Archives for category: Greece

I am referring to my 06/25/2016 post: “Brexit not End of “World” but Hopefully End of EU Non Governance”, I am herewith repeating a concrete proposal made X times in my blog for a two-speed Eurozone to be installed instead of the past and current obsolete Eurozone Commission “organization (sic) of a 19 countries potpourri and a not decisive anymore Germany-France axis.

This “radical change proposal” is not due to the Brexit but to the decades’ long inefficiency and indecision of the EU and Eurozone’s “Governance.

The Brexit now happened and long exit negotiations will start on October 2016 and will last for 2 years at least and more. We will once more see how all the already announced  meetings will come out with zilch since everything is based on improvisation as usual.

Several forms of partnership with the EU exist, with varying degrees of integration. But none really are suited to the new situation created by the Brexit

The European Economic Area is not interesting for the UK since it would have to comply with EU legislation, neither is the “Swiss Compromise” and falling under WTO rules is not acceptable to the UK.

Therefore long negotiations might end with a revised free trade area scheme and other important mutual cooperation items  to be included in a series of bilateral country agreements.

In my blog and my September 2014 self-edited Amazon book on Eurozone “Governance” (“Why Obsolete Macro Governance is Killing the World Economy”) I made concrete proposals on how the Eurozone  could gradually reach social economic integration and accordingly  function efficiently. I will only include here the call them highlights:

I formulated my proposals by including a “modus operandi”, like with private corporations’ organization and inter functional “instructions”…

This Eurozone restructuring proposal needs to be understood as referring “only” (sic) to the social (including education and training) – economic and financial topics in Eurozone “Management”.

It does not extend to all the other ”regal” governmental areas, such as the major areas of health, defense and military, interior, foreign affairs, etc…

Instead of being an Organization which gives “Directives” to member countries, the Eurozone “Governance” should be reflexive, pro active, involved in “the “field” with local governments, in summary act as an executive counseling unit.

 From an “operational” standpoint, the 19 Eurozone countries should be divided, at the beginning, into 2 categories of countries:

–  “Speed 1 “ countries, these being the most performing countries, which are Germany, The Netherlands, Finland, Austria, including Luxembourg which is very ”atypical”.

 –  “Speed 2” countries, these being Belgium, Cyprus, Estonia, Greece (*), Ireland, Italy, Latvia, Lithuania, Malta, Portugal, Slovakia, Slovenia, Spain, to which I add France, the 2nd biggest Eurozone country, but whose future is quite uncertain for the time being.

(*) I have felt for a long time that Greece should have exited the Eurozone long ago, this would have been beneficial and far less costly to both the Eurozone and Greece itself.

If a corporation had kept a product which did not “make it” for years, it would have suffered considerably, and would have had to sacrifice putting adequate resources on their existing “good“ products” and eventual projects on ”new” products, running also the risk of lacking adequate financing for the whole corporation, this goes back to the famous and still actual BCG method of the 60’s of the ”golden cow and the rest  of the ”animals” (products) and what to do  with them…

Instead of having lost all this time and money, the Eurozone Governance (?) should have had positive discussions with the UK, second biggest country in Europe and 5h biggest economy worldwide which has been increasing its GDP and decreasing unemployment substantially.

1. Operational Social-Economic decision making organization and modus operandi

“Speed 1” countries will commit to transitionally financing “Speed 2” countries, under certain conditions, and mainly under a totally different reciprocal communication “methodology”, under the supervision, control  and follow –up of a new and compact Eurozone Central Governance Unit.

– All countries must prepare short (1 year), medium (3 to 5 years) and long-term term (above 5 years going up to 10 years) strategies, clearly defining priorities.

– All countries need to define Operational plans – short and medium term (see above)

– All countries need to determine their Financial Needs plans – short and medium term, based on operational plans

The Eurozone Central Governance Unit needs what private corporations call a “Controller”, which in macro terms should be called a Eurozone Minister of Economy, who reports to the “General Manager”, that is the President of Eurozone‘s Central Governance Unit.

This Eurozone Minister of Economy will head the Social-Economics Council, where the main responsibility is furthering job creation and reducing “official” unemployment and even more so under employment.

In private corporations, the Controller has reporting to him/her a “Planning Manager” who is knowledgeable of all “functions” of the corporation, to accordingly coordinate the various activities, and enable this function to plan effectively on a corporate basis to help build Operative corporate planning.

In every Eurozone member country’s government this function should be filled by the Budget Secretary reporting to the country’s Minister of Economy.

The Eurozone Economy Ministry includes under the Eurozone Planning Manager’s supervision: “country social – economic counselors” assigned to specific Eurozone Member countries.

In private corporations, there exists a “Human Resources Director” who reports to the “General Manager.”

In every member country’s government this function is that of the Minister of Labor, who reports to the Prime Minister.

This Minister of Labor function needs to be far more liaised with the Minister of Economy, and be closely related to the Budget Secretary, who needs to prepare, analyze and follow up on the country’s budget/plan. This is necessary in order to integrate the analysis of Job Creation and various forms of Unemployment and Underemployment, which are the top priority factors to be improved, into the Operational Planning of the country.

2. Financial modalities and decision making which are required to finance agreed upon strategic and operational plans.

The Eurozone Central Governance Unit needs what private corporations call a “Treasurer”, which in macro terms could be called a Eurozone Minister of Finance, who reports to the “General Manager”, that is the President of Eurozone‘s “Governance”.

The Eurozone Minister of Finance will head the “Finance Council”.

The Eurozone Finance Ministry includes under its supervision: “country financial counselors” assigned to specific Eurozone Member countries.

This pragmatic social economic and financial Eurozone Central Governance Unit organization is what will make for a dynamic, hands on, pro active, ”in the field working” and “managerial” relationship between the Central Eurozone Governance Unit and the various Eurozone’s countries ’governments.

It will have the great advantage of implicating – constantly – and giving responsibility on an individual basis to Eurozone’s countries’ Prime Ministers: Economy, Labor and Financial Ministers, and to their Governments obviously (Prime Minister and President).

