Euroland's revolt has begun. Greece has become the first country on the distressed fringes of Europe's monetary union to defy Brussels and reject the Dark Age leech-cure of wage deflation. While premier George Papandreou offered pro forma assurances at Friday's EU summit that Greece would not default on its €298bn (£268bn) debt, his words to reporters afterwards had a different flavour. "Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts. We did not come to power to tear down the social state," he said. Were we to believe that a country in the grip of anarchist riots and prey to hard-Left unions would risk its democracy to please Brussels? Mr. Papandreou has good reason to throw the gauntlet at Europe's feet. Greece is being told to adopt an IMF-style austerity package, without the devaluation so central to IMF plans. The prescription is ruinous and patently self-defeating. Public debt is already 113% of GDP. The Commission says it will reach 125% by late 2010. It may top 140% by 2012. If Greece were to impose the draconian pay cuts under way in Ireland (5% for lower state workers, rising to 20% for bosses), it would deepen depression and cause tax revenues to collapse further. It is already too late for such crude policies. Greece is past the tipping point of a compound debt spiral. – UK Telegraph
Dominant Social Theme: Just a glitch?
Free-Market Analysis: Here at the Bell, we've not been shy in labeling the European Union an exercise in empire building by the powers-that-be. In fact, when one goes back to the root of it, one finds perfectly predictable reporting that puts the genesis at the feet of the American political establishment after World War II and also British royalty which had a yen to spread Belgium's dysfunctional French and Flemish union far and wide. Marry this to a disciplined effort among European socialists who install government-driven leveling via subterfuge and you've got a "free-trade" zone that has somehow morphed into a Charlemagne-like empire.
What's especially clever about the EU is that those who pull the strings, in our opinion, are exceptionally well hidden – or perhaps hidden in plain sight would be a better description. There is a great deal of discussion for instance as to how France and Germany are the main engines of the EU and the states with the most to gain. But our analysis tends to return the Americans and British – for this is logically the authoritarian power nexus. It beggars common sense to focus on Germany and France in our opinion since these states were in no condition to make any decisions about Europe after World War II. Germany was bisected and France was shattered. And yet somehow it was then that the EU was spawned.
Yes, the Anglo-American axis, which has controlled the Western world for some 70 years now (actually much longer than that) put the EU in play and has kept it in play. This is indeed the only sensible conclusion if one looks at the "facts on the ground." In Britain for instance, the process of joining the union has been driven forward by one subterfuge after another. There was never in Britain a consensus for joining or staying in what the EU has become. And truth be told, if there were a referendum tomorrow, the British would walk out the door. As would the French apparently – as they voted against the union several years ago.
It is the American and British elites that want the European Union to succeed. This does not mean that European elites generally don't want to see the EU go forward, only that it is the Anglo-American axis that has been responsible for what the EU has become and for what it will be – if it survives. In Britain today, for instance, there is a terrible row about the evisceration of the City, London's financial district, at the behest of the EU which is supposedly going to tax and regulate the City out of existence (if the British Labour government itself doesn't get there first).
Indeed, from our point of view, this is quite accurate. The elites in Europe are after a pan-European bourse of some sort that will finally bring to Europe American-style securities trading for the masses. The destruction of the City, from this point of view, is quite logical. Europe is to become one large financial district – the better to deal with Asia and Wall Street — and to provide a convenient launching point for a further consolidation of currencies if it should ever come to that.
And yet, there is the Internet. The Internet, which exposes these shenanigans on a regular basis and has educated viewers in the West about what is going on. There is no great love, we believe, in Europe for the EU, and what love remains is regularly purchased by subsidies and buy-offs. The EU, in other words, is a transaction. It is not bound by culture or loyalty but is simply a commercial calculation. Again, in the longer run, we do not see how such an entity can succeed. Even its stated purpose – stopping pan-European war – is not feasible. Inevitably, the system that has been erected is an invitation to the nationalistic fervor that has helped spawn European conflicts in the past. Watch what happens in Greece if the EU insists on cutting the wages of Greek unionists.
Greece, or the city states that make up Greece, trace their composite culture back 4,000 years or more. A Greek does not think of himself as a German or a Dane. In fact, as indicated above, the EU is a series of ancient tribal fiefdoms. And how does one negate these pesky elements? The idea is, we suppose, that over several generations the culture can be vitiated and the populations neutralized, more and more energetically, by immigration. It is the destruction of these age-old cultures that is being counted on as generational power elite gazes towards the stars and dreams of a consolidated Europe – with one currency, one bourse, one national anthem and, most importantly, one army.
The Telegraph's implications (article excerpted above) are dead on. The problem with the European economic entity as it stands right now is that euro provides a one-size-fits-all financial structure. Fiat money is an implosive structure anyway, and if you deprive regions, even larger regions, of the ability to inflate at will (the only way to sustain a fiat currency) then you end up with a series of disastrous consequences.
For now, the Greeks probably will do what they need to do regardless of EU dictats. And as this article points out elsewhere, a consortium bail-out will likely be arranged. But what this amounts to is that the few "healthy" EU countries will be basically printing money and lending it to the Greeks who refuse to change their profligate ways. Think Germany, in fact, and you will likely have reached the proper conclusion. But here is the real question: How long will Germany continue to pull the EU train without commensurate political compensation – which basically means turning the EU over to Germany? … Which we cannot envision the Anglo-American axis allowing.
It is not just Greece that is in trouble. Half of the EU is underwater or headed there despite rosy predictions of a Europe that is "emerging" from the current financial crisis. Spain and most of the Eastern European states are staggering and even Germany itself is not in great financial shape. It cannot be otherwise given this great fiat-money experiment. And then there is Britain itself, also headed down the track toward insolvency.
The elite's favorite free-market economist Milton Friedman once predicted that a great economic crisis would prove the end of EU. His general response, of course, was some cockamamie suggestion that central banks be rigged to smooth the money supply. History, in fact, shows us that a private gold and silver standard would be the preferable solution. But in this one instance, anyway, we will grant he may have made the correct observation.
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