Global Economic Crisis. Ante Portas?

by Capricorner

The British chant : God save our gracious Queen. Long live our noble Queen. etc etc

To them the Queen symbolizes the nation and this is why they want the best for her.

The Germans chant: Deutschland, Deutschland uber alles. Uber alles in der welt. etc

They want their country supreme and, as the rest of the lyrics go, they stand together for, the good of their country.

The French chant : Allons enfants de la Patrie. Le jour de gloire est arrive. etc etc

To the French, the blessings of freedom and true democracy have been won with struggle and they are always willing to fight for them and for glory.

The Americans chant : Oh, say can you see by the dawn’s early light. What so proudly we hailed at the twilight’s last gleaming. Their flag represents the land of the free and the home of the brave, in keeping with the character of this outstanding nation.

The Greeks chant : Se gnorizo apo tin kopsi tou spathiou tin tromeri, which means : I know you from the terrible edge of the sword. To the Greeks warring is the means by which their country came about and survived and “warring” is a part of their nature.

The British want continuity. They cherish their security though familiarity with what is “British”, which may help explain why their institutions remain unchanged for centuries and adaptation to changing conditions is a step by step process, nothing radical, ergo their reluctance to join the European Common Market, which gave birth to the EU, until they felt the consequences. This also explains their loath for the Euro, which they nevertheless want to see healthy, again for reasons of interest (their Banks have great exposure to the Eurozone and their “city” vested interests in the potency of the Euro-countries). Their relationship with the EU is opportunistic, strictly “business”, not too close for comfort. In fact there are a number of people in the UK who want Britain out of the EU because they resent conforming to the decisions of others.

The Germans want to achieve and national achievement, to them, is possible through collective effort, which necessitates organization and hierarchical leadership of the society, which, subsequently, promotes comprehension of the role and of the expected contribution of each component of the German society/economy. Germany is at the top end of the world economic ladder because it is an export oriented economy whose output is primarily addressed to the Global markets and to the Eurozone, still its prime market. The Germans are now showing signs of impatience with some of their Eurozone partners because their fiscal management is not as frugal as it should be, which is a potential threat to the common currency- the Euro- and consequently their exports to the Eurozone.

The French want to enjoy what they have and fight to secure it, adapting their ways to changing conditions, either through political decisions, or through social pressure. They are the Eurozone’s second largest economy and, like Germany, founding partner of what is today the EU and, indeed, the Eurozone. They appreciate what the Euro has contributed to their economy and want to see it maintain its stature and France maintain its top rate credit. They are currently imposing stricter fiscal discipline to secure this. They respond to the threat.

The Americans want to be free to develop their lives, their country, as they please, in what is still a predominantly Anglo-Saxon work ethic, within a sufficiently flexible framework. The US is “all business”, with industry and trade at the forefront and financial services of every kind as the background of development. As of late, the US is being increasingly identified with its financial, rather than its industrial behemoths. Its economic interests are intertwined with the EU and, the Eurozone, hence the close monitoring of the area’s affairs.

The Greeks want everything done their way. They are not happy with fiscal discipline. They seem to have taken for granted the financial aid they have received from the EU, which they did not properly utilize. They greatly benefited from their membership of the Eurozone, albeit not to secure the continuity of their prosperity but to enjoy “the good life”. The one thing that stands out is the dearth of good leaders and the deficiency of its fiscal management. More than once the country went bankrupt. The present situation is typical of the Greek character “I want it all and I want it now”. No forward planning, no fiscal discipline, no consensus on anything.

DIVERSE PEOPLE. DIVERSE BACKGROUNDS. DIVERSE PERCEPTIONS. This has not been a problem until now, but the crisis has revealed the weakness of the EU, the EUROZONE in particular. When the going gets rough, as it is now, the diversity of the psychology and mentality of its members as well as the conditions in each country affect their views on how to handle the crisis and this puts a strain on the stitches of the Eurozone and the EU itself. The British are unhappy with the German handling of the crisis, as are the Americans. Their approach to the crisis differs from that of the Germans. Both countries have a lot at stake in the EU and the Eurozone. The Germans want to impose what they believe is the right solution to the problem, AUSTERITY, ignoring the particulars of each member and in the process some basic tenets of economics.

The Americans and the British have much to loose if the Eurozone goes under and the EU disintegrates. Their interests are no longer antagonistic to those of the EU. This is why they are actively concerned with the Eurozone’s anti-crisis formula which is the opposite of theirs. They are recovering, but the Eurozone is not and if the Eurozone fails it will drag down their Economies as well and create a Global Economic crisis. An indisputably experienced financial titan, that Mr. Soros is, called Mrs. Merkel the architect of the Eurozone’s catastrophy, because he sees what the Germans can not. Austerity alone is not the answer to the present problem, but the Germans do not have the “combat experience” of Mr. Soros, so they impose austerity, this is all they know, without counterbalancing it with development policies to encourage consumer expenditure and from it the creation of jobs which, through the “multiplier effect”, will create increased revenues, increased tax receipts, ability to service and to reduce debt.

The Germans want a “German” Eurozone and they do not even contemplate on the views of others, which of course reflect their own problems. The leadership of the Eurozone, the Germans in particular seems to be inadequate. Even former German chancellors have criticized Mrs. Merkel, who has exhibited inability to understand the workings of the markets (she grew up in East Germany) and consequently she and the Eurozone leadership are always one step behind developments. Then again they may be working on something. They may be planning a two tier Eurozone, with the AAA credit rated countries on the top and the undisciplined South (Italy-Spain-Portugal-Greece) at the lower tier.

