Why Europe Keeps Failing........ merged with "EU Seizes Cypriot Bank Accounts"

[a_majoor]

It was actually a trio;

Prime Minister Thatcher
President Reagan
Cardinal Karol Józef Wojtyla (later Pope John Paul 2), who provided the moral authority and support for people who stood against oppression.

And of course an outstanding cast of millions who threw off their chains and brought the Cold War to an end.
Liberty of person precedes economic liberty, as John Locke well knew:

Freedom is...a Liberty to dispose, and order, as he lists, his Person, Actions, Possessions, and his whole Property, within the Allowance of those laws under which he is; and therin not to be subject to the arbitrary Will of another...The great and chief end therefore, of Men's uniting into Commonwealths...is the preservation of their Property

 

[daftandbarmy]

It was actually a trio;

Prime Minister Thatcher
President Reagan
Cardinal Karol Józef Wojtyla (later Pope John Paul 2), who provided the moral authority and support for people who stood against oppression.

And of course an outstanding cast of millions who threw off their chains and brought the Cold War to an end.
Liberty of person precedes economic liberty, as John Locke well knew:

Freedom is...a Liberty to dispose, and order, as he lists, his Person, Actions, Possessions, and his whole Property, within the Allowance of those laws under which he is; and therin not to be subject to the arbitrary Will of another...The great and chief end therefore, of Men's uniting into Commonwealths...is the preservation of their Property

"During my lifetime most of the problems the world has faced have come, in one fashion or other, from mainland Europe, and the solutions from outside it." Margaret Thatcher

 

[Edward Campbell]

More pessimism about Europe, by a thoughtful source, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/opinions/opinion/fear-may-save-the-euro-but-not-necessarily-europe/article2315053/singlepage/#articlecontent

Fear may save the euro, but not necessarily Europe

TIMOTHY GARTON ASH

Davos, Switzerland— From Thursday's Globe and Mail
Published Thursday, Jan. 26, 2012

Angela Merkel came to Davos on Wednesday and, in a speech as solidly built as a Mercedes, once again assured the world’s business leaders that the euro will be saved. But this time, there’s a difference: More of them seem to believe it. That immediately raises two further questions: Even if the euro zone is saved, where is the strategy for growth? And where would this saving of the euro leave the larger politics of Europe?

On the euro, I find a noticeable shift in mood. Six months ago, business and political leaders were not convinced that Europe in general, and Germany in particular, would do what it takes. A gradual accumulation of piecemeal, pragmatic steps – very much in Ms. Merkel’s style – has changed the balance of sentiment. There is the decision to accelerate the introduction of the European Stability Mechanism this summer, following hard on the heels of the existing European Financial Stability Facility. There is the very active role of the IMF, another indirect way for European governments to help out (and impose conditions on) other European governments.

There are the two Marios. I recently heard one leading banker describe Mario Draghi’s initiative to give generous three-year loans from the European Central Bank to European banks as the European form of quantitative easing. Mario Monti’s professorial program for Italy has also earned plaudits. This is not an American- or Chinese-style big bazooka; the European version of a big bazooka is an array of small- to medium-sized bazookas.

The mood may swing again, even in the next few days, if the apparent impasse over Greek debt is not resolved. But one increasingly hears Greece being discounted as a special case. In case of a Greek default, the euro zone would have to move very fast to show that it would not let Portugal go the same way. But that, if achieved, could also prove a positive turning point. A line would be drawn.

Let’s assume then, for the sake of argument, that over the next six months, the euro zone is saved. Two problems arise. The first: Where is the growth to come from? The German austerity recipe provides no clear answer to that question.

Unless Europe has a growth strategy, it is in danger of falling into a deflationary debt spiral, as George Soros warned Wednesday. If economies contract and tax revenues fall, the debt burden – the ratio of accumulated debt to GDP – would actually increase. Earlier this week, the IMF came out with a revised forecast, predicting a contraction of the euro zone economy by 0.5 per cent in 2012 – with, needless to say, some countries doing much worse than others, and Britain being pulled down with it.

That takes us to the politics. If markets are about perceptions and emotions, so are democracies. If the former are about those of the few, the latter are about those of the many. And the feelings in Europe are very bad.

Read the newspapers, watch television, check out the opinion polls, listen to debates in national parliaments, watch the demos in the streets: You will find precious little of what Ms. Merkel called Wednesday “the happiness of being able to shape things together.”

There are massive resentments between nations – Greeks against Germans and Germans against Greeks; northern against southern Europeans; Brits against almost everybody; almost everybody against Brits. There is a general crisis of confidence in the European project.