This whole organization is extensively developed in my above cited book.

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Brexit is not the end of the world but it should (?) be the end of (continental) Europe as we have known it since the EU developed into a 28 nations potpourri and the Eurozone was badly created not starting by harmonizing tax structures and social protection system.

The not handling of the (poor) Greek situation is a perfect demonstration of the total inability of the bureaucratic and inefficient EU and Eurozone Commission “Governance” (sic) to not only solve problems, but (mainly) to provide guidance.

Greece, less than 2% of Eurozone’s GNP was the tail that wagged the dog. The populist Syriza party who with Tsipras won Greek elections on January 2015 (18 months ago) with a populist and unrealistic platform and ever since was given far too important and continuous attention by the EU (as usual), France, Germany, etc… and by ECB and IMF, costing every day more to the Eurozone taxpayers, when it should have been exited from the Eurozone at least 6-7 years before.

This undue and pernicious laxity and indecision favored immensely the eclosion of populist parties all over Europe.

The cries of victory from europhobe parties in (by order of GNP importance)  France, Italy, Spain, the Netherlands, Austria, Denmark (even Germany with AFD), etc… is not due to Brexit but was well preceded and “contaminated” by how Greece got and gets away with totally unacceptable behavior showing the huge limitations of EU and Eurozone “Governances” leaving the door open to populist “ideology” (sic).

These populist parties are or will demand the organization of consultations / referendums to exit their countries from the EU.

Europe enters a long tunnel of elections. The Spaniards are voting Sunday to elect their MPs and the election could favor Podemos, the party of the radical left hostile to Europe of austerity advocated by Germany. The Italians will be as follows in October with a referendum on the proposed reform of the Italian Constitution. The decision of Prime Minister Renzi, to transform this consultation into a plebiscite and resign if it fails will favor the populist 5 Star Movement (who gained two major successes already by obtaining Rome and Turin governance). The legislation in the Netherlands in March 2017 and the presidential election in France in May 2017  will also show considerable growth in representation of populist movements (PVV in Netherlands and FN in France). 

The inadequate austerity policies which Germany had tried to impose in 2013 instead of pushing for complete social economic structural reforms (which Germany had to a great extent accomplished since the beginning of the XXI century) created further strong disagreements between disciplined Northern  countries and lax Southern countries including France, the champion of budget laxity and “no reforms”…

This helped to create denials of solidarity in rapidly mounting indebtedness favored by ECB’s irresponsible “policies” putting the cart before the horses with money flooding, which now includes negative interest to banks, to push demand. Moneys mainly used by the “rich” companies and by nations to increase indebtedness, and little used by SMEs who employ 95% or more of the working population, which clearly shows that ECB, and Central Banking in general, have no policies to diminish effectively high unemployment, and mainly underemployment.

Now the EU and openly France, through Hollande’s declarations, want the UK to nominate immediately a new PM and not wait until October 2016 as Cameron declared. Why? Because the EU is afraid that more member countries might want to abandon the Eurozone, the real reason that could provoke this being the totally inefficient Governance of the EU and the Eurozone Commission and Germany’s parochial and selfish policies which make this country unfit to “indirectly govern” the Eurozone.

It will take well over 2 years to negotiate the Brexit and a number of bilateral agreements will see the day because intra EU – UK trade is not going to stop

I only wrote seven posts since October 2015 because it became too monotonous to write all the time the same comments with nothing happening because of the Governments’ obsolescence in general and the  total inability of the Eurozone “Governance” (sic) to reform macro social-economics in this supposed “common interest” area.

This may seem an arrogant statement but I have written 2000 posts from April 2011 until October 2015 and made a great number of concrete alternative proposals not limiting myself to criticism.

I have also written – 2014 / 2015 – in self-edition – Amazon – two books whose titles are self-explanatory: “Why Obsolete Macro Governance Is Killing the World Economy” and “Growth through Structural Reforms” (With Leadership and Competence Great Opportunities Exist).

The motto now is to reform Europe  social economically and contemplating huge migrants problems to “regain strong support of citizens” because “we must listen to the voice of the people rather than the Eurocrats – nice wording.

How? By successive meetings as usual, first (Monday, June 27th), between Germany, France, Italy, the Eurozone three top economies GNP wise and one day later by the  Council of the remaining 27 EU members. Nothing will come out of these unprepared (as usual) meetings…due to past and mounting cacophony.

The “future of Europe” (sic) is supposed to be played in Berlin, with lukewarm Merkel facing its – Germany – responsibilities (as usual). Some of the main European “leaders” (sic) will meet in Berlin on Monday, June 27th, around the Chancellor: EU Chairman Tusk, at first, and then, later on, Hollande and Renzi. They will prepare “all the response” (sic) that will be discussed next day at the European Council with two objectives: to prevent the risk of contagion to other member states tempted by an output and offer the prospect of a rebound for Europe (which is totally unprepared and will have no effect whatsoever).

Already the fight for predominance has started. The Elysee Palace announced Friday night that a first working dinner on Saturday (today) Hollande and Renzi will meet and Tusk will be “received”on Monday morning. The configuration of these meetings go beyond the traditional Franco-German axis, it reflects a competition between Paris and Berlin on the leadership of future discussions. The differences between Paris and Berlin on the future of the EU, the political weakness of the French head of state and criticism about the German Chancellor object to its policy in Europe are not likely to facilitate dialogue.

Merkel advocated  to “analyze calmly and wisely,” the consequences of Brexit. The procedure will be opened in the name of Article 50 of the Treaty “will last several years,” said the pragmatic Merkel, noting that by then Britain “remains a member of the Union” and was held by its commitments. If the Chancellor wants to warn PM Cameron’s  future successor against any unilateral decisions, it also intends to preserve the economic interests of Germany and of the EC. A hasty breaking might frontally affect the economies of the EU.

