The Greek police have sent an extraordinary letter to the Troika supervising the austerity measures being imposed upon Greece:
Greece’s largest police union has threatened to issue arrest warrants for officials from the country’s European Union and International Monetary Fund lenders for demanding deeply unpopular austerity measures.
In a letter obtained by Reuters Friday, the Federation of Greek Police accused the officials of “…blackmail, covertly abolishing or eroding democracy and national sovereignty” …
“Since you are continuing this destructive policy, we warn you that you cannot make us fight against our brothers. We refuse to stand against our parents, our brothers, our children or any citizen who protests and demands a change of policy,” said the union, which represents more than two-thirds of Greek policemen.
“We warn you that as legal representatives of Greek policemen, we will issue arrest warrants for a series of legal violations … such as blackmail, covertly abolishing or eroding democracy and national sovereignty.” (Greek police letter)
It would appear that the Greek government (six of whose members resigned today) no longer has the support of the police. How much longer can it go on? Also, yesterday, the Telegraph’s Ambrose Evans-Pritchard reported:
Greece’s manufacturing output contracted by 15.5pc in December from a year earlier.
Industrial output fell 11.3pc, compared to minus 7.8pc in November.
Unemployment jumped to 20.9pc in November, up from 18.2pc a month earlier.
I have little further to add. This is what a death spiral looks like.
Something like 80% of the latest bail-out is going to go to banks and other financial institutions rather than to Greece itself. As its economy implodes, Greece is being squeezed dry of its assets in order to pay off its debts.
So much for the “European Union.” When a region of the UK gets into financial difficulties, the UK government will direct funds to it from more prosperous regions. The same applies in the USA. But if a member of the EU gets into trouble, they send in a Troika to make sure that it pays its debts by screwing every last cent out of it.
“You’re on your own,” is the implicit EU message to Greece. “And we want our money back.”
And what applies to Greece today is very likely to apply to Portugal, Spain, Italy, and Ireland tomorrow. They’re on their own too. They’re not part of any “union” at all. They might have thought they were, but they’re not.
In addition, a year or so ago (and even 6 months ago), there were regular EU conferences being held, with all the EU heads of state present, and EU President Herman van Rompuy and EU Commission President Manuel Barroso overseeing the talks. But gradually, only two leaders came to count: Nicolas Sarkozy and Angela Merkel (aka “Merkozy”). Sarkozy told Britain’s David Cameron to get lost. “You never liked the euro,” he told him. And probably similarly dismissive messages were sent to all the other heads of state. But now it seems to be just Angela Merkel who is calling all the shots. Rompuy and Barroso, and pretty much everyone else (including Sarkozy, it would appear), have been sidelined.
This is no longer a European Union. It’s just a bunch of separate European states, each of which is looking after its own interests, and nobody else’s. For this is what has been becoming increasingly apparent over the past year. The European Union is being exposed as a sham. It’s just an useless and expensive bureaucracy based in Brussels (where firefighters have turned their hoses on police). French economists have even drafted a plan for the orderly break-up of the European Monetary Union.
If it continues like this (and it certainly looks set to), one by one a whole succession of states will leave the EU. All of them will probably rue the day they joined it, and swear never to join any successor. The EU Project will have come to a rancorous and sticky end. The EU powers based in Brussels will dwindle away, and the writ of EU law will extend over an ever-shrinking area. In the end, Europe may even formally revert once again to what it always was – a collection of sovereign states.
In many ways, it’ll be a great shame. A happy family of European nations was always a worthwhile goal. It’s a shame that the happy family gradually metamorphosed into a bloated and tyrannical superstate with delusions of grandeur.
That is the first time I’ve heard the comparison of how a country deals with a regional financial crisis compared to how the EU is dealing with Greece. You, sir, are a bloody marvel. Thank you.
I completely agree, Frank. The EU was even too much occupied with their own ‘grandeur’, when the people of Holland and France said ‘No’ to the new ‘constitution’. They just found a non-democratic way to forward their agenda.
