Angie's dragon and its retreat

News is quickly emerging about how negative a reaction Germany's Chancellor Angela Merkel provoked with her proposal to appoint a financial dictator to run Greece. Die Welt reports (Merkel macht kehrt im Griechenland-Fiasko 30.01.2012) of Angie's proposal for putting Greece under a Gauleiter: "Das Land hätte damit endgültig seine Unabhängigkeit verloren – und vor allem: nicht de facto, sondern für alle erkennbar." ("The country {Greece} would have then finally lost its independence - and above all, not de facto, but obvious to everyone.") The accurate implication of that, of course, is that the current bankers' collection-agent government in Greece isn't really a democratic national government. But at least it maintains the formal conventions of an independent national government. Angie wanted to take even that away.

As I've said before, Angie seems to have been very impressed with Dick Cheney's foreign policy.

Martin Schulz: President of European Parliament, German Social Democrat and shameless Angiebot

Martin Schulz, the pitiful German Social Democrat who is President of the European Parliament is walking back his previous endorsement for Angie's Gauleiter proposal. But it sounds like the guy is a real Angiebot:

Und Martin Schulz, der neue Präsident des Europaparlaments, kann sich Herzlichkeit leisten: „Frau Merkel ist auch meine Bundeskanzlerin", sagt er. Schulz freut sich sichtlich, dass er an diesem Tag der erste auf der europäischen Bühne sein kann, der Angela Merkel seine Kritik überbringen kann – weil die Kanzlerin erst zu ihm kommt, danach zu ihren Kollegen. „Wir haben über unterschiedliche Auffassungen mehr gesprochen als über Gemeinsamkeiten", sagt er.

Und im Gehen, Merkel ist schon weg: „Es hat schon sinnvollere Äußerungen gegeben", sagt er zur deutschen Idee. Natürlich müsse es eine Aufsicht geben, aber das geschehe doch bereits. „Man sollte Begriffe wie Staatskommissar oder Sparkommissar vermeiden." Und er setzt noch einen hinterher: „Es gibt Leute, die dazu beitragen, die ohnehin angespannte Stimmung zwischen den Mitgliedstaaten noch zu verschärfen."

[And Martin Schulz, the new President of the European Parliament, can provide heartiness: "Frau Merkel is also my Federal Chancellor," he says. Schulz is visibly happy that he can be the first on the European stage on this day to bring his criticism to Angela Merkel - because the Chancellor comes to him first, then to his colleagues afterward. "We discussed more about different evaluations than about agreements," he says.

And in leaving, Merkel is already gone: "There have certainly been more sensible statements," he said about the German idea [Angie's Greek Gauleiter proposal]. Of course there has to be oversight, but that's already happening. "One should avoid concepts like state commissar or savings commissar." And he then adds: "There are people who would use that to intensify the already tense mood between the member states."

Duh, yuh think, Martin? Are those the kinds of insights you get from being one of Angie's poodles? I hope she scratches behind your ears for you.

But he's right about the need to avoid those kinds of expressions. "Gauleiter" or "dictator" would be more appropriate for what Angie proposed and for which this sad excuse for a democrat originally endorsed. And this guy is President of the European Parliament! That is just sad.

Carsten Volkery reports for Spiegel International on the negative reactions to the Greek dictatorship idea that Angie and her boy Martin Schulz proposed: Merkel Gets Her Fiscal Pact: EU Summit Marred by Fears of German Domination 01/31/2012.

The terms of the agreement are hard to parse from the news reports I've seen, probably because the terms weren't public until Tuesday when the "fiscal pact" was finalized. Also, a lot of the reporters are probably just being lazy in trying to understand and explain it. The spin from Angie's government and from the summit generally was that, hey, we're made great progress and the financial markets should love us. I guess that was to be expected.

But there doesn't seem to be an awful lot to this "fiscal compact". For one thing, the critical enforcement mechanism won't be decided until the scheduled March EU summit.