Growth, employment, intra-European financial solidarity, the influx of refugees, borders or defense, etc…, these are the main subjects which Merkel and Hollande are now on notice to discuss after a decade of immobilism. Then comes the headache of a possible (?) reconstruction of the EU, without rushing Twenty five capitals, now that the exit door was opened in the UK.

Is this the beginning of the end for the European Union?

“No!” Replied curtly Juncker, the most prominent figure of the Brussels “bubble”. Continental Europe is facing an earthquake, but the reflexes of eurocracy die hard.
Brussels had fallen asleep with the first estimates favorable to the British “yes”, but next morning, Friday, it awoke paralyzed by the “no” numbers. In shock, it tried all day to keep itself in countenance, with obsolete formulas. Whatever is officially said, no one doubt that this is now a matter of survival for the EU. Tusk, Chairman and organizer of EU summits is coming closer to the truth: “The situation is serious, it is very dramatic. It is impossible to predict all the consequences. (…) But what does not kill you makes you stronger in the end”.

An EU summit will convene at twenty-seven, without UK’s PM Cameron. This is the end of a long denial, a break with the legal fiction that the UK would remain a full member of the EU until the divorce is legally sanctioned, by two years.”This means that London is no longer associated with the decision says Martin Schulz, head of the European Parliament, a few journalists. The EU is determined (?…) to quickly turn the page and to proclaim to the whole world. “Europe wants to act quickly”. It would be the first time since the Eurozone was created…!

To avoid being “dismissed” the EU and the Commission request European country “leaders” to demand that the UK notify formally and immediately its intention to leave the EU, without waiting for October 2016 as declared by Cameron. “Outside, it’s out!”: the official slogan of the continent in a loop. “There will be no new negotiations” with London, confirms the European declaration.

The EU political priority is clear: avoid a chain reaction and counter what Hollande euphemistically called the “dilution” of the EU. He could have said dissolution…

The real threat to the unity of Europe from the North and the rich countries, who feel they have already given too much and could give, like the British, the temptation of isolationism.

The Southern countries have paid great social costs to their financial collapse since 2008 without reforming themselves socially economically, the big error!

Eastern Europe shows its rage at the uncontrolled influx of refugees and migrants. 

For most of them, the EU does not respond to the promise of its founders.It became a heavy techno bureaucratic non administration, a threat to their prosperity. The British drew the conclusion with Brexit.

What might, slowly and finally, be emerging sometime in the future is a two-speed Europe, this being most worrying to the Eurozone Commission since their jobs would be at peril – a Godsend should it happen!

In a nutshell it is what I have been “proposing” since April 2011 accompanied by this blog’s concrete alternative and practical “solutions”.

 

I have not been writing any posts since 9th February, 2016 because it became too monotonous to write all the time the same comments with nothing happening because of the Governments’ obsolescence in general and the  total inability of the Eurozone Governance (sic) to reform macro social-economics in this supposed “common interest” area.

This may seem an arrogant statement but I have written 2000 posts from April 2011 until October 2015 and (only) three posts since October 2015 and made a great number of concrete alternative proposals not limiting myself to criticism.

I have also written – 2014 / 2015 – in self-edition – Amazon – two books whose titles are self-explanatory: “Why Obsolete Macro Governance Is Killing the World Economy” and “Growth through Structural Reforms” (With Leadership and Competence Great Opportunities Exist).

I am now quoting entirely the Express.co. UK’s 06/11/2016 article: “Eurozone heads towards its next monetary crisis” and showing it under MORE at the end of this post – you can also read it by clicking on above link.

This article, in a nutshell, relates to the incompetence of the EU and to the current domineering subject: Brexit or no Brexit, leaning heavily on the Brexit side.

My Comments

The only reason I am writing this short post is because of my continuous (5 years) largely repeated total disagreement with Central Banking dominant positions and “policies” (sic) in  the US, the Eurozone, to “limit” myself to these two huge areas.

The below cited article touches on the disgraceful “policies” of the ECB, which is trying to be  even worse than the FED (a real challenge!…) .

Last year I tried to be published by a traditional large and well known publisher in the UK / US and since they could not use the material in my two self-edited books with Amazon I wrote 100 pages of an eventual third book which I had entitled: “Structural Reforms Impeded by Central Banking”.

This was refused and the main reason was that it was not “classroom material” and that it was “iconoclastic”. I refuted the second point by arguing that there were no idols to be destroyed but that long awaited strong (not “reformettes”) social-economic structural reforms were not being achieved because of , in general, Governments ‘ ineffectiveness and Central Banking flooding markets with printed money at even negative interest rates by ECB, which made it easier for most ineffective Governments in the Eurozone to avoid implementing social-economic structural reforms, and by the same token to increase already huge indebtedness.

Now, Dragui, one of the big culprits that the Eurozone is not really getting out of recession, wants to initiate “helicopter” money flooding (see below article) to push demand (hopefully a joke?).

It suffices to observe the situations in Greece (the total absurdity, it should have been exited long ago), Spain (contaminated by the Greek situation and the popular new “Greek type” political parties’ expansion, with no Government since months), France (continuing going down the hill because of no capacity to reform itself), etc, etc…!

Conclusion: Nothing basically changes and if so it is for the worse – relatively.

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Most economists and analysts provide comments based on “history” (1929 Crisis, Oil crises in the 70 s, etc…) not – really – realizing (or wanting to) that this crisis is totally different because the world’s structure has changed immensely in the last quarter of a Century, geo politically and by sectors of activity, and that new models are required.

 
I have been doing my “share of work”…, trying to offer concrete new governance approaches through the 2000 posts in my blog “macrovolatility.com” since April 2011 and through two self-edited (with Amazon ) books: “Why Obsolete Macro Governance is Killing the World Economy” (September 2014) and “Growth through Structural Reforms” (April 2015), both titles being self-explanatory.

I am referring to Le Figaro Premium published today – 09/07/2015 an article: “Merkel – needing to prove her leadership” by Nicolas Bavarez, well known French historian and self-assumed “economist” (sic) who is always negative and never makes constructive comments. I have translated the article, will quote it and precede it with – my very much repeated – short comments.