I just hope that the EU will crash and fall back to the essential issues where they might be helpful to the individual states: an Economic Union as they used to be. Let them go back to basics again.
All these self-elected egos need to revise their power ambitions and start working for the citizens again, not for themselves. The European Commision needs to be democratically elected and will need to defend their reason for existence for the public they claim to represent.
I am, at this moment, watching Parliament TV stuff. I see politicians screaming abuse at each other. Scoring political points. Shouting at each other.
WHAT ROT! Are we supposed to be impressed by Cameron shouting at Miliband, and Milliband shouting at Cameron? Should they not be calmly discussing the pros and cons of whatever?
Our political system stinks – it is schoolboy hysterics. Why do Parliamentarians put up with it? Why do they not condemn it?
Oddly enough. the EU is at the opposite extreme. Opposition is not permitted. In our Parliament, hysteria prevails. In the EU, everything is calculated in advance and imposed.
The original idea of an economic ‘level playing field’ was a good idea. It meant that people could have confidence in the quality of the goods bought anywhere from the parties to the ‘Common Market’. It worked well, and countries in the Common Market prospered.
But this working ideal floundered when it grew like topsy. How did our ‘elite politicians’ ever come to believe that chaos would not ensue from their machinations? The chaos was predictable.
We need the arseholes like Cameron, Clegg and Milliband like we need the plague. They are joint and severally totally useless. The reality is that they are, collectively, PRETENDING that they know what they are doing.
It is not so much, “Follow the money”. It is more, “Follow the New Aristocrats”.
Frank its exactly what the french did to germany after ww1, They didnt pay up so france invaded the ruhr valley I believe it was and took over til the germans paid up. Now its the EU moving an and basically gutting the countries few assets with which to live by. It appears nationalism is taking over and Id expect to see a military coup very soon!
Italian banks were downgraded today!
Let the domino effect begin!
I admit, as a Yank, I don’t understand all of it except that I’ve always thought the EU was a bad idea that would either end in Oceania or WW3. The Brussels bureaucrats were attempting to create a micro-managed dystopia (Oceania Lite) so I sincerely hope the whole bloated enterprise implodes. Though perhaps that’s easier to wish from a distance.
That said, I have a question, which I base on the street riots here in the US. Aren’t the individual governments (and the individual citizens– especially the ones who are rioting for “more” –or at least for “not less”) also partly responsible? They got into debt by spending too much and borrowing too much and promising too much and entitling everyone (who then felt perfectly and righteously entitled) till the music suddenly stopped and there weren’t enough chairs.
Is that a true or false picture? (And my question is genuine.)
It’s the mess we’re getting into here in the US and I fear it won’t end pretty
The other problem of course, Walt, is that the Greek politicians themselves were effectively lied to by the EU. True, they’d got themselves into a deep financial mess all on their own but the situation wasn’t unlike a wealthy individual offering to act as a guarantor for a loan on behalf of a bankrupt person, unde the pretence that they’re getting them out of a hole, but then refusing to stump up the cash when the bankrupt person find that he still isn’t able to manage his money and hasn’t got the funds to settle his loan repayments. In that situation the guarantor has clearly been daft to offer to guarantee the repayments (just as the EU were daft to allow Greece into the Euro in the first place), but that doesn’t justify going back on the promise – that just makes the whole situation worse, and causes resentment and ill-feeling and mistrust all round – as we now see in Greece.
But then, blind idealism, lying to achieve their own political ends, going back on promises and running roughshod over the concepts of honour, integrity and honesty is what we’ve all come to expect from the EU these days …
Aren’t the individual governments (and the individual citizens– especially the ones who are rioting for “more” –or at least for “not less”) also partly responsible?
I think that in the case of Greece it’s been the government that borrowed cheap EU money, and now can’t pay it back. It’s not as if the ordinary Greek man in the street went and borrowed money from French or Italian banks, and now can’t pay it back.
