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Monday, January 26, 2015

The real fear of the Eurocrats

Daniel Hannan observes that it isn't a Greek bankruptcy that would be the real catastrophe as far as the EU is concerned:
A default and devaluation would offer a fresh start. Although the economy has been pummelled by six years of Euro-austerity, some of the fundamentals have improved. The bureaucracy has been slimmed, taxes are now collected and, if debt repayments were taken out of it, the budget would be in balance. In truth, this is what EU leaders fear. Not that Greece will leave the euro and collapse, but that Greece will leave the euro and prosper.

A competitive Greek economy, exporting its way back to growth, might inspire Spaniards and Italians, who have also been paying the price of the euro, to follow. For those Eurocrats who see the single currency as a component of political integration, that prospect is too horrible to contemplate.

We’ve been here before. Two years ago, when it looked as if Cyprus might leave the euro, Brussels went so far as to lift money directly out of private bank accounts to pay off the country’s creditors.

The extreme measure was necessary, the European Central Bank admitted, ‘to prevent worries over the reversibility of the euro resurfacing’.
I observe that Iceland, which rejected the EU's bank-first dictates, is doing considerably better than Italy, Ireland, Spain, and Portugal, which obediently followed the EU's instructions. I tend to doubt this observation has escaped the new Greek government.

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39 Comments:

Blogger Eric January 26, 2015 4:06 AM  

Well, sure, you can always better your position by screwing your creditors. The real question is whether the voters in creditor countries will ever wise up. You can set your watch by Argentina's defaults, and yet the bond markets welcome them back with open arms every time.

Blogger Gordon January 26, 2015 4:24 AM  

Iceland is very different from Greece in so many ways, not the least of which is that Iceland's population is the size of Minneapolis, and they're all related to each other.

Blogger Rantor January 26, 2015 4:54 AM  

I would like to be optimistic about this and hope that I am wrong but the Greeks just elected a socialist party promising free everything for everyone. While escaping the Eurozone will ultimately help the Greek economy, few socialist states succeed for even a few years before debt and noncompetitive business and labor practices drag them into shared poverty instead of redistributed wealth. (How much wealth is left for the country to redistribute?).

It will be interesting to see what Syriza can accomplish in the coming months.

Anonymous realmatt January 26, 2015 6:15 AM  

I don't believe Vox is claiming Greece will do as well as Iceland. He's making a point about other countries following suit and abandoning the Euro and ultimately the EU itself, seeing Iceland as an example, whether their success is likely to be duplicated or not.

At the very least, re-establishing national pride will be a step in the right direction, which is one of the main goals of Golden Dove.

Blogger LP 999/Eliza January 26, 2015 6:31 AM  

Iceland will require a stubborn resolve to tell the globalists trash bankers no.

OT At deadline.com, Lena Dunham makes asinine comments.

Anonymous zen0 January 26, 2015 6:47 AM  

ZH has an article about the new Greek Finance Minister, Yanis Vaoroufakis. He has written many blogposts since 2008.

This from the comments section to the article:

Since January 2013 Varoufakis has been teaching at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.

His next book currently has the working title: Reverse Alchemy: Europe on the Road to Disintegration.

Anonymous fish January 26, 2015 7:13 AM  

OT At deadline.com, Lena Dunham makes asinine comments.


Other places too.

Anonymous Stilicho January 26, 2015 7:17 AM  

Brussels' real fear is even simpler: that Greece will leave the EU and show that the surrender of sovereignty and right of self-determination was not permanent and irreversible as Eurocrats wish. How do you respond if millions of slaves simply walk off the plantation, even if they were the laziest and least valuable?

Anonymous FUBAR Nation Ben January 26, 2015 7:37 AM  

Greece's battle cry could be: Remember the 4th Crusade!

The Eurocrats are sacking Greece just like the Crusaders sacked Constantinople and stole everything.

Blogger mmaier2112 January 26, 2015 7:38 AM  

Eric January 26, 2015 4:06 AM
Well, sure, you can always better your position by screwing your creditors. The real question is whether the voters in creditor countries will ever wise up. You can set your watch by Argentina's defaults, and yet the bond markets welcome them back with open arms every time.


Isn't this just a function of fractional reserve banking? Any money in is good because of the multiplying factor?

Blogger John Morris January 26, 2015 8:14 AM  

Greece should leave the Euro, they can never compete within an economic framework built for the Germans (which is what the Euro is). Greece has been in debt default since 2010, and anyone who can do basic maths can see that it is impossible for Greece to repay their debt. Hanging on in the EU austerity programme simply benefits the Euro politicans.

