In early 2010, fears of a sovereign debt crisis, the 2010 Euro Crisis developed concerning some European states. What should be the response? How should economic and financial policies be coordinated at the EU level?

The Eurozone crisis changes everything. If by the end of the year, the Eurozone is left limbless and the economy sits in deep freeze, the binary in/out argument for continuing EU membership will no longer be left just to Nigel Farage and the Tory Bufton Tufton’s out in the shires. If enough Tories don’t see that Margaret Thatcher’s continent-wide single market baby is worth protecting, which they don’t, then it won’t be long before they ask the people to foster it to the evil uncles in Brussels.

By David Gow

www.nucleus.uk.net
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Inexorably, it is dawning on a number of great British opinion-formers that if Greece falls out of the euro, the catastrophe that ensues will eclipse this country, too. Nucleus has been warning for some time that those who have been prophesying with glee that the Greeks would bring about the collapse of the single currency should be careful what they wish for.

If the German Finance Minister Schäuble says that the eurozone would survive Greek exit, it means that such scenarios are no longer the domain of journalists and become a task of practical financiers.

Wolfgang Schäuble added that he wants Greece to stay in the eurozone but only on the condition that the country will live up to obligations. While addressing his fellow countrymen, he stated that the eurozone is now more resistant than two years ago. The Minister’s optimism is forced and I do not share it at all. If it happened that the Greeks left the eurozone, it would be the first treaty step towards disintegration. In many areas Europe does not present the same level of integration (e.g. Schengen) but the Greeks would be the first to take a step back.

What will be the psychological and political consequences of such a movement, no one knows, but Eurosceptics across the continent will then get the wind in their sails.

El triunfo de François Hollande en las elecciones presidenciales francesas a hecho correr por Europa la especie de falso debate entre los defensores de la austeridad y los partidarios del crecimiento economico. Como si una cosa estuviera reñida con la otra, cuando realmente una es condición para la otra o ambas son simbiosis de la buena praxis de la gobernanza. Cierto es que la politica impulsada por la Canciller alemana Angela Merkel y seguida a pies juntillas por el expresidente galo, Nicolás Sarkozy de ajustes presupuestarios, a base de recortes sociales para alcanzar el sagrado totem del déficit cero, han provocado un movimiento pendular hacia el lado de las propuestas de inversión para fomentar el crecimiento. Un péndulo más movido por los ciudadanos a la hora de votar, que por las propias propuestas de los socialdemócratas con proyectos alternativos a los de los conservadores. La crítica de la izquierda en una Europa de nuevo en recesión y sus vagos guiños de esperanza al electorado, han sido suficientes para empezar a desalojar a la derecha gobernante.

Pero de momento, más que por una alternativa, por lo que la gente ha apostado es por la alternancia a ciegas. Los europeos, elección tras elección, estamos convirtiendo la política en una suerte de batidora que tritura a todo gobernante que ha tratado de gestionar la crisis, más allá de su color ideológico o de la fortaleza de sus líderes. Brown, Papandreu, Berlusconi, Sócrates, Zapatero, Cowen, Rutter, Sarkozy y previsiblemente Merkel que lleva un rosario de derrotas en elecciones en los länder, han engrosado la larga lista de políticos engullidos por la vertiginosa marcha que ha impuesto la crisis. Superar un mandato, el mínimo de cuatro anos, se ha convertido en el plazo de quita y pon a que estamos sometiendo el ritmo de decisiones políticas. Tal estress, aunque resulta lógico dada la ineptitudo de todos ellos para enfrentarse a los problemas, no parece el clima más adecuado para llevar a cabo un programa de medidas solvente con proyección a medio plazo. Queremos soluciones y las queremos ya, sin pensar que probablemente las soluciones solo vendrán del cambio de modelo y para ello se precisa reflexión, ideas y tiempo para que funcionen.

Ese es el camino del new deal europeo, una nueva era del viejo continente que debe rejuvenecerse en todo. Los requisitos que señalan aquellos que aún se dedican al desprestigiado oficio de pensar en Europa, establecen una serie de premisas para empezar a transitarlo. Los principales think tank europeos  han propuesto un decálogo para salir de esta crisis sistemica. A saber:

1. Compromiso: sin una apuesta decidida de pueblos y gobernantes para salir adelante, sin un nuevo contrato social entre todos, no hay futuro. El espacio europeo primero tiene que ser creíble y para eso tenemos que creernoslo los europeos, sentirlo y desearlo. Solo de esa pasion útil surgirá la defensa de Europa como algo propio.

2. Sacrificio: la construcción europea se basa en la cesión y en el sacrificio de todos para todos. La cultura del esfuerzo debe ser proporcionada, una forma de ser de la Unión tan imprescindible para evitar agravios comparativos dentro, como para ser tomados en serio por las potencias internacionales y no ser vistos como el club de los ricos ociosos del mundo.

