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The only other option is breakup

Friday, 31 July, 2015 0 Comments

Germany is running the show and writing the rules says Philippe Legrain. Why, then, he wonders, is France proposing even deeper integration? “The Last Thing the Eurozone Needs Is an Ever Closer Union” argues Legrain in Foreign Policy. Snippet:

“The conceit in Paris is that a eurozone government would be shaped by France. But why would it be? Berlin rules the roost in the eurozone, so it is scarcely going to subordinate itself to a Franco-European institution in Brussels. When German officials talk about fiscal union, what they have in mind is not the Keynesian eurozone treasury that France would like, but a supranational fiscal enforcer that could rewrite national budgets at will. That would entail an extension of German power, not a reclaiming of French influence.”

Legrain’s conclusion is worth pondering: “A flexible eurozone would be good economics and sound politics. Trying to impose a single, rigid, and deeply flawed Germanic model on the eurozone is not. A French-style eurozone government is a pipe dream. The only other option, of course, is breakup.”

I said, pretend you’ve got no money

Monday, 6 July, 2015 0 Comments

“I said, pretend you’ve got no money,
She just laughed and said, Oh you’re so funny.”

Common People, Pulp

In May, the Greek newspaper Athens Voice suggested that the woman who inspired the Pulp song is Danae Stratou, wife of Yanis Varoufakis, the former Greek minister of Finance. Ms Stratou studied at Saint Martins College of Art and Design in London between 1983 and 1988 and is the eldest daughter of a wealthy Greek businessman.

That celebrated Paris Match spread in March raised eyebrows and generated questions about the contrast between Syriza reality and rhetoric. Yanis Varoufakis was a player. He remains a puzzle. “I wear the creditors’ loathing with pride,” said Minister No More.

Common People

Give me the money or I’ll shoot!

Friday, 3 July, 2015 0 Comments

Intra-European affairs are fraught these days, given the dissent about Brexit, migrants and Putin. The Greco-German relationship is going through an especially rough patch right now thanks to lending/borrowing “issues” and the cover of today’s Handelsblatt, the daily financial paper published in Düsseldorf, sums up the fear and loathing.


Meanwhile, “Greek politics is short-term. The long term is for Germans,” notes David Patrikarakos in Politico. Problem is, Germans and Greeks are united by the euro. Still.

By the way, those taken aback by the Handelsblatt cover, should take a look at the depictions of German leaders in Greece. They’re not very subtle. Here is a referendum poster in Athens that shows the face of German Finance Minister Wolfgang Schäuble and states: “He has been drinking your blood for five years, now tell him No.”


The art of currency: Stefanos, Banksy, Warhol

Wednesday, 1 July, 2015 0 Comments

“On the front of both series of euro banknotes, windows and doorways are shown,” states the European Central Bank. “They symbolise the European spirit of openness and cooperation. The bridges on the back symbolise communication between the people of Europe and between Europe and the rest of the world.”

That’s the view from Frankfurt. The Greek artist Stefanos says that the currency does not reflect the reality of our era and he’s hacking it to make his point.

In the spirit of the British street artist Banksy, who uses public spaces and property to showcase his messages, Stefanos is using money to make a statement about the dire situation in Greece. His altered euro banknotes depict mass hysteria, despair, violence and social collapse. To create his works, Stefanos draws human figures on the notes using a black ink ball-pen, scans the results, posts the images on his website and returns the notes into circulation. Their subversive message is then spread around the modern agoras by consumers.

As we move towards a cashless world, banknotes are on their way to becoming valuable collectables. Before they’re banished, however, there’s the pressing matter of a Grexit, which could make the euros of Stefanos worth even more than their defaced value. Andy Warhol would have approved.

Artistic note

Margaret Thatcher predicted Yanis Varoufakis

Tuesday, 30 June, 2015 0 Comments

It is fashionable for liberal/leftist elites, including feminists, to hate Margaret Thatcher. She was all that they are not and because she refused to play the glass-ceiling game, they despised her. The most obvious recent example of their rage is The Assassination Of Margaret Thatcher by Hilary Mantel, which was published to much acclaim last year. Gleefully, the BBC adapted it for radio.

What they cannot deny, however, is that Margaret Thatcher understood the nightmare potential of the euro and she saved Great Britain from getting entangled in its snares by voicing her concerns. This led to the “five tests” devised, allegedly in the back of a taxi, by Gordon Brown and Ed Balls in 1997 that kept the UK out of the euro for good. In The Path To Power (1995), Mrs Thatcher revealed that she had been under constant pressure since 1990 to accept the proposed EMU (Economic and Monetary Union). She wanted no part of it; she foresaw the inflation and competitiveness dangers, she knew her history and she understood human nature. Referring to EMU, she said:

“Under this, Germany and France would end up paying all the regional subventions which the poorer countries would insist upon if they were going to lose their ability to compete on the basis of a currency that reflected their economic performance. I also thought that the Germans’ anxiety about the weakening of their anti-inflation policies, entailed by moves towards a single currency and away from the Deutschmark, could be exploited in negotiations.”