The EFSF could, instead of giving loans, guarantee the borrowing of the Eurozone members and subsidize, if necessary, the interest they pay. But this is not on the table.

The German single minded adherence to the “dogma” of austerity, if not accompanied with development may bring failure, but failure is more likely to come not from the German but from the Greek “ dogma” which is: a bigoted self serving political approach to the problem of recovery.

Greece has been given a wonderful opportunity to survive, thrive and scale down its debt. This, however will not save Greece, because its politicians have put the country on the road to catastrophy. Only good, sensible Governments can do what it takes and such Governments are not indigenous to Greece. To begin with a temporary Government is required, backed by the two big parties, which do not want such a Government to include capable people, fearing that a capable Government will delineate their miserable inadequacy. After elections Greece will be in the hands of criminally incapable people who will waste the opportunity and blame it on others. Furthermore, things look good for Greece now. What the future brings is not certain. The Italian chapter of the story has now started. What will follow? Will the saviors of Greece decide to let Greece go and concentrate on the survival of the Eurozone without Greece? Will the Eurozone survive? Its politicians are below par, the Greeks a joke and Greece may be the cause of a Eurozone collapse. The people who brought Greece to where it is now are not the people who can move it forward. Example their inability to agree on the temporary Government and the refusal of Mr. Samaras to sign the written commitments of Greece, because his word should be enough! The EU, alarmed by the unreliability of the Greeks wants signatures to provide the funds which will ensure the survival of Greece and Samaras demands “respect” for his word, forgetting that beggars can’t be choosers. That’s his perception of reality.

The oddity of Greece is not merely its present state of absurdity. Having reached a fiscally unsustainable position, it is kept afloat by its Eurozone partners who together with financial aid are “imposing” strict fiscal discipline, which in the last analysis should not have been “imposed” but elected, some time ago, with a consensual political process, as a national salvation and development strategy. This in itself constitutes a blessing, for normal people, for it puts them on the road to development. But are the Greeks normal people? Their anger and satire is about Mrs. Merkel, whose country is the main contributor to the Greek rescue plan and who, they feel, puts them in a regimen (Greeks hate regimens) and not, as one would think, about the “villains” who brought them so perilously close to the exit of the Eurozone . . . their former prime minister, karamanlis (who inflated an already ballooning national debt) and his successor, Papandreou, (who became the laughing stock of the world with his insane antics that brought Greece shame and the increased probability of expulsion from the Eurozone). The Greek idea of normal is to have the parliament give a vote of confidence to the prime minister who promised to resign, after the vote of confidence.! For the fans of a soccer football team to riot and plunder, when they feel their team has been wrongfully disadvantaged, is normal.

For a group of people to defend or pursue what they feel is their “rights”, causing frustration anger and pain to others, is normal.

At the same time the Greeks, who rebel about everything they do not like, display a passive attitude for those who brought them so near to catastrophy, as if these people are capable of getting them out of the bind they put them in. Most Greeks are fed up and want NEW people, a NEW state of affairs, a NEW model of Government, NEW political thinking. The two tormentors of Greece know it and do all they can to prevent NEW PEOPLE from attracting National attention and prominence.

The only solution to the problem is PEACEFUL resistance, like refusal to work, everybody to stay home for one day and tweet, face book, call, every politician they know to say go home and make room for others. There are means of peaceful resistance to the clowns of the present parliament. If and when elections take place and there is no NEW party, of people with backgrounds suggesting capability and integrity to govern, how will the Greeks react? Will they abstain from voting? If only 30% of the people vote, or 70% cast a white ballot, this may trigger a wider reaction of the people, as a Parliament resulting from only 30% of the electorate has no legitimacy. But what are the chances of this happening? The Greeks seem to be in a state of lethargy. They will probably vote as before, for the two calamitous parties (and the two bank on it) which is why they will do their utmost to prevent the creation and participation to the elections of one or more NEW parties. Unless new people take over Greece is doomed, because the current self centered, myopic “system” simply can not govern and will, thus, lead the country out of the Euro and in to a dark tunnel. With Greece going under, the Eurozone crumbles, for the known reasons, and with it the Global Economy. Greece brings the Global Economic Crisis Ante portas. That a temporary Government has been formed headed by the right person, bearing in mind the present circumstances, does not allow hope to warm the hearts of the Greeks because it is composed not from technocrats, as it should have been, but by people from three political parties, who will do their utmost to make this Government a failure. It would be disastrous for the politicians to allow this Government to succeed and thus give the Greeks a standard by which to judge them and condemn their inadequacy and morals. Papandreou made sure that he stays in office until Friday, because this way, according to the media, he is entitled to the presidency of PASOK for the next six months. One day less as prime minister would have deprived him of this right. How is he going to use the presidency of PASOK? Guess.

Some solace can come from the law of probabilities according to which, mathematicians say, if you put an ape in front of a computer and let him punch the key board for as long as he enjoys it, again and again, for days, for months, it is not impossible that an entire Shakespearean play, say Hamlet, can appear from the ape’s punching of the key board. The law of probabilities, therefore, that gave Greece Papandreou and Samaras, may give it a NEW breed of people who can avert catastrophy and bring a Government of quality, which will set new standards, usher in a new era for Greece.