Nevertheless, with yet another “final” Euro summit underway the time seems appropriate to re-address the unraveling of the Eurozone.
At the crux, of course, is Greece. The election of the centrist coalition solved nothing, If the left had won, Germany’s bluff would have been called. But, unfortunately now that particular scenario has been delayed. In the lottery for the dubious honour of becoming Greece’s Finance Minister so that the Germans could kick him and solutions down the road, Yannis Stournaras won. He was there in 1994 to negotiate Greece’s entry into the Eurozone. He may well be there on its exit.
Minister Stournaras only has a couple of moves before disintegration. Will they happen and will Germany accede? No. But, anyway, official time for Europe has expired and we’re now in the first overtime. Yannis Stournaris must resist the pressure to buy more time by extending the bailout, which will only produce more debt which will be paid to German banks in the end. Don’t extend the bankruptcy. Call the German bluff. Get a deal from Europe.
Keep in mind that all the bailout funds masterminded by the Germans are nothing more than payments to the banks, not to the Greek people. Furthermore, much of the bailout goes to allow Greek banks pay German and other European banks for loans that should never have been made. Greece’s sovereign debt problem is not being addressed and won’t be until Germany is forced into a position where it can no longer dictate its austerity program for others while maintaining its competitive advantages that were deliberately structured into the Eurozone system. Money that re-capitalized Greek banks should not be part of the national debt – that releases a bunch of Euro’s, by the way. Let the European Financial Stability Facility own the banks and do with them what they need to do.
Everyone, including the Germans, are now talking about a growth strategy. Well, let’s say growth returns in one or two years. Until that time there should be no payments required on the loans. After growth begins to appear, payments can be resumed with a ratio pegged to growth.
To be clear, I don’t think any of this will happen as Germany, and Germans, seem to forget that their growth is dependent on buyers and as usual are forgetting that their economic strength lies only in exports. Losing buyers in Europe by sticking to an inane austerity policy is just plain stupid. What they are doing is saving the banks and abandoning the people.
What Germans and the German government refuse to admit is that the Euro ship and its economies are sinking fast and, like the Titanic, it will take down the wealthy and the poor, those who are industrious and those who are not. Their attitude and solutions are Hooveresque without the quaintness. He and his government, in response to a rapidly disintegrating economy in the US, moved rapidly to reduce government expenditure, and cut wages. He was an idiot then and Merkel and company are the idiots today.
Finally, and what makes the Eurozone almost problematic at this point, is that Chancellor Merkel wants to create a German Europe; every nation should live, work and apply its governance according to German rulebooks.
Merkel and many (if not most) Germans have an annoying tendency to patronize the southern tier, telling them to “do their homework” for example, so that they can all become good little Germans. This is nothing more than a tool to bring all of Europe under German leadership. The word “rule” might be too harsh. Maybe. However, this makes Germany a threat to the Eurozone and Europe – not Greece, Italy, Spain or Ireland. So everyone else in Europe needs to decide if they want to live under German leadership or resist.
Merkel keeps saying that she and Germany will do whatever it takes to save the euro; except that every plan presented by others has been vetoed to satisfy German voters, German banks and the German press. Oh, and yes, national interests.