3. Colaboración: abrir fronteras, posibilitar el movimiento de mercancias, capitales y personas, dotarnos de instituciones y monedas propias ha supuesto una ingente tarea política de más de medio siglo. Debemos preguntarnos cada uno de los ciudadanos europeos si estamos aprovechando esa maravillosa oportunidad que hemos sido capaces de proporcionarnos. Las posibilidades de colaboración entre empresas, entidades locales e individuos son aun enormes y porqué no hemos puesto en valor ni un 10 por ciento de sus posibilidades, segun los estudios de la Comisión Europea.

4. Juventud: los principales cambios de era en Europa los han liderado los jóvenes, siempre han actuado de vanguardia política, artística o científica. Darles el protagonismo que requieren y un futuro esperanzador es un requisito imprescindible para nuestra supervivencia.

5. Educación: solo creceremos si formamos mejor a las generaciones futuras. Nuestros centros educativos desde primaria a secundaria y, de forma muy especial, universitaria, son el eje del valor añadido del proyecto europeísta. Debemos aspirar a la excelencia educativa y volver a ser referente mundial de pensamiento.

6. Innovación: nuestros productos y servicios pueden diferenciarse por sus procesos innovadores y de investigación, distinguiéndose de competidores mundiales cuantitativos y de bajo coste. No debemos aspirar a convertirnos en un espacio de reducción de precios y de derechos como si fueramos un país emergente.

7. Solidaridad: somos más de 500 millones de habitantes con iguales derechos y debemos serlo con las mismas oportunidades. Consolidar y no perder el carácter social de Europa es una necesidad para seguir gozando del mayor espacio de paz y seguridad mundial.

8. Democracia: la transparencia y el ejercicio participativo de nuestras sociedades es un requisito básico para que los ciudadanos se sientan parte de un todo. No somos un colectivo dirigido a un objetivo ciego, con una meta de crecimiento planificado, somos un conjunto de pueblos diferenciados, con diversidad de culturas que deben ser respetadas siempre, aunque nuestros ritmos sean mas lentos de lo deseable.

Y llegamos al corolario que hoy centra el debate:

9. Austeridad: no gastar lo que no se tiene, realizar previsiones ajustadas de ingresos y gastos, llevar a cabo una gestión pública fiscalizada y con un correcto plan de prioridades, debe ser un forma de ser que no puede verse alterado por los vaivenes de los ciclos económicos.

10. Crecimiento: ese ansiado afán de toda sociedad que significa traducir los incrementos del PIB en riqueza y desarrollo social, solo puede venir de la aplicación de los nueve anteriores puntos de este decálogo. No existen recetas o medidas mágicas, que tornen la recesión en crecimiento por el mero hecho de poner en marcha una serie de cortoplacistas medidas reactivadoras. No hay otro plan Marshall para Europa que pueda servir, porque ni hemos vivido otra guerra, ni EE.UU. nos tienen que salvar. La solución está en nosotros, la solución es Europa.

On May 7 2012, Jens Weidmann, the president of the Deutsche Bundesbank published an article in the Financial Times titled “Monetary policy is no panacea for Europe’s ills“. From the title one might expect to read a series of well-documented arguments forwarding the thesis point of the article. However in Mr Weidmann article this is not the case. Instead it is a text replete with misleading remarks and quasi-moralistic demands. His suggestions are in fact used to present in a good light the policy of his institution -the Bundesbank- and the overall approach of the German government to the crisis.

I could comment upon each and every paragraph of his article, at the risk of frustrating the reader, but instead of doing so I will only focus on the following pontification of Mr Weidmann, which is enough to destroy his case. As an introductory remark, allow me to say that in truth his article has nothing to do with monetary policy. It rather is a litany of normative statements arguing how prudent central banks have been, how important their independence is and why governments ought to implement austerity measures (emphasis on the quote is mine):

…[T]he funding of banks that are not financially sound or against inadequate collateral would shift substantial risks between national taxpayers. Such implicit transfers are therefore beyond the mandate of the eurozone’s central banks. Rescuing banks using taxpayers’ money is something that can only be decided by national parliaments.

There is much that is wrong with this statement. Above all it reproduces the erroneous rhetoric of “transfers”, implicit or not, with a clear intention to practically suggest that German taxpayers are in one way or another bailing out the banks of the GIIPS. Nothing could be further from the truth. The word “transfers” either implicit or explicit, direct or indirect, is an imposter term when speaking about the operations of the monetary system. What Mr Weidmann, and the other devoted “ordoliberals”, call “transfers” are just the normal, daily operations of any currency union operating under a fiat monetary system.

