Jun 242015
 June 24, 2015  Posted by at 9:58 am Finance Tagged with: , , , , , , ,

Ben Shahn Sideshow, county fair, central Ohio 1938

The only thing that would really go towards beginning to solve the problems with Greece is for Athens to NOT sign a deal. The short version of why that is so: it would leave the EU intact for longer. And the ECB.

Neither have any viable future, but as they go down, they can cause a lot of damage and pain. It’s mitigating that pain which should now be our priority no. 1, the pain that will result from the demise of Europe’s institutions. But we see precisely zero acknowledgment of this. Anywhere.

All that attention for whatever comes out of yesterday’s, and today’s, and tomorrow’s Troika vs Athens talks is very cute and nice and all, and putting on a ‘phantom summit’ is hilarious, but in reality it’s all based on a far too myopic picture.

Maybe that’s what you get when you’re only looking at life as exclusively consisting of things that can be either bought or sold, which seems to be the way the entire world press interprets the negotiations, the only way they have of interpreting anything. But this is not about money.

There’s more to life than money. That is to say, there’s a lot more going on than those talks and the deal-or-no-deal results that may or may not emanate from them. To wit: If the past 5 months or so have made anything clear, it’s that the eurozone has no future at all, and the EU as a whole has very little.

There is no trust left between Brussels and Greece, and therefore at the same time also not between Brussels and Rome, or Madrid. Italy and Spain could be the next to receive a five-month treatment like the one Greece has had, and the people there sense it. Even if their present governments do not.

As I said a few days ago :

None of these institutions, IMF, EU, ECB, has any raison d’être or any claim to fame unless there is explicit trust in what they represent. That trust is now gone, and it’s hard to see how it can ever be recovered.

Whatever happens to Greece going forward, that is perhaps the biggest gain its dramatic crisis will gift to the rest of Europe, and indeed the world. Which therefore owe it a debt of gratitude, and of solidarity.

You know, we’ve heard it said that politics is about seeing ahead. Well, that’s just too bad, because if there’s one thing European politicians, to a (wo)man, show us these days it’s that they lack the ability to see ahead, even just beyond the beam in their own eyes.

These people don’t see ahead, they project ahead. They are under the self-reinforcing collective illusion that the future will bring what they want it to bring. They honestly think they have the power to control history. And control all of Europe. Their vision of the future is one that they look good in.

And that can in turn only possibly bring about mayhem. Or actually, as the Greece crisis tells us, it already has. Something the leadership in Brussels, Paris and Berlin will flatly deny, because, as Paulo Coelho once said: “Collective madness is called sanity”.

The more power they seek to gather in Brussels, the harder the resistance against them, and against that power, will become. But that is not going to stop them. Just read the report issued last week by the “Five Presidents: Completing Europe’ Economic and Monetary Union.

Brussels sees, projects, solutions to its problems exclusively in more Brussels. But nobody in Europe wants more Brussels. Nobody wants to give up more sovereignty, people instead want back what has been given away. Still, the myopic Five Presidents come with this:

Economic Union: A new boost to convergence, jobs and growth
• Creation of a euro area system of Competitiveness Authorities;
• Strengthened implementation of the Macroeconomic Imbalance Procedure;
• Greater focus on employment and social performance;
• Stronger coordination of economic policies within a revamped European Semester.

Financial Union: Complete the Banking Union
• Setting up a bridge financing mechanism for the Single Resolution Fund (SRF);
• Implementing concrete steps towards the common backstop to the SRF;
• Agreeing on a common Deposit Insurance Scheme;
• Improving the effectiveness of the instrument for direct bank recapitalisation in the European Stability Mechanism (ESM). Launch the Capital Markets Union
• Reinforce the European Systemic Risk Board

Fiscal Union: A new advisory European Fiscal Board
• The board would provide a public and independent assessment, at European level, of how budgets – and their execution – perform against the economic objectives and recommendations set out in the EU fiscal framework. Its advice should feed into the decisions taken by the Commission in the context of the European Semester.

Those “Five Presidents” (isn’t it telling enough that that Brussels counts five of them?) are Jean-Claude Juncker, Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin Schulz. Nice little team you got there. Politico referred to them as the “Five Horsemen Of The Euro’s Future”.

• Juncker, president of the European Commission, was one of the main architects of the chaos we now see, in a long stint as president of the Eurogroup, 2005-2013. For causing the mayhem he was rewarded with his present seat. Not an unfamiliar chain of events in the musical chairs game for career politicians in Brussels.

• Donald Tusk, president of the EC council, has only one claim to fame, but that still gifted him with his present position: he is a vocally rabid anti-Putin orator. They love that in the EU these days.