If we are witnessing the euro being saved, this is a triumph of fear, not of hope. Other great moments of the European project – the introduction of the single market, successive enlargements, the launch of the euro itself – were driven by hope. Here, it is fear that has led Germany and others to do the minimum necessary: fear that the costs of collapse would be higher than the unpalatable, resented alternative of bailing out the countries in trouble.

If the euro zone does not return to growth, or does so only in a few better-placed countries, these resentments will multiply. Even if it does, there will be legacies of bitterness. More and more people will ask, “What is this Europe really for?” (Remember that the European monetary union was conceived of not just as an economic step but also, perhaps even more so, as a political one.)

There are good answers to this question, and they urgently need to be spelled out. They have to do with our negotiating power in the 21st century world of emerging, non-Western giants such as China and India; global challenges like climate change; the Arab spring, the most hopeful development of this decade; and defending (with the help of essential, managed immigration from the Arab world) the domestic achievements of the last half-century, including a certain European mix of relative prosperity, quality of life, social justice and security.

It would be foolish to pretend that the euro has been the best and straightest path to those larger goals. If the euro did not exist, it would not yet be necessary to introduce it. But it does exist, with all the design faults that have now become evident. We have to start from where we are. To go back now would be worse than to go forward. Difficult though it will be, Europeans have to correct those design faults as they go along, working within the necessary constraints of national democracies, and adding a strategy for growth.

Above all, we have to recognize that saving the euro is no substitute for the larger political project, of which it was once meant to be both core and catalyst. The politics of fear may have saved the euro. We need a politics of hope to find a European answer to the Arab Spring.

Timothy Garton Ash is professor of European studies at Oxford University.

The "great project" of the 20th century was, arguably, the reconstitution of Europe, after 2,000 years of turmoil, as a peaceful, prosperous guild of nations.

But, perhaps, the Europeans paid too small a price for both the peace and the prosperity. General Hastings Lionel "Pug" Ismay, 1st Baron Ismay, KG, GCB, CH, DSO, is credited with a pithy quote about "why NATO?" It was designed, he said, "to keep the Yanks in, the Russians out, the French up and the Germans down." It, NATO, the EU, the Euro, worked: America is, 65 years on, still propping up an economic powerhouse; Russia is a stumbling, shambling monster - no longer a fearsome giant, just worrisome troll - but it remains, safely, outside of 'the new Europe;' The French remain, inexplicably, "up," - exercising far more power than they deserve; and the Germans might not be "down" any more but they are still reluctant to take up the mantle of leadership. The Europeans did not have to work very hard, until 2010, for their newfound peace and prosperity; the Americans, and to a lesser degree, Canadians, underwrote it, subsidized it for 40 years and still pay a too large share of the "price" for a stable, rich, peaceful Europe. Now most European countries are being called upon to "pay the piper;" a few, notably Britain, Iceland and Ireland, are doing that now, a few others, including e.g. Sweden, did their "paying" before the recent crash. But many, including France and Italy, are still trying to hide from reality.

My guess is that Europe can be saved - but only after a few (10±) years of real economic pain which must be felt by ordinary people - and under new leadership which, I suspect will involve Northern European countries: Germany, Netherlands, Denmark and Britain.

 

[Spooks]

My feeling on why Europe is in such an economic crisis is this...

(again, this is my opinion and a moderate rant)

Back in colonial days, those that came to America (by choice) knew they had to work and work hard IOT survive and make it. That kind of mentality has been passed down through the generations to today's generations - if you work hard, you will succeed. This drained Europe of a large number of these A-type personalities leaving behind societies of people who will 'weather the storm' or take time to enjoy the pleasantries of life. I argue this latter point due to seeing too many people around me always on the go-go-go (work and take on a million projects, get home, take the kids to karate and hockey, goto yoga class, pick kids up, do some paperwork before bed and repeat).

My feeling, especially for countries like Greece and France, is that there is no work ethic as we Westerners call it. They enjoy a fine wine, long dinners and relaxation. From what I know (based on many of my immigrated friends) is that they love family time and almost reserve time every day to relax. Therefore you get people who work because they have to and put it as not a big priority in life. This is passed down to those same people not making the oodles of cash that gets you the new car every 3yrs, the new house every ten, a new flatscreen TV every year and all the toys everytime they come out. Not having the money to do this prevents the government from gaining money through taxation such as income tax and sales tax.

The west is a very 'now' society. We -have- to know what our friends are doing on momentary basis with Twitter and Facebook. Our workplace is so sped up that we cannot physically go around to our departments to see what their status is and rather send out blanket emails for insant responses. Meanwhile, from what I view, Europeans have an opinion where 'what can't be dones today can be done tomorrow'.