Sure enough, Germany will not accept greater inflation, poorer countries are insisting on bailouts and Yanis Varoufakis knows a thing or two about exploiting his counterparts in negotiations. Those dealing with the mess now might benefit from studying this snippet from a lecture Margaret Thatcher gave at Hillsdale College in 1994:

“Sir Edward Gibbon (1737-1794), author of The Decline and Fall of the Roman Empire, wrote tellingly of the collapse of Athens, which was the birthplace of democracy. He judged that, in the end, more than they wanted freedom, the Athenians wanted security. Yet they lost everything — security, comfort, and freedom. This was because they wanted not to give to society, but for society to give to them. The freedom they were seeking was freedom from responsibility. It is no wonder, then, that they ceased to be free.”

Margaret Thatcher

Greece as Zimbabwe or Argentina

Friday, 20 February, 2015 1 Comment

What will happen if Greece exits the eurozone? For starters, the banking sector will collapse as everyone tries to move their euros to German banks. Although word on the street is that most have done so already. Athens might consider reintroducing the drachma, but no one would want it, so people would just keep using the euro. This option is not without precedent. Back in 2009, Zimbabwe gave up the pretense of monetary sovereignty and the United States dollar is now the official currency for all government transactions. Just as Robert Mugabe has no influence over the Fed, Greece would no longer have a seat at the ECB but life goes on and there are reports that nightlife in Harare is picking up again.

Instead of going the way of Zimbabwe, Greece might become another Argentina and things won’t be as bad as the pessimists say. Given that what the Argentines call “viveza criolla” is very much at home in Greece, a tango-sirtaki morph may be on the cards. That being the case, here are some useful viveza criolla phrases:

Total, si no robo yo, robará otro.” (In the end, if I do not steal, another will steal.)
Hecha la ley, hecha la trampa.” (Made the law, made a loophole.)
El vivo vive del zonzo y el zonzo de su trabajo.” (The smart guy lives off the fool, and the fool lives off his job.)

Back on the 11th of this month, STRATFOR looked at the two countries in Greece and Argentina, Similar But Not the Same. Conclusion:

Even though Syriza used Argentina’s case as an example during the electoral campaign, and many Greeks are aware of the country’s history, Athens has considerably less room for action than Buenos Aires did. Many of Buenos Aires’ moves since 2001 have been ill conceived and poorly executed, but unlike Greece, Argentina was a fully sovereign country when it made them. Greeks elected Syriza to fix the country’s debt problem without leaving the eurozone and the European Union. Greece’s main problem is that it will be extremely hard for Athens to achieve both goals simultaneously.

The genius of Grexit

Tuesday, 17 February, 2015 0 Comments

The word “Grexit” combines Greek’ and ‘exit’ and it refers to the possibility of Greece leaving the eurozone. The term was coined by Citi economists Willem Buiter and Ebrahim Rahbari in a February 2012 note and it has spread rapidly since then. One sign of its genius is that it no longer needs translating.

German: Grexit-Wahrscheinlichkeit steigt auf 50 Prozent

Italian: Grexit, l’Italia rischia 61,2 miliardi

Spanish: Ni Grexit ni Grecovery

Dutch: ‘Grexit is niet te vermijden’

French: La fantasme du “Grexit”

Estonian: Repliik: Geuro ja euro või grexit

Portuguese: Grexit: como seria a saída da Grécia do euro

Swedish: Grexit dåligt alternativ för EU:s skattebetalare

Strong tobacco from Stark

Thursday, 12 February, 2015 0 Comments

“The truth is that, in contrast to many eurozone countries, Germany has reliably pursued a prudent economic policy. While others were living beyond their means, Germany avoided excess. These are deep cultural differences and the currency union brings them to light once again.” So writes Jürgen Stark, a former board member of the European Central Bank, in today’s Financial Times. “The historical and cultural differences that divide Europe’s union” is the title of the piece and it reveals all one needs to know about the division and disunion at the heart of the euro experiment.

In some ways, the comments are more revealing than the article.

This man needs to read Michael Pettis.The self satisfaction is nauseating.While the “bailout” of the German banks was going on, Siemens was flogging submarines and other much needed rubbish through a vast system of bribery and corruption. senior muppet

For the Greeks it was wonderful for many years to be able to run a political system of patrimonial privilege funded by transfers from outside the country, but that is a self-exciting system in need of a negative feedback loop – which it finally got. The upshot is that now the Greeks are being compelled to consider a choice between maintaining their old social contract or continuing to receive transfers from outside, but not both. In such cases one would normally expect a society to make the most strenuous efforts to avoid the choice. But in their anger at the unfairness of it all, the Greeks now look capable of actually, voluntarily making that choice. Amazing! This moment will not last, but in this moment all kinds of potential surprises now lurk. Whatever