• Jeroen Dijsselbloem, the president of the Eurogroup who works hard to remain in that seat for another term, is an agricultural economist. Which is fine for telling us what strawberries should go for in winter, but not for defining policies with regards to for instance Greece. He’s so far outclassed by Varoufakis it can only lead to stupidity.

• Mario Draghi, governor of the ECB, is a Goldman Sachs man, and that’s all we need to know. He’s also one of the global class of central bankers who feel omnipotent after discovering the printing press. They will instead bankrupt their economies.

• Martin Schulz, the president of the European Parliament, is just another career EU tool. After 20 years of loyal heel-licking and brown-nosing, he was rewarded with the seat he’s now in. Nobody should be allowed to be in Brussels any longer than perhaps 5 years at the most. It’s the worst of all possible worlds.

Summarized: it’s incredible and insane that such a set of clowns can actually present a paper about Europe’s future. They all come with a huge agenda, and their own future is far more important to them than doing what’s best for Europe. As the Greeks know better than anyone.

A structure such as the EU, we’ve said it before, selects for the exact wrong people. Power is accumulated is non-transparent and only pseudo-democratic ways, and the accumulation continues unabated if left unchecked. A certain class of wannabe ‘leaders’ feeds on just that.

And now the only conclusion is that the EU as an experiment has failed. There is nothing anyone can do anymore to repair it, there is nothing that can be done to undo the damage. Trust is broken, and will never return. Pushing one nation into utter misery, for everyone to see. is all it took.

The only remaining question now is how to dissolve the union. But that of course is not what those whose income and status depend on that union want to even contemplate, let alone discuss. So who’s going to do it? Who’s going to do it for them? People in the street, that’s who. They’re the only option there is. National governments are not willing to perform that function for them.

To do what everyone should be able to see, should be done. Because if you look hard enough, it’s awfully obvious that the euro is finished. Perhaps not the EU, but that can only continue to exist if the entire structure built around and on top of it is thrown out the window, and if European countries start again from scratch to organize their ‘channels’ of cooperation.

If they stick to the present structure, that can only lead to nasty ugliness, because they are tied together in a union that constraints their freedom and their cultures far more than people are comfortable with.

Something that could always only ever have become clear in less prosperous times. Well, we have those. And with them the gaping cracks in the political edifice. As any builder will tell you, cracks in a foundation are a death sentence.

And those times have made painfully obvious that monetary union without fiscal union, or even political union, can not work. It never could. But a political union would never be accepted. European countries want to remain sovereign.

Anything else is unacceptable. The only reason the euro was ever accepted is that hardly anyone understood at the time that it would imply handing over a substantial part of sovereign powers to increasingly dodgy bureaucrats in Brussels and Strasbourg (well, Britain sort of understood).

In the Greek case, what we’ve seen is that the troika did not go into the negotiations on an equal partners basis. Although the EU is an equal partners union, that’s its very foundation. But it still could have worked, and the problems worked out, though only temporarily, if Brussels had resisted the temptation to turn the EU into a power game. Then again, a structure such as the EU exclusively selects for ‘leaders’ drawn to power games, removed from the everyday public scrutiny national leaders have.

The national leaders, it should be obvious, have also fallen into the power game trap. It is not hard to go out and play bully to a country like Greece, and kick it while it’s down. It’s not even hard to lure such a country, a small player when it comes to population and economy, into yet another trap: that of unpayable debts.

Certainly not if and when you can nominate technocrats to lead nations. Which Brussels has done in Greece, in Italy and in Spain. The problem with that is it’s a blind and unwinnable game in a set-up like the EU. Because the nations you attempt to force into submission, politically and economically, will always remain sovereign nations.

It’s a game you can’t win, because you can’t take over power forever in foreign sovereign nations. The EU has 29 of those. One day an election will take place in which the people will elect a government that seeks to protect the people’s personal and sovereign interests. And until you take away that option, you will never win the game, you will only cause a lot of misery. Again, in Greece this is duly noted.

We’re not entirely comfortable with the far right being the only side that thoroughly understands this, but we’ll take it; we have no choice. Besides, what happens on the left in Greece, Spain, and Portugal may yet balance this out. The crucial mistake the left makes is that so far it’s seeking to remain part of the Europe that Brussels is seeking to construct. Not a wise idea.

