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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsEurope’s Controlled Demolition
Impassioned, insightful analysis by one of the best indies around. It's worth reading the whole thing. Ilargi really knows his way around this territory, though I expect a few posters here will disagree with him. Vehemently.
Moreover, yall Krugmans and Stiglitzes fully missed something that happened while Juncker was speaking yesterday: Jean-Claude changed the entire game in one brilliant move. The Greeks I was with, including in Syntagma Square, didnt notice it either.
What changed is that after Junckers speech, the discussion is no longer about data or numbers or facts anymore (but who understands that?), because he never mentioned them.
Its instead now about fear and fight and flight and various other base instincts, you name them. And thats not a coincidence. The reason he, and the EU as a whole, resort to this message (and no, these guys spin teams are not stupid) is to a substantial extent that its simply all they have left.
The EU is a club led by people with mental disorders, that panders to special interests. Its not a union of sovereign nations that hold meetings on how to find common ground. That common ground is now supposedly a given, and no matter what any nation thinks about that matters one bit anymore. Unless its Germany or France, and even then. The EU has superseded the nations that formed it. And that can never have been the idea of the people of these nations. As I started writing a few hours earlier today:
It wont be a surprise anymore that I am not a fan of the European Union. That is to say, I like the idea but not the execution of it, and certainly not the clowns who execute it. However, what happened yesterday is something that even I couldnt foresee. The Troika volunteered to self-immolate, though the three-headed beast is undoubtedly too full of hubris to understand what it did. Good.
Still, Im looking at this, thinking: really guys? You really think deliberately sparking chaos in an EU member state on the eve of a democratic referendum is something that will help your case in the long term? Have you thought this through at all? Im guessing the overriding notion is that threatening and bullying as a model has worked for Brussels so far; but Im also guessing that the approach has its limits.
For the ECB to freeze ELA for Greek banks is the biggest blunder it has ever made, and arguably the biggest one it is capable of making in its present mandate. For one thing, its a purely political move, and the ECB has no place in politics, or politics inside the ECB.
That the Eurogroup added to the insult a refusal to grant Greece a one-week extension so preparations for the referendum could be executed in peace, tells us loud and clear what it thinks about democracy: its a mere afterthought.
DonCoquixote
(13,616 posts)and I offer a story because that format helps.
There was a pop band named Europa, and the three lead singers were London, Paris, and Berlin. Granted, there were many others in the band, but these three dominated. They were also known for fighting, a lot. Eventually, the American and Russian companies fought to buy their contract, and they said "er, maybe we oughta stop fighting for a bit" They did, and for a while, it seemed like they were going to take over the world, but the three divas had a nasty habit, among many, they really really enjoyed exploiting and kicking around the lower people in the band, especially the Slavic and Olive-skinned Musicians. They really enjoyed treating the Muslim roadies like shit too. Eventually, Berlin, that did have a good head for business, said "I'm tired of helping this band manage the books, either sign this contract that means I manage the checkbook, or I leave ya high and dry." Normally, Paris and London would have told Berlin off (like they normally had to do every couple of years) but this time, they both wanted to mistreat the Olive skinned underlings, so they let Germany slap people around, and even tried to encourage some of the Slavs that if they picked a fight with archival band Moscow, it would be fun.
Needless to say, the other musicians are getting tired of this. The whole idea of this new band was to stop the stupid fights, and to actually make harmony. That was coo, but nowhere did that say you had to be starved and treated like crap. This was also so that they did not have to act like the Russian and American companies wanted them to act, but now they were right in the middle of the ealge and the bear, both of them trying tricks. And the Muslim roadies stopped wearing the band's t-shirts, exchanged them for traditional garb, and some of these folks started listening to a new band called Isis, kind of anarchist punk rock that had a lot of loud viol;ence that appealed to people who were told "Fuck You" several times a day by fans of London, Berlin and Paris.
lindysalsagal
(20,692 posts)Suddenly, our greenbacks are looking good, again.
