Europe

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.


Primo Levi remembers the horror of Auschwitz

Tuesday, 27 January, 2015 0 Comments

Primo Levi described his return to Italy from the Auschwitz concentration camp in La tregua (The Truce). The Truce In this Paris Review interview, Levi reminisces about one of the book’s characters: “You remember Mordo Nahum? I had mixed feelings toward him. I admired him as a man fit for every situation. But of course he was very cruel to me. He despised me because I was not able to manage. I had no shoes. He told me, Remember, when there is war, the first thing is shoes, and second is eating. Because if you have shoes, then you can run and steal. But you must have shoes. Yes, I told him, well you are right, but there is not war any more. And he told me, Guerra es siempre. There is always war.”

Today, as the world commemorates the 70th anniversary of the liberation of Auschwitz, we should strive to understand the revulsion that Primo Levi felt towards those who took part in the Nazi extermination campaign and also towards those who could have but did not speak out against it. In memory of the murdered millions, here’s an excerpt from The Truce:

“There is no rationality in the Nazi hatred: it is hate that is not in us, it is outside of man. We cannot understand it, but we must understand from where it springs, and we must be on our guard. If understanding is impossible, knowing is imperative, because what happened could happen again. Consciences can be seduced and obscured again — even our consciences. For this reason, it is everyone duty to reflect on what happened. Everybody must know, or remember, that when Hitler and Mussolini spoke in public, they were believed, applauded, admired, adored like gods. They were ‘charismatic leaders’; they possessed a secret power of seduction that did not proceed from the soundness of things they said but from the suggestive way in which they said them, from their eloquence, from their histrionic art, perhaps instinctive, perhaps patiently learned and practised. The ideas they proclaimed were not always the same and were, in general, aberrant or silly or cruel. And yet they were acclaimed with hosannas and followed to the death by millions of the faithful.”


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


Selfish

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.

Selfie


We need to talk about Greece

Tuesday, 20 January, 2015 0 Comments

The latest poll before Sunday’s election in Greece show the anti-bailout party Syriza getting 33.5 percent of the vote. Should this translate into a majority for the left-wing agitator Alexis Tsipras, the cat will be truly among the euro doves and hawks next week. Note: Syriza has promised to enact a law preventing banks from seizing the homes of people who have fallen behind on mortgages on primary residences valued at less than €300,000.

Greek euro On Friday, the Wall Street Journal reported: “Adding to the air of trepidation ahead of the vote, Eurobank and another lender, Alpha Bank SA, have requested access to an emergency cash facility run by the central bank. Both said the moves were only a precaution and that neither faced an immediate funding crunch.” The report’s next sentence is a classic: “People familiar with the matter said the banks are seeking a few billion euros between them.” Just like that: “a few billion euros between them.” Not hundreds, not thousands, not millions; just a few billion.

The Journal article moved Bloomberg View columnist Megan McArdle to write a piece headlined “It Might Be Time to Panic About Greece.” Money quote: “I rush to note that we are hardly in the end days yet; bank officials told the Wall Street Journal that this was only a precautionary move, and they were not facing an immediate cash crunch. One is always pleased to hear that bankers are being cautious. But the Journal also reports that $3 billion has fled Greek banks over the last two months, and there are rumors that other European banks are reining in their lending to their Hellenic counterparts. Which means that, unfortunately, their caution seems more than warranted.”

Wait until Monday. Meanwhile…


The Warmth of Other Suns

Friday, 16 January, 2015 0 Comments

In 2014, more than 276,000 people immigrated to Europe illegally. That’s almost 140 percent more than in 2013, according to figures published by the EU. The most of these migrants sailed across the Mediterranean, and the newest method of trafficking them is cruel and effective. The smugglers buy cargo ships from scrapyards, pack hundreds of people onto them and collect thousands of dollars from every one. Then, in the middle of the Mediterranean, the captain sets the auto-pilot for Italy and jumps ship.

Migrants

Isabel Wilkerson addresses the mass movement of people in the The Warmth of Other Suns and while her focus is the American South during the 20th Century, the eloquent conclusion she reaches is universal:

“The migration was a response to an economic and social structure not of their making. They did what humans have done for centuries when life became untenable — what the pilgrims did under the tyranny of British rule, what the Scotch-Irish did in Oklahoma when the land turned to dust, what the Irish did when there was nothing to eat, what the European Jews did during the spread of Nazism, what the landless in Russia, Italy, China, and elsewhere did when something better across the ocean called to them. What binds these stories together was the back-against-the-wall, reluctant yet hopeful search for something better, any place but where they were. They did what human beings looking for freedom, throughout history, have often done.
They left.”

The warmth of sun


Young Asian men buying up infant milk

Tuesday, 16 December, 2014 1 Comment

Odd sight in the local supermarkets. Young Asian men filling suitcases with powder infant milk. Maybe they are all delighted fathers who cannot get enough of the excellent European formulation for their babies. Perhaps their muscle is needed to carry the packed suitcases to distant places. The latter seems to be a more likely explanation when one considers the New York Times report of 25 July 2013: Chinese are buying up infant milk powder everywhere they can get it, outside of China.”

Shopping till they drop

Good for baby


The Mediterranean: The world’s most dangerous sea

Thursday, 11 December, 2014 0 Comments

More than 207,000 people have crossed the Mediterranean since 1 January this year seeking refuge in Europe. Of these, 3,419 perished in the sea — making it the world’s deadliest migration route. Last week, 17 African migrants died from hypothermia when they tried to travel from Libya to Italy in a small boat.

the Mediterranean

Many of the refugees are from Syria, where war has raged for nearly four years, but an increasing number are from Eritrea, where national service, in the form of indefinite conscription, amounts to forced labour. How bad are things in Eritrea? In its 2014 Press Freedom Index, Reporters Without Borders ranked the county’s media environment at the very bottom of a list of 178 countries, just below North Korea. It’s high time for the EU to get tough with the brutal regime in Asmara. The root causes of why its people are fleeing and drowning in the Mediterranean have to be addressed, otherwise the numbers at the end of 2015 will be even more grim.