Mathew D. Rose: Greece – Dead Man Walking

Yves here. As much as I like Mathew Rose’s latest piece, I take issue with some of his readings, and would be curious to get the reactions of readers in Europe or with good contacts in Europe.

On the one hand, he focuses on an issue that reader Swedish Lex and other have pointed out: the heavy-handed actions of Germany in the tempestuous negotiations between the Eurozone and Greece have wound up being a major own goal. The worst moment was when German Finance minister Wolfgang Schäuble rejected the Greek memo submitted Thursday without consulting with other Eurogroup members. Mind you, that may not be as out of line as it appeared technically, since Eurogroup procedures often allow any member to exercise veto power. However, it was a huge breach of protocol since the Eurogroup was due to consider the submission formally in short order.

Greece has done at least as much damage by Varoufakis’ repeatedly and effectively making the case that austerity is not working. Admittedly, that cuts no ice among the true believers, who are legion in the debtor countries, as well as the leaders of the creditor countries who submitted to the Troika’s misrule. But anti-austerity pundits, who had long languished in the wilderness, are now getting more of a hearing. However, the move so far only seems to be toward austerity lite, as opposed to austerity repudiation.

But the bigger issue that Rose raises is that last week’s ugly negotiations, in combination with the fiasco in Ukraine, is exposing Germany as a lousy hegemon, which he argues is producing a political crisis in Germany and fracture lines in Europe. I’m in no position to second guess his reading on Germany politics, but I doubt the immediate significance as far as the rest of Europe is concerned. I suspect that the political reaction across Europe to the German stance in the Eurogroup negotiations did more to crystalize long-standing doubts than embody shocking new information. Moreover, the US example shows that even terrible hegemons can continue to throw their weight around despite producing disastrous results.

As we’ve pointed out repeatedly over the last few years, Germany’s leadership class and its citizens are wedded to contradictory goals: they want Germany to continue to run large trade surpluses, yet they are unwilling to continue financing their trade partners. So the solution seems to be to try to strip mine them until Germany has destroyed its export markets, either politically or economically. That does not sound like a very prudent national strategy.

The only remedy that in the long term will keep the Eurozone together is towards more federalization and more fiscal spending. But that is anathema to Germany. It has no interest in ceding its advantaged role, and many of its voters and power players reject the idea of being fellow citizens with people they regard with some contempt, like Greeks, Spaniards, and Italians.

A section from Karl Polanyi’s The Great Transformation, describing the 1930s, is apt:

Germany reaped the advantages of those who help kill that which is doomed to die. Her start lasted as long as the liquidation of the outward systems of the nineteenth century permitted her to keep in the lead…In adjusting to an isolation sought by herself and later, in the course of her slave-dealer’s expeditions, she developed tentative solutions to some of the problems of transformation…

Under the liberal and Marxist assumptions of the primacy of economic class interests, Hitler was bound to win. But the social unit of the nation proved, in the long run, even more cohesive than the economic unit of class.

Readers may recall the important post by Michael Pettis, Syriza and the French Indemnity of 1871-73. In it, he argued:

The European debt crisis is not a conflict among nations…The financial crisis in Europe, like all financial crises, is ultimately a struggle about how the costs of the adjustment will be allocated, either to workers and middle class savers or to bankers, owners of real and financial assets, and the business elite.

Now return to Polanyi. He argued that even though the 1930 looked like a class struggle, with businessmen and aristocrats too often eagerly embracing fascists as a bulwark against Bolshevism, German was willing to push a breaking system to its destruction. And that rallied nation-states as nation-states to act against the fascists.

Rose himself and others have argued that Germany is engaged in economic war. It will prove to be ironic if the self-styled true Europeans of Syriza, by putting the focus on the destructive end game of Germany’s domination, rally defenses along nation-state lines, to act to stymie Germany, since the collaborationist European elites cannot be trusted to defend them.

By Mathew D. Rose, a freelance journalist in Berlin

Without a doubt, there was some truly brilliant reporting and analyses in the Anglo-Saxon media up to and during Greece’s negotiations with Germany last week. It was suspenseful and informative down to the last minutes of Friday evening. The problem was, that I sincerely doubt that the best articles, commentators and analysts were right. Everyone concentrated upon the financial aspects of the event to such a degree, that they had again lost all perspective of the overall and decisive political picture.
It was Germany who pulled up from the brink in the last minute. They did this, because they had to. Germany’s decision had little to do with financial questions. If that had been the case, then Greece would now be bankrupt and no longer a member of the eurozone.

No one seems to realise that Germany is currently in a major political crisis. The German government have made a complete mess of what they have so desired to attain after 65 years of abstinence: European hegemony.