Refuting the misleading arguments of transfers

One of the necessary elements of a monetary union, such as the eurozone, is that its currency, the euro, must always have the same value regardless of the country in which it is circulating. This means that a 100 euro deposited in a Greek bank must always have the exact same value with an equal amount of euro in a German bank. Though on the face of it this might sound obvious, in fact this is not at all a “natural” feature of the currency. On the contrary there is a very sophisticated payment mechanism in place allowing for the smooth, automatic extension of credit between banks to create this effect. This is what Mr Weidmann falsely calls “implicit transfers”.

To understand why this is the case, one has to realize how a currency is evaluated. We shall consider two simple examples. At first assume that Greece and Germany have their national currencies. Then let’s imagine that in present time 100 drachmas are equal to 100 deutschmarks and we allow the economy to work on its own over time, without any intervention whatsoever. Under these absolute free market conditions the value of each currency is a function of a complex, interweaving web of causes. Some of these are the amount of money in circulation, the demand for it, the conditions in the economy, future expectations, the prevailing interest rates and so on. In short, the value of each currency would ultimately be determined on the market. Understandably if the market considered the deutschmark as a safer currency, because the German economy is more reliable than the Greek, then the deutschmark would be appreciated with respect to the drachma. Hence the initial 100 drachma = 100 deutschmark rate could easily become 200 drachma = 100 deutschmarks. The only way through which their mutual valuation could remain fixed at all times, would be for the central banks of each country to intervene and adapt accordingly to all those factors, by fine tuning their operations. Otherwise the market will scarcely ever treat these currencies as of having an equal value.

The same applies in the eurozone, even though each country uses the same currency. If we were to assume that no interventions from central banks exist, and that the eurozone uses only euro, we would eventually see that a German euro coin would have more (expected) value than a Greek euro coin, exactly because the forces of the market would favor the former rather than the latter, for obvious reasons. For the euro to be of equal value all across the eurozone, the National Central Banks and the ECB need to constantly extend credit to one another to counter the forces of the market and create this equilibrated effect of fixed currency evaluations.

These operations are handled by the TARGET2 payment system. In doing so they ensure that a euro in Greece will always be equal to a euro in Germany, regardless of market conditions.

This payment system becomes even more important and necessary during periods of severe financial stress such as today’s, where banks, operating under the modern fractional reserve banking system, find their selves short of credit because of a dearth in savings, continuous capital flight and due to their inability to access the capital markets at any reasonable price. Their only means of functioning is by resorting to the payment system as outlined above, to finance their daily activities and keep their ATM’s active. The process would thus go as follows: the local bank needs money to carry out a transaction >> it contacts its national central bank, asking for the creation of the respective amount >> the national central bank creates the money necessary for the transaction and sends a claim, through TARGET 2, to the eurosystem.

Such a process is automatic and has nothing to do with transfers of any “real” money, certainly not of taxes. It is a common feature of our modern fiat monetary system, where central banks create money out of thin air (whether that is desirable or not is another issue). As for the actual claims and the potential risk they bear, this can only make sense if the eurozone was to collapse altogether, since member-states are partially exposed to one another via this system. Thus the point of Mr Weidmann, fallacious as it undoubtedly is, seems to be grounded on the assumption that there is a high chance for the eurozone to collapse any time soon. Even though such a possibility can never be ruled out over the medium to long term, the chances of it happening in the short run are minimal.

If we strip away all the technicalities of the above analysis we realize that from a money point of view a monetary union can never be treated as an amalgamation of nation-states, with “transfers” between them.

It is therefore clear that no transfers whatsoever take place in the sense that Mr Weidmann purports to show: as taxes of Germans channeled into (quasi-)bankrupt peripheral banks. To present a regular function of a capitalist, fiat monetary union as “implicit transfers” is flatly wrong and insistence on this terminology is pernicious. There is no particular criterion to base this misleading remark beyond that of short-sighted nationalistic politics.

German banks are among the greatest beneficiaries

Yet this is not the end of Mr Weidmann’s problem, for the above quote also includes another dubious assertion. Namely that “rescuing banks using taxpayers’ money is something that can only be decided by national parliaments”. By presenting this alleged truism, Mr Weidmann fails to realize that if it were to be taken as a universal axiom it would ultimately be to the detriment of the Bundesbank and the German economy.

We know well that German banks are heavily exposed to the eurozone’s periphery. When the ECB used its SMP programme to buy government bonds of peripheral countries, or when it pumped €1 trillion into the european banking system through the two tranches of its LTRO loans, German banks were among the beneficiaries. Either because the governments that owed them money, found the cash to pay them back; or other domestic private banks tried to cover their own liabilities to them, such as Spanish banks who are heavily exposed to the property bubble and who are interwoven with German capital; or the German banks themselves gained direct access to these funds. After all, as the Financial Times reported,more than half of the 800 banks that received the second tranche of the LTRO were German banks, while Deutsche Bank, one of the world’s most leveraged banks, recently capped almost €10 billion from the ECB. In case Mr Weimann did not realized it, all this was never approved by any national parliament, but only by the governing board of the ECB, without any parliamentary scrutiny.