My Comments

Mr. Bavarez should request from the “officialy” named (not elected) European Union (EU) and European Committe (EC) to exercice Governance and leave Germany out of it.

For two easy to understand reasons:

It is the EU and EC who, with a 35 000 manned techno bureaucratic “mammoth”, are not governing Europe. Europe would be better off without them but since they “occupy” their well / highly paid jobs and do “politicking” most of the time, they should start by execising their governance job or declare being inept. 

Germany’s policies are very well suited for…Germany, but not for Southern countries, nor the more and more “inefficient” France, because of obvious differences in mentality, usus, social protection and tax stucture, disciplinarian and constitutional attitudes. etc…

Quotes

The chronicle of Nicolas Baverez.

Europe, who dreamed to go beyond history, is facing four major crises that call into question the achievements of sixty years of integration: Greek default; the referendum on leaving the United Kingdom of the Union; Russian intervention in Ukraine; the largest wave of migration since the end of World War II.

Due to the collapse of France, Germany is alone in the front line to meet these challenges are testing its leadership like that of Angela Merkel.

The central role of Germany in Europe is due to three reasons: the strength of its institutions, based on the culture of compromise and stability; the success of reunification; a new economic miracle. After a difficult decade 1990, Germany has adapted to forced march to globalization and the transition to the euro. It is the only major developed country that has truly overcome the crisis of globalization such as sovereign risk in Europe.

If the economic and monetary leadership of Germany is a continuation of its radical reform after 1945, the recent breakthrough in the diplomatic and moral field constitutes a break.

This economic dominance made  Germany to be the ultimate eurozone reinsurer alongside the ECB. This is the axis formed by Merkel and Mario Draghi who developed and produced the reform of institutions such as the single currency adjustment coordinated models of its Member States – with the notable exception of France. Germany has led the bailout of Greece according to its principles. For the same reasons, it stands out as the main interlocutor of David Cameron’s attempt to renegotiate the status of the UK within the European Union.

If the economic and monetary leadership of Germany is a continuation of his radical reform after 1945, the recent breakthrough in the diplomatic and moral field constitutes a break.

In the Ukrainian crisis, it is Merkel who took the initiative and led the negotiations Minsk 2, where the role of Francois Hollande has been reduced to that of simple guarantee. Especially, given the dramatic influx of refugees, it is Merkel who reminded the Europeans their home duty under the universality of human rights, while France remains paralyzed.

Far from merely talking, Germany began experiencing in 2015 with a project to receive more than 800,000 migrants, or 1% of its population, mobilizing for this purpose 10 billion euros.

After a paradox, Germany is in the leadership position. While refusing to exercice political power, Merkel always adopting the most prudent and consensual leadership, is  nowobliged to take considerable risks. Risks for its style and its popularity, as her art for consensus are disrupted by emergencies  coming from theirown crisis management.

Domestic political risks with the xenophobic violence around refugee – from pegida and neo-Nazi NDP – or outside because of the resurgence of anti-Germanism round of austerity policies. Strategic risks because its initiatives could turn against Germany and Europe in addressing the consequences of further shocks as their causes.

In the refugee crisis, Merkel has saved the honor of Europe while adopting a coherent position to stem the demographic decline of his country.

The new Greek bailout remains unsustainable both economically and financially, for lack of a restructuring debt reached 180% of GDP. In Ukraine, calls to order go to Kiev to ensure autonomous status to self-proclaimed republics Luhansk and Donetsk, not in Moscow, which methodically continued their annexation.

In the refugee crisis, Merkel has saved the honor of Europe while adopting a coherent position to stem the demographic decline of his country, whose population is expected to decline from 83 to 70 million people by 2050.

But Europe cannot sustainably accommodate 1 million migrants per year – particularly in the south of the continent heavily hit by the crisis, unemployment and debt – nor interrupt their flow, without deploying a comprehensive immigration policy and asylum, border control, Middle East Stabilisation and North Africa, starting with Libya. But it remains in limbo, due to lack of strategy and policy instruments.

Germany legitimately haunted by its history, wants an empire well. It is to be welcomed to bring up the freedom and dignity of men that France has abandoned to embody. But these values ​​must not only be illustrated; they must be defended at a time when internal and external threats comeback. Generosity is not enough; we need a policy, articulated at the national and European level, backed by power means to implement it. Leadership wears if it is exercised as hemiplegic way. Safety must become a priority for Germany and for Europe.

The wordlwide social-economic situation, now strongly impacted by to be expected China’s negative evolution, is alarming if monetary measures continue being considered as key measures to obtain a recovery worldwide instead of, finally, implementing social-economic structural reforms – wordlwide

Please refer to my two latest posts with self-explanatory titles: 09/01/2015 : “Central Banking “Policies” Fail Consistently – See Why”, 09/02/2015: “China – US – Europe – Japan et al need social-economic restructuring – Globalisation has shown its limitations”, which try to explain why world wide growth stagnation is an “option” if no structural mesures are, finally, taken, abandoning solely monetary measures which have shown their level of incompetence.

I am referring to an article published on 09/01/2015 by Le Figaro Premium on a interview with well known Nobel Prize economist Joseph Stiglitz: “How can European leaders they glorify stagnation?”, which I will quote and precede with my own short comments.

My Comments

I respectfully disagree with economist Stiglitz on the principal measures he prioritizes.

He is still referring to monetary measures as “the solution” and does not recognize that Central Banking’s QE s and other liquidity expansion vehicles have killed the implementation of unpopular structural reforms, something that I have repeated at nauseum in my blog and written and published two books about: “Why Obsolete Macro Governance is Killing the World Economy” (Amazon – September 2014) and “Growth through Structural Reforms” (Amazon – April 2015).

Stiglitz is still referring to Greece, when the solution is easy: Exit it, it is a time and money loser and and will strengthen extremist parties in Europe due to all the mess the European Union and Commission and the Troika (EU/ECB/IMF) have (and continue), created during 8 months of sterile “negotiations”.