Finally, the West has helped foster the impotency of Europe. It was told to me by a Bosnian vet that we (UN) went in there and gave them whatever they needed to build themselves up again. They needed a generator, water treatment plant, school, whatever? We just gave it to them. We did not make them do it themselves and therefore, as he described, it made Bosnia a welfare nation where they expected handouts rather than do it themselves. The same goes for the rest of Europe militarily. I'd say that after WW2, the big super-army of the US could protect all of Europe. Afterall, communism was bad so they even had a fully manned base out in Germany for a long time. Little France could go to the playground where the communist kids played and if they were given any grief, they could call in their big, bad, enforcer brother, the USA. After the Wall fell, this mentality continued until even Afghanistan where the US, Canada and UK took the volitile south while the other NATO countries 'did their part of contribution' and deployed to the safer regions.

Now I hear many of my friends complaining about the European debt crisis and how it is affecting them. Surely, even the 'we don't need them in NATO' topic comes up and there is more grumbling to be had. Sure, I may agree that the whole purpose of NATO is invalid now (protect against the Soviets) but until that is addressed politically, there is no sense in fretting about it now. As for their economic influence on our markets, all I say to them is 'that is the price of being a part of a global village'. Our economies are so intertwined together that if you drop one pebble in the pond, everyone will feel the ripples.


Now I welcome anyone who wishes to fire back at an inaccuracies or misconcerptions I have. I just remind that is it only my opinion and it can be swayed with logical argument rather than statements like 'You are an uneducated moron, Jack'. In fact, I welcome if anyone can shed light in an area I do not know a lot about.

 

[Kirkhill]

TGA per ERCampbell

... “What is this Europe really for?” (Remember that the European monetary union was conceived of not just as an economic step but also, perhaps even more so, as a political one.)

There are good answers to this question, and they urgently need to be spelled out. They have to do with our negotiating power in the 21st century world of emerging, non-Western giants such as China and India; global challenges like climate change; the Arab spring, the most hopeful development of this decade; and defending (with the help of essential, managed immigration from the Arab world) the domestic achievements of the last half-century, including a certain European mix of relative prosperity, quality of life, social justice and security.

Or to summarize: Europe is about power for the few and a quiet life for the many.



Michael White, The Guardian, Thursday 26 January 2012 10.21 GMT
Article Link

...Under Thatcher and Reagan, Anglo-Saxon capitalism lurched away from the post-war social democratic consensus towards free markets and free trade. It was exactly what many continental mercantilists – more inclined to managed and protected markets and Catholic "social solidarity" – instinctively mistrusted....

Suffice it to say I am at one with Thatcher, Reagan and "British" capitalism. (Anglo-Saxon in this sense being a pejorative devised by Franco-Saxons with long standing grievances against their fellow Saxons).

This comes from a lifetime of being influenced by quotes of this sort:

Robert Burns, "A Man's a man, for a' that"

The coward slave-we pass him by,
We dare be poor for a' that!

or as Benjamin Franklin would have it:

They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.

or Robert Heinlein

TANSTAAFL

 

[Colin Parkinson]

The concept of good debt and bad debt is an established practice as is the non-payment of debt by companies. People, companies and corporations are routinely not paying their debts, it’s called bankruptcy. Once you declare bankruptcy you are protected from most debt, but at a price, you lose assets and the ability to borrow credit. The problem is that most citizens of these countries want the debt erased and then carry on as if nothing happened.
An example of “Odious debt” is the bill rung up by Saddam in the Iran-Iraq war. I firmly believe that France, China and Russia know that as soon as Saddam fell, so would the chances of being paid for the debts that he owed. To be fair to the Iraqi’s they had little say in the finances of Saddam and the named countries forwarded credit to someone that was not legitimately elected and therefore own a lot of the risk.
However in a Democracy, the people “own” the majority of that debt as the governments acted on their behalf, with their consent. So if the people wish to disown some of that debt, they must be willing to bear the consequences of that act. This is why I wanted the Greeks to have a referendum, as they needed to “own the problem” Currently I think they are not accepting the reality of their situation. 

 

[Spooks]

Didn't know that angle before, Colin. Thx! 

 

[Edward Campbell]

An interesting perspective on German "leadership" in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/opinions/opinion/germans-squirm-in-the-european-drivers-seat/article2331261/

Germans squirm in the European driver’s seat

TIMOTHY GARTON ASH

From Thursday's Globe and Mail
Published Thursday, Feb. 09, 2012

In 1953, novelist Thomas Mann appealed to an audience of students in Hamburg to strive for “not a German Europe but a European Germany.” This stirring pledge was endlessly repeated at the time of German unification.

Today, we have a variation that few foresaw: a European Germany in a German Europe.

Chancellor Angela Merkel’s Berlin republic is a European Germany, in the rich, positive sense in which the great novelist had come to use the term. It is free, civilized, democratic, law-bound, socially and environmentally conscious.

