Monday, January 30, 2012

New EU summit: the drama continues

The euro crisis is starting to seem like a B-movie tragedy, where everyone can see where the plot is going but the motives are hard to fathom and it's dragging on forever.

The latest EU summit started on Monday. Angela Merkel may be Obama's biggest threat to re-election. Because if Angie keeps getting her way, it maximizes the chances that the eurozone will crack up this year and maybe take down some major banks with it, like the mortgage crisis did in 2008.

This Euronews report plays up Angie's superficial rhetoric about the need to promote growth, EU leaders shift focus from austerity to growth 01/30/2012. But Angie isn't budging from her "ordoliberal" austerity policies. Her "growth" proposals pretty much consist of more austerity and anti-labor legislation, with a few extra dollars to be kicked in to so-far-undefined growth measures from various EU funds that has surpluses at the moment. In this report, we see her stressing the need for boosting youth employment, which Angie sees as yet another chance to weaken labor laws. She apparently expects the new conservative government in Spain to lead the way on that approach to youth unemployment.

Greece is bankrupt in all but name and they still haven't tied down the "voluntary" writedowns from private holders of Greek debt that were part of the stopgap measure for Greece agreed on at the December EU summit.

Portugal is on the verge of bankruptcy, with Italy, Spain and Ireland kind of shaky. And Europe is in a new recession. Belgium just had an apparently pretty effective one-day general strike against government austerity measures there.

Angie's proposal for an EU Gauleiter to run Greece until their debts are paid down and the bond markets like them again got a pretty negative reaction once the Financial Times reported on it publicly. Even Greece's Post Democracy 1.0 government, installed at Angie's insistence to act as banks' debt collectors, to her to go blow on that one. Austria's Social Democratic Chancellor Werner Faymann, who has been pushing a foolish "debt brake" austerity proposal like the one Angie is demanding from other EU members, criticized Angie's Greek Gauleiter proposal on his Facebook page (01/30.2012), though in more diplomatic language than Angie's proposal deserved:

Die Bedingungen, die Griechenland in den kommenden Jahren zu erfüllen hat, müssen strikt bleiben. Die Einhaltung dieser Bedingungen wird von der Trojka aus Europäischer Kommission, Internationalem Währungsfonds und Europäischer Zentralbank streng überprüft, überwacht und auch eingefordert.

Griechenland kann den Staatshaushalt derzeit bekanntlich nicht über Anleihen auf dem Finanzmarkt refinanzieren. Bis dies wieder möglich ist, sind glaubwürdige und feuerfeste Hilfsprogramme der internationalen Gemeinschaft notwendig, um die Eurozone stabil zu halten. Die Stabilität des gemeinsamen Währungsraums liegt auch im Interesse Österreichs. Es ist ganz klar, die Bedingungen sind einzuhalten. Deswegen muss aber niemand beleidigt werden, deswegen dürfen nicht demokratische Werte ausgehöhlt werden.

The conditions that Greece has to fulfill in the coming years must remain strict. The observance of the conditions will be monitored by the Troika of the European Commission, the International Monetary Fund and the European Central Bank.

It is known that Greece cannot refinance its budget with loans on the financial market. Until this is once again possible, credible and fireproof assistance programs from the international community are necessary in order to keep the eurozone stable. The stability of the common currency [the euro] is also in Austria's interest. It is clear that the conditions have to be met. But that is why no one should be insulted, that is why democratic values should not be hollowed out. [my emphasis]
Faymann sounds almost as timid as a US Democrat there. But still, even in diplomatese, it's clear that he's criticizing Angie's Post-Democracy 2.0 proposal for Greece.

Austria has had some rather unpleasant experiences with German Gauleiters in the last century.

Angie's policies are making all the eurozone's problems that much worse. Heckuva job, Angie!

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