Before examining the causes of Germany’s change in strategy on Friday one has to understand Wolfgang Schäuble and why he is relatively irrelevant. Schäuble is a vindictive old man (72 years old), who failed miserably in politics. He, as did many others, believed he was going to become Chancellor of Germany. As a politician he was rather boring and unimaginative, but was well liked because with his right-wing credentials. Schäuble personified the German conservative mentality. He was also a loyal acolyte to the then Chancellor Helmut Kohl, doing what a good German does, following orders, right or wrong. 1997 Kohl named Schäuble as his successor. Following Kohl’s electoral defeat in 1998, Schäuble became not only Chairman of the Christian Democrats, but leader of the group of Bundestag members of the Christian Democrats and their sister party, the Bavarian Christian Social Union; in other words, the Shadow Chancellor. He would have to wait for four years for the next elections, in which he had a good chance of finally being instated in the chancellorship.

In 1999, however, Kohl’s orgy of corruption in his period as Chancellor came to light. He had illegally accepted millions of Marks of illegal contributions. Schäuble had obediently assisted his boss and was found out to be an accomplice. After initially adamantly denying being involved, Schäuble in the end had to confess to accepting illegal donations from a notorious arms dealer. As public prosecutors in Germany are not independent, but take orders from the government, of course all charges against Schäuble were dropped. That however terminated his dream of becoming Chancellor. Being popular among the right wing of a right wing party, Schäuble was given minister portfolios under Merkel. The latest, and probably last, as Minister of Finance. Thus he shall conclude his political career as a perennial second fiddle. Merkel runs the show. Thus the bitter, spiteful, bigoted old man he is.

Schäuble’s negotiations with the Greek government in the past weeks have shocked not only much of Europe, but have equally rattled the European political class, which is heavily politically invested in the disaster of austerity. Schäuble dropped all pretensions of a united Europe with a rational financial policy. Instead he has let everyone know who was in charge, which includes deciding unilaterally and bullying the Greeks. He made Vladimir Putin, who at least takes the trouble of being disingenuous; appear a sporting chap. Schäuble was not only willing to smash the Eurogroup, but everything for which the EU stands. For the German Finance Minister there were no options on the table, just capitulation and an austerity programme dictated by Berlin; and better yet, without Syriza in government. Greece, since the election, was financially a dead man walking.

That Germany has been ordering everyone in Europe about for the past six years is no secret, but this has been occurring behind closed doors. Schäuble, with his uncontrolled public outbursts, was discrediting the complete neo-liberal faction that currently runs Europe. Suddenly Germany’s paladins were exposed as supernumeraries of a Teutonic Goliath bullying the Greek David. For the anti-austerity parties it vindicated their claims that European democracy is at threat from German hegemony and arbitrariness. Tsirpas and Varoufakis, who were confronted with a worse case scenario, were clever enough to change their course and become the voices of European reason. The more they did this, the more Schäuble lost it. This was exactly the contrary of the roles assigned to the two parties initially. Should you have forgotten, just have a look at the cover of the Economist from 31 January. The political dynamic of the past weeks was breathtaking. It will probably be remembered as one of the great PR disasters of the decade.

While Schäuble is being hailed as a hero at home, his quislings in Spain, Portugal, Italy, Ireland and France will be closely following the upcoming polls to ascertain the damage done. Nigel Farage had a field day in the European Parliament. Merkel had no choice but to intervene. Her European project is currently going down the drain and Schäuble’s actions would have aggravated the situation still further.

One should not forget that Germany has just suffered a major political setback in its efforts to expand its hegemony within Europe: Ukraine. The German government thought it could demonstrate its political clout in Europe to the United States. While the American government was to organise Ukraine’s membership in NATO, its partner Germany was to spearhead the attack and first bring Ukraine into the European Union.

At the latest in 2011 Germany was preparing the political terrain. The Konrad-Adenauer-Stiftung, a political foundation of Merkel’s Christian Democrats, was already grooming Vitali Klitschko, the current mayor of Kiev, and a year later the current Ukrainian president Petro Poroschenko, to integrate Ukraine into the EU. Merkel’s government apparently completely miscalculated the situation and suddenly found itself in confrontation with Russia, towards whom it has traditionally turned a blind eye regarding human rights to facilitate, successfully, German access to Russian raw materials and the Russian market. It has been a cosy relationship, financially profitable for both sides. How the German government so grievously miscalculated the situation is a puzzle.