However Greece is unlikely to improve whatever happens. Greece has the most bloated socialist state of any EU country. The state owns major utilities, has a vast corrupt bureaucracy which openly extorts bribes from small businesses and is completely hostile to the new technologies that might save it.


Noriel Roubini has it right. The only way Greece can succeed is to get an entirely new political class who are not corrupt and have the welfare of the country at heart. Given Greece's history the chances of this look slim.







Anonymous cheddarman January 26, 2015 8:19 AM  

Here is a copy of Syriza's 40 point platform. If platforms in Greek politics are anything like American politics, this means nothing. Syriza seems to have an anti-Greek Orthodox stance, including use of church buildings to house the homeless and taxes on the church (points 8 and 12)


1. Audit of the public debt and renegotiation of interest due and suspension of payments until the economy has revived and growth and employment return.

2. Demand the European Union to change the role of the European Central Bank so that it finances states and programs of public investment.

3. Raise income tax to 75% for all incomes over 500,000 euros.

4. Change the election laws to a proportional system.

5. Increase taxes on big companies to that of the European average.

6. Adoption of a tax on financial transactions and a special tax on luxury goods.

7. Prohibition of speculative financial derivatives.

8. Abolition of financial privileges for the Church and shipbuilding industry.

9. Combat the banks' secret [measures] and the flight of capital abroad.

10. Cut drastically military expenditures.

11. Raise minimum salary to the pre-cut level, 750 euros per month.

12. Use buildings of the government, banks and the Church for the homeless.

13. Open dining rooms in public schools to offer free breakfast and lunch to children.

14. Free health benefits to the unemployed, homeless and those with low salaries.

15. Subvention up to 30% of mortgage payments for poor families who cannot meet payments.

16. Increase of subsidies for the unemployed. Increase social protection for one-parent families, the aged, disabled, and families with no income.

17. Fiscal reductions for goods of primary necessity.

18. Nationalisation of banks.

19. Nationalisation of ex-public (service & utilities) companies in strategic sectors for the growth of the country (railroads, airports, mail, water).

20. Preference for renewable energy and defence of the environment.

21. Equal salaries for men and women.

22. Limitation of precarious hiring and support for contracts for indeterminate time.

23. Extension of the protection of labour and salaries of part-time workers.

24. Recovery of collective (labour) contracts.

25. Increase inspections of labour and requirements for companies making bids for public contracts.

26. Constitutional reforms to guarantee separation of church and state and protection of the right to education, health care and the environment.

27. Referendums on treaties and other accords with Europe.

28. Abolition of privileges for parliamentary deputies. Removal of special juridical protection for ministers and permission for the courts to proceed against members of the government.

29. Demilitarisation of the Coast Guard and anti-insurrectional special troops. Prohibition for police to wear masks or use fire arms during demonstrations. Change training courses for police so as to underline social themes such as immigration, drugs and social factors.

30. Guarantee human rights in immigrant detention centres.

31. Facilitate the reunion of immigrant families.

32. Depenalisation of consumption of drugs in favor of battle against drug traffic. Increase funding for drug rehab centres.

33. Regulate the right of conscientious objection in draft laws.

34. Increase funding for public health up to the average European level.(The European average is 6% of GDP; in Greece 3%.)

35. Elimination of payments by citizens for national health services.

36. Nationalisation of private hospitals. Elimination of private participation in the national health system.

37. Withdrawal of Greek troops from Afghanistan and the Balkans. No Greek soldiers beyond our own borders.

38. Abolition of military cooperation with Israel. Support for creation of a Palestinian state within the 1967 borders.

39. Negotiation of a stable accord with Turkey.

40. Closure of all foreign bases in Greece and withdrawal from NATO.

Blogger Joshua Sinistar January 26, 2015 10:13 AM  

Syriza is just another puppet in the puppet show of "democracy". There are usually two heads on Janus the False Hope called Democracy, but in Greece there were many. I suppose you need lots of choices to squeeze the People's Choice Golden Dawn off the ballot.
Syriza will bitch and moan, then when faced by angry Greeks and Golden Dawn will sell out and join the controlled opposition just like Orange Boy Boner sold out the conservatives and TEA Party that elected him.
That's the end of the EU. When people see all this democracy is just a massive telenovel soap opera to keep them occupied while the Vampires drink their blood, the shit is going to hit the fan...

