Wednesday, November 02, 2011


So much to say, so little time. So I'll let this editorial from The Times do it all for me, followed by some quotes from the euro-sceptic MEP, Daniel Hannan.

The future of the euro is now in doubt. It is no longer possible to dismiss the break-up of the eurozone as wishful thinking or scare-mongering. The promise by George Papandreou, the Greek Prime Minister, of a referendum on the European bailout for his country has moved the eurozone beyond crisis and into chaos.

The surprise offer of a referendum has made a mockery of political leadership in the European Union. Last week, the heads of European governments sat together through the night and hammered out a deal for Greece. On Monday evening, those very same heads of government were flabbergasted to find out that Mr Papandreou had decided, without consulting them, to insert a clause of his own: the deal requires the consent of the Greek people.

Mr Papandreou has not only incensed his counterparts across the Europe, but he has surely dented confidence in European decision-making: it will be hard to take future European summits seriously when there is the possibility of leaders following the Papandreou model and rewriting the details of the plan when they get home.

That said, Mr Papandreou is surely right to insist that the Greek people deserve a say over their economic fate. If he can secure Greek support for an orderly default as envisaged by eurozone leaders, he will have landed not only a mandate for the deal but also an endorsement of Greece’s continuing membership of the euro. That, though, is a considerable “if”. Recent opinion polls in Greece suggest support for Mr Papandreou is weak and opposition to the bailout stubbornly strong. There is every possibility that, if the Greeks get the chance to vote in a referendum in January, they will reject the bailout plan. What happens then? And, just as important, what happens in the meantime?

Time is not on Europe’s side. Mr Papandreou’s Government may well have fallen by then. The Greeks may yet be pressed to hold the referendum within the coming 30 days or call it off altogether. But what was already a difficult feat to pull off — reduce the Greek debt burden, secure the French banks and find a European funding mechanism that will satisfy the Germans — has become more complicated still.

In practical terms, it will now be harder for Europe to obtain outside financial assistance to bail out Greece and guarantee Europe’s sovereign debts. China, for example, is not likely to provide much firepower to the much-vaunted European bazooka when the fate of the euro and eurodenominated bonds looks so uncertain. In turn, this will mean that the pressure will once again be on the International Monetary Fund and, more particularly, the European Central Bank to stand behind the euro and European debt.

Greece first exposed the economic flaws in the euro project; now, Mr Papandreou has revealed its essential political shortcomings. For the problem with the euro was never just one of economic management. It was predictable and predicted that imposing a single currency and interest rate on a disparate group of states would create enormous economic stresses. The euro also represented a political project that was kept at a determined distance from the people. That “democratic deficit” now has to be repaid. The price threatens to be staggeringly high: a disorderly break-up of the euro could not only mire European nations in new debts and sink some of the continent’s banks, but also damage confidence and demand worldwide with dire consequences for the UK economy.

Europe’s leaders meet, yet again, for an emergency summit today. Their aim is to put the pin back in the grenade. The problem is that Mr Papandreou has already blown apart the idea that Europe’s economic future can be decided without consulting the people.

Daniel Hannan

Shall I tell you the truly terrifying thing about the EU? It’s not the absence of democracy in Brussels, or the ease with which Eurocrats swat aside referendum results. It’s the way in which the internal democracy of the member states is subverted in order to sustain the requirements of membership. George Papandreou, the luckless Greek leader, is the latest politician to find himself being chewed up because he stands in the way of the Brussels machine

Euro-enthusiasts in Brussels and in Athens are ready to bring down an elected government rather than allow a referendum. Yet the funny thing is that Papandreou is a Euro-enthusiast.

It’s chilling to write these words, but EU leaders are evidently prepared to vitiate Greek democracy and wreck the Greek economy rather than allow the euro to break apart. Yet even if they succeed in Greece, they may find that their efforts are for nothing. Italian bond spreads yesterday were back at the level that usually triggers bail-outs. We are about to see quite how far the Brussels apparat will go in defence of its privileges.

And someone else on The Times

When democracy becomes this terrifying, there must be something wrong with the system.


Is it too late to consider criminal charges against those who established the system, knowing full well the pain and grief it would inevitably cause? And the scale of it.

The French and the Germans were, of course, the first to breach with impunity the EU rules on deficits/debt. So there's something poetically just in seeing them flailing around and making fools of themselves to protect their banks - not their people, of course - from the consequences of this 'moral hazard'. Or bad example, to be more prosaic. Truly are they reaping what they sowed/sewed. And we are all paying the price for their hubris, as nemesis is visited on everybody. In one degree or another.

Roll on the new world order. And a few public executions. Pour encourager les autres. If we're going to have a Robin Hood tax, we might as well shoot a few Sheriffs of Nottingham. Or Paris and Berlin.

Anyone agree or disagree? Shall we start a new street movement that's rather less passive than the current models?

1 comment: said...

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