euroland scene. Commissioner Olli Rhen, Eurogroup leader Jean Claude Juncker, EU President HVR and the Portuguese gentleman who is responsible for ruing his country and was therefore rewarded by being made president of the Commission, have all come out with statement of how great this is, how Greece is doing extremely well and other such self serving nonsense. (Why self serving? Well, for these guys it means if everything is going well you don’t have to do anything, do you?)
Now, a small digression, everything was supposed to hang on the troika’s report, because none of these European dignitaries had any idea what the situation in Greece was like, so they needed to wait for the report before making any decisions. Now they are all convinced that with this criminal tinkering they have all agreed to, Greek debt will be sustainable in 2020, and that everything is going swimmingly in that god forsaken, devastated country. Oh, but what happened to the troika report then? Oh, um, well… I don’t suppose we do need it after all. Anyway they will only report what we want them to. This is called integrity in Europe.
Now on the Titanic the band was told to keep playing so the passengers wouldn’t get upset. It was important for the company because it had set out to break the record of how long it takes to sail to New York. It would spoil the spin (as we call it now) if the passengers realised what was really going on, and, god forbid! Panicked!
In other words, those in charge were just like those in charge of Europe. They were in a state of complete and utter denial. The ship was going down and all they could think about was business. How will it look if the passengers panic? It won’t be good advertising for our company now will it? Yet no one stopped to think how it would look if most of the passengers actually drowned owing to criminal negligence.
That is what is happening in Euroland now. We mustn’t let on that the ship is actually sinking because how will it look to our electorates? For the so called surplus countries of the north, the only thing that matters is that the electorates must be reassured that no taxpayer money will be lost, through any write downs of debt for lazy profligates (which is what they have been made to believe).
Totally covering up two facts. That so far they have made good money from the bailouts and second, (and this is of Titanic proportions) that after the delight in squeezing the wretched PIGS till their pips squeak and refusing to write off enough debt to rebalance their economies, then these profligate southern states will in fact blow up. On a grand scale. Because There Is No Alternative, or at least you have decided to block all and any other viable alternatives out of self serving short sighted greed.
So while the band is playing and the first class passengers are enjoying their champagne and truffles, people in steerage are already drowning. And though that may be of no concern to the first class passengers, they are on the same boat. When it goes down, so will they, and how.
If the debt problem continues to be addressed in this short sighted, criminally negligent way then there is only one thing left that can happen.
The over indebted states of the south will be obliged to default in the most disorderly manner. When that happens, then the first class passengers will realise that they too were sitting on the top of the ice berg that sank them whole. Lock stock and barrel. Because when the south defaults, the smug northerners will be rudely awaked to the fact that, oh dear, we were rich on their loans. And our banks have just imploded!
But then it will be too late. Just as it was for the Titanic. Play on my gracious minstrels, play on. It is merely a matter of time now.