And what kind of "fiscal compact" is it? This piece from BBC Online, The eurozone: Another step by Europe editor Gavin Hewitt , leads the reader to believe that there is no treaty change involved. If you read the very closely, you might wonder if he doesn't mean there's no change to the EU Treaty. Or maybe he just means there's no treaty change for Britain involved, so who cares?

Here's the text of the thing, the "thing" being officially called Treaty on Stability, Coordination and Governance in the Economic and Monetary Union. The magic numbers are 3%, the maximum amount an annual deficit can be in relation to GDP, and 60%, the allowed ration of national public debt to GDP.

Article 3 designates a "fiscal compact" among the members, but this is an international treaty. It does designate the EU Commission as having an enforcement role in determining whether the countries involved are complying with the fiscal limits. The European Court of Justice is the juridical enforcement mechanism. This represents a compromise and, for Angie, a climb-down from her original proposal of having the EU Commission impose automatic sanctions on violators. It's not a good policy. But it does seem to avoid what in her original proposal would have been effectively a German veto over national budgets if the fiscal targets aren't met. The treaty does specify that "a correction mechanism shall be triggered automatically," though the mechanism in itself isn't defined in the text.

I don't claim any technical qualifications to interpret treaty language. But from the text and the commentary that I have seen, it appears that a shadow of Angie's original automatic enforcement mechanism survives. The EU Commission will decide on sanctions for violators unless a majority of the countries vote to oppose the sanctions. But the sanctions won't take effect until a case is brought to the European Court of Justice.

The treaty would take effect on January 1, 2013 if it has been ratified by 12 of the eurozone members.

It's a bad idea. And it's very doubtful whether it's even enforceable in this form. But it's not as bad as Angie wanted it to be. Plus, it's increasingly obvious to me that the eurozone members know that the Angie farce can't go on that much longer. I think the non-German eurozone members are basically playing for time, with everyone trying to avoid being the first country to bail out of the euro and everyone developing contingency plans for how to minimize the damage to themselves when this increasingly shaky house of cards collapses.

It's worth noting that the EU has always had some stringent budget deficit rules. And that they were often observed in the breach. (David Böcking und Florian Diekmann, Folgen des EU-Fiskalpakts.Kontinent der Schuldensünder Spiegel Online 31.01.2012) Although it was clearly Angie's intent to make the controls tighter and more effective, time will tell how much more effective they are. And, for the immediate future, as long the depression is going on, less effective will be a good thing, because the eurozone and the EU need more stimulative spending, not less. In an ideal "fiscal and transfer union", Germany would provide the bulk of the stimulus. But nothing run by Angela Merkel is going to be even close to ideal.

Tags: angela merkel, eu, euro, european union, greece, post-democracy

Angie gets pushback on her finance Gauleiter demand for Greece

It's encouraging to see that German Chancellor Angela Merkel's anti-democracy proposal to appoint a financial Gauleiter to rule Greece on behalf of the EU, more particularly on behalf of Germany, and even more particularly on the behalf of private banks, is getting significant resistance from various other European leaders. For some reason, they are not really excited about the idea of such an arrangement.

This is a Spanish cartoon about sacrificing their national constitution to the Goddess Angie of the Market. But it could apply to every other country that signs onto to Angie's austerity policies, as well:

Angie's Post Democracy 2.0 proposal would be about as direct a case of letting giant banks rule the country of Greece as it would be possible to get. A pure financial dictatorship. The only way it could be more direct would be if they just designated a committee of Bank CEO's to run the country. And even then, they would probably appoint some kind of Gauleiter like Angie is recommending.

Philipp Wittrock in Debatte um Sparkommissar.Merkel besänftigt aufgebrachte Griechen Spiegel Online 30.01.2012 reports on criticism coming from leaders in Austria, Greece, Luxembourg,

Since the current Greek government is a Post Democracy 1.0 regime of debt collectors installed at the insistence of Germany and France, though with technically legitimate democratic forms, it wasn't a given that they would put up any kind of a stink about it. But I guess that was too crass even for what is already a government of debt collectors for private banks.