Given that the large German banks are among the ones with the highest leverage ratios in the eurozone, it is natural to expect that they welcome the cheap money from the ECB to raise capital, so as to meet the capital adequacy criteria, by June 30, 2012; or to make some easy profit in the meantime. I really do not think that Mr Weidmann would like this money-printing bonanza to pass from any parliament, because then, German banks could risk running short of funds, with whatever implications this would have on their stability and their sustainability.

By the way allow me to use the words of Mr Weidmann to pose a rhetorical question: does this “funding of banks that are not financially sound or against inadequate collateral” really“shift substantial risks between national taxpayers”? If yes, then the distinction between monetary and fiscal policy is completely obliterated and so the much-vaunted independence of any central bank becomes absurd and meaningless…

Mr Weidmann propounds a series of self-serving arguments, perhaps very useful for the cheerleaders of pseudo-nationalistic yellow papers such as Bild, who are enamored with such oratory and who will delight their selves with “analyzing” the “oracular wisdom” of their Bundesbanker. In truth Mr Weidmann’s article seems as if it was written by the spokesperson of Madame Merkel and not by the president of the Bundesbank, who cares so much about the “independence” of central banks.

I believe it is high time we abandon this hypocritical, polarizing palaver. It serves no one to play the game of “the good, the bad and the ugly” during these times of crisis, where dogmatism can only lead to unpleasant outcomes.

Image credit: L’express

Quo vadis Jens Weidmann? | Protesilaos Stavrou.

Es ist die sozialdemokratische Rolle rückwärts. Weg von Gerhard Schröder und der Agenda 2010, hin zu Johannes Rau und damit hin zum Wohlfühlen, Umsorgen, ja keinen Streit anzetteln.

Hohe Schulden trotz Rekordsteuereinnahmen, klamme Kommunen und eine schwer identifizierbare Wirtschaftspolitik waren keine Themen beim Wahlkampf im Industriestandort Nordrhein-Westfalen. NRW hat am Muttertag die Landesmutter Hannelore Kraft gewählt und gezeigt, dass auch Deutschland in Zeiten der Euro-Schuldenkrise nicht zwingend sparen möchte.

Düsseldorf war in der bundesdeutschen Geschichte häufig Schrittmacher. Am Rhein wurden erstmals sozialliberale Bündnisse geschmiedet, dann Rot-Grün etabliert und mit der SPD-Niederlage 2005 wurde die Kanzlerschaft von Angela Merkel eingeläutet, die für Haushaltsdisziplin steht.

Jetzt siegte eine SPD-Kandidatin haushoch, die Probleme professionell weglächelt und damit bei den Menschen sehr gut ankommt. Die SPD zelebrierte Kraft, ihre Minister spielten noch nicht einmal Nebenrollen. Kraft hielt dafür das alte gewerkschaftsnahe “Wir-Gefühl” aus den 1980er-Jahren hoch und wird damit zu einer ernstzunehmenden Gegenspielerin der nüchtern auftretenden Angela Merkel.

Norbert Röttgen steht hingegen vor dem politischen Aus. Er hat einen stümperhaften Wahlkampf zu verantworten und das schlechteste Ergebnis seit Bestehen der Bundesrepublik für die CDU eingefahren. Mit welcher politischen Autorität will er nach seinem Rücktritt in Düsseldorf noch in Berlin auftreten? Sein Glück könnte darin bestehen, dass Merkel ungern ihre Regierungsmannschaft umbildet.

Für den FDP-Spitzenmann Christian Lindner war dies eine Traumausgangslage. Ihm gelang es so doch recht einfach, seine gebeutelte Partei wieder in das Landesparlament zu führen. Lindner bezeichnet sich gerne als “parlamentarischen Kampfsportler”. Die Auseinandersetzung mit Rot-Grün sei in diesem Zusammenhang für ihn eine “Delikatesse”. Widerspruch fällt schwer.

As I read some of the latest news about the Greek election and the attempts to form a government I am struck by the following quotes: “We cannot make true our dream of a left-wing government“, says Alexis Tsipras of SYRIZA and that “Foreign creditors are now more open to renegotiate“. Meanwhile, “Should Greece stop [...]