Too bad it's at the expense of the euro: I was hoping it would hold on. I still hope it will.
dixiegrrrrl
(60,010 posts)the EU is an organization led by people with, lets define this subtly and carefully, sociopathic traits (Antisocial Personality Disorder), simply because the EU structure self-selects for such people. As do all other supra-national organizations, and quite a few national ones too, but lets stick with Brussels for now.
DFW
(54,408 posts)"The EU has superseded the nations that formed it. And that can never have been the idea of the people of these nations."
Wrong. THAT was ALWAYS the idea OF THE NATIONS THAT FORMED IT--namely France and Germany.
The EU was the idea of the German Adenauer and the Frenchman DeGaulle. Coming out of the ruins of World War II, the latest of a series of wars between the two nations stretching back to Napoleon I more than a century earlier, their idea was to form a union so strong and a bond so thick that it would no longer be imaginable for Germany to go to war with France any more than New Hampshire would go to war with Vermont. Countries like Greece were never a part of the original idea.
The original idea was a success. It is no longer imaginable that Germany and France would ever fight a war between them again. That was EXACTLY the idea of the people of THESE TWO nations. Now you don't have to even show your ID when you cross the border and you don't have to change money because it is the same. That's even more closely intertwined than the USA and Canada.
Yes, it grew into a multi-headed monster later on when the original vision was lost. But the original idea--a pacifist idea to make a political union so strong that a war between the two would be no more imaginable than someone's right hand going to war with their left hand--THAT idea was what DeGaulle and Adenauer had in mind. In that, it was a roaring success.
riderinthestorm
(23,272 posts)geek tragedy
(68,868 posts)Greece--well Tsipras anyways-- played chicken with the rest of Europe and lost.
They were clearly pegging their strategy to contagion panic amongst the other Eurozone nations. Oops.
Greece's economy is the same size as that of the Dallas-Fort Worth area. Europe can live without them and their constant drama, sense of entitlement, and inability to manage their own economy.
Is austerity a shitty policy? Absolutely.
But beggars are not choosers. And Greece is a beggar nation unless they leave the European Union.
Reminder:Greece is in this pickle because they were the ones incapable of managing their own economy. The ECB is on very solid financial ground. Germany is not out banging its tin cup on the sidewalk for Greece to help it buy its next meal.
I know the romantic myth is that Mr. Bean is leading a revolution against eeevul bankers and Nazis and sniveling Eurocrats. Reality is that he is the leader of a desperate nation who badly overplayed his hand and has burned up not only good will amongst the nations he's asking for aid, but also completely destroyed his own credibility outside Athens.
moondust
(19,993 posts)tonight Chris Hayes compared the Greek situation to the irresponsible lending U.S. banks did in the years leading up to the Great Recession. In other words, banks shirked their fiduciary responsibility to properly screen loan applications, kept handing out money freely, and then acted surprised when a lot of borrowers couldn't pay it back.
I haven't followed it closely but wouldn't be surprised if the ECB has Greece's creditors have similarly shirked some fiduciary responsibilities vis-a-vis lending to Greece.
Edit: Changed ECB to Greece's creditors.
geek tragedy
(68,868 posts)to Greek debt. There was serious risk of contagion then-Greece stiffs Bank A, who then goes our of business, but not before stiffing Bank B, rinse and repeat.
The Troika has been playing for time since 2010, diffusing the risk of a Grexit so that there wouldn't be a contagion effect.
They are not stupid. When Tsipras got elected by promising to end austerity, turn water into wine, and raise the dead, they knew this moment was inevitable, or at least very, very possible.
The ECB does have lending obligations and restrictions, which is a major problem for Greece going forward. Sure they can maybe roll over the old debt. But Greece and its banks will have trouble getting lifelines due to rules against "good money after bad" lending.
moondust
(19,993 posts)If nobody holds them accountable for making loans they know are unwise, it could turn into a sick profit game of loan-wait-seize (collateral), loan-wait-seize. There's probably a financial term for such chicanery.
geek tragedy
(68,868 posts)against bans on "too big too fail" banks--the risk of a domino theory contagion may be greater when you have smaller banks/counter parties who are more vulnerable to default events.
It took an act of massive incompetence for Shittygroup to have such risk concentration in the world's largest balance sheet.
There are no white hats in debt markets.