But in the case of Greece, the penalties for government mismanagement are falling on the average Greek, who isn’t a rich man by any means. Rich Greeks have been getting their money out of the country (and buying properties in London, it appears).
I don’t think the riots in Athens are like the recent UK riots, which were about stealing TV sets and stuff. I think there’s now genuine hardship in Greece in the way that there isn’t in the UK.
“A happy family of European nations was always a worthwhile goal. It’s a shame that the happy family gradually metamorphosed into a bloated and tyrannical superstate” – sorry, but no. This is a fallacy. The EU was always intended to become what it is today; the ‘Common Market’ was just an interim stage, as was the ‘European Coal and Steel Community’ before it. That the elites have lied to the people of Europe for decades about the Project’s true nature does not alter that fact.
I only hope that something good comes in its wake.
Some people may have always intended to create a European superstate. But I doubt if such people were ever in complete unanimity about what sort of superstate it should be, because there is never complete unanimity about anything anywhere ever. There is always a plurality of opinions and goals.
Some people (the old aristocracy) may also have wanted to see European monarchies restored. Some people may also want Europe to be an exact replica of the Soviet Union. Some people may want it to become Islamic. All sorts of people want all sorts of things. Nothing is black and white.
Some people (the old aristocracy) may also have wanted to see European monarchies restored. Some people may also want Europe to be an exact replica of the Soviet Union. Some people may want it to become Islamic. All sorts of people want all sorts of things. Nothing is black and white.
The perfect storm for a new world war!
Frank as vile as the nazi eugenics driven anti-smoking crowd is,can you imagine that hate directed in a more radical way! Hitler lites running rampant in a decaying economic structure where hungry out of work people are willing to go to any measure! Its a condition that maynot be to far off.
Excellent post, Frank. I agree with everything you wrote.
This is no longer a European Union.
No, it isn’t it has become a dictatorship; a large number people in Germany call it “EUdSSR”, whilst brazing themselves for higher taxes and an ever increasing cost of living; the latter meaning being reduced to mere existence.
But now it seems to be just Angela Merkel who is calling all the shots. Rompuy and Barroso, and pretty much everyone else (including Sarkozy, it would appear), have been sidelined.
A fine mess has been created. I’d rather neither, Merkel, or any of the others, was calling the shots.
In the meantime let’s all brace for a massive economic collapse.
Brigitte, you can tell me this. What, exactly, is the economic situation in Germany these days? The impression that we get in the mainstream media over here is that it’s about the only country in the EU that is awash with money, now that France seems to be falling behind a bit in the economic stakes. But is it? Or is the situation in Germany a bit like ours in the UK, where just one section of the economy is doing OK (financial services in the UK, engineering and manufacturing industries in Germany), while all the others are being allowed to go to rack and ruin? We hear a lot over here about the countries which are really having a hard time, but much less about countries which aren’t in such dire straits, so we kind of assume that they’re doing pretty well. But your comment makes me wonder whether the people of Germany are suffering in the same way as other not-yet-at-crisis-level EU member states – that is, just about keeping our heads above the water, but not exactly prospering, and as a result the people are starting to pay the price. I’d be interested to hear it from a normal, everyday German citizen – much more reliable than reading carefully-worded articles dictated by politicians to the media …
German citizen aren’t awash with money – currently the economic situation is pretty similar to England’s although it is set to become much worse. Unemployment is rising; the sort of equivalent of “social benefit” (Hartz IV) is much more meagre and people are forced to take 1 Euro/hour “jobs” if they are to continue to receive this meagre “benefit”.
The engineering and manufacturing industry is “restructuring” (which translates into cutting costs). Unemployment is set to rise.
Although the pension age has been adjusted to the same here in England, at this point in time, though, there are only rumours about cutting old age pensions.
Massmedia, however is much more manipulated into being “Pro-EUROPEAN SUPERSTATE” than anywhere else. German citizen are confused, a lot of them fed up and it is dictated to them, that they have to pick up the bill of Greece’s “mismanagement”. I guess, we are now arriving at this “divide and conquer” stage by turning one country against another. German citizen are confused.