Germany, which has reduced its armed forces almost to dysfunctionality to achieve a balanced budget, found itself completely reliant on the US as a military counterbalance to Russian aggression in Ukraine. Against the explicit wish of German business interests Merkel thus had to join the US sanctions against Russia. In Ukraine the situation has inexorably disintegrated: the fall of Donetsk airport to the rebels, the cutting off of a large Ukrainian government force in Debalzewo by the rebels and morale problems in the government army and among the Ukrainian populace. At this point the US ratcheted things up further by publicly proposing arm deliveries to Poroschenko’s government. Germany was suddenly threatened with a full blown war involving Russia at its back door. Merkel saw herself forced to appease the Russian government to stop the Americans, resulting in Minsk II, which probably tacitly included the withdrawal of Ukrainian government troops from Debalzewo – with heavy losses. It was a calamitous defeat for Merkel.

This has created a new geo-political problem for Merkel, again one of her own making. Turkey’s attempt to join the EU has been frustrated by Germany and France, resulting in the Turkish government expanding its relations with Russia and China. This has been accompanied by a deterioration of its commitment to NATO and a weakening the alliance’s southern flank. It cannot be ruled out, that Greece, if driven out of the eurogroup, would turn to Russia or China for financial assistance. NATO could soon find its southern defences in Italy, and that in a time of heightened tension with Russia. Weakening NATO’s southern flank by alienating the Greek government, or even creating a Greek dependency upon Russian economic support, would have added a new dangerous dimension to Ms. Merkels mishandling of the situation in Ukraine. If this possibility had not occurred to the German government, one can assume the US administration has pointed it out.

The introduction of quantitative easing was also a major climbdown for Merkel’s government, demonstrating increasing nervousness in the Eurozone following six years of German imposed austerity, which may be benefitting Germany, but is threatening the political existence of many of its allied political parties in the Eurogroup. Much of the Eurozone’s positive GDP figures are not a result of real growth, but deflation, which at the same time is aggravating the debt burden of many the group’s nations. The German government was able to water down the agreement on Friday evening, but this alters nothing with regard to the increasing misgivings in the eurozone with regard to German financial policy.

Thus it comes as no surprise that the nationalistic and racist German tabloid, Bild, which has supported Merkel in her policies over the years, last week presented its readers with the front page headline: “Two aggressive heads of state bully Europe: Russian or Greek – Who is more dangerous for us?”. This was accompanied by pictures of Putin and Tsirpas. For most EU citizens, neither; for Germany, both – equally.

Germany’s horrific performance in the past week with regard to Greece was anything else but a demonstration of a responsible, competent government, but a government in crisis. We may possibly be currently witnessing the unravelling of the era Merkel – and of German hegemony. That the situation with Schäuble was able to reel so dramatically out of control is a nod in this direction.

The accord on Friday between Greece and Germany had the same function for both sides: gaining time to sort out where things go from here. There has been enough analysis concerning the next steps to be taken by Greece and the Greek government seems to be muddling through the corridors of EU-power somehow.

More important is what the German government will undertake. They have painted themselves into a corner. They can go back into storm trooper mode, forcing Greece to leave the Eurozone, claiming this measure was necessary to defend German hegemony (although they will call it “protecting the Eurozone”) and Germany’s neo-liberal programme. If so, the Germans may arrange for the troika of creditors or another eurogroup nation to do its dirty work by repudiating Friday’s agreement, absolving themselves of blame. On the other hand, they could compromise and try to regain some loss ground. That will be difficult after indoctrinating the German populace into believing that the lazy, corrupt, cheating, greedy Greeks have only one goal in life: plundering the Bundesbank. They will probably follow the usual policy of the Eurozone in crisis and kick the proverbial can down the road.

The problem is that the past two German administrations have been intellectually weak and at the same time increasingly hindered by its ideology of austerity and ambition of European hegemony. The danger of ideologues is the more things go wrong, the more bloody-minded and inflexible they become – even to the point of self-destruction, as was the case of Germany’s last gambit in this direction.

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  1. Ruben

    Yves: “Greece has done at least as much damage by Varoufakis’ repeatedly and effectively making the case that austerity is not working. Admittedly, that cuts no ice among the true believers, who are legion in the debtor countries, as well as the leaders of the creditor countries who submitted to the Troika’s misrule.”

    There are no more true believers. Leaders of debtor and creditor countries KNOW that austerity did not work, is not working, will never work, to put troubled countries on a growth path and reduce public debt. But they cannot admit it and correct course, because that admission would probably lead to several establishment parties being wiped out of the political scene. These parties are hoping that if they hold on long enough, something good would happen to growth and/or that they would stealthily control a change of course out of austerity in a gradual fashion, so as to retain their hold on power. They “sincerely” think that this is better for their countries than to leave the change of course to radical, populist outsiders, such as Syriza, Podemos. They are professional politicians, they made a major mistake with austerity, all right, but this is no reason to make matters worse by letting populist parties take control of the State machinery, or so they “think”.