Even Angie's FDP coalition partner Foreign Minister Guido (Guido Westerwelle) is trying to distance himself from her Greek Gauleiter proposal. But despite Guido's public comments, Wittrock reports that Angie was still pushing the proposal on Monday!

It's remarkable to me at this stage, though, that Angie's out-of-control, destructive policies aren't getting more explicit public resistance across the board from other EU countries. No doubt, it's a reflection of the deeply corrupting and crippling effect that the neoliberal ideology of globalization (and it's well-healed backers) have had on European politics, just as it has had in America.

Jan Strupczewski and Luke Baker Report for Reuters in EU leaders struggle to reconcile austerity, growth 01/30/2012 on the summit. It's rather bizarre that an article like that one doesn't mention Angie's Greek Gauleiter proposal until far down in the article, and then only half-report it:

Germany caused outrage in Greece by proposing last week that a European commissar take control of Greek public finances to ensure it meets fiscal targets. Greek Finance Minister Evangelos Venizelos said that to make his country choose between national dignity and financial assistance ignored the lessons of history.

The German idea won cautious backing from the Dutch and Swedish prime ministers.

"We need to have things in place for monitoring that they are really doing what they are promising," Swedish Prime Minister Frederik Reinfeldt told reporters on arrival.

But Merkel played down the idea of placing Greece under stewardship, saying: "We are having a debate that we shouldn't be having. This is about how Europe can be supportive so Greece can comply, so there are targets."

You wouldn't know from that report that other countries were expressing concern and opposition to the idea. They do allude to the bad economics behind the proposal that the summit is apparently set to approve for new, more rigid austerity requirements to be written into treaty commitments, another terrible idea of Angie's that can only make the debt crisis worse:

With Britain standing aloof, most of the other 26 EU leaders were set to approve a fiscal pact to write balanced budget rules into their national law, despite economists' doubts about the wisdom of effectively outlawing deficit spending.

"To write into law a Germanic [sic] view of how one should run an economy and that essentially makes Keynesianism illegal is not something we would do," a British official said.

Outlawing Keynesian measures is exactly what Angie is seeking to do. But we also should wonder why a "British official" needed anonymity to say that, since it's straightforwardly true. And also why Reuters would grant anonymity for that. They would have little trouble finding well-known economists to tell them the same thing. Maybe it's because they thought the "Germanic" crack would make good copy but the "British official" didn't want to be quoted by name sounding like a petty nationalist.

See also: Sven Böll et al, A Bluffing Game: European Politicians in Denial as Greece Unravels Spiegel International 01/30/2012; Micheál Martin, Fiscal pact fails to address problems at root of crisis Irish Times 01/30/2012; Eurozone crisis live The Guardian.

Tags: angela merkel, eu, euro, european union, greece, post-democracy

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!

Tags: angela merkel, eu, euro, european union, greece, post-democracy, werner faymann

EU Commission reportedly rejecting Angie's Greek Post-Democracy 2.0 plan

Die Zeit is reporting that the European Commission is rejecting Angie's proposal to put Greece's budget under direct EU (i.e., German) control, with sovereign debt interest payments given first priority and Greece given no option to threaten default no matter the cost to the Greek people. (Griechenland soll souverän bleiben 28.01.2012)

Athens News reports the same opposition in Germany wants Greece to give up budget control - sources 28.01.2012. But it's not exactly a resounding rejection:

On Saturday, a European Commission representative, called on to comment on press reports referring to a document distributed at the Eurogroup, proposing that a senior eurozone official assumes control of the implementation of Greece's budget, told AMNA that "the executorial task must remain in the full jurisdiction of the Greek government, that is accountable to the country's citizens and bodies. This responsibility lies on the shoulders of the Greek government and must remain so".