It’s far from perfect, obviously, but as good as any other big country in Europe – and the best Germany we’ve ever had.

Yet because of the crisis of the euro zone this European Germany finds itself, unwillingly, at the centre of a German Europe. No one can seriously doubt that Germany is calling the shots in the euro zone. The reason there is a fiscal compact treaty agreed by 25 European Union member states is that Berlin wanted it. Desperate, impoverished Greeks are being told “do their homework” by Germans. More extraordinary still, the German Chancellor is now telling French voters who to vote for in their own presidential election, through a series of campaign appearances with President Nicolas Sarkozy. Everyone says Europe is being led by “Merkozy” but the reality is more like “Merkelzy.”

Germany did not seek this leadership position. Rather, this is a perfect illustration of the law of unintended consequences. German leaders, from Helmut Schmidt to Helmut Kohl, had envisaged advancing the European project through a European monetary union, but it was François Mitterrand’s France that insisted on pinning Germany down to it. Historians can argue about how far the commitment in the Maastricht Treaty was a direct quid pro quo for French support for German unification, but two things are clear. Both sides of the Rhine agreed that this was an important part of binding a newly united Germany into a more united Europe, in which France would continue to play a – if not the – leading role. And many Germans saw giving up their precious deutschmark as paying an economic price for a larger political good.

Twenty years on from Maastricht, we see that the precise opposite has happened. Economically, the euro turned out to be very good for Germany.

Politically, it is precisely the monetary union that has put Germany in the driver’s seat and relegated France to the front passenger seat.

So far, Germany is proving a reluctant, nervous and not very skillful driver.

There are many reasons for this. One of these is not wanting to be in the driving seat in the first place. Another is suspecting that everyone else in the car wants you to pay for the gas, the meal and probably the hotel too.

Then there is the unhappy sense that they are damned if they do lead and damned if they don’t. The terrible history that prompted Mann’s postwar appeal plays a role here. If Germany suggests a commissar to oversee Greek budget cuts, he inevitably gets called a gauleiter. Then there is the fact that the German elite simply is not used to playing such a leadership role in Europe, unlike the French elite, who like nothing better. The French want to, but can’t; the Germans can, but don’t want to.

Above all, there is the perennial dilemma of Germany’s awkward, in-between size: “too big for Europe, too small for the world” said Henry Kissinger.

Even with the most self-confident, adroit elite, and even without the memories of 1914-1945, leadership from that in-between position would be difficult.

Two things are therefore needed. First, all Germans should go back and read Mann’s short talk, both to understand the historical dimension of today’s challenge and to recall the intellectual and moral grandeur that was once theirs. For Mann’s beautifully crafted, profoundly moving message to those young Germans in 1953 can also be summarized in three short American words: “Yes we can.”

Second, they need a lot of help from their friends. They won’t manage it on their own. We may laugh at Sarko’s antics in the front passenger seat (“Non, non, ma chérie! Tout droit, tout droit!”), but he’s got the right idea. For Prime Minister David Cameron to consign Britain to the back seat of the European car at this critical moment is folly beyond words. Earlier this week, Ms. Merkel again stressed how much Germany wants to see this fellow northern European, free-market liberal country return to the heart of European affairs.

Back in Hamburg in 1953, the British were doing everything they could, in a far from ignoble way, to help ruined Germany back on its feet. It would be so shortsighted, so plain dumb, for Britain to abandon Germany to its own devices just when it finds itself playing such a decisive role in Europe – a role that it did not seek, for which it is ill-prepared and in which it needs all the help it can get.

Timothy Garton Ash is professor of European studies at Oxford University.

I'm not sure that history supports Timothy Garton Ash's penultimate and final paragraphs: Britain has never done well on the continent except as an interested outsider; Cameron may be playing his cards very well.

As for Merkel: there's no room for anyone useful in the front seat until she pushes France out. German's natural partners in the front seat are Austria, Finland, the Netherlands and, indeed, Britain; but there is no room for any of them and their good, sound economic practices, so long as France plays a leading role. France, Italy, Spain, Portugal and Greece are the problem, not the solution.

 

[Good2Golf]

...As for Merkel: there's no room for anyone useful in the front seat until she pushes France out. German's natural partners in the front seat are Austria, Finland, the Netherlands and, indeed, Britain; but there is no room for any of them and their good, sound economic practices, so long as France plays a leading role. France, Italy, Spain, Portugal and Greece are the problem, not the solution.

Concur.  Latin heritage is great in the bedroom, not so much in one's bank account.  Nordic-Teutonic heritage has a practical value that holds the key to long-term stability on the continent.

 

[Kirkhill]

Which is least unsafe?