    1. Yves Smith Post author

      That is not as true as you think. Many of the professional bureaucrats at the EU and IMF probably would agree with your statement. But in Germany, it is well nigh impossible even now to find any economic pedagogy that includes neo-Keynesians, let alone Post-Keynesians.

      Many of the key political players do sincerely believe in austerity. Schauble does, fervently, and most Germans do too, thinking that the failures are due to the debtors not trying hard enough. Members of the ECB’s board, such as France’s Christian Noyer, have also made pretty extreme statements about Greece being clearly able to pay its debts. Finnish pols are even more hard core. The Latvians are positively proud of their “accomplishments” under austerity and bouncing off the bottom, failing to mention that Latvia also saw significant emigration under austerity.

      So it is not accurate to say that everyone recognizes that austerity does not work. When Olivier Blanchard of the IMF published a paper in 2012 or 2013 that in effect said austerity did not work (“in most cases fiscal multipliers are greater than one”) the general response was that it confirmed prior beliefs. The people who had been austerity critics were emboldened to talk more loudly and broadcast the IMF’s seeming conversion, while the loyalists simply attacked the IMF paper.

      Moreover, the program side of the IMF does not appear to have converted, even though the research side largely has. I am told the IMF team for Europe is extremely hard-nosed.

        1. Yves Smith Post author

          Actually, there are a lot of studies that show that people over time become convinced of positions they take publicly even if they originally did not believe them. The classic case is the defense attorney who takes on a client he is pretty sure is guilty. They almost always come to believe the case they make. At Lazard back in the 1980s, they called this “believing your own PR.” They saw it as a common form of CEO psychopathy.

          1. Ruben

            This is an interesting topic. I tend to think that public officials suffer from a different kind of moral distortion, not just the prosaic “believing your own PR”. Something more nuanced, closer to doublethink. In the matter at hand they have already learned that it is morally and economically wrong to impose austerity, sanctify debt, bail out banks, and that the _proximate_ right thing to do is to correct the course. However that would jeopardize their overwhelming background impulse to remain at or near the top of a shining hierarchy. Thus at a higher level of thinking they manage to concoct an argument for being _ultimately_ better for most of those involved that they remain in power and direct the changing course in a gradual fashion. The key here is the public official has to think “what is better for most” and this gives ample room for holding contradictory thoughts, trump essential ethical principles.

            PR still goes on as in “stay on course and austerity will work” but they know that’s just PR.

          2. cassiodorus

            I have to wonder about the extent to which the Big Club — and those of you who are familiar with a now-famous comic routine by the late George Carlin know what I mean — is just a club of ethical egoists.


            Ethical egoists are people who believe that “what is good for me is good,” disregarding the possibility that “what is good for me” might in fact suck for everyone else.

            In this regard, shielding the ethical egoists of the transnational capitalist class from recognizing the fact that “what is good for them” in fact does suck for everyone else is the solid social reality that they have got most everyone else to do their bidding. This is what permits them to believe that austerity planning is good policy.

            1. hunkerdown

              Hunh. Quintessentially middle American, that — can one even talk to an average USian for five minutes without encountering some proclamation based on ethical egoism?

              Thanks for the vocab lesson, though — “Augustinism”, while useful as a mirror for New Atheist evangelicals, isn’t always quite the right term.

            2. MyLessThanPrimeBeef

              To me, an ethical egoist is not merely someone who thinks ‘what is good for me is good,’ but more broadly anyone who believes he/she is good and expects others to know it.

              The ethical egoist takes a stroll in the park and sees birds and rabbits scatter away as he/she approaches them and wonders “I am not a predator, why are you running away from me? I am peaceful, don’t you guys know?’

          3. Cugel

            I’ve been arguing all along that the political dimensions of this crisis far outweigh the question of how much relief Greece can possibly negotiate with the Troika or who is “winning” in the short term. The downward death spiral of “Austerity-lite” (as Yves puts it) will continue and the political war is just starting.

            Of course the bankers and their political servants are trying desperately to keep the current program on track. Expecting reasonableness out of them is like expecting Dick Cheney to admit he made a vast blunder in attacking Iraq. No chance of that.

            But, “reality is that which, when you stop believing in it, it doesn’t go away.” Failure is and will continue to be failure. Believing in the magic market confidence fairy is not going to prop up the European economy. Hence something must give – either Austerity or the Eurozone. We’re just in round 1 of the 15 round fight. And it’s not going to just be Greece vs. Goliath. This fight will be held in every country in Europe and in the U.S. as well.

      1. vidimi

        i don’t know what schauble may or may not believe but i do know that austerity is essential for the effective looting of greek public assets and that is why it’s being so aggressively pushed.