As Europe embarks on a quest for a new “Growth Compact,” it is clear that the old ways of facilitating a painless recovery via Keynesian stimulus spending is not an option. After all, if government spending did lead to higher growth, Europe would have had a stellar economic performance in the past. France, for instance, has not run a balanced budget in over 30 years but has little to show for it in terms of superior growth performance. In other words, growth is an outcome, rather than a policy. If it were the latter, wouldn’t all countries make ample and easy use of it? In addition – and despite what a rising chorus of voices would have you believe, public finances are simply too constrained, particularly in the hardest hit countries, to once again ‘tax and spend’ our way out of economic malaise. That’s the bad news. The good news is that thanks to powerful, new digital technologies, it’s no longer necessary to resort to old-style, expensive shovel-ready projects to kick-start the economy and job creation.

I have been ruminating recently on the key questions that divide Greek society over the economic crisis; the issues that raise controversy among political parties; the actual steps that need to be made for the country to finally move from here to there; from near disintegration, to a stable state where the common good will prevail over short-sighted party politics. What I have realized is that the core issues have not been addressed, in any comprehensive sense. Instead the debates are confined within sterile exchanges of competing slogans and other attention-getting devices, which lack content. Not a single party has ever presented a coherent strategy of the steps to be followed henceforth. I am not speaking of any particular orientation, pro-memorandum or anti-memorandum, pro-EU or anti-EU, neoliberal or socialist etc. I am referring to the complete absence of any viable proposals to the Greek people, of feasible alternatives.

For a better perspective let us for argument’s sake put aside all the obstacles that were raised in the last elections and that a coalition of ND-PASOK and some other party forge a government to run the country. The president of ND, Mr Samaras, whose party has secured the most seats in the parliament, has long been delivering promises of renegotiating the memorandum with the troika – the memorandum that he and his party voted in favor of a few months ago to secure the second bailout agreement and the restructuring of the country’s debt under the PSI programme. What can he really ask for? The position of the trio of official lenders is straightforward: meet the fiscal targets or else you will not receive any further financing. What are the strong negotiating points of Mr Samaras to present before the troika so as to entice them to accept his new proposal? What can he say to counter the hard line of the official lenders? In truth nothing, apart from the well-known pointed remarks on the failure of austerity policies, which will nonetheless fall on deaf ears.

The bargaining power of the domino effect

Had this discussion to better negotiate the conditions of the bailout programme been held two years ago, Greece would have been in a more advantageous bargaining position since a disorderly default back then would have inflicted immeasurable loses to all parties involved, both private and public (whether that would be good for the interior is another issue). If we are to strip away all the moral and political objections that could be raised, scrupulous Greek politicians could have asked for much more favorable conditions by presenting a possible default as a threat. For whatever reason they did not try anything like that, preferring instead to slavishly follow every single one of the dictates of the troika, with the ex-Minister of Finance Mr Papakonstantinou trying to convince us at the time that Greece would definitely regain access to the markets by 2012 (this will not happen earlier than 2020 or even later).

For two years the government(s) clung on to a futile programme that could never succeed, for it was chasing chimerical targets, under unrealistic assumptions, without considering the real impact on the economy and society. It is obvious that you cannot reform a country’s economy without considering the microeconomic impact of the incrementalist austerity policies that put all the burden on the average entrepreneur and worker. An economy requires stability and this programme did everything possible to create constant instability and major uncertainty, byrevising the regime every few weeks – grand failure (this holds true even if we accept that the policies themselves are indeed desirable, which is not the case).

Today with most private creditors secured or better capitalized and with everyone in the markets expecting a Greek default, perhaps accompanied by a disorderly exit from the eurozone, there really is no way for any Greek politician to play the “contagion threat”. The risk of contagion coming from Greece has long now been significantly diminished, especially ever since the debt restructuring that transferred most of the debt burden from the shoulders of private creditors on to official creditors (though systemic risk has increased elsewhere in the eurozone). The plain fact is that a Greek default can and will be handled in one way or another, hence no magnificent pressure can be exerted towards that end, if negotiations were to reach such a point.

Note that many politicians still believe that this is a powerful tool in their hands. Especially SYRIZA, the left-wing party that came second in the recent elections, and the Independent Greeks, the moderate patriotic/nationalist party that finished fourth, are of the belief that they can declare the debt illegitimate, refuse to pay it back and thus be in a position to better negotiate with the troika. This view is in present time fallacious for three reasons: (1) it fails to recognize that the systemic risk in the eurozone has shifted from Greece, to Spain and deep in the horizon, France – yes France -, (2) it considers the troika as soulless automatons who will not react accordingly to the measures of the Greek politicians, (3) it underestimates the impact this will have on the legitimacy of Greece both towards its European partners and towards the capital markets for years to come.

The sole reality is that once the Greek politicians start behaving as if all Europeans and the markets are their foes, then the country will be subjected to a silent treatment and will be committed to a diplomatic purgatory, litanies to the contrary notwithstanding. This pseudo-nationalistic inwardness can only harm Greece, especially at this point in time where cooperation with as many forces as possible is the only prudent way of avoiding the chilling effects of economic depression combined with political isolation. Greece needs allies not enemies – and alliances are built through constructive proposals, through tangible, coherent, persuasive and compelling plans; not through absolutist oratory and “we against them” syndromes.