Option A - To be in a vehicle with a Latin and a Teuton fighting it out for control of the wheel?
Option B - To be at the side of the road watching a vehicle coming at you with a Latin and a Teuton fighting it out for control of the wheel?
Option C - To be driving on a road with two other vehicles, one with a Latin at the wheel and the other with a Teuton at the wheel?
Option D - To go to the Pub.

 

[Edward Campbell]

Which is least unsafe?

Option A - To be in a vehicle with a Latin and a Teuton fighting it out for control of the wheel?
Option B - To be at the side of the road watching a vehicle coming at you with a Latin and a Teuton fighting it out for control of the wheel?
Option C - To be driving on a road with two other vehicles, one with a Latin at the wheel and the other with a Teuton at the wheel?
Option D - To go to the Pub.

The correct answer is B followed, after the inevitable crash, by D. After D the new correct option is:

Option E - Buy a new car, let the Dutchman drive, the Brit navigate and the Teutons and Vikings pay of the gas, the meal and the hotel, too, as Timothy Garton Ash puts it.

 

[Colin Parkinson]

Which is least unsafe?

Option A - To be in a vehicle with a Latin and a Teuton fighting it out for control of the wheel?
Option B - To be at the side of the road watching a vehicle coming at you with a Latin and a Teuton fighting it out for control of the wheel?
Option C - To be driving on a road with two other vehicles, one with a Latin at the wheel and the other with a Teuton at the wheel?
Option D - To go to the Pub.

I am so using this on my blog (with your kind permission of course) 

 

[Kirkhill]

I am so using this on my blog (with your kind permission of course) 

Go for it. 

 

[Kirkhill]

From the Telegraph's Debt Crisis Blog

13.50 Spain has confirmed it will submit its budget to the EC only after regional elections in Andalucia on March 25.

Is it just me or are elections in numerous countries this year (US, France, Spain, Greece) getting in the way of sorting out the financial crisis?

13.20 Big news now. Eurozone finance officials are examining ways of delaying parts or even all of the second bail-out programme for Greece while still avoiding a disorderly default, several EU sources have told Reuters. Delays could possibly last until after the country holds elections expected in April, they said.

While most of the elements of the package, which will total €130bn, are in place, eurozone finance ministers are not satisfied that Greece's political leaders are sufficiently committed to the deal, which requires Athens to make further spending cuts and introduce deeply unpopular labour reforms.

It is also not clear that Greece's debt-to-GDP ratio, which currently stands at around 160pc, will be cut to 120pc by 2020 via the agreement, as demanded by the 'troika' of the European Commission, IMF and European Central Bank.

There are proposals to delay the Greek package or to split it, so that an immediate default is avoided, but not everything is committed to. They'll discuss the options. There is pressure from several countries to hold off until there is a concrete commitment from Greece, which may not come until after they've held elections.

.....Governments are instituted among Men, deriving their just powers from the consent of the governed.....

  Some bunch of rebellious Yanks ca 1776.

Memo to Merkozy et al - you probably would have been better off letting Papandreou have his referendum.  You are all going to be judged by your citizenry in any event - including those that don't usually vote.

 

[Edward Campbell]

From the Telegraph's Debt Crisis Blog
  Some bunch of rebellious Yanks ca 1776.

Memo to Merkozy et al - you probably would have been better off letting Papandreou have his referendum.  You are all going to be judged by your citizenry in any event - including those that don't usually vote.

Very true ... remember Mark Carney's comments back then, he was right, too.

The Greeks are being asked to sacrifice a lot ... they need to understand how and why and they need to understand the alternatives and the consequences. When they do they can, should, in my opinion, must decide for themselves: a bailout with painful conditions or a default which might be even more painful.

Ditto, by the way, Italy, Spain, Ontario and Québec and, and, and ... including California, amongst others.

 

[Kirkhill]

More in the same vein ERC...

From the Telegraph again

20.33 We are hearing rumours that Germany, the Netherlands and Finland want guarantees from small Greek political parties that the bail-out measures will be kept in place, or for the elections in April to be called off.

20.22 A eurozone government source has reportedly told Dow Jones that both a troika presence and an escrow account is needed in Greece before a bail-out can proceed. An escrow account would ensure Greece gives priority to debt servicing.

And.....

16.03 German Finance Minister Wolfgang Schaueble has got involved in Greek politics just before a teleconference on a second bail-out for the debt-stricken country. He told SWR2 radio:

When you look at the internal political discussions in Greece and the opinion polls, then you have to ask who will really guarantee after the elections… - and I find this very alarming - … that Greece continues to stand by what we are now agreeing with Greece. I am also not yet sure that all political parties in Greece are aware of their responsibility for the difficult situation their country is in.