        1. James Levy

          I think we can go too far here in demonizing the Germans. They made the money, they lent the money, they want it back. That’s not exactly evil. What’s evil is the stupid way they want to punish those (in the best Protestant manner, and Merkel is the daughter of a minister) who can’t, right now, pay them back, or help those who owe them money earn the money to pay them back. This, I would argue, is stupidity born or culture and not an inherent plot to screw over the Greeks. The Americans had the same idee fixe post-WWI. They had lent the British and the French billions to do the dying on the Western Front to check German hegemony over the Eurasian landmass. No matter how hard the British and French tried to get the Americans to convert some of the debt into “blood money”, i.e. to acknowledge the material and manpower losses of the European Allies and reduce the debt, the Americans refused. A loan was a loan, and it was Britain and France’s job to find the money to repay it. So they hobbled Germany with massive reparations so that the Germans could give them the money to repay the Americans. This was all “solved” by the Americans lending the money to the Germans so they could then repay the British and French so that they could in turn repay the Americans (with the US banking elite skimming fees and interest payments all over the map).

          The current crisis is just a recapitulation of this sad old tale. It is not unique to Germany.

          1. Oguk

            I would add that it doesn’t seem stupid so much as ignorant, as in it betrays the lack of awareness (among the Germans, and pretty much everyone who doesn’t understand MMT) of how a debtor country can pay back its debts. It reminds me of the fundamental misunderstanding of a country as a “household” that is either thrifty or spendthrift. National economies aren’t like that; they are dynamic systems. That is why Varoufakis is such a breath of fresh air: he is trying to teach Europe to understand this and to rise above the morality fable.

            1. MyLessThanPrimeBeef

              The people of a country, collectively, are not like a household, as far as how much money can be created directly and immediately for them to spend is concerned.

              The government, though, of that country, can be organized as a household.

              Furthermore, the planet itself, is like a household with respect to resources – we shouldn’t take more than we can give back.

              1. Cugel

                They’re ideologues pure and simple. Varoufakis for years tried to argue “OK, if we take your [idiotic] assumptions seriously, do the conclusions you claim follow from the assumptions?” and then showing that they don’t. He’s recently concluded that they don’t care: i.e. they are totally intellectually dishonest. Their economics is a cover for greedy looting by the top 1% and nothing else. They have all the intellectual honesty of “climate scientists” who are paid by the Koch brothers to publish rubbish denying Global Warming. I.e. they are useful idiots.

          2. H. Alexander Ivey

            “They made the money, they lent the money, they want it back.”

            No. No, that is not what has happened. The money was not “made”, it was created by German banks by the good grace of the German government who gave them the charter to be a “bank”. The money being talked about is not cash money, under the control of a government printing press, but credit money, under the control of a bank.

            Also the argument fails, deliberately, to acknowledge the responsibility of the lender. The bankers lent irresponsibly, why should the people have to cover the bank’s loss?

        2. Tsigantes

          I agree with Ruben. The only people backing neo-liberalism / austerity in the EU are the very few whom it benefits – and their obedient media. Their voices are loud, their power for now is apparently great, but their ranks are tiny.

          Yaroufakis created no damage by saying to the Eurogroup that Austerity doesn’t work – they know it of course! – and much good in Europe, since this simple truth has so far been confined to economists, opposition parties (both national and EPP), the universities,the middle classes and the streets. Ordinary Ukrainians of all classes are outraged at the neolib / IMF destruction underway there.

          Eurogroup has fought back by trying to isolate and demonise Varoufakis – Le Monde this weekend going so far as to claim that without him the green light would have been given last week [not!]. Varoufakis is merely the thin edge of the wedge, and a better prepared person would be hard to imagine.

          I would go further than Ruben when he says the EU leaders and Finmins know Austerity doesn’t work: apart from being professional politicians defending their diminishing grip on power, most of them represent the only group in their respective countries benefitting from it: since the flip side of austerity-for-the-people has been massively increased fortunes, along with new fortunes. The non-beneficiary voters that traditionally supported these parties (representing historical voting patterns) are deserting these parties in droves. While Scheuble’s ‘nein’ raised questions in Germany, Rajoy’s overt aggression toward SYRIZA is backfiring hugely in Spain.

      2. Oregoncharles

        ” they want Germany to continue to run large trade surpluses, yet they are unwilling to continue financing their trade partners. ”
        Yes. This is painfully obvious, as is its unsustainability. Consequently, those who continue to pursue it are either ideological to the point of stupidity, or they’re dishonest, covering up their greed with conscious hypocrisy. Somehow, this is a very familiar question about politicians (and for that matter, economists). Not that those choices are mutually exclusive, in practice.
        I think this tends to support Ruben’s point: they MUST know what they’re doing, regardless of what they SAY. I’m not sure this gets us past a moral point, but it means the austerity position is inherently weak – they don’t really even believe it themselves.