The EuropeanUnion and European Commission are obsolete techno bureaucratic “politicking” mammoths of 35 000 employees which decide on nothing and abide to Germany – de facto Eurozone leader

His criticism of Germany as an individual country is greatly unfounded, since this country had implemented most of the badly required  structural reforms in the early 2000s which allowed Germany to have a positive evolution.

What Germany has to be critized for is their rigidity, disciplinarian and constitutional attitudes which they want to impose on the rest of the Eurozone not wanting to understand that what  works well for Germany does not for the Southern countries and inefficient France, this being caused by the total absence of any real “governance” in Europe.

Quotes I translated this article – colored lettering is mine  

INTERVIEW – For the Nobel Prize in economics, austerity packages imposed within the EU block any return to growth.

Joseph Stiglitz, Nobel Prize in Economics in 2001 for his work on asymmetric information, published Wednesday in a French compilation of his writings about the growing inequality of American society in a book entitled “The Great Divide” (editions The links that release).

Professor at Columbia University (New York), 72 years old, the former chief economist of the World Bank and advisor to US President Bill Clinton, said that the American dream is dead and regrets that the revival orchestrated by President Barack Obama has especially favored banks, who were responsible for major wrongdoings in the subprime crisis (poisoned mortgages).

He worries about stagnation in Europe, which according to him was maintained by overly cautious leaders when they should, he said, have stopped the austerity measures that undermine the foundations of the eurozone and prime the pump of growth.

LE FIGARO. – In what state do you find the European economy?

Joseph Stiglitz. – France and Europe in general, have not had good results in recent years. Per capita income fell below its level before the crisis. Even the most successful economies, like Germany, have recorded anemic growth. If it were not for the crisis, Germany would have been rated D by everyone. And the lost half-decade could become an entire decade, given the economic situation.

Le Figaro – Which brings us to the question: why?

Joseph Stiglitz

The cause of the anemic growth throughout Europe is due to the current austerity cures. A sluggish economy results in low tax revenue, which under the Maastricht criteria, results in capital costs and tax increases, which in turn weaken the economy even more. This is mainly due to the stiffness of the corset imposed since the establishment of the eurozone. It maintains a form of permanent instability in denying States the adjustment tools to economic shocks, as once the gold standard imposed on the US Central Bank during the Great Depression. This explains why Europe has suffered from low growth in the last five years, and lets me fear that stagnation or near stagnation, will continue.

Le Figaro – What reforms should we lead?

Joseph Stiglitz
One in particular seems to me more urgent. European leaders overwhelmingly recognize the problem of the lack of Federation of banks in the European Union. Consequently, when the crisis occurred in 2008, money has fled the Spanish banks and those of other countries most at risk, to take refuge in Germany. We need to stop this hemorrhage by setting up a common supervision of the banking system within the EU, and a mechanism for resolving problems of capital flight. We must expand the mandate of the European Central Bank (ECB), so that it is more focused, not only on inflation but also on employment and growth. It is urgent to move the cursor.

Some countries like Greece can obviously no longer borrow on the markets but that is precisely where Europe can act. It was a very good move  to create solidarity funds for new entrants (note: during the recent enlargement phases). It needs to create stabilization funds for convalescent countries. Europeans should use more aggressively the European Investment Bank (EIB) to invest in countries in crisis. They must set up a loan fund recognizing that the banking system was devastated, facilitaing credit to SMEs in the countries in crisis.

“European leaders are careful not to upset the straitjacket of the eurozone”

Le Figaro – Do you see the light at the end of the tunnel?

Joseph Stiglitz
Honestly, I cannot distinguish it. The damages induced by the crisis are durable because the money that fled Spain and other countries most deeply affected and permanently damaged their banking systems. Even more than austerity in public spending, the contraction of lending to SMEs has had devastating effects on economic performance. What bothers me even more, is that European leaders seem to be satisfied with this virtual stagnation and are careful not to upset the straitjacket of the eurozone. A prime example: when the German Minister of Finance Wolfgang Schäuble came to Columbia University (last April 15), he acknowledged that he would have to get used to this new form of anemic growth as a new standard. As if one could glorify stagnation!

Le Figaro – You called to rush to the aid of Athens, by erasing the 312 billion euros of Greek debt. Has the Greek crisis been mismanaged?

Joseph Stiglitz
I’m not privy to but it seems that the German authorities have played a role in maintaining the status quo. But things are very clear: forecasts made by the experts for the “Greek model” have been calamitous. They said that austerity will cause some decline but restore confidence so quickly that there would be a return to growth. Normally, their  predictions invariably failing, year after year, you could have expected thta they would be conduct a review of this model. But no! Nothing of the sort happened and the Troika is held in hits certainty that the benefits would eventually end up manifesting it in English called “double down.”

Yet I observed some consensus on the fact that the Greek debt must be cleared. Just because the Greeks could never pay. The austerity program imposed on Greece is such that the GDP will continue to decline, the economic depression increase, which will require restructuring of their debt even more. The German position is frankly inconsistent. They want the IMF to be an integral part of the solution but the IMF will not wet himself without a prior restructuring of debt of any unsustainably. We will have what Berlin allows. Schäuble is not an economist. I hope someone in his entourage will eventually explain all this, but it would seem, alas, that it is not for tomorrow.

The European Union and European Commission continue wasting their money (which actually is Eurozone’s countries’ money!) and time on Greece and eventual results from next – 09/20/2015 – Greek elections. They have already lost 23 billion euros out of the very erroneously granted third bailout to Greece of 86 billion euros, with both IMFand ECB repaying themselves of what Greece owed Them in August 2015, and which Eurozone taxpayers will be liable for if the Greece “matter” blows up!

Greece’s now  ex-prime minister Tsipras resigned and called for elections on September 20, 2015 (one month after his resignation). He did so out of fear of losing a vote of confidence that would have forced the same result rapidly.