So we have Marine Le Pen who speaks most clearly about Europe, and who understands best of everyone in public office what is going on, or at least expresses it best:

Marine Le Pen: Just Call Me Madame Frexit

Marine Le Pen, a frontrunner in France’s 2017 presidential election, says a Greek exit from the euro is inevitable. And if it’s up to her, France won’t be far behind. “We’ve won a few months’ respite but the problem will come back,” Le Pen said of Greece[..]. “Today we’re talking about Grexit, tomorrow it will be Brexit, and the day after tomorrow it will be Frexit.”

Le Pen, 46, is leading first-round presidential election polls in France, ahead of President Francois Hollande, ex-leader Nicolas Sarkozy and Prime Minister Manuel Valls. She’s the only one of the four calling for France to exit the euro, banking on people’s exasperation with the Greek crisis and Britain’s proposed referendum on the European Union to win over voters.

“I’ll be Madame Frexit if the European Union doesn’t give us back our monetary, legislative, territorial and budget sovereignty,” Le Pen said. She’s calling for an orderly breakup of the common currency, with France and Germany sitting around the table to dismantle the 15-year-old monetary union. [..]

Even German Chancellor Angela Merkel has expressed concern about the level of support Le Pen will receive in 2017 and how that power might weigh on French economic policy. “She knows perfectly well that if France leaves, there’s no more euro,” Le Pen said. Although Le Pen hasn’t given a full, detailed plan of how she would lead her country out of the euro, she says she doesn’t believe France would be shut out of the borrowing market or rejected by investors as a result.

We shouldn’t need Le Pen to voice the obvious. But that no other ‘leader’, save for Nigel Farage, puts it into these crystal clear terms, does tell us a lot about all other European leaders. And unfortunately that includes Alexis Tsipras. Though we hold out some hope for him yet.

Here’s hoping he will not sign that deal, whichever it may be in the end, and thereby set in motion the disintegration of the unholy Union.

Home Forums The Only Good Deal For Greece Is NO Deal

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  • #21805

    Ben Shahn Sideshow, county fair, central Ohio 1938 The only thing that would really go towards beginning to solve the problems with Greece is for Athe
    [See the full post at: The Only Good Deal For Greece Is NO Deal]

    Nicole Foss

    What we’re witnessing is the contraction of the trust horizon, leaving international institutions as stranded assets from a trust perspective. When the trust is gone, so is the political legitimacy, and with it effective governance. Effective organizational scale is going to get a whole lot smaller over the next few years pretty much everywhere. That is what we always said would happen.

    Formerly T-Bear

    That NO will have to come from the Greek Parliament as a collective NO. The enormity for any single government minister including PM is just too great a responsibility but acting together Parliament has the gravitas to counter the troika institutions of the EU / EMU. Should that not happen, the probability Syriza continues holding office diminishes rapidly as anti-EU extremist likely replace forming a new government that the EU will have no ability to deal. At that point Greek participation in EU affairs is likely over as well as Greek membership in OTAN/NATO (without massive cash transfers or credible existential threats or combination thereof). The EU will be trading the difficult devil for the impossible devil, hear what LePen in France has to say, as a guide for the imagination. It’s not hard to see why the Greek people wish to remain in the EMU given the stabilising effect it has on national governments, particularly wayward ones, but there are limits to such acceptability which are likely passed at this point, the costs now far surpassing gain; but that is yet in the future should it come to pass. Interesting times these.

    phil harris

    I agree about a contracting ‘trust horizon’ but Greek majority opinion apparently still stays in the ‘trust zone’? Ditto in Eire.
    Continuing youth unemployment, particularly across the Eurozone, may prove to be the ‘killer’ factor, but it could take a while yet. And ‘floating’ currency is no guarantee of anything; see https://www.economist.com/blogs/graphicdetail/2015/05/european-economy-guide

    Dr. Diablo

    An excellent explanation of why central power must be pushed down to the lowest effective level.

    In general, the Left believes in Statism, in centralized power, in ordering people around for their own good, as represented by Technocrats, Socialism, and the blizzard of regulations put out by the EU bureaucracy. Ironically, this shows a deep lack of belief that people are pretty good and if left to themselves will be okay–or at least no worse than otherwise. Of course the Right believes in war, and that a lack of government will lead to increased morality. This is not the “lowest effective level” of enforcing rules, but rather “let’s have no checks on power.” But ironically, the Right, who presents as suspicious of others, has a deep belief that if people were left alone they’d more or less organize themselves no worse than now…but a lot cheaper.