      3. Rosario

        I will do what shall not be done in forums and follow Godwin’s Law. The NAZIS! But seriously, I don’t buy the “they have convinced themselves” argument. A similar argument would have been (and was) firmly rejected at the Nuremberg Trials when presented by card carrying SS officers. Why? Because ultimately this stance requires that a person have no capacity for reflection and adaption, which I argue is impossible (absent some biological deficiency as yet not understood by neurologists). This rot runs too deep for reason, and this is why I fear the problem is far larger than anyone is aware. Following my argument, how can one reason with someone who is willingly disavowing the capacity to reason as a matter of comfort and security (or ease of action)? As would be the case of these officials involved in Euro negotiations (particularly the Germans).

      4. Jeff N

        I was asking a Greek citizen (on FB) why they keep putting up with the austerity, and he told me that the belief over there is that the EU is keeping Turkey at bay. No EU = Turkey war with Greece. Not sure how realistic this is, but for it to be the first reason he gave me, AND that I’ve never seen this concern anywhere else, it all seemed strange to me.

    2. Ben Johannson

      Here’s the recent release from Germany’s economic “five wise men”:

      Upon reading you may be surprised to discover the complete lack of monetary economics or macroeconomics in its analysis. Germany’s respected experts are ignorant of how modern finance works and instead focus on spinning tales of economic growth flowing from “responsibility” and “willingness to pay”. Varroufakis has been hobbled by dealing with people who know and understand much less than he does and are incapable of recognizing it — an elitist form of Dunning-Kruger effect.

      1. craazyboy

        Well, don’t be so sure about that. The OECD used to put out a nice report in the pre – 2008 years where they totaled up the trade balance for the Eurozone as a whole with the ROW. The large German surplus almost exactly offset the sum of trade deficits of the rest of EZ countries with the ROW. IIRC, the Netherlands had a small surplus and France was only slightly negative. But keeping the zone in balance kept the euro purchasing power strong and also private sector AND government borrowing costs low.

        So I would say the TPTB in Germany and the EU may have been confused over whether this was a good thing or not. On the other hand, obviously the securitization enabled banks saw an opportunity to pillage the interior and sell off the risk. We know that this behavior is in the “blind spot” of most flavors of Macro.

          1. craazyboy

            That puts them tied with ours, except, lacking a official Federal Fiscal Authority, you can’t put everyone on food stamps as the “fix” – until you nurse the banks “back to health”, of course.

          2. guest

            Make that “official German economists”. Apart from the so-called “five wise men” there are several other boards of experts in Germany whose analyses, recommendations and forecasts do not fundamentally depart from each other; they all share the same core beliefs.

            On the other hand, there are indeed a few German economists who have a completely different perspective, and methodically deconstruct and decry the deflationary and mercantilist policies of the German government and denounce their effects on the rest of the EU. Of course, these few outsiders have no presence in those official boards. An example is Heiner Flassbeck — his site is mostly in German, though.

            1. Nathanael

              Ugh. Deflationary mercantilism. An accurate description of the insane German government policies.

              Inflationary mercantalism works OK. Deflation is everywhere and always a disaster.

          3. Calgacus

            Heiner Flassbeck on the wise men, Germany’s Collective Denial:

            FLASSBECK: Yeah. Well, these people are stupid. You know, I do not not even think about them. This is a club of extremely radical conservative economists with no clue about the world and all the important relationships in this world. So don’t even–ignore it.

      2. Ruben

        I read the opinion piece. It’s a biased and superficial account of the macro situation. It doesn’t mean they are stupid, it’s just means that they are biased and simplistic, and it looks intentional.

  2. Clive

    Those who are looking at the current Greek Tragedy (sorry, but the pun is lame and yet not unjustified) and are at all surprised obviously didn’t live through the equally predictable and preventable farce that was the UKs (mercifully brief) membership of the Exchange Rate Mechanism (or ERM) — the forerunner of the Euro project.

    An excellent capturing of the events of the time is available in “The Blunders of Our Governments”
    by Anthony King (but don’t buy it from Amazon, if you want to buy it use the Powell’s Books link on the right hand navigation sidebar). It is copyright so I can’t quote too extensively, but here is a key finding as outlined in the book:

    “Following Black Wednesday and in later years, commentators and some of those involved in the 1992 events commented on British ministers’ and officials’ apparent inability to grasp either how governments on the Continent actually worked or how the world as it was seen from Paris or Frankfurt might possibly differ from the world as seen from Whitehall and Westminster. At a seminar in 2007, Geoffrey Howe, by now Lord Howe and long since retired, commented that, as chancellor of the exchequer during the early 1980s and frequently in the chair at meetings of European ministers, he had learnt a great deal about the importance of human relationships and communication with and between central bank governors and finance ministers.