The two scenaria of the failure to renegotiate with the troika

If then a unilateral renegotiation, championed by Mr Samaras et al, is in fact nothing more than a fleeting dream, or the humbuggery of power hungry politicians, what could possibly be the final outcome? Two are the most plausible scenaria, even though in today’s Greece, where populism seems to have obliterated reason, I would hardly be surprised by any other unexpected outcome.

The first scenario argues that the new government will more or less march along the path of its predecessors, implementing the memorandum so as to receive the periodic tranches of loans from the troika. Considering the anti-memordandum oratory however, and how many politicians portrayed their selves as the knights in shining armor who toil against “the markets, the bankers and the creditors”, this would scarcely be accepted by the electorate. Either some like it or not, the fact is that the majority of Greek citizens clearly voted against the current regime of austerity measures and it will be extremely hard to persuade them for more of the same. As such the coalition supporting the troika programme could fall into disarray renewing the round of regime uncertainty that has covered the country over the last months (years), bringing forth the need for new national elections. Given the rigid time frame and the position at which Greece currently stands this could hardly be good news, as a negative reaction from the side of the EU or the IMF or indeed private investors who would otherwise like to invest in Greece, cannot be ruled out.

The second scenario cuts into the nub of the issue: the lack of feasible alternatives mentioned above. Assume that for whatever reason Greece fails to meet the conditions set forth by the troika and the ECB decides to cut funding to the Greek banking system, thus effectively forcing Greece to exit the euro and reconstitute its national currency, the drachma. Should that be the case, only a coherent and detailed plan to introduce the new currency as fast as possible could mitigate the immense shock. The key question therefore is whether any such plan exists? And is it anyhow comprehensive or is it similar to the empty statements we are accustomed to hear these days? To put it bluntly, I suspect that the Greek political system has no idea of what to do, if plan A falls into jeopardy. There is no plan to contain a potential negative outcome of the “renegotiation” of the memorandum, while there is no real strategy to bring about any kind of change to the current regime.

With that said, there is another worrisome sign: the absence of an in depth public debate on the key issues of the present situation. One would expect some kind of well-defined proposals on issues X, Y, Z. Some systematic efforts to identify and combat the root of the problem. In Greece we did not see that. What we saw instead was a competition over who will sound more “patriotic” or “social”, without any interest whatsoever in the actual content of the political palaver. All we witnessed was the cheerleaders of populist political pontification parading before the TV screen, whose arguments cannot be based on any criterion other than myopia.

Thus in May 2012 Greece is once again in complete denial of its self; seemingly unaware of the perils ahead, with no prudent leadership and popular determination to shrewdly navigate through the Scylla and the Charybdis of our time. My final question is: Why didn’t any political power try to establish bridges of communication with other forces in Europe to present a compelling system-wide strategy, which is the only means of actually combating the current approach to the Greek crisis in particular and the eurocrisis in general? To renegotiate you need to have real alternatives and real allies across the EU. Alas the Greek political system has none of the two.

Greece in complete denial: The failure of the political system | Protesilaos Stavrou.

La elección de François Hollande como presidente de Francia ha significado un soplo de aire fresco para toda Europa, tal vez más por la novedad del personaje y la necesidad de reequilibrar el eje franco-alemán, que por las realidades del programa del socialista galo que ofrece pocas pistas de sus intenciones.  Sabido es que la esperanza tiene la fuerza de la naturaleza conservacionista y que nos aferramos al optimismo del futuro aunque esté basado en el desconocimiento, pero también es cierto que en muchas ocasiones son esos deseos los que como un movimiento inercial son capaces de cambiar la realidad. El hombre “normal” Hollande, sustituye al fracaso de un Sarkozy tan grandilocuente como ineficaz para contraponer y negociar un modelo de la Unión al rostro de la austeridad que representa la canciller Angela Merkel.  Es precisamente la capacidad de Hollande de aportar una mirada nueva, con nuevas ideas que puedan provocar un cambio de enfoque en las políticas comunitarias la gran incógnita en torno al personaje. Tal vez vive Europa el mismo momento de expectativa que produjo en el mundo la llegada a la Casa Blanca de Barak Obama en el caso del nuevo inquilino del Palacio del Elíseo.

