Tuesday, May 08, 2012


Walking to the gym this morning, I was musing on the question of whether the Brussels elite have a Plan B for Greece. If not, as I think I've said before, they should all be taken outside and shot. And, if they really haven't by now developed a plan for Greece's orderly exit from the eurozone, it can mean only one thing - Scotland may leave the British union and Cataluña may leave the Spanish union but no country at all - whatever its economic plight - will ever be allowed to leave the euro union. Other, of course, than by disorderly exit over which Brussels has no control and which might be catastrophic for all the members. Even Germany.

And then, at the gym, I read an article in the i newspaper, in which the following comments seemed worthy of citation:-
- The only rational solution to the ills of the eurozone, if it is to remain a single currency area, demands full scale political union and fiscal transfers on a pan-European basis, in exactly the way, for example, that the taxpayers of England fund Wales and Northern Ireland. If this were to happen, Germany would become even more the paymaster of Europe.
- There is no sign the German electorate is willing to do this, but even if it did, it would only be in return for watertight political control over how their money was spent.
- [Referring to extreme political views in both Greece and Germany] It is a bitter irony that so much of this is precisely a consequence of the creation and widespread adoption of the euro, the currency created by France and Germany in the belief that only this would entrench such political harmony in Europe that conflict would be permanently prevented.
- The question now is: Can a plan be devised to allow Greece, if it can't construct a government to fall in with the euro stability plan, to leave the single currency without the whole system breaking down?
- According to a friend involved in European financial affairs: "We should be having discussions about this but not only is the break-up of the union not being publicly debated; it is not even being discussed in private. It is, in the literal sense, unspeakable".

Once upon a time in Spain, there were seven savings banks (cajas/caixas). As these were controlled by local politicians, they did silly things like lend money to friends of politicians such as property developers and constructors of vanity projects. When the bubble burst, they found themselves close to bankruptcy. So the government brought them all together and created a real bank, called Bankía. As this was built on a base of toxic assets, it too has arrived on the edge of bankruptcy. So, the government - which said it never would - is preparing to inject between 7 and 10 billion euros of public funds into the bank. Which would have covered an awful lot of social, health and educative services.

The UK ranks only 16th in Europe when it comes to the speed of broadband connection. Given that you can get up to 80Mbps here, I wonder where Spain ranks, when MoviStar can offer only "6-10 megas" in areas of good reception and a pathetic 1 mega where I live. To add insult to injury, the connection speeds may be low but the prices are high. Which helps to explain why MoviStar is the most profitable phone company in Europe.

An interesting historical fact: When the representatives of Britain, France and Italy met with Hitler in September 1938 to initiate the dismemberment of Czechoslovakia, they negotiated - more accurately, talked - until shortly after midnight. But when they came to sign the document, they found there was no ink in the ornate ink-well. So much for German efficiency.

Finally . . . another quote from Dr. Osler:-

No human being is constituted to know the truth, the whole truth, and nothing but the truth; and even the best of men must be content with fragments, with partial glimpses, never the full fruition.

3 comments:

Azra said...

What would happen if Germany and France left the Eurozone instead of Greece?

Colin said...
This comment has been removed by the author.
Colin said...

Well, this is one of the two solutions mooted by some commentators, the other one being Greece's exit.

However, they usually talk of only Germany leaving so that its currency can appreciate against other currencies, including the euro. I've never seen France put alongside Germany. Probably because its economy is weak and also needs to benefit from depreciation against the New Mark.

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