    He also commented on the almost complete breakdown in communications during Margaret Thatcher’s last years between Number 10, the Treasury and the Foreign Office (why should the Chancellor consult the Foreign Secretary?!!). On the same occasion, Sir Samuel Brittan noted the long time it took before the economic and financial consequences of German reunification sank in: A wider moral of that is [that] the world is elsewhere and not to be too fixated on what is happening in the City or Westminster.

    While I cannot fault in any way the aims, objectives and motivations of the Greek governments — both historic and current — to attempt to engage with Germany to try and resolve a basic economic problem / disagreement without engaging with the Finance Ministry and the Bundesbank (but instead to see it and try to treat it as a political problem) is doomed to failure. This is simply not how Germany “works”. The Greek negotiating team thought — like the UK did with the ERM — quite wrongly that if you want to change some aspect of German financial policy you talk to the German foreign office or the Chancellor (Merkel). This seems logical but is unfortunately entirely incorrect.

    Trying my best to look on the bright side, Greece does now have an opportunity to work with those agencies (especially the Bundesbank) and make its case on economic theory — and an appeal to German self-interest — grounds. And if anyone can make headway on that, it will be tough going, Yanis Varoufakis can. But please Greece, stop wasting your time with Merkel. It will get you nowhere because (and she’d be the last person to ‘fess up to this reality so you won’t hear it from her or her advisors) Merkel simply is not empowered to deliver what you need Germany to be delivering for you.

  3. 6th-generation Texan

    “Germany, which has reduced its armed forces almost to dysfunctionality to achieve a balanced budget, found itself completely reliant on the US as a military counterbalance to Russia.”

    And the US is an ocean away to the west, while Russia is just a few hours’ drive to the east. There are plenty of Germans still alive who remember the last time the Russians came to visit, and the Russians weren’t too happy back then either about their recent shabby treatment by their Teutonic neighbors. Perhaps the old folks ought to be telling a few horror stories to remind their kids and grandkids about how really, really dangerous it is to go around provoking bears who were just minding their own damn business….

    I have a history degree and am half-Slavic, half-Germanic/Nordic by my genes, so I am following this fascinating history-in-the-making with a bit of neutral detachment — and for the life of me I can’t begin to figure out what the German “elites” are thinking. They are badly over-playing their hand in every conceivable field: economically, geopolitically, diplomatically and every other way possible. The only explanation that makes sense to me is that the NSA really does have every last one of them by the short hairs; I suppose when their shit inevitably hits the fan they’ll join their Nazi predecessors in a new “Operation Paperclip” exodus to Amerika.

    Of course, they’ll have to wait in a long line behind the hordes of honest-to-God Ukrainian Nazis who’ll be desperate to escape the hell they’ve created in that festering shithole of a “country”….

    1. hunkerdown

      C’mon, this is America. You know full well the richies’ll get in way ahead of people who actually do work.

    2. susan the other

      I’m pretty sure it wasn’t Germany that set out to provoke Russia. It was our neocon State Department. It is trying to solve the problem of NATO: Unless NATO can become an efficient enforcer of State Department dictats then State is as useless as NATO because the rest of the US has no desire for a war with Russia over oil. Remember Hudson’s amusing description of what really happened in Ukraine – State maneuvered to create a situation that would draw Europe into a war with Russia. Add to this obvious snafu (which Merkel did not foment) the strangeness about Crimea whereby Obama allowed Crimea to join Russia, no problemo, and he should have refrained more adamantly from considering giving Ukraine weapons when Russia decided to take sufficient land in eastern Ukraine for land access to Crimea. I have noticed that Obama has been remarkably patient, allowing all sorts of things to go wrong for Poroshenko. Poroshenko is a hapless pawn. I don’t think Merkel mishandled Ukraine. I think it was a case of Vicki Nuland’s “Fuck Europe” false flagging. I think that Merkel and Hollande went to Minsk II and saved the situation. Soon thereafter both Germany and France signed some document of intention to cooperate with Putin/Russia. And our State Department has been noticeably silent.

      1. gordon

        “It was our neocon State Department”.

        I’m inclined to agree. The US strategy seems to have been to go for immediate integration of Ukraine into NATO regardless of consequences, whereas the German strategy (if there was a German strategy) was much more gradualist and sensitive to Russian feelings.

        The missing link in such a US strategy is of course any solution to the problem of Russian resistance to a Ukraine in NATO. I suspect that the US view was that it would be up to the EU to supply money and arms to a pro-EU Ukrainian Govt., and that they would do so. If so, that was wishful thinking which left out of account EU reluctance to provoke Russia and perhaps a better understanding in the EU of the unpopularity of a civil war among ordinary Ukrainians. I think there is a strong possibility that the US thought the Ukrainian population as a whole would “rise up” (such a meaningless phrase) and willingly fight.