Nice piece of Teutonic my-opism. German non-keynesian economics work as long as there are other countries willing to generate excess demand through borrowing and you can export to (US, China, Souther Europe). It is recipe for disaster for continental size economies. This is not a theoretical debate, the results are painfully obvious. True Finance

Sorry the disasters of the early twentieth century were German disasters. No other country was so bad. You simply cannot read across from a completely awful Germany to anywhere else. Nicki

If Mr Stark is right about the “deep cultural differences” between Eurozone countries, then why on earth did they create a common currency in the first place? This article is basically a list of all the reasons that the Euro should never have come into existence. If the Euro is to succeed, Eurozone countries must work more closely to coordinate their economic policies. It is obvious now that they cannot do so. I have always hoped that the UK would eventually join the Eurozone, but Mr Stark has finally removed the scales from my eyes. Gordon Brown was right after all. Little Briton

Meanwhile, in Spain, six years into its depression, 5.46 million people don’t have jobs, two million households have no earned income, youth unemployment is at 51.4 percent and home prices are down 42 percent. No surprise, then, that the neo-Bolivarian Podemos party is pulling ahead in the polls. The latest Metroscopia survey gave it 28 percent. The ruling conservatives have dropped to 21 percent and the once-mighty PSOE, the Spanish Workers Socialist Party, has fallen to 18 percent. The message to Jürgen Stark is clear: The elites can defend the euro, but they will lose their political base.

Greek EU joke

Monday, 26 January, 2015 0 Comments

Back at the beginning of this century, a small town in Spain was twinned with a similar one in Greece and the mayor of the Greek town was invited to visit his Spanish counterpart. When he did, and when he saw the lavish home of the Spanish mayor, he wondered aloud how his host could afford such a place.

“See that bridge over there?” the Spanish mayor asked. “Well, the EU gave us a grant to construct a two-lane bridge, but by building a single lane one with traffic lights at each end, I was then able to buy this place,” he said, winking at his Greek peer.

The following year, the Spaniard visited the Greek town. He was astonished at the mayor’s mansion: marble floors, a Kallista Archeo copper bathtub, gold taps, Aresline Xten chairs, plasma screens, Sartori silk rugs, a Northland refrigerator, diamond doorknobs… it was simply incredible.

When he asked him how he’d made the money to build and furnish such an amazing house, the Greek mayor said: “See that bridge over there?”

The Spaniard replied: “No.”

La Pepa  Bridge

Written in Alexandria by an Achaean

Sunday, 25 January, 2015 0 Comments

Greeks go to the polls today at a time of rising tension between Athens and its main creditors. A win for the left-wing opposition party Syriza over the ruling conservatives of New Democracy is predicted. Would a Syriza-led government start a game of poker with Germany that could lead to chaos and a Greek exit from the euro? While we wait for the results, let’s turn to the poetry of Constantine P. Cavafy. He knew his Greek history.

Those who fought for the Achaean League

Valiant are you who fought and fell gloriously;
fearless of those who were everywhere victorious.
Blameless, even if Diaeos and Critolaos were at fault.
When the Greeks want to boast,
“Our nation turns out such men” they will say
of you. And thus marvellous will be your praise.

Written in Alexandria by an Achaean;
in the seventh year of Ptolemy Lathyrus.

Constantine P. Cavafy (1863 — 1933)

Note: The Achaean League (280 — 146 BC) was a confederation of Greek city states on the northern and central Peloponnese. It was dissolved when the corrupt generals Diaeos and Critolaos were defeated in 146 BC by the Romans. Cavafy attributes this imaginary epigram to an Achaean living in Alexandria during the reign of Ptolemy VIII Lathyrus, a turbulent age, somewhat like our own. Actually, Cavafy wrote the poem in 1922, after Greece had been defeated in the Greco-Turkish War. History has no end.

The Achaean league


Thursday, 22 January, 2015 0 Comments

Yes, the European Central Bank’s belated embrace of quantitative easing will dominate today’s headlines, but given the widespread disaffection with the continent’s out-of-touch leadership and the gnawing sense of being left behind in an increasingly globalized world, Europeans are switching off. Instead of the dismal Mario Draghi, people want the fascinating Kim Kardashian. And she’s everywhere today.

First: Mrs Kanye West took to Instagram on Tuesday to share some snow shots while wearing a “Furkini” that shows off her big booty, flat tummy and signature boobs. She captioned the pic: “Boots with the fur…

Second: Medium has a marvellously nerdy piece titled “How PAPER Magazine’s web engineers scaled their back-end for Kim Kardashian (SFW)“. Snippet: “The first thing Knauss did was get a big honking server to run on the Amazon cloud, with a large hard drive. He copied all the images and files from the smaller original web server to the new, big server. Then he installed a piece of software called Gluster, which allows many computers to share files with each other—it’s sort of like a version of Dropbox that you can completely control.”

Third: On 28 April, Selfish, by Kim Kardashian, will be published. Blurb: “Kim has mastered the art of taking flattering and highly personal photos of oneself. For the first time in print, this book presents some of Kim’s favorite selfies in one volume.”

Over to you, Mario.