    In either case, Left and Right are two feet of the same duck, headed in the same direction. There is no party representing decentralization, non-statism, and Liberty. Liberty is distinct from Freedom for in Freedom, you do whatever you want: the law of the jungle, the strongest prevails. But Liberty is the Freedom to do what you want, so long as it does not infringe the Freedom of others–that is, Freedom + Responsibility. And law. And therefore a means to agree upon and enforce that law. For example, you have the right to say mean and dumb things. The other guy also has the right to say mean and dumb things. But you do not have the right to PREVENT him from saying mean and dumb things. However, he does not have the right to transform his meanness into violence against you. It’s a restraining force with the minimum of involvement (which is cheapest, and also errs on the side of Freedom), but which protects the individual, the minority, and has the smallest, most decentralized power, so the centralization of power doesn’t lead to the different peril we now see in Greece and Europe. (With the note that Democracy, which we clearly don’t have in Europe, protects no one, as seen in the French Revolution. Any 51% mob can do anything, and the rights–and lives–of the 49% have no protection whatsoever. Made far worse if the mob opinion is engineered by a centralized media.)

    When all this falls apart, they’re going to ask for MORE concentration, centralization, and absolute authority. There is so much said about what is wrong and how it isn’t working that sometimes we should keep our eyes on the goal of what has worked and we can all agree on. And get back there, quickly.

    Formerly T-Bear


    You have yet to tell us where your Dr came from or is that a figment of your imaginary world as well.

    It is so convenient how you have ordered your world view as to what your opinion of left and right are about. Please inform of some examples please, if you can find any. YOur deposits here are not even worth the value of manure which can actually grow plants and other lifeforms.

    You pretend to lecture the readers here about your acquaintance with power where obviously the only contact you have had with power comes from watching hollywood movies and listening to libertarian tracts on youtube. You don’t have the slightest idea of what life is like for Europeans, nor their education, or their social conditions, or their economy. All you have is some opinion based on some delusion you have. Please stop putting forth that you know anything. You know nothing. You are a charlatan. You are a fraud. Your opinions are without worth. You seem to want to prove your ignorance beyond all doubt. If that is your goal, go ahead and keep it up. It’s your call.



    A very astute observation. Tsipars cannot do it, the big NO, can’t even be seen as doing it. But at the same time, it will never be the entire Parliament. The other parties smell their shot at another stint in the Big House. Pro-euro demos are carefully scripted with flashy pamphlets and all, people tell me.

    Nicole is of course very right – isn’t she always? – it’s about trust, as I wrote:

    “None of these institutions, IMF, EU, ECB, has any raison d’être or any claim to fame unless there is explicit trust in what they represent. That trust is now gone, and it’s hard to see how it can ever be recovered.”

    I might as well have said it’s impossible to see. We’ve passed beyond the trust horizon, we just don’t know it yet.

    Greece can shake the EU on its foundations. France can topple it. The third dog in the bone fight is Italy. Spain can do a lot of damage.

    Formerly T-Bear

    @ Ilargi reply # 21817

    Is it not 50% + 1 to enact in Parliament? Syriza was in coalition with another party for making a majority government. Surely there are enough extraneous sympathetic votes to maintain that majority position as well given most politicians are adept at reading their political auguries – this time the sacrifice being augured is their own future.

    Greece is the keystone position now. Should that give way, the rest of the arch will follow. Either Italy or Spain following the Greek path will finish the present form of the EMU. France would finish the concept altogether. Once the EMU is destroyed, nothing like it will be possible again, or at least given the present state of economic knowledge. Whether a quantum jump is possible from the present conditions is questionable, it certainly is not from the present political environment and levels of public education required for reaching rational consensus. The problem is that of complex system dysfunction and collapse of complexity. Go figure a way out of that.

    Trust was what was violated, unspoken assumptions of trust growing from the disaster of the Second World War. The grandchildren had no memory of those requirements fundamental to the structures they inherited. Instead they sold their birthright to the neoliberals for a handful of beans and promises and handed over the reins of political power in exchange. Whether this can be undone or not is the question.

    Dr. Diablo

    This is an ad hominem attack. What is my error and what is your counter-proposal for where we should be headed?

    How is “Libertarianism” different than what Raul describes of the many problems of centralizing in Europe, or Nicole about the urgency of smaller organizational scale?
    To me Left and Right are a false paradigm and hazy to the point of being meaningless. I only brought them up because Raul mentioned that unwavering belief in the EU project as presently constituted is a weakness of the “Left”—whatever the faults of the Right, which are many. Like our host, I’m equally describing the faults of the Right and Left. Like our host, I am of the opinion that concentrating power attracts the wrong sort of people and leads to problems. From the Wiki: “Libertarians generally share a skepticism of authority…however, they diverge on the scope of their opposition to existing political and economic systems [and] offer a range of views…” I share that skepticism, and like everyone I have a personal view that is similar to some and different from others. That view cannot be European, as I am not from Europe. However, my view is that countries and people should do as seems best for them, and have no need to follow an American model, or even one that represents freedom or democracy if they don’t wish to.