        Now that the EU (esp. Germany) have signalled their reluctance to pour money and arms into Ukraine and it’s becoming clear that ordinary Ukrainians (except for some neo-Nazi fanatics) aren’t interested in a bloody war on the Russian border, the US is in something of a quandary. Does the US supply money and weapons itself? Do they pressure the EU even more? Do they give up and go home?

        I find it hard to believe that EU countries are likely to risk a semi-Vietnam on the Russian border without huge payoffs – which means the US Govt. telling Monsanto and Cargill and other US corps. that, sorry, all those promises about profitable investments in a NATO Ukraine are off the table. The Germans are getting it all. That would be politically “difficult”, I suspect, though I suppose some kind of US/German condominium might be at least theoretically possible.

        1. Nathanael

          The correct strategy all along was to invite *Russia* into NATO. Unfortunately, the calcified fossil Cold Warriors were unwilling to do so.

  4. Jesper

    A journalist who writes things like this:
    “doing what a good German does, following orders, right or wrong.”
    is surely not to be taken seriously?

    As for what he wrote about the Ukraine situation, not quite sure why the blame is being shifted away from the US. US multinationals and US government officials have their fingerprints all over the situation.

    Not quite sure why Russia would bother supporting Greece. If it wanted to annoy the US then supporting Cuba would make more sense. But supporting either would be just a vanity-project without much strategic value.

    Syriza is at the moment like Obama was when he came into office for the first time. Did he do well for the American people? Will Syriza do well for the people of Greece? Time will tell.

    1. Yves Smith Post author

      I’d bet the US is much more worried about financial and economic blowback of a Grexit (not the Grexit itself if it was done in an orderly manner, but the knock-on effects) but the NATO card was the more effective one to play in talks with Germany.

      1. Jesper

        The NATO-card is a prestige-card. Biggest loser if Greece were to leave NATO would be the dominating country in NATO – the US.

        1. Sanctuary

          You’re not seeing the whole picture. The NATO card is not just a prestige card. Forcing Greece to Grexit (and the calamitous poverty it would induce) would call into question the entire notion of the NATO alliance, not to mention structurally weakening it by economically destroying one of its strongest members. Greece is one of the few European countries that actually meets its NATO defense spending obligations. If Russia came to the aid of Greece while a supposed NATO ally imposed depression upon them, it would make many other eastern European countries rethink the value of being in NATO. What is the veracity of Article V if an “ally” is allowed to economically destroy another ally and hollow out the defensive capabilities of the alliance? How is NATO relevant when most of its members refuse to meet the 2% budgetary defense spending requirement necessary to make it credible because they are lashed to a deflationary Euro and an unreasonable/hopelessly petty regional hegemon (Germany)? For the sake of a few billion dollars in aid, Russia could seriously destabilize what it considers its greatest enemy. That the Germans can’t see any of that is proof positive they are far too small minded to be any kind of European hegemon.

          1. James Levy

            The people running Eastern European states are largely psychological products of the revolutionary period circa 89-91. They see America as 10 feet tall and Russia as the enemy. You’d need a generational shift to get beyond that deeply held impression of reality. Besides, we overestimate how realistically and cleverly political and economic elites judge their own best interests. Other than grasping for money and trying to maintain the status quo that they dominate they don’t think very clearly or strategically from my reading of things.

          2. NotTimothyGeithner

            The rapid expansion of the EU to me at least always had a get an Uncle Sam out vibe, and forcing the EU to work was seen as the path to ending NATO as we know it. After all, France functioned as a European state without being in NATO. I don’t think Germany really cares about NATO.

            If Greece leaves now, I agree NATO will be called into question. After all, France and Germany have the same population as Russia, the land of super hitlers (tip of the hat to Hillary).

          3. Nathanael

            Turkey is currently ordering non-NATO anti-aircraft missile defenses.

            Their government isn’t stupid. They know exactly how trustworthy the US is, and they know that the US treats NATO as its personal toy.

    2. Santi

      A journalist who writes things like this: “doing what a good German does, following orders, right or wrong.” is surely not to be taken seriously?

      Well, I remember an experiment on convincing people, done with Citibank employees throughout the world, that revealed that there were a number of “components” of the ability to persuade, and that:
      * Mediterranean/South American people valued strongest personal empathy
      * Japanese/Chinese people valued strongest respect for hierarchical connections
      * Anglosaxons/Canadians valued strongest “tit-for-tat” (You owe me one)
      * Germanic/Scandinavian people valued most the compliance with regulatory frameworks

      So while a stereotype is always just this