18.36 More on Greek President Carolos Papoulias' attack on German Finance Minister Wolfgang Schaeuble (16.58). During a visit to the defence ministry, the Second World War veteran also said:

"I do not accept having my country taunted by Mr [Wolfgang] Schaeuble, as a Greek I do not accept it. Who is Mr Schaeuble to taunt Greece? Who are the Dutch? Who are the Finns? We always had the pride to defend not only our freedom, but also that of Europe.

Happy Families it is not.

 

[a_majoor]

The north/south split is getting wider:

http://www.telegraph.co.uk/comment/columnists/christopherbooker/9090332/The-European-project-is-splitting-apart-at-the-very-core.html

The European project is splitting apart at the very core
A gulf is growing between France and Germany over the future of the eurozone.

By Christopher Booker7:00PM GMT 18 Feb 2012244 Comments

Behind all the spin, smoke and fury of recent days, we see unfolding the greatest crisis in the history of the “European project”. What is emerging is a fundamental split which threatens to inflict on it by far the most serious reverse in its 62-year history. It is apt that this conflict should centre on what was always designed to be the supreme symbol of the drive to full European integration, the euro.

As Greece plunges into meltdown – its economy shrinking by more than a fifth, Athens burning, 200,000 businesses already closed or on the brink, unemployment approaching 25 per cent – it is clear that the EU is separating into two irreconcilable camps. On one hand, the defenders of the orthodoxy, led by the Commission and supported by France (which is exposed to a Greek default more than any other country), is battling to hold the line with another massive bail-out. They know that for Greece to leave the euro would be an unprecedented defeat for integration, with almost unimaginable consequences as other overborrowed countries follow suit. To avert this they are prepared to work as closely as possible with the puppet prime minister the EU has imposed on Athens to do its bidding.

On the other hand, it becomes increasingly clear that Germany, supported by Holland and Finland, has had enough. They see no point in throwing colossal sums of money into what Germany’s finance minister, Wolfgang Schäuble, calls “the bottomless pit” of Greek debt. It is they who have wanted to pile ever more impossible demands on Greece to hurry on a default. If other debtor countries such as Portugal, Italy and Spain follow suit and leave the euro that they should never have been allowed to join – so be it.

What makes this moment so significant is not just that the disintegration of the eurozone will be by far the most serious check to the hitherto seemingly irresistible drive for “ever closer union”, but that it marks the rending apart of that Franco-German alliance which has been seen, ever since the Elysee Treaty of 1963, as the central “motor” of European integration. As the slow-motion crisis inches towards breaking point, France and the European institutions are on one side of an unbridgeable divide, and Germany and its increasingly restive people on the other. The latter see that the gamble of the euro has failed just as dismally as the Bundesbank had warned it would back in the 1980s – before being ruthlessly outmanoeuvred by Jacques Delors and Helmut Kohl.

National interest is reasserting its sway over a project that was inspired, above all, by the desire to suppress national interest. However the chips fall in coming days and months, the eurozone will disintegrate. The European dream has entered a nightmare stage from which there is no rational escape and the consequences will be horrendous, for Europe and the world.

Britain, itself sitting on a national debt which has doubled in five years and is still rising, is scarcely even a bit-player on the edge of this tragedy. If only Edward Heath could look up to see where his hubris has led us to.
Alex Salmond’s wind scam doesn’t ruffle Cameron

When David Cameron flew to Edinburgh for his testy exchanges over Alex Salmond’s plans for a referendum on Scottish independence, one rather important issue was not on the agenda. The same day, National Grid Plc announced that it is to spend £1 billion on the world’s longest undersea interconnector cable between Ayrshire and Cheshire, to enable Scotland to send up to 2.2 gigawatts of electricity down to England (with another to follow, down the east coast).

The declared purpose of these cables – in line with Mr Salmond’s pledge that Scotland will have enough wind turbines, within eight years, to ensure that 100 per cent of its electricity needs are met from renewables – is that all the surplus power they produce when the wind is blowing at adequate speeds can be exported to the English. What gets left out of this rosy picture (as I reported on January 21) is that, when Mr Salmond has closed down all Scotland’s nuclear and fossil-fuel power stations and the wind is not blowing at the right speed, the Scots will be relying on those same cables to import some three-quarters of the power they need from conventional power stations in England.

Furthermore, thanks to the ludicrous subsidies for wind energy, the Scots will be able to sell their electricity to the English at two to three times the price they pay for the much larger amount of power they import. This almighty rip-off will be paid for by the English through their electricity bills (not to mention the £2 billion cost of those two cables). Of course Mr Cameron – with his enthusiasm for windmills of the type which earn his father-in-law £1,000 a day – would not worry about a little thing like that.