This is the "ordo" in Angie "ordoliberal" doctrine. Corporations should be allowed to operate with maximum freedom from government restraint. But when their risks get them in trouble, as the European banks are now with sovereign debt, it's the job of a strong state to step in as the enforcer for the corporations for which the "free market" is failing to meet their expectations. For ordinary workers, not so much. Or not at all.

Tags: angela merkel, eu, european union, ordoliberalism, post-democracy

With another EU summit coming, Angie demands Post-Democracy 2.0 for Greece

The euro, the EU and democracy in Europe will have another dramatic day on Monday at the next EU summit. Angie wants to have agreement coming out of that for all EU countries participating, not just the eurozone, to permanently commit to austerity economics, not only in the current depression but basically forevermore.

This can only go on for so long. What can't work will eventually stop working.

And the sovereign debt crisis goes on, in an acute way. Angie's austerity policies can only make the immediate sovereign debt problem worse.

Economist Nouriel Roubini sees Portugal slipping into a Greek state of crisis, probably needing a writedown of the debt. (Roubini prophezeit Portugal griechische Tragödie Financial Times Deutschland [FTD] 28.01.2012) Portugal's interest rates on their bonds have spiked to clearly unsustainable levels. The Portuguese Prime Minister, who not long ago suggested that unemployed Portuguese citizens should consider emigrating to Brazil or Angola, seems to be hiding his head in the side, perhaps for fear of Angie's wrath.

Speaking at Davos, Roubini suggested that Greece might be leaving the eurozone within a year.

And it turns out that the Princess Angela von Merkel may be ready to impose Post Democracy 2.0 in Greece. According to the Financial Times, Angie wants to basically install a financial dictator representing the euro group (read: Germany) to have final say over the Greek budget and expenditures, with the power to override the democratically-elected government. (Though the current debt-collectors' Post Democratic 1.0 regime in Athens previously imposed by Angie is democratic only in a formal sense.) Peter Spiegel and Kerin Hope report in Call for EU to control Greek budget 01/27/2012:

The German government wants Greece to cede sovereignty over tax and spending decisions to a eurozone “budget commissioner” to secure a second €130bn bail-out, according to a copy of the proposal obtained by the Financial Times.

In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders. The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing "all major blocks of expenditure" by the Greek government.

"Budget consolidation has to be put under a strict steering and control system," the proposal reads. "Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time."

Angie has lost it. "It" in this case being her sense for democracy.

And since it is the rightwing parties in Europe who have been working nationalist themes for years in opposition to the European Union, this hands them one more political advantage. What Europe, the European Union and the eurozone need more than anything right now is to get Angie out of the European German Chancellorship. (That was an actual Freudian typo on my part there.)

This is obscene:

Athens would also be forced to adopt a law permanently committing state revenues to debt service "first and foremost". ...

Greek voters have already expressed anger about EU attempts to assist in implementing reforms. Horst Reichenbach, the German national who heads an EU task force to assist Greece, was depicted in German military garb by leftwing Greek newspapers when he arrived last year.

Herr Reichenbach received the un-fond nickname in Greece of Third Reichenbach.

And despite IMF General Manager's criticism of Angie's austerity policies this past week, the IMF is joining with Angie to further impoverish Greece and the Greeks:

Even before Germany circulated its proposal, the EU and International Monetary Fund had presented a 10-page list of "prior actions" Athens must implement before the new bail-out is agreed. According to a copy of the document, also obtained by the FT, Greece must cut an additional 150,000 government jobs within three years.

Not so long ago, it was conventional wisdom that a depression could be a danger to democracy. And here is Germany proposing to set aside another major chunk of the superficial appearance of democracy in Greece for the greed of the banksters. This is just awful. And this to override a government that Angie insisted on installing just a few weeks ago for the main purpose of collecting debts for the banks.