Blogger luagha January 26, 2015 10:19 AM  

" The bureaucracy has been slimmed, taxes are now collected and, if debt repayments were taken out of it, the budget would be in balance."

This doens't sound like the Greece I am familiar with.

Blogger RandalThorn January 26, 2015 10:34 AM  

@ Lauagha

"This doens't sound like the Greece I am familiar with."

If you mean the 5-year's prior Greece, there are improvements, there are just lost in under the clinch of the austerity program.

I have no illusions that Syriza will change anything, but hey, both Troika and New Democracy (A. Samaras) have lied thrice about us getting out of the austerity program only to suddenly "need" more control because of reasons!

Once a liar, always a liar, and we Greeks learn that too slow I am afraid.

Blogger Josh January 26, 2015 10:38 AM  

12. Use buildings of the government, banks and the Church for the homeless.

This is a glorious proposal.

Anonymous rienzi January 26, 2015 10:38 AM  

Much of Syriza's manifesto looks like a recipe for utter disaster. The EU should let them leave, then, when Greece implodes in spectacular fashion, the PTB can point their fingers and say: "See what happens when you leave the Euro and the EU!"

Poor damned Greeks, Seem to be in for a screwing no matter what they do.

Blogger RandalThorn January 26, 2015 10:43 AM  

Oh, Rienzi, Euro and Dollar are heading for parity just because some French financial shenanigans, you believe that EU is going to exist even ONE of its members decides to leave? After all Merkel herself said there is no Grexit.

Anonymous Jake-the-Rake January 26, 2015 10:44 AM  

Never forget that the ex Bank appointed Prime Minister of Italy, Eurocrat Mario Monti is on record (September 2011) declaring that

The success of the Euro is proven by Greece

http://youtu.be/gC2G7xeHoz8

(Hungary instead, clinged to her Florin, sent the BCE and FMI packing, and is doing great).

Blogger Josh January 26, 2015 10:45 AM  

Much of Syriza's manifesto looks like a recipe for utter disaster.

On balance, there's probably more good points than bad ones.

Anonymous Stilicho January 26, 2015 10:46 AM  


30. Guarantee human rights in immigrant detention centres.

31. Facilitate the reunion of immigrant families.


Because another 11 million African invaders will fix the economy!

39. Negotiation of a stable accord with Turkey.

40. Closure of all foreign bases in Greece and withdrawal from NATO.


As if Greece ever contributed to Nato in any meaningful way.

Tommy, I think you're being "invited" again.

35. Elimination of payments by citizens for national health services.

You always get what you pay for...


37. Withdrawal of Greek troops from Afghanistan and the Balkans. No Greek soldiers beyond our own borders.

The one thing Greek membership in NATO is accomplishing is to allow those deployed Greek troops to be paid at the highest coalition rate (American) by the U.N. In other words, it is an actual source of foreign currency to Greeks. Clearly this is unacceptable.

38. Abolition of military cooperation with Israel. Support for creation of a Palestinian state within the 1967 borders.

Sure, ally yourself with a group so obnoxious that their own countrymen (Jordanians) tossed them out on their asses.

34. Increase funding for public health up to the average European level.(The European average is 6% of GDP; in Greece 3%.)

Let's see, 3% of 0 is zero, but we can solve our problem by increasing that to 6% of 0. Winning!

14. Free health benefits to the unemployed, homeless and those with low salaries.

What about the other 5% of the country? Are they not Greeks too?

3. Raise income tax to 75% for all incomes over 500,000 euros.

This sounds like an excellent way to ensure that there are no incomes over 500,000 Euros.

4. Change the election laws to a proportional system.

Why screw around with half measures? "One man, one vote, one time!" You know it's what you want!


1. Audit of the public debt and renegotiation of interest due and suspension of payments until the economy has revived and growth and employment return.


That's just recognition of reality.


12. Use buildings of the government, banks and the Church for the homeless.


Have to put those African invaders somewhere, but NIMBY!

and the list goes on...

Anonymous Alexander January 26, 2015 10:56 AM  

Greece's government should absolutely pick a fight with the Orthodox Church. That sounds like a wonderful idea that can't possibly backfire, and as a bonus you'll get a bunch of free buildings and stuff!

Also, a permanent accord with Turkey. Of course, the last time around it was Turkey who made the proposal, but the Greeks turned it down: seemed like they weren't keep on the 'permanence' of a plan that involved killing all the Greeks and replacing them with Egyptians. But maybe things will work out better this time round.