 

[Edward Campbell]

Maybe, if this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail is to be believed, Britain is turning the corner:

http://www.theglobeandmail.com/report-on-business/international-news/uk-cuts-income-tax-sees-economy-picking-up/article2376242/

U.K. cuts income tax, sees economy picking up

MATT FALLOON AND SVEN EGENTER

London— Reuters
Published Wednesday, Mar. 21, 2012

British finance minister George Osborne cut personal income taxes but aimed new levies on the wealthy on Wednesday, taking a political gamble while pledging to stick to his government’s tough austerity plan.

He also said that Britain’s economy was improving, although growth is set to remain very modest this year.

In a move that will please his own Conservative party, he cut a 50 per cent income tax band for the highest earners to 45 per cent, from next year on. The Conservatives say that high a levy is a barrier to aspiration. The Labour opposition say it is a fair way to spread the pain.

In a nod to the Liberal Democrats, the junior coalition partner, Osborne raised the income tax threshold by more than previously announced to £9,205 ($14,300 U.S.), taking more poorly paid people out of the tax net.

Mr. Osborne also introduced a new 7 per cent stamp duty rate on sales of property worth more than £2 million. But he cut corporation tax 2 pence to 24 pence in April.

“We’ll be getting five times more money each and every year from the wealthiest in our society,” he said, in a statement opponents are likely to challenge.

Mindful of the risk that heavily indebted Britain could lose its prized top-notch credit rating, Osborne said there was no room to soften the plan of unprecedented spending cuts and tax increases, aimed at reducing sky-high debts.

A shock jump in public sector borrowing to a new record in February, released ahead of the budget statement, provided a stark reminder that the chancellor of the exchequer had no money to provide the fragile economy with a significant boost.

“This budget reaffirms our unwavering commitment to deal with Britain’s record debts,” Mr. Osborne said in his budget speech to parliament.

Despite the ongoing risks from the euro zone debt crisis, Britain’s economy was set to avoid a renewed recession and growth is expected to pick up in coming years, Mr. Osborne said.

The coalition government of Conservatives and Liberal Democrats also remained on track to meet its fiscal targets to erase the budget deficit - which topped 11 percent before it took office - within the next five years.

In November, the ongoing economic weakness had forced Mr. Osborne to add two more years of austerity after the 2015 election and pointing to a much slower recovery than they expected when they took power in 2010.

Ratings agencies have warned Britain that it could be downgraded, with apparently only Mr. Osborne’s unwavering determination to cut the deficit keeping them onside for now.

Britain has been hit hard by the 2007-2009 financial crisis and had to spend tens of billions to bailout major banks.

The recovery from the steep slump has been very weak, with the economy still running well below its pre-crisis peak and the unemployment rate at its highest in 16 years.

Many Britons have experienced the worst squeeze on their living standards in at least a generation as price rises outpaced meagre wage growth and the government’s tax increases and austerity measures are eating into households budgets.

But in recent weeks, the overall mood among businesses is slowly improving after taking a severe knock from the euro zone crisis at the end of last year.

The government’s Office for Budget Responsibility forecast that growth should pick up from the 0.8 per cent predicted for 2012 to 2.0 per cent next year and 2.7 per cent in 2014, leaving its November predictions largely unchanged.

The government’s Office for Budget Responsibility forecast predicted that net borrowing would fall from £126-billion in 2011/2012 to £21-billion in 2016/2017.

Overall Britain’s public sector debt as share of gross domestic product (GDP) will peak at 76.3 per cent in 2014/15 before falling, fulfilling the second part of the fiscal target.

Any hopes for stimulus still rest squarely with the central bank and Wednesday’s minutes suggested those chances of more money printing are receding.

Minutes from the Bank of England’s latest meeting, also released on Wednesday, showed rising concerns about oil prices and future wage inflation, in a sign that the central bankers may be reluctant to extend quantitative easing beyond the current target of £325-billion.

There is no relief for defence in this budget and my guess is that absent an Argentine invasion of the Falklands, and even if there is a dramatic economic recovery, Britain will still demand some major cuts in defence.

 

[Edward Campbell]

If, and it's still a big IF, Britain is "turning the corner" in the right direction then France appears to be veering left, in the fundamentally wrong direction, according to this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/world/a-surge-from-frances-right-as-sarkozy-hollande-prepare-to-face-off/article2410319/

A surge from France's right as Sarkozy, Hollande prepare to face off

DOUG SAUNDERS

LONDON— From Monday's Globe and Mail
Last updated Monday, Apr. 23, 2012

Europe’s simmering mood of anti-establishment anger seemed to erupt into French politics as voters turned their backs on conservative President Nicolas Sarkozy with a first-round presidential election result that was polarized between strong centre-left support and a resurgent extreme right that received a record fifth of the vote.