    So how would you construct a successful Europe? With more concentration or less? With more representation or less? With more personal Freedom and autonomy or less? And with more responsibility corresponding to that freedom, or less? With power that is more restrained, or less? Proceeding from the present pattern, or with criticism and skepticism of the present authorities? The article above from our host suggests he believes in less centralization, more freedom and autonomy, more community responsibility, with oversight of power and a healthy skepticism of the present powers; all principles that I agree with.

    Dr. Diablo is a name having a high degree in being the Devil’s Advocate, asking difficult, disturbing, or uncomfortable questions, and presenting views the most when they are least wanted. The opposite of the popular person and the popular view. Sounds like at least one of those worked.


    Trust? Trust requires ethics, a sense of fairness, and good faith by all parties concerned. Since when have these been operant values in civilization? Even imagining trust in the current environment takes the wildest leap of naivite. The problem is that most people in the West are not suffering ENOUGH yet. The activation energy has not yet been realized. Like all self-appointed Messianics, the current Western “leader-puppets”.. and their “system”.. will ultimately be seen as delusional, but they will cause a lot of pain on the way down and the DEGREE of damage will be worse the longer the reversion to the mean is postponed. So let’s get on with it and stop procrastinating. We can only hope that the accelerating hubris of TPTB will make their evil so obvious that less destruction will be unleashed to prevent more destruction.

    Formerly T-Bear

    @ diablo

    This is ad hominem ad ignorantiam and it will only happen once.

    To begin, you are applying an amerikkkan construct with your dichotomy of left/right. Would it surprise you to find out in the small village where I live there are some twenty political parties presented to the voters just for election to the city council? and about three thousand voters on the register? Your comments never consider spectrum of political opinion but usually some attack on target du jour, for some perceived misdemeanour you imagine they commit. Most of your pronouncements are fact free, speculative, judgmental or censorious, having no connection to any single or consistent school of thought. Your modus operandi is to set up straw-men and proceed to disparage your construct. A passage from Moon of Alabama puts it succinctly with a minimum of modification:

    To “deny, disrupt, degrade/denigrate, delay, deceive, discredit, dissuade or deter” is exactly what Internet trolls are doing in the comment sections of blogs and news sites. … The more these [from: So The Spy Services Are The Real Internet Trolls] services grow and their methods proliferate the less possible will it become to have reasonable online discussions.

    my emphasis and insertion of post title

    If you had not noticed, your opinion was shown not to have substance and added nothing to the host’s post and was in general distracting from discussion at hand, your assumptions are those of sophomoric understanding of economic, political, historical or legal subjects, your education is obviously incomplete and sadly deficient, not your fault for sure but nonetheless affecting your ability to write coherently – look at the gibberish in your paragraph starting “How is …” and ending “… if they don’t wish to”, and they thought Sarah Palin did word salads and was grand-master of incoherency.

    If you are going to write of economics and politics, both of which require a firm basis in history, sociology and the legal system, then you are needing to start studying and coming to some firm understanding of the nature of those things. This deficit is painfully obvious to anyone reading your diatribes and should be made known to you. If you are deluded about what your history was, you are deceived about where you are now and haven’t the foggiest chance of directing where you wish to go. There is an aphorism that might stand you in good stead:

    It is far better to remain silent and be thought a fool, than to open ones mouth and remove all doubt.

    by the by, what you wanted was not Dr., the Latin is: advocatus diaboli, you can take it from there, if you’re able.

    That was ad hominem.

    Diogenes Shrugged

    Martin Armstrong wrote an article today that nicely supports Nicole’s comment, but from a slightly different angle.


    Diogenes Shrugged

    T-Bear: Recognize that this is just a comment section – – a chat room – – and Ilargi allows all viewpoints here. Comments rarely stick to Ilargi’s topic in any rigorous way, so why the vituperative attacks? You’re not looking smart. A smart reader skips the commenters he doesn’t like and spends his time more wisely. Quit taking yourself so seriously, take a deep breath and give it a rest. I, for one, will be skipping your comments in the future if you keep wasting my time.


    T-Bear. I’ve been reading automatic earth for about a year now. It is only now that I decided to register and comment. Do you enjoy being an arrogant, condescending, trolling douche-bag? Diablo’s comments seem spot on. Perhaps you could try growing up (a lot), being a bit more mature, reasonable and not such an asshole?


    Time to cool down. Warning, advice, you name it. TBear, down a notch, por favor.

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