In addition, Tsipras wanted the confidence vote out of the way before further rounds of pension cuts and tax hikes (imposed by the inefficient ex-troika (EU/ECB/IMF) and indirectly by Germany, would continue playing havoc with the rapidly – non existing… –  Greek economy. Not that opportunistic and politicking Tsipras (letft radical populist “politicking” – sic) knew and knows what to do to “save” Greece either.

Due to defections – see further on please – Tsipras will have to form a new, more unwieldy coalition government — possibly with as many as three other parties.

The first major opinion poll since elections were called, published Friday in the left-leaning Efimerida ton Syntakton newspaper, showed Syriza as the most popular party, with 23% saying they intend to vote for it. That was down from 26% in early July 2015. The second-biggest party, the conservative New Democracy is seemingly increasing is voting potential with 19.5% of the intended vote, up from 15% in July 2015.

Short of a majority, Tsipras would first look to renew Syriza’s coalition with the Independent Greeks, a small right-wing party that had quietly backed all his policies. But in the ProRata poll, only 2% said they would support the Independent Greeks, below the 3% needed to enter Parliament.

Syriza would most probably reject the idea of an alliance with the Popular Unity, the new party formed by its own dissidents. A large portion of Syriza’s party has, seemingly (?), switched to the Popular Unity party, which is campaigning for a voluntary exit from the Eurozone and the re-adoption of the drachma.
“Re-adopting the drachma is not a catastrophe. . . There are plenty of European countries doing well that are not members of the eurozone,” Mr Lafazanis said at the weekend.

Tsipras tried to re assemble Syriza party members behind him during the weekend in advance of the election, opinion polls reflecting deepening disappointment among voters with his government’s “record “(there is none…). On top of everything, his former “friend”, Varoufakis, ex-blogger, self asssumed game playing “expert” and former… Greek Finance Minister (a joke) is trying to rally extreme left parties in all of Europe.

Tsipras’ message was somewhat diluted by infighting among senior party officials, reflecting Syriza’s disarray in the wake of mass defections last week to Popular Unity, a new radical party led by the former energy minister Panagiotis Lafazanis.

Tsipas is suffering from another “inconvenience”: a usually loyal party: the “Group of 53”, including several former Tsipars’ cabinet ministers, circulated a document at a meeting criticising Tsipras’ decision last month to make his “hundredth” political gyration within 8 months by “agreeing” (sic) to a third Greek bailout of 86 billion euros after months of endless and totally contradictory negotiations.

 

 

 

As is further stated at the end of this post, the obvious political and economic solution, since five years( this blog “proposed” it since its creation in July 2011), was and is to EXIT Greece from the Eurozone.

France, as usual, was the first to provide yesterday (08/22/2015)  a TV audience to left radical populist ex Greek Finance Minister Varoufakis, inviting this self proclaimed “expert game player” and ex-blogger to an interview (badly prepared without an official interpreter…) by France’s “official” Chain 2 at 8.30 pm.

France’s “politicking” as usual allows visibility to “people” like Varoufakis, who became Minister of Finance in the January 2015 elected Government in Greece with the left radical populist Syriza party, who made totally unrealistic promises to the Greek population, which had been mistreated by past corrupt and inefficient governements and made the big mistake of believing and electing these “charlatans”. This government – with Tsipras as Prime Minister and Varoufakis as Minister of Finance – immediatey undertook a “selling” trip in February 2015 to most European capitals, starting with France and getting “attentive” reception.

Brussels, with its EC president Juncker also paid great attention to these “jokers”…

During the February- August 2015 period Greece filled the News, pracftically every day, a country whose dwindling GDP represents less than 2% of Eurozone’s GDP!

This by itself shows the ineptitude of all supranational institutions – EU / EC / Eurogroup (perhaps the most inefficient “institution” (sic) / IMF / ECB et al – in setting priorities, which should have been to stress the urgent need for implementing real / complete social-economic structural reforms (not “reformettes” like in France) in the Eurozone, activating negotiations with the UK, before the second biggest economy in Europe (after Germany) separates from the Eurozone, and trying to plan ahead alternatives for the Eurozone in case of a China hard landing, instead of eternally “discussing” Greece and becoming the laughing stock worldwide!

Germany, “de facto” leader of the Eurozone, cannot continue assuming this “unofficial” role, setting policy for this supposed “Eurozone Union”, since what has worked very well in Germany, does not work well in Latin countries with different history, usus, mentality, etc…,and requires a completely different approach to Eurozone “Governance”, which this blog has been  repeating “ad nauseum” for over 4 years, providing concrete and applicable alternatives, which need a total revamp of the Brussels mammoth “organization”(sic) and approach to seizing opportunities and resolving problems.

The so called Greek governement made “hundred” girations during this 7 months’ period, not even respecting a referendum that they themselves called for, thereby” kidding” the Greek population. This last week Tsipras resigned as Prime Minister with new elections being called for on September 20, 2015 (in one month) because the Syriza party is split through the middle and there is no viable Government anymore to…govern.

Accordingly, there is no Greek government left anymore to respect the “agreement” reached some weeks ago to allow a third 86 billion euros bailout to Greece, where 23 billion euros had already been paid out to Greece – before Tsipras’ resignation (take the money and run…)!

With its  usual and undue optimism, Brussels feels that this election might (?) bring about a reinforced majority in Parliament to respect the “agreement” and proceed with the agreed upon (?) “reform plan”…

Varoufakis now makes HIS European trip, meeting all left radical populist parties, like this wekend the Extreme left in France (Melenchon) and “rebel” Montebourg, and will do the same with Spanish “Podemos”, with Italian Beppe Grillo’s  Five Star Movement, etc…, to try and form European resistance to what they call the Brussels (and Germany’s) “austerity” plans.

