Wednesday 14 September 2011

The Eurozone - A Fairytale Of Our Time

When the gross incompetence of Gordon Brown was finally realised, he puffed himself up and blamed the bankers for our troubles. They had, he said acted irresponsibly and they had taken unacceptable financial risks. For good measure he added that the crisis was caused by America. So pretty much anyone but the guy who had acted irresponsibly by borrowing recklessly and in so doing had taken reckless financial risks with the entire nations wealth.

But he was partly right of course, that the decision by the Clinton administration to force mortgage providers, by law to extend loans to people who hadn't 'traditionally' been able to afford them, was the root cause of the crisis. Because they not only couldn't 'traditionally' afford these mortgages, they couldn't in reality either. Add in suicidal risk taking by greedy corporate bankers and hey presto! an entirely predictable crash that was a shock to the bankers and regulators alike.

In effect, these extremely stupid people had bought a parking lot full of cars, many of which were on fire. 'That's OK' they assured themselves, 'the profit we make on the good ones will cover those on fire.' Then they watched the fire spread until the whole lot was gone. 'Oh well, I'd better ask my old mate Mr Politician to give me a sackful of cash, for no justifiable reason and with no strings attached', was the resigned sigh on the banker.

Now it is payback time and American politicians are accusing the Eurozone of continuing, exacerbating and feeding the world wide economic crisis. A charge that cannot be denied. Take Angela Merkel. On the face of it she is a German politician representing the best interests of Germans. So when she stands up and pronounces on the latest measures to control the financial crisis, she is doing the best for her country and the wider community of nations, we all being reliant on each other in this financially interconnected world, of course.

But no, Merkel is in actual fact supporting only a small cabal of EU politicians, of which she is one and the technocrats behind them who run the EU. Greece is in trouble and that trouble is caused by the Euro. And they cannot grow their way out of trouble, because of the Euro, so huge bailouts of EU cash (much of it German) is passed to the Greeks. It doesn't really help as the problem is systemic -the Euro, but it tides them over. That the bailouts are illegal under EU law seems to be overlooked.

Here is the logic Merkel and all of the 'top table' EU politicians are working to; if the EU were a single nation then the Greek crisis could be contained the same as the disparity between North and South in the UK. But that means setting up a superstate called Europe, centrally run and with a single set of laws and taxes, which amazingly also happens to be what the whole project was set up to achieve. So a crisis caused by the politicians and that cannot be cured without Union, will result in what the politicians have wanted all along. Ever felt you are being played?

The tiny, insignificant fly in the ointment is that the people of Europe do not want this solution, but what EU politician ever thought that what the people wanted was important?! If these politicians grant themselves the present they have always wanted, there is no guarantee that the world economic recession they are currently exacerbating, will end. That can be achieved though, by simply throwing the whole idea of a united Europe into the same bin in which currently resides the last great soviet project. It is funny how authoritarian communism, no matter how it tries to disguise itself always implodes. Maybe, it is just a bad idea, don't you think?

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