The article describes what is happening in terms of sovereigns trying to find a solution to their predicament. However, much more interesting are the themes the author touches upon but does not explore further. To wit:
“Greece’s labour federation immediately called a general strike for February 24, dashing hopes that Europe’s provisional backing for Greek crisis policies would restore investor confidence.”
Unions, students and all unemployed will fight tooth and nail any austerity measure needed to put things right. As I remarked in many previous posts, over past decades society has developed an acute sense of entitlement vis a vis the state and rightly so. In a fiat monetary system, the authorities will always and everywhere confront a political or economic crisis with increased spending. Since 1913, subsequent administrations in the USA and then gradually in Europe and then the rest of the world, have always and still are resorting to inflation in order to solve any problem real or perceived as it may be. Inflation has thus come to be viewed as the natural state of the world and the state as the natural provider and the problem solver of last resort.
Of course, if you read this blog you will know that government spending can and does palliate the tragedy that is the political process in a society based on democratic principles. But that’s all it can do. Excess spending can only postpone the problem for as long as inflation can be expanded into a monetary system. When inflation hits the inevitable brick wall, then drastic measures are needed to re-create the conditions to allow the inflationary cycle to start again. In the meantime, deliberate inflationary policies pander to interest groups including unions and sundry political interest groups thus fostering an acute sense of entitlement. Thus, when the cows come home and spending must be curtailed, society will resist.
“Mr Almunia said concerns have spread beyond Greece to other eurozone countries where public finances are spinning out of control, chiefly Spain and Portugal. “In these countries we have seen a constant loss of competitiveness ever since they joined the eurozone. The external financing needs are quite big,” he said.”
Considering that less than a year ago Almunia was boasting about the presumed commercial and financial advantages of EU membership, this is quite a change of heart. But then again. Almunia contradicts himself week in week out because, once again, political pandering is more important than effective action.
“Brussels invoked new EU powers under Article 121 of the Lisbon Treaty, allowing it to reshape the structure of pensions, healthcare, labour markets and private commerce – a step-change in the level of EU intrusion.”
Right there is the more interesting tid bit of info that gets no attention whatever. Remember the Lisbon Treaty? Do you remember that it gave us a whole new layer of politicians that despite not being elected by the people have nonetheless serious executive power? Well there you go. But wait! This is not what is important. If you understand what is going on here, then you surely can understand the degree of political sovereignty we have surrendered to what is for all intents and purposes an entity that is very Fascist in inspiration… and now in deed. The more long range ramification of the Lisbon Treaty (and this so far is only speculation on my part) is the ability for the EU to declare war bypassing all traditional political mechanisms that would necessarily require various levels of approvals from civic and political entities alike.
“The EU told Greece to “spell out the implementation calendar of (budget) measures within one month”. Athens must be ready to “adopt additional measures if needed” and to submit quarterly updates.”
So that’s what it comes to; threats. Which begs the question: what if Greece doesn’t play ball? Then what could the EU do? What; we are going to send the army to straighten the country out? What does this threat imply?
“The gap between what EU demands and what ordinary Greeks seem willing to accept is so wide that it may prove extremely hard for Mr Papandreou carry the country. The top union bloc said the government had “succumbed to the will of the markets” but would now have to face the stronger will of the people.”
The top union bloc, like all unions around the world and particularly in the West (with the exception of Germany) fails to grasp the situation. When the monetary authorities can no longer push inflation any farther, there is no money left for political pandering. Certainly there is no money left for political pandering at the level of the great unwashed. And this is what is going to light the tinderbox. The unemployed, the homeless, students, the elderly, the retired and, at some point, even the employed will notice that although we are contributing billions to save the banks, we have no money left for society… that is the point at which the masses begin to get twitchy… that is the point at which, Western governments are going to need a drastic solution…. which speaks to the whole point of this entire blog…
Our options are few and well defined. In order to avoid doing what is necessary, our leaders will plunge us in a world war. I stand by my prediction. War by 2013/2015.