(Reinhold, correct me if I am wrong; I only hear what my circle of friends are telling me!)
How might the EU have come about?
Suppose you have three ideas of govts:
1) Very little govt control = 40% of the people
2) A lot of govt control = 40% of the people
3) Total govt control = 20% of the people
Group !’s plan will be voted down by groups 2 & 3.
Group 2′s plan will be voted against by group 1 because it goes toooo far and by Group 3 because it doesn’t go far enough.
Group 3′s plan will be acceptable to Group 2 because it includes their ideas and thus you have total govt control or a EU running things.
I am curious Frank, what would be the real, palpable net effect on the average Briton if Greece went back to the drachma? With growing frequency, I’m hearing that as a distinct possibility.
Apocalyptic scenarios never seem to fully pan out. A week or two after the L.A. Riots the glass was swept up and life returned to normal. Last I heard, South-Central Los Angeles is still there.
I assume that you mean that Greece defaults on its debts before re-introducing the drachma. The default is expected to sink quite a few European banks. And, in a knock-on effect, bring down a whole bunch of other banks. A lot of people would lose a lot of money. And with little money around, and banks not lending, investment and growth would slow or stop. Lots of people would lose their jobs. We’d enter a depression. We’re not far from one anyway, just as things are. There’s very little liquidity in the system, because banks aren’t lending, but trying to build defences against a tidal wave of bankruptcies.
Thing is, the longer Greece delays before defaulting, the more money it has to borrow to stay afloat in the meantime, and the bigger the crash at the end. And of course there’s Portugal and Italy and Spain, etc, waiting in the wings to do the same in their turn.
And more or less all the financial experts seem to think that Greece will default. There’s talk of Greece defaulting but staying in the eurozone (and so save the EU ‘Project’), but they won’t be able to devalue their currency (which is the usual procedure after a default) if they do that.
So we’re talking full on Depression here? With bread lines and people selling Apples (i-pads and i-pods, sorry that one was too easy) on street corners? That sounds mortifying to me.
I’m of course way too young to have experienced the Great Depression. But I did study it in pretty great detail. I did pretty well in Econ 101 at college (1991).
Our textbook (which is sitting beside me right now) was the Paul Samuelson one that read like a Keynesian guidebook. I honestly thought we’d managed to iron out the business cycle. The prima facie evidence seemed to bear this out until this last one. At one point in time I thought Keynes was the saviour of humanity. I thought Alan Greenspan was a genius, too. Still think he’s brilliant. He was wary of deflation when he kept rates so low for so long, which is partially blamed for this awful bubble.
Now I’m prepared to give the Hayek way a chance. The markets need to clear. It will be more painful at first, but prices and the magic hand may prevail. We’ll start from a lower base, but there will be tangible growth and psychologically that what is needed. In the long run I think Economics is group psychology measured with money.
On the other hand a case could be made that prices will drastically tank and we’ll enter the ever cork-screwing down spiral that Keynes was trying to solve with his theories.
Sorry about carrying on here. Economics is the dismal science. Everything is a double-edged sword, it’s totally frustrating and sometimes I wish I’d never enrolled in the course. Ignorance is bliss.
Well, I’m really just reporting the gist of what I’ve been reading. Clearly some attempts are being made to sandbag the banks against a default. And maybe that will work. Maybe they know exactly what they’re doing.
But if they did know what they were doing, would they have got into this mess in the first place?
Many thanks for that explanation, Brigitte (sorry, the “reply” tab has vanished!) I always suspected that probably the situation for “real” German people was almost certainly similar to that of “real” British people. And no doubt the situation for German politicians is the same as for British ones, too – i.e. not feeling the pinch at all and still happily enjoying their good salaries and perks up there in their ivory towers! Sorry to hear that your media is still so “bought” by the EU, though – it seems as if ours (well some of them), are just starting to see the light and make some very tentative negative noises about the whole EU set-up. Still some way to go, though, before we get really honest reporting …