Guess we're putting Next Year in Constantinople on a hold for another year. Ah well, nothing new.

Anonymous The other skeptic January 26, 2015 11:28 AM  

And then there's Juden über alles but in practice, that has oft been the case.

Anonymous Jonathan January 26, 2015 11:36 AM  

I started laughing when I got to the point r/t supporting the Palestinians. It's gotta be some sort of dog whistle.

Anonymous Stilicho January 26, 2015 11:44 AM  

I started laughing when I got to the point r/t supporting the Palestinians. It's gotta be some sort of dog whistle.

yeah, just like the "protection of the right to...environment"...they've embarrassed themselves with "global warming", so they don't use it, but they still need a shibboleth to indicate that they are the right sort of communist warren

much of that list reads as if was written by a freshman member of the student communist collective at Berkley... and not a freshmen there on an academic scholarship at that...

Blogger Akulkis January 26, 2015 11:48 AM  

In fact, Iceland through all of their corrupt bankers in jail.

Maybe I should move there.

Anonymous Anubis January 26, 2015 12:37 PM  

"And then there's Juden über alles but in practice, that has oft been the case."

Isn't that the plot from the Turner Diaries jews ban guns from whites, leave 3rdworlders armed and let themselves be armed.

The EU's real fear is that Greece will seal their borders against the 3rd world and the flow of low IQ 3rdworlders willing to vote for more free stuff will be cut off.

Blogger Doom January 26, 2015 12:41 PM  

Yeah, but Greece, under a hard left government, isn't going to do better. That's like wiggling off the skewer into the bonfire. And the Euro, if it still exists when they hit bottom, would probably still take them back. It's not a matter of want, but doing what it has to do to survive.

Don't know, but I hope Greece goes, falls, Euro takes them back, and it's the proverbial straw on the camels back. One can hope.

Anonymous Gx1080 January 26, 2015 1:07 PM  

Having a bunch of different countries following the same economic policy is a fool's dream, but this is a childish appeal to the Marxist superhero: Daddy State. Which is going to use his super nationalization powers and his "tax the oligarchs"* vision to make money fall like manna from the heavens.

Not to mention "Instead of taking advantage of the fact that we are going to pull our soldiers from the Middle East conficts to have some peace, we are going to play for the other side because we are more Leftist than anybody".

Hilariously pathetic.

Anonymous Gx1080 January 26, 2015 1:09 PM  

*Oligarchs that can leave, BTW. Forgot to add that.

Anonymous Stilicho January 26, 2015 1:37 PM  

11. Raise minimum salary to the pre-cut level, 750 euros per month.

And where, pray tell, are those Euros going to come from? Condensed unicorn farts?

Blogger Josh January 26, 2015 1:47 PM  

And where, pray tell, are those Euros going to come from? Condensed unicorn farts?

That's silly.

Everyone knows the unicorn farts have to be suspended in a brine like substance first.

Anonymous Stilicho January 26, 2015 2:16 PM  

Everyone knows the unicorn farts have to be suspended in a brine like substance first.

So...go long brine futures ahead of ECB QE program?

OpenID thenoisyrogue January 26, 2015 2:47 PM  

Iceland was my immediate thought on reading the quote, but in a different way. The EU technocrats have effectively shut down the mainstream media over Iceland. Will they be able to do the same over Greece?

Blogger Robert What? January 26, 2015 3:03 PM  

There are really no sides to cheer for in this situation. On the one hand the thieving, socialist Eurocrat banksters, on the other the even more socialist Greeks. Like all socialists their dream is to go as far and fly as high as other people's money and hard work will take them.

OpenID thenoisyrogue January 26, 2015 3:11 PM  

5. Increase taxes on big companies to that of the European average.

and

9. Combat the banks' secret [measures] and the flight of capital abroad.

are mutually exclusive.

Based on that 40 point list, Greece is doomed even if it does leave the euro.

Blogger Eric January 26, 2015 11:38 PM  

If they manage to stem capital flight without extreme totalitarianism they'll be the first government in history to do so. The Greek government has problems collecting taxes, which is easy mode play for a government.

Anonymous Titus Didius Tacitus January 27, 2015 4:42 AM  

Robert What?: "There are really no sides to cheer for in this situation."

Golden Dawn, in prison, watching their enemies foreign and domestic discredit themselves.

Blogger stevo January 27, 2015 7:52 AM  

Wow... It sounds like heaven!

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