The ex-troika – EU / ECB / IMF –  is to blame for this , since, once more, they have been following European Commission (EC) and Germany’s requests, starting all over again with practically the same austerity “policies” which have rotundly failed in the five last years and providing all the necessary munitions and argumentation to Varoufakis and Co…

On top of all this big “Mess”, the institutions themselves in-fight, like IMF who wants to make “haircuts” to the huge and totally unmanageable Greek debt, this being opposed by Germany, the biggest Creditor with close to one third of the over 300 billion euros Greek Debt, a Debt which is now coming close to 200% of Greece’s falling GDP.

But, IMF started off (with ECB) by reimbursing itself, using the first 23 billion euros installment of the third bailout of 86 billion euros – already paid out (please refer to above comment), leaving the Eurozone countries with the debt burden which will eventually fall upon Eurozone taxpayers if the Greek situation fails (and not on IMF nor ECB!)

This situation has become totally unacceptable from a purely political Eurozone standpoint, with no respect for any agreements due to continuous changes in Greek “governments” (sic), the obvious obvious “solution” (since five years – which this blog “proposed” since its creation in July 2011) being to EXIT Greece from the Eurozone.

 

As is further stated at the end of this post, the obvious solution, since five years – this blog “proposed” it since its creation in July 2011 –  was and is to EXIT Greece from ethe Eurozone.

I just finished watching tonight (08/22/2015)  on French TV 2 – 8.30 pm an interview of Varoufakis.

France’s politicking as usual allows visibility to “people” like Varoufakis, a self-proclaimed expert in “game playing” and ex-blogger ,who became Minister of Finance in the January 20165  elected Government in Greece, with the leftish, radical, populist Syriza party, who made totally unrealistic promises to the Greek population, who having been mistreated by past corrupt and inefficient governemnts made the big mistake of believing these charlatans. This government – with Tsipras as Prime Minister and Varoufakis as Minister of Finance; immediatey undertook a “selling” trip to most European capitals,starting with France and getting a “warm reception”.

Brussels, with its EC president Juncker also paid great attention to these “jokers”…

During the February-  August 2015 period Greece filled the News, pracftically every day,a  country whose dwindling GDP represents less than 2% of Eurozone’s GDP!

This by itself shows the ineptitude of all supranational institutions – EU / EC / Eurogroup (perhaps the most inefficient “institution” (sic) / IMF / ECB et al – in setting priorities which should have ben to stress the urgent need for implementing real / complete social-economic structural reforms (not “reformettes” like in France) in the Eurozone, and activating negotiations with the UK, before the second biggest economy in Europe (after Germany) separates from the Eurozone.

Germany, “de facto” leader of the Eurozone cannot continue seting policy for this supposed “Union”, since what has worked very well in Germany, does not work well in Latin countries with different history, usus, mentality,etc…

The so called Greek governement made “hundred” girations during this 7 months’ period, not respecting a referendum that they themselves called for, thereby” kidding” the Greek population, until now, when Tsipras resigned and new elections are called for on September 20, 2015 (in one month) because the Syriza party is split through the middle and there is no government anymore! 

Varoufakis now makes HIS European trip, meeting all leftish populist parties, like the Extreme left in France (Melenchon) and “rebel” Montebourg, and will do the same with Spanish “Podemos”, with Italian Beppe Grillo’s  Five Star Movement, etc…, to try and form European resistance  to what they call “austerity”.

To blame is the ex-troika – EU / ECB / IMF – who have, following EC and Germany’s demands, started all over again with practically the same austerity “policies” which have rotundly failed in the five last years and providing all the necessary munitions to Varoufakis and Co…

On top of all this big “Mess”, the institutions themselves in-fight, like IMF who wants to make “haircuts” to the huge and totally unmanageable Greek debt, this being opposed by Germany, the biggest Creditor…, a Debt which is now close to 200% of Greece’s falling GDP.

IMF started off (with ECB) by reimbursing itself, using the first 23 billion euros installment of new”aid ” – already paid out (!) and being part of the agreed upon third bailout of 86 billion euros, which will eventually fall upon Eurozone taxpayers if the Greek situation fails (and not on IMF nor ECB!)

The obvious solution, since five years – this blog “proposed” it since its creation in July 2011 – was and is to EXIT Greece from ethe Eurozone.

 

The Tsipras coalition government could no longer count on 119 of the 300 elected Greek Parliament. The situation had become untenable for Tsipras, himself ,who came to power after early parliamentary last January 2015. The agreement with the creditors of Greece for a third aid package and avoid an output of the euro countries, has alienated a large number of the elected representatives of Tsipras’ party Syriza.

Tsipras resigned, after thathe first tranche of the support program had been paid to Greece. This government instability weakens the agreement between the country and its creditors.

Tsipras wasted no time – on Thursday (08/20/2015) – after – being paid 23 billion euros under the new aid package for Greece he resigned, hoping to strengthen its base at New elections. “Now that this difficult cycle is over, I would submit to your judgment what we have accomplished,” said Tsipras in a brief televised address at 8.30 pm local time.

All the time spent on this small and unimportant country by all major Governances  – Brussels (EU, EC, Eurogroup), IMF, ECB et al, could (should) have been dedicated to re negotiating with the UK, a far more important partnership with the Eurozone, than this ever changing and unmanageable country, which should have been exited from the Eurozone at least 5 years ago  – this is what my blog “proposed” since July 2011, when I created it.

Now time should be spent antipating how the Eurozone will be “hit” by China’s situation  and the terrible Migration problems, but the Brussels ‘ Governance and IMF and ECB et al will keep trying to “solve” Greeee!

Saying that he has a “clear conscience” and ensuring having “resisted the pressure and blackmail,” Tsipras then went resign to President Prokopis Pavlopoulos.

This, after being elected in January 2015 on a platform criticizing the previous two aid plans (memoranda) imposed on the country in 2010 and 2012 for a total amount of 240 billion euros, Alexis Tsipras eventually signed one third bailout (which EU/EC/ Eurogroup/IMF/ECBet al were “candid” -not to use more offensive words – enough to concede on July 13, to prevent his country from being may be expelled from the Eurozone.

Even before the official announcement, the head of the cabinet of the President of the European Commission (EC) Juncker, Martin Selmayr, tweeted “early elections in Greece may be the way to broaden support” to the aid package…!

