Let’s transform the Greek tragedy into the first Eurozone epic! (22-03-2010)
A tragedy requires the heroes to be aware that the gods are playing with their destinies but without being able to prevent disasters of unraveling. An epic requires wars and fights, adversaries, if not dark enemies, to be violently defeated. What looks like a tragedy from a Greek point of view is more and more resembling more and more an epic seen from a Eurozone perspective because it represents one of the beginning of a global war of currencies, involving the Dollar, the Yuan, the Yen, and of course the Euro, the new comer in the game, and the most promising one which became in 10 years almost 35% of the world’s reserve currencies. On the other hand, you find the Dollar fighting in a tragic attempt to preserve its dominant status and the British Pound holding its last fight for survival. In the middle, you have the Yuan, wondering how and when to establish its newly global status. All around you find scores of international medias serving mostly their Dollars-Pounds masters, hedge-funds and speculators of all sorts trying to make short term profits from every bit of chaos. Last but not least, at the very core of the epic, you have billions of small heroes, the citizens from Europe, America, China, trying to find out what will happen with their wealth, their economic sovereignty, their future.
If all that does not set the picture for an epic, then our era has lost the sense of grand historical upheavals.
Two things are certain though before getting into the details of the story :
. any epic needs heroes but very often they shape themselves to that status along the way when at first they look like anything but ‘to be heroes’, full of doubts and uncertainties … no question that Eurozone leadership has lots of candidates of that kind;
. the very country whose epics have been the core exportation product for centuries is Iceland! That is undoubtedly a good sign from the Gods!
~ ~ ~ ~ ~ ~ ~
So, let’s go into the Greek case and its Eurozone consequences. When Mrs Lagarde denounces Germany’s export oriented economy or when Mrs Merkel expresses the idea that in the future it should be possible to exclude a country from the Eurozone, they both show they essentially do not understand anything about the way the EU is operating.
Talking to clarify and to inform; not just to make noise
First, these questions are typically the kind of issues which should be discussed within a Eurozone Economic Governance body, as proposed five years ago by Newropeans*, not when a crisis erupts, but rather on a regular basis; not in a non-Eurozone newspaper, but rather within specific Eurozone institutions. Not in a national parliament but rather at a European summit. Otherwise these declarations are just making the debate more obscure and therefore immediately becoming tools in the hands of speculators.
Second, both women (and they represent 99% of the current Eurozone political elite) just assumed that the Eurozone as they took it in the early 2000s was perfectly organized. Bad guess! A key problem with a generation of politicians who only paid attention to the EU once they got national political positions, a bit too late unfortunately to catch the essence of the game. A key problem with national politicians, who like Mrs Merkel and Mrs Lagarde, are only trying to please their own political constituencies, to score points in public within the tough task of creating a reaction to the Greek crisis without having anything prepared in advance, neither the proper Eurozone governing body to invent it.
Therefore, a first constraint that a Eurozone politician should self-impose these days is to speak only to clarify, and to focus on the Eurozone citizens’ information about the Greek case. Simple in appearance, but obviously difficult to apply! At least, it is a good test to see who deserves a real ‘European level’ politician status!
Giving the long term perspective rather than talking nonsense
Another thing is certain though: both women underline true problems but which both have nothing to do with solving the Greek case, but rather everything to do with the after-Greece Eurozone’s perspectives. In itself, it shows that Eurozone leaders are already pushing their pawn for the day after.
For instance, it is absolutely ridiculous to imagine an exclusion of the Eurozone beyond pure psychological pressure’s aims. A country faced with such a situation will see its currency and financial situation fall into pieces while it will generate a major political mess throughout the EU.
Meanwhile the global crisis is putting an end to what used to be the ‘norm’, such as Germany using its Eurozone partners as mere exports markets; or Eurozone leaders pretending that they still can act as if the Euro did not exist.
So in both cases, both women would have been better inspired to set up the perspectives for the coming three to five years required changes in the Eurozone governance, rather than appearing to argue about the short term crisis reasons.
Both could also have usefully highlighted one of its key components : the fact that a global monetary war has started, with Washington and London trying to defend their currencies against the new kids on the block such as the Euro and the Yuan.
And that, in such a currency war, the ‘situation room’ cannot accommodate adversaries, questioning therefore the future role of any European institution involving non-Eurozone countries when it comes to Eurozone decisions. The UK position is particularly at stake as it is obvious to all that the interest of the British pound is almost adverse to the interest of the Euro.
Last but not least, they could have also explained why in the coming years the Eurozone needs to create a kind of ‘Rapid Financial Deployment Force’, such as a European Monetary Fund, dedicated to the sole Eurozone interests. One reason being that the Eurozone can no longer trust the IMF (in Washington’s hands) to respect its own interests rather than those of the Dollar.