De todas las medidas que se esperan de Hollande, sin duda, la más importante sería la incorporación al pacto fiscal parido por el dúo “Merkozy” de un capítulo dedicado al crecimiento. Ese tratado que desde su nacimiento los propios miembros del Partido Socialista francés a menudo llaman el “tratado de austeridad”, parece que tiene los días contados, pero la realidad es que durante sus siete meses de campaña, Hollande ha mantenido la ambigüedad sobre el verdadero significado del ansiado nuevo “Plan Marshall”. Las ideas que ha incluido en su discurso, tan ambiguas como vagas, se han referido al refuerzo del papel del Banco Europeo de Inversiones y la creación de “eurobonos” como respaldado fundamental para estabilizar la deuda de los Estados de la zona euro y para financiar proyectos a gran escala de infraestructura. Es evidente que realizar un planteamiento poskeynesiano en un escenario de crisis sistémica como la que asola Europa no es tarea fácil y de ahí que Hollande haya encargado un memorando sobre el crecimiento que están preparando actualmente las principales personalidades socialistas francesas, entre ellos Elisabeth Guigou (ex asesora de asuntos de la UE del presidente François Mitterrand) y diputados del Parlamento Europeo como Catherine Trautmann y Pervenche Berès. Un documento que servirá de base a la discusión que centrará la próxima cumbre los Jefes de Gobierno en junio.

Man kann sich fragen, ob Berlin es nicht eigentlich auf den Untergang der Eurozone abgesehen hat, so wie sie sich im Augenblick darstellt. Es sei daran erinnert, dass in der Planungsphase des Euros in den 1990er Jahren Teile der öffentlichen Meinung in Deutschland dagegen waren, bestimmte Mittelmeerländer mit einzubeziehen, bevor ihre Volkswirtschaften nicht stabil, diszipliniert und – natürlich – auf Sparkurs getrimmt wären. Berlin stimmte (den Europlänen) damals zu. Aber steht es heute noch dazu, oder wird es darauf drängen, dass die “Instabilen” und “Undisziplinierten” die Eurozone verlassen? Ist es das, was die Deutschen erreichen wollen?

In jedem Fall muss sich Deutschland darauf gefasst machen, dass die “Disziplinlosigkeit” die Grenzen des Mittelmeerraums überschreitet. So bereitet sich Frankreich nach dem Sieg Hollandes auf disziplinloses Verhalten vor, und vielleicht ziehen auch die Niederlande und Belgien mit. Irgendjemand hat gesagt, dass die Wähler in Griechenland und Spanien es leid seien, sich ihre Haushaltsführung von Brüssel vorschreiben zu lassen. Er irrt sich. Die Maßregelungen kommen nicht aus Brüssel, sie kommen aus Berlin…

François Hollande verkörpert die Hoffnung, dass Europa auf einen anderen Weg gebracht werden kann. Charakteristisch für das derzeitige Europa ist der Verfall des Gemeinwesens und das Ausufern der Privatinteressen; Wachstum ist Sache des Einzelnen, insbesondere wenn er zu den Reichen und den Bankern gehört… Europa untersteht den Deutschen – “Die Wirtschaftsregierung sind wir”, sagt die neue eiserne Kanzlerin, während Fraktionschef Volker Kauder, den sie vor einigen Wochen entsandt hat, um dem spanischen Regierungschef auf die Finger zu schauen, voller Hochmut erklärt: “Europa spricht heute Deutsch”. Aber es gibt auch noch vernünftige Stimmen in der Bundesrepublik wie die des sozialdemokratischen Parteichefs Sigmar Gabriel, der darauf hingewiesen hat, dass Europa nur funktioniere, wenn Deutschland nicht allein den Ton angebe. Oder die von Helmut Kohl, historische Führungsfigur der Wiedervereinigung und politischer Ziehvater der jetzigen Kanzlerin, der beklagt, dass sie “sein” Europa kaputt mache…

Angela Merkel, die ehrenwerte eiserne Kanzlerin, und ihre Partner sind definitiv dafür verantwortlich, dass das europäisch Gemeinwohl in Frage gestellt wird und dem Untergang geweiht ist. In ihrem Land ist sie demokratisch gewählt, aber sie verhält sich so, als gelte das für ganz Europa. Sie bewegt sich in Einklang mit den vor-demokratischen Grundsätzen eines Thomas Hobbes, nach denen ein Souverän, dem das Volk einmal seine Autorität übertragen hat, mit absoluter Macht regieren kann… Angela Merkel betrachtet (ihre Regierung) als Instrument, um im Sinne deutscher Interessen die finanz- und steuerpolitische Stabilität in Europa zu gewährleisten.

Präsident Hollande ist in der Position, Berlin und Brüssel davon zu überzeugen, dass die deutschen und europäischen Interessen gleichermaßen von einer Wachstumsstrategie profitieren können, die unser Europa vor dem sozialen, wirtschaftlichen und politischen Ruin rettet, den wir im Augenblick ansteuern. Während Griechenland nach der Wahl dafür ein blutiges Beispiel gegeben hat, ist in Frankreich zur gleichen Zeit die Hoffnung in Gang gesetzt worden.