In a rare exception to the solid wall of conservative blue that covers much of Europe’s political map, Socialist Party leader François Hollande captured 28.5 per cent of the vote, ahead of Mr. Sarkozy’s 26 per cent, according to projections. Even these modest returns required both major candidates to deliver messages of stark anti-Europe and anti-capitalist anger, often in a reversal of their traditional more moderate positions, just in order to keep up with the more extreme parties.

The two will face each other in a May 6 runoff vote, and the next two weeks could prove a pitched battle to capture votes from an angry two-fifths of the electorate who, apparently alarmed by globalization, immigration and the collapse of the euro, cast its lot with the parties on the fringes.

A good part of France’s anger was directed at Mr. Sarkozy himself, whose air of haughty luxury, un-presidential emotional outbursts and close relations with his German counterpart have spurred a phenomenon known as l’anti-sarkozysme. Yet there seemed to be a wider anger as well, aimed at the entire economic and political system.

The biggest shock of the evening was far-right candidate Marine Le Pen, whose National Front is hostile to religious minorities and opposed to immigration. She was projected to end up with a staggering 19.6 per cent of the vote, according to projections, a record for her party and possibly the strongest result an extreme-right party has received in a recent European election.

Though not enough to make her a final-round contender, that result means that a good part of the major candidates’ activities in the next two weeks will be devoted to trying to win the support of her voters by appealing to their fears of economic and cultural insecurity.

Mr. Sarkozy seemed to acknowledge this Sunday night when he addressed his party, the Union for a Popular Movement, to explain the poor result. “Voters have expressed fear and anxiety in the face of a new world,” he said, before using rhetoric that seemed to come from Ms. Le Pen’s speeches. “We have to protect the French way of life,” he said, framing immigration and globalization as threats.

Indeed, it sounded like an echo of the speech Ms. Le Pen gave at around the same time to a jubilant audience. “We are seeing French opinion changing,” she declared, “returning to traditional French values that Marine Le Pen embodies.”

The odds are good, but far from certain, that France’s presidency will change on May 6 from right to left for the first time since Francois Mitterrand’s 1981 victory. One projection on Sunday, by the polling firm Ipsos Mori and based on current voting intentions, shows Mr. Hollande beating Mr. Sarkozy by 54 per cent to 46 per cent.

But even Mr. Hollande is likely to be effected by the strong Le Pen showing – a large part of her success came from her appeal to working-class voters alienated by globalization, the same constituency Mr. Hollande tried to reach with his unusually left-wing campaign in which he railed at the market economy and promised to raise taxes on the wealthy and withdraw from European Union fiscal obligations.

Surveys show that the centre-right Mr. Sarkozy will pick up only half of Ms. Le Pen’s supporters in the runoff, while a fifth of her voters intend to switch to Mr. Hollande. Some of her support may have come from people casting a protest vote against the establishment, but who would rather see a Socialist win than Mr. Sarkozy. But it’s also fair to say that Mr. Hollande and Ms. Le Pen are part of the same phenomenon. They both campaigned against the established conventions of European politics, including the tight bond between German Chancellor Angela Merkel and Mr. Sarkozy that had been at the root of a euro-crisis bailout pact built around fiscal austerity and limited growth. Ms. Merkel, perhaps unwisely, had sealed the “Merkozy” relationship by endorsing her French counterpart.

Both the extreme-right leader and the Socialist Party veteran were campaigning against that European status quo. Ms. Le Pen wanted to withdraw all but completely from the euro zone and the European Union, and Mr. Hollande wanted to renegotiate the European fiscal treaty so that it was built on growth and stimulus rather than austerity.

Mr. Hollande also will gain the lion’s share of votes from far-left candidate Jean-Luc Mélenchon, who won 11 per cent of the vote after a charismatic and attention-grabbing campaign, and spent the weekend urging his followers to back Mr. Hollande in order to prevent a Sarkozy re-election.

“I call on you to come out on May 6 and beat Sarkozy without asking for anything in exchange. I urge you: don’t drag your heels, mobilize as though it were me you were sending to victory in the presidential election,” he told his backers. No such support for Mr. Sarkozy emerged from Ms. Le Pen.

The French, like the Americans, hold themselves in the highest possible regard and with even less reason. The "anti-establishment anger" is even a copy of what's happening in the USA on both ends of the political spectrum ("Occupy" vs "Tea Party") but the French copy is neither as authentic nor as productive as the American originals.

No one should be sorry to see Sarkozy go but it's a bit sad that he will be replaced by someone even worse.

21st century France

 

[GAP]

Germany and France were the two main proponents holding up the ultimate fate of the Eurocrisis, and if France is flushing itself out of it's position, I don't see much good coming out of Europe in the next few years.......