From Angie's proposal itself:

Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure. This will reassure public and private creditors that the Hellenic Republic will honour its comittments [sic] after PSI and will positively influence market access. De facto elimination of the possibility of a default would make the threat of a non-disbursement of a GRC II tranche much more credible. If a future tranche is not disbursed, Greece can not threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement. [my emphasis]

Hungary is not the only country in Europe in which democracy is under immediate threat.

Tags: angela merkel, eu, european union, greece, post-democracy

Gosh, a government of "technocrats" isn't working magic? I'm shocked, I tell you, shocked!!

A government of technocrats might seem like the neoliberal dream to bankers and to Big Thinkers like David Brooks who worship at the altar of High Broderism, where politics is dirty and distasteful.

But the idea also has its problems, as this story of the bankers'-debt-collector government of Italy headed by an unelected Prime Minister illustrates, Is Mario Monti's honeymoon over? Global Post 12/01/2011:

A tough and revered former European antitrust czar, [Prime Minister Mario] Monti was quick off the starting block. He took the oath of office on Nov. 16, two days earlier than originally scheduled. He presented his first austerity measures and called for his government’s first confidence vote — which he won by an overwhelming margin — four days ahead of plan.

The cabinet he named — of diplomats, private sector leaders, academics, and technocrats — was almost universally praised. Monti said Italians would be called on to sacrifice, but he promised the sacrifices would be spread evenly. Pollsters said the man, who had been teaching economics classes as Milan’s Bocconi University just a month ago, saw his approval levels surge to stratospheric levels.

But since then, things haven’t worked out according to plan.

It only took a few days for political bickering to restart:

• Allies of the ousted Berlusconi threatened to pull their support for Monti’s government if it reinstated the so-called “wealth tax.” Berlusconi, a billionaire, had repealed it while in office.

• The separatist Northern League, which had been a junior member of Berlusconi’s coalition, threatened to balk at a plan to let the children of immigrants born in Italy to become Italian citizens.

• Center-left parliamentarians has begged Monti to delay raising the retirement age.

• And political parties from both sides of the aisle have thrown up roadblocks, systematically stalling or blocking approval of mid-level appointees needed to run the government’s day-to-day operations.

The situation has gotten so bad that the European Union quickly dispatched observers to Rome to monitor it.

"It didn’t take long for Italy to return to being Italy," Mario Andrea Ventimiglia, a political scientist at the University of Puglia, told GlobalPost. "Monti's honeymoon seemed to last for about 15 minutes.”

Italy did have a government for a couple of decades last century that dispensed with all this electioneering and democratic politics nonsense while provided rallies and the occasional war to keep the public entertained. But it didn't work out so well, either.

Monti's government at least has their priorities straight, which is to serve as debt collectors for European banks:

So far, Monti’s technocratic, all-star cabinet has made it clear that paying down debt and jump-starting economic growth are far and away their main concerns. Even ministries usually far from the economic battlefields are on message: The Ministry of Environment wants to be sure environmental disasters do not stand in the way of industrial production, for example, and the Ministry of Culture wants to promote the country’s artistic and historic riches to attract more tourists while adding a fee to every hotel room stay.

Analysts say the new government might do even better by focusing on political stability - by easing parliamentary infighting, increasing public sector transparency, and passing difficult political reforms. These measures would increase chances that the next elected government would be stable enough to preserve and strengthen the country's democratic institutions.

Ah, yes, if we could just get rid of all that "parliamentary infighting" - especially from selfish 99-percenters piffling around over pensions and jobs and health care and nonsense like that - everything could be fine. And the government could "preserve and strengthen" the current "democratic institutions" which somehow allowed Germany and France to dictate to them that they would have to install a bankers' debt-collector government who doesn't give a flying flip about what those silly and irrelevant voters want.

This is what "post-democracy" (Jürgen Habermas) looks like in Italy and Greece: government with the bare forms of parliamentary democracy acting in fact as the agent of the European financial lobby.

Tags: italy, post-democracy