European Council president Herman van Rompuy has arranged a summit dinner for EU leaders on May 23. For François Hollande the Brussels feast will be a first opportunity to brief all his colleagues on France’s new approach to the eurozone crisis and how he sees a return to growth in Europe. His message will be relatively well received. The fascinating question is who will fill Greece’s dining chair and how deep will the Greek crisis have become in two weeks’ time.

En ce 9 mai 2012, la Journée de l’Europe fête son vingtième anniversaire dans des conditions d’incertitude jamais connues.

Une incertitude due à la situation financière de plusieurs pays de l’Europe du sud et leur course poursuite derrière les organismes financiers mondiaux. Face aux crises, face à l’élection grecque,  celle en France pays porteur de la construction européenne qui vient de voir la victoire de Monsieur François Hollande fait presque figure de non évènement.

La situation est vraiment sérieuse et ce qui avait été tenu a bras le corps par les acteurs de l’avant 7 mai doit être impérativement poursuivi sous peine d’un éclatement réel de l’Union européenne. Et la diplomatie ne peut travailler qu’avec les Allemands. Elle doit échanger dans le même temps avec la Pologne, la Grèce, l’Espagne, le Portugal, l’Irlande qui présente le Traité budgétaire à référendum le 30 de ce moi de mai et tous les autres Etats membres.

Un impératif est de revenir aux fondamentaux de la construction européenne.  Ceux que Robert Schumann appelait « la responsabilité des Européens ». On ne peut les galvauder car c’est sur eux que les Européens sont d’accord. Ils installent tout ce qui a fait qu’ils sont signés ensemble. L’Union européenne est pour nous une évidence, un fait social, politique et diplomatique. Bien sûr elle nous irrite parfois par ses complexités, son éloignement supposé mais ses réussites sont incontestables. Robert Schuman a eu une vision prophétique écrivait récemment Jacques Rigaud. Il a inscrit nos vies dans un contexte totalement inédit sur la planète, de paix et de fraternité entre les peuples d’Europe. Toute notre existence est inscrite dans ce cadre européen, en termes d’études, d’engagements professionnels, de perspectives culturelles, de voyages et d’échanges. L’Europe est notre espace de vie. Un territoire à la dimension des Européens et de leurs cultures.

Mais cette construction nécessite une éthique claire. La première règle est que lorsqu’un traité est signé,  il ne se renégocie pas. Sinon c’est la fin de la solidité de l’Union européenne. Par contre travailler  un contenu d’un nouveau traité, pour faire avancer l’Union toute entière, cela oui, c’est une nécessité permanente. Un traité n’est jamais figé dans le marbre. On l’avait déjà dit, on l’affirme à nouveau Un traité remplace un autre traité.

L’Europe prend en compte les choix politique des Etats membres mais elle doit assurer la sécurité et la pérennité de l’ensemble. C’est ce que l’on appelle l’intérêt communautaire. C’est le sens de la réunion du 23 mai prochain.  L’objet est de réduire au maximum cette incertitude et ouvrir de la lisibilité pour les européens et leurs partenaires.

Pour cela il faut faire attention aux termes et concepts utilisés dans chacun de nos pays. Le mois croissance est un de ceux là. Comme le mot laïcité il n’a pas la même compréhension dans les vocables latin et anglo-saxon. S’il parle de relance partout en France il s’agit d’une relance par la dépense publique tandis que chez nos voisins il s’agit d’agir sur la flexibilité et l’adaptation du travail. Alors bien sûr tout le monde est d’accord pour relancer la croissance. La difficulté va être de s’entendre sur les termes. C’est la dimension interculturelle de la construction européenne. Le temps est sans doute venu d’écrire un glossaire européen.

A coté des affaires financières et monétaires, il y a la citoyenneté européenne dont nos candidats n’ont pas abordé le thème durant leurs campagne. Cette citoyenneté qu’il convient d’approfondir afin d’un faire un véritable élément de progrès pour chacun d’entre nous et un outil de développement collectif pour l’Union européenne. Plus que jamais créer le sentiment d’appartenance à l’Europe est essentiel. C’est une priorité face à la montée des extrêmes droite et gauche et leur anti européanisme affirmé.

Cette semaine, fête de l’Europe, cette dernière est confrontée, comme elle l’a été sans aucun arrêt, même si en France on peut avoir l’impression que le monde s’est arrêté le temps d’une campagne électorale, aux réalités de notre temps. Souhaitons bon vent, bonne mer à ceux qui vont engager notre vie future et quotidienne.

 

 

 

In my last post (What Is The Cost To Europe Of Individual Actions?) I looked at the apparent movement of money out of Greece and into potentially safer locations. That is, of course, only one form of individual action. This weekend has seen another sort of individual action which has the collective power to cause [...]