Please refer to my yesterday’s – 08/20/2015 -post: “Greece – Tsipras Resigns – The Big Joke at the expense of Eurozone “Authorities”.

As for its majority in the Vouli, the Greek unicameral Parliament, it has vanished during the vote on the plan on August 14, 2015 adopted with the support of the opposition. His coalition government with the sovereignty of Anel right party could still count on 119 of the 300 elected, an insufficient motion of censure.

Tsipras’s decision is argued as being liable to reassure its European partners. “Rapid elections in Greece can be a way to extend support to the stability program (ESM) that just signed on behalf of Greece Prime Minister Tsipras,” commented Martin Selmayr, Chief of Staff to the President European Commission, Jean-Claude Juncker. 

“An election can enhance the ability of the Greek government to implement reforms,” ​​argued further another European official. But “the implementation of reforms is what matters most to restore financial stability in the country,” stressed Dombrovskis, Vice-President of the European Commission responsible for the euro.

“It is crucial that Greece maintains its commitment to the Eurozone,” said for his part the President of the Eurogroup Jeroen Dijsselbloem, quoted by NOS Dutch television. “There is broad support for the reform program in the Greek Parliament. I hope that the new elections will lead to (even) more support, “he added. Creditors and not hiding their joy at the prospect of seeing Alexis Tsipras relieved of his old friends. For its part, the president said he would do whatever was necessary for Greece to keep its commitments to the Eurozone, according to comments reported by analysts.

Tsipras’ “friend”, Varoufakis, former “game playing expert” Finance Minister (sic), has being multiplying for several days the criticism against “capitulation” and fueling popular discontent.

All this shows the immense incapacity and weakness of the ever “politicking” European Commisssion, Eurogroup,  et al, which will most probably, once more (!) embark themselves in another “make believe” and hazardous situation with unimportant Greece!

The Spanish Finance Minister Guindos, a far more responsible political executive, had worried about this risk of “political instability “and its consequences for the implementation of reforms and austerity measures imposed on Athens.

Moody’s expressed fears for “the good implementation of the program,” seeing “a risk on future cash payments.” The first of these payments was in any case very fluidly place, while Greece had received nothing from its creditors (EU, ECB, IMF, ESM ( European Stability Mechanism) since August 2014, under the previous government conservative-socialist coalition.

Greece received 23 billion euros: 10 were recorded in an account for future recapitalization of Greek banks and 13 were almost immediately absorbed by a refund of € 3.4 billion was due imperatively to the ECB on Thursday, and that of a 7.16 billion bridge loan obtained in July 2015 (in other words IMF and ECB repaid themselves with Eurozone taxpayers eventual funding!). Finally, this tranche of aid will also include a payment of three billion euros “before the end of November 2015” according to the progress of the implementation of reforms in the program.

 

 

 

Greek Prime Minister Tsipras to Call for New Elections on September 20, 2015 – 8 months after having been elected  on a fallacious platform –  which at first, during many months, was taken seriously by Brussels, IMF, ECB and all of Eurozone, when he first made his “selling trip” in February 2015. In the meantime with Varoufakis, his game playing Minister of Finance, they made innumerable changes of position, until this final joke: his resignation forced by non support of his radical far left populist party – Syriza. 

All the time spent on this small and unimportant country by all major Governances  – Brussels (EU, EC, Eurogroup), IMF, ECB et al, could (should) have been dedicated to re negotiating with the UK, a far more important partnership with the Eurozone, than this ever changing and unmanageable country, which should have been exited from the Eurozone at least 5 years ago  – this is what my blog “proposed” since July 2011, when I created it.

Now time should be spent antipating how the Eurozone will be “hit” by China’s situation  and the terrible Migration problems, but the Brussels ‘ Governance and IMF and ECB et al will keep trying to “solve” Greeee!

Official “News – Quote New York Times: 

The “official” news  say that Prime Minister Alexis Tsipras of Greece will call for national elections on Sept. 20 in a bid to consolidate his power and press ahead with the bailout plan he agreed to this summer with European creditors, government officials said Thursday.

Mr. Tsipras was expected to begin the process by submitting his resignation on Thursday, which he now did, clearing the way for a vote next month on whether he and his leftist Syriza party should be returned to power with a new mandate.

“We know for sure that we will have elections on the 20th,” said one government minister, who agreed to speak only on the condition of anonymity. “He is going to resign today.” Tsipras has been coinsidering  having new elections for weeks amid a deep split within his party over his embrace of the bailout plan.

As Greek Bailout Deal Passes, Alexis Tsipras Faces Rebellion

Tsipras was elected in January 2015 on an anti-austerity platform but, after several tumultuous months, he reversed course and agreed to a new bailout program with the country’s European creditors. The deal infuriated Syriza’s far-left factions, and it was passed through Parliament with the help of opposition parties. Defections from Mr. Tsipras’s coalition had raised the possibility that he would not have the necessary support to prevail in a potential parliamentary test of confidence in his leadership, a possibility he short-circuited by calling for new elections.

Some analysts had thought Mr. Tsipras might not call snap elections until October, after the country faces the first review of its progress in meeting the terms of the bailout, but instead he moved to act more quickly.

The move to quick elections could slow or complicate progress in carrying out the initial phases of the changes demanded by the bailout package. But Mr. Tsipras has remained highly popular in Greece despite his reversal on the bailout plan, with polls showing no other leader in a position to challenge him at this stage.

In comments in Parliament on Thursday, Finance Minister Euclid Tsakalotos said early elections would not lead to political instability and called on Greeks to return their savings to banks.

“Now there is an agreement, there is a course ahead,” he said, referring to the latest bailout, which formally took effect on Thursday following approval on Wednesday by the German Parliament and European officials in Brussels.

Energy Minister Panos Skourletis said on state TV earlier in the day that elections were needed to deal with the split in Syriza. “The political landscape must be cleared up. We need to know whether the government has or doesn’t have a majority.”