Of course, these questions are typically the kind of issues which should be discussed within a Eurozone Economic Governance body, not when a crisis erupts, but rather on a regular basis; not with British or American medias, but rather within the Eurozone public sphere and with Eurozone citizens democratic approval.
At least we can hope that the current situation reminds our leaders that ‘Gouverner, c’est prévoir’. Something they obviously forgot.
Explaining the options on the table to solve the Greek case
Especially because there is no doubt that the Greek case will be solved. Fifty billion Euros is little money compared to what the European banks have received last year.
So let’s be very clear : Greece is not Lehman Brothers … because it is a very anticipated crisis. The lack of process in solving such a crisis makes everybody involved in arm twisting games. And US-UK financial medias are blowing as much as they can on the fire to try to prevent people to looking at their own more dangerous public debt problems. The European Commission would prefer to see the IMF coming than having the Eurozone solving itself alone … because the Commission is also UK, Sweden, and because every year it is losing more ground as an institution in a European Union where the Eurozone is obviously the core engine.
But in any case, in the end, engineering of the strategy will come from the ECB. They cannot act directly, but they are the most powerful player in the game and with the best prepared teams. It is the only institution which has operated in ‘crisis mode’ for more than two years now.
The solution will come from the continuation of ECB buying out some Greek bonds, or other countries big banks buying out some Greek debts and a mixture of some EU structural funds and European investment Bank money.
Maybe on short term, the bad solution of involving the IMF money (which is Eurozone money too) will be retained; a bad solution, because, it will give the US and UK a way to have an impact in the Eurozone governance, which is exactly one of the reasons why they started the war on the Euro with the Greek case a few months.
But in medium term, not long from now, this situation will fuel an acceleration of the will by the Europeans to build their own European Monetary Fund, away from the IMF and its US influence; as the Asians already did, by the way.
The Greek citizens will indeed have to suffer quite significantly to get out of 40 years of irresponsible management of their country. But the Greek authorities, as well as the Greek people, are proving that they are serious about making the required efforts. Contrarily to what most medias say, the Greek people did not demonstrate much against the austerity measures : the biggest demonstration had 70 000 participants in Athens when there were 150 000 against the Irak invasion in 2003!
Making the best use of the Greek crisis to improve the Eurozone governance
So let’s use the Greek crisis in the best possible European way which will help them to modernize Greek politics by taking it out of feudalism: a big expectation of Greek citizens.
In doing so, like partners helping out a political and economical structural evolution, and not like bashers with only short term interests, we will use the Greek case to help the Eurozone to become a mature monetary and economic entity by adding a crisis management mechanism to its governance process, because for a decade all Eurozone leaders have also been in denial by refusing to look at the needed governance reforms for the Eurozone.
So German and Dutch people will have to use their budgetary rigor (which is not a genetic feature but an acquired one) to help the Eurozone shape its own;
The Mediterranean countries and Ireland will have to get used to the new world where the Euro prevents past bad habits to survive and where the global crisis puts an end to growth by debt;
The French will have to demonstrate that they still have this ability to bridge the gap between Northern and Southern Europeans (which requires credibility towards both sides).
And all sides will balance the budgetary costs with the huge economic advantages they get from a fully functioning Eurozone.
the current crisis around the Greek case is more a lack of anticipation from the Eurozone leadership than anything else, used by powers who are conducting an attack on any currency that is threatening the Dollar’s dominance.
The lack of anticipation is so obvious when one looks at the Lisbon treaty which is of no help in the current situation. As Newropeans said repeatedly, this Treaty was made by looking at the future in a rear-mirror. Now we have the proof. And Mrs Merkel who was the first one to say that the treaty has to come in force even against the will of European citizens, because they will not be asked for it, is now asking for some arrangements the treaty didn’t foresee. Well, let’s hope that next time Mrs Merkel will not dismiss so easily the added-value of serious public debates when it comes to the Eurozone future, which is from now on the core engine of any European future.
As soon as the dust settles on the Greek case, in coming weeks, what will be left are two crucial truths of our world in crisis:
. the first truth is that countries which lived essentially in debt will be forced one after the other to go through a very critical situation as their economic model is terminated by the global crisis. The UK and the USA are the next big ones on this list.
. the second is that the Eurozone leadership has to move fast from now on to create the required structure to manage the Eurozone, including a democratic process because the Greek crisis has attracted a very high level of scrutiny from its 300 millions citizens. There are now 300 millions Eurolanders fed up by the inability of our leaders to anticipate the obvious : that one day, such a case will emerge. Sooner than many can think, the Eurozone citizens will call for a democratic governance of the Eurozone.
Let’s see who will anticipate correctly when that day will come?