Crisis in the Cradle

By TD Fuego

By now, most of us have heard of the Eurozone crisis. The country that has been the hardest hit is undoubtedly Greece. This was once the proud land of Agamemnon, Ajax and Achilles — the cradle of European civilization and of Democracy.

A proud people so humiliated, brought down to its knees by the self-proclaimed Aryans from up North. Their PM is made to attend humiliating summit after humiliating summit with the proverbial begging bowl in his hand. As someone has observed rather wryly, there are more summits in the EU these days than the Himalayas.

An advanced economy, Greece lies in the southern, warmer part of Europe with a population of 11m. It has a GDP of USD310bn and the per capita income is USD27k, making it a high income country. For obvious reasons, it is a popular holiday destination, particularly with Northern Europeans in search of sun and culture, both of which are in abundant supply. Indeed, tourism accounts for 18 percent of GDP and employs 19 percent of the workforce of 4.9m.

At the time of writing, the unemployment rate is at a high 22 percent; and 28 percent of households are at risk of living below the poverty line. The budget deficit is 9 percent and Government debt amounts to 165 percent of GDP. That is a whopping USD511bn and, like the sub-prime fiasco, only made possible by greedy national/international bankers unscrupulously dishing out cheap and easy money, right under the nose of the monetary authorities. Now there is a crisis because, just like many private borrowers of sub-primes, the Government does not have the wherewithal to repay this massive debt.

The Cure

So, what do the clever economists from the ECB-EU-IMF troika, some with brand new Nobel gongs, suggest? Lend them yet more money (by the hundred billions if you please!); and couple that with severe austerity measures — slashing jobs, reducing pay and expenditure on welfare. In other words, the same tired recipe that does no one any good. Someday, perhaps someone will explain to us lesser mortals how lending more money to a bankrupt government and simultaneously putting hungry people on a slimming diet is supposed to help their ailing economy. It seems to me that, sometimes, economic theory is totally devoid of all common sense.

What they ought to be doing is put (more) money in the hands of the people instead of the Government’s. This would allow the economy to breathe and grow, generate further jobs and tax revenue for the Government with which to repay some of that massive debt.

How? Well, instead of giving the money to a bankrupt government, simply give Old Age Pensioners (OAPs) cash vouchers which they can redeem towards a Greek holiday in the low season. Hotels/guest houses that would have remained closed till next summer would be open for business, jobs in the tourism sector would be saved/increased, with other sectors like transport, cultural heritage sites, restaurants, shops, etc., also benefitting in the process.

By just adding 50 percent (a very reasonable target given the size of European OAPs) to the 19m yearly arrivals, imagine what can be achieved. And if the figures were to be doubled? Any increase would obviate the kind of violent social unrest we have witnessed on our TV screens. And it would cost a fraction of the amounts being dished out in terms of “haircuts” and yet more loans to government.


However, that would unfortunately not do for the empire builders from up North?!

Surely, I can’t be the only person on Earth who thinks that all this Eurozone do-da is no mere accident, but has been hatched and nurtured over the decades since 1960 — the year the Club of Rome was formed — to get European countries exactly where they are today. It is not such a well-kept secret, after all, that the Germans have throughout modern times at least thought themselves capable, indeed entitled in some divine way, to be masters of Europe. WW I and WW II were largely an outcome of this obsession, with 80m+ lives lost.

With the fierce resistance that these endeavours were met with, the German Establishment had to think of another strategy. A strategy that would transform Europe in a way that, without the firing of a single bullet and the spilling of a single drop of blood, it would be at the command of the Reich. A German empire encompassing the whole of Eastern and Western Europe, all willingly lining lamblike to join this exclusive Club, aided and abetted by the sycophantic French who also want a slice of the action.

If anyone has any doubts, just think of the leaders who are involved in driving the European agenda in these agonising times. Out of the 23 countries that use the Euro as their currency, the decisions that matter are mostly taken by the Berlin-Paris tandem and, as a probable eyewash, the IMF which is coincidentally led by Frenchwoman Christine Lagarde. If you listen closely to her on matters such as (European) fiscal integration and centralisation, it quickly becomes clear on whose side of the net she has chosen to bat from.

On the other hand, has anyone ever heard of Herman Van Rompuy? He is the President of the EU, but the poor man is side-lined all the time by the strong Franco-German team with the sort of contempt reserved for a vassal. Who gave this dynamic duo these extraordinary powers? Were they ever mandated by the 27 EU members to hog the driving seat and dictate even the minutiae of the ECB as if it were their Central Bank instead of the EU’s?

Up The Creek

Now, it would also not have escaped anyone’s attention how, in spite of Maastricht strict criteria, many countries were allowed into the Eurozone with some very tenuous figures. I won’t say they lied about these, rather eyes were deliberately turned the other way, because the Zone had to be created at all cost. Empire had to be achieved early on in the 21st century; and 2002 was the chosen year. Audits, which ought to have been carried ought prior to entry, were only performed after the crisis had taken firm hold in what is known as the PIGS countries. And of course, that was 10 years too late!

By then, the Euro had been launched and these economies were in dire straight. And, we are told it is practically impossible to disengage. But, why not revert to a national Euro with an effective exchange rate, and leave the door open to “Europeanisation” when, and only when, Maastricht and — with the benefit of hindsight — even more stringent criteria have been satisfied? Indeed, why not call off the whole idea for good?!

Whatever unfolds in the future, we have to admit this: if ever there was a stroke of genius, this Eurozone caper is definitely it. Who would have thought so many countries can be so easily subjugated without the use of a huge war machine? No guns, no armies, no warfare. This time round, the ARMS used were nothing more than pieces of glossy paper — a vast amount of it!

Yes, you have guessed it, the Euro — a barely disguised Darasing* of a Franc-Mark. If anyone has any doubt, just ask any European resident what has happened to his purchasing power since 2002. And simultaneously think of the post-Eurozone countries that are doing relatively well and those that are up the proverbial creek without a paddle.

A rivederci!


*A famous Indian wrestler and film star who recently passed away

* Published in print edition on 20 July 2012

Add a Comment

Your email address will not be published.