Tuesday, November 15, 2011
End of the euro, Tuesday editionThe eurozone is ending ugly. And probably the EU itself. A depression struck when both Germany and France were led by conservatives with little vision, heart or competence to manage the situation, Angela Merkel and Nicolas Sarkozy, "Merkozy", as the pair are called. Any commitment they may have had to the "European project" of a democratic and peaceful Europe turned out to be entirely secondary to their desire to protect their own one-percenters from the disastrous consequences of their own gambling and irresponsibility.
So now we have new governments in the process of formation in both Greece and Italy that are basically nothing but debt collectors for big banks.
Silvio Berlusconi had become widely hated, and his departure from office on Saturday was greeted by widespread jubilation in Italy. The Italian President, Giorgio Napolitano, appointed Mario Monti as senator for life and asked him to lead the Italian government. The man isn't even an elected official. Yet their parlimentary system is still functioning (nominally?). A sadly telling comment about Monti came in a news analysis by Guy Dinmore and Giulia Segreti (Berluscone 'ready to pull plug' on Monti) Financial Times 11/14/2011):
But on the political fringes there are already those portraying Mr Monti, who is listed by Goldman Sachs, the investment bank, on its board of international advisers, as a tool of the "masters of the universe" [stock and bond traders], along with Mario Draghi, head of the European Central Bank and former executive at the investment bank. [my emphasis]Yes, who but "the political fringes" would blink an eye at such a situation? James Mackenzie also reports for Reuters in "Italian Prussian" Monti enters political storm 11/13/2011, "He is chairman of the European branch of the Trilateral Commission, a body that brings together the power elites of the United States, Europe and Japan and is also a member of the secretive Bilderberg Group of business leaders and other 'leading citizens.'" I think it's safe to say that we can expect him to be a loyal representative of the one-percenters.
If it weren't so serious, it would be comical. What's next, appointing Lex Luthor as the President-for-life?
At least in Greece, the government is being formed according to normal parliamentary procedures. But it is likely to be what Jamie Galbraith describes as "a junta of creditors' deputies if such can be found willing to take the job". He adds, "It won't be anyone who wants to continue to live in Greece afterward". (The crisis in the Eurozone Salon 11/10/2011)
Portugal's prime minister Jose Socrates resigned in March of this year after he failed to deliver the Portuguese parliament on a vote for the austerity plan demanded by the bankers, whose love for austerity reflects a dogmatic approach self-destructive even to the bankers' own interests, rationally conceived: but the banksters are running on fear, arrogance and self-entitlement, not a larger rationality.
In Spain, Prime Minister Jose Luis Rodriguez Zapatero has another few days before his government falls. He is voluntarily stepping down as Prime Minister and his once-promising reformist PSOE (Socialist Party) government are set to be crushed in this coming Sunday's election, with the conservative Popular Party (PP) under their leader Mariano Rajoy likely to win a majority in parliament and make big gains even in traditional PSOE strongholds. Not that the Spanish Socialists have been anything but faithful debt collectors for the banks themselves since the bond markets went after them. A Rajoy government will continue the debt-collector function. Spain is coming under increased pressure from the bond markets in the form of higher rates just this week. It may not be entirely irrational; even more intensive cuts undera a Rajoy are likely to make Spain's debt ratios - which are lower than Germany's - even worse.
The enforcers of the European banks' financial and increasingly political rule over Greece, Italy, Ireland, Spain and Portugal is now known as the Frankfurt Group. As The Economist describes it (The euro's Frankfurt Group: A crisis? Call the F-team 11/04/2011):
Consisting of the leaders of Germany, France, the Eurogroup of finance ministers, the European Central Bank, the European Commission and the International Monetary Fund, the F-team has quickly established itself as the cluster managing the euro’s crisis. It has no legal structure or secretariat, but it is now the core within Europe’s core.If we judge them by their performance on preserving democratic governance and sensible economic policies, F Troop would be a better TV-reference nickname for them.
The austerity policies forced on the countries that have so far come under attack by the bond markets haven't fixed the debt problems or brought significant relief to any of its faithful practitioners on their usurious interest rates being charged on their sovereign debt.
Who will the bond speculators go after next? The spreads to German bond rates have been giving some indication that Belgium, France and Austria will be next in line. (Edward Harrison, Credit Revulsion in Belgium, France and Austria Naked Capitalism 10/18/2011) Slovenia is also showing signs of being on the next row of euro casualties. (David Keohane, Slovenia's bond yields hit 7% beyondbrics 11/11/2011)
Reacting to rumors of a credit downgrade by Standard & Poor's, Austria's Socialist-lead Grand Coalition government with the conservatives (Why anyone takes S&P seriously after their role in the 2007-8 crash is another question!) is scrambling to implement more austerity economics and proceeding with a spectacularly wrong-headed idea to write a 60% limit of debt to GDP into the Austrian Constitution. (Regierung plant Notoperation am Budget Der Standard 14.11.2011)
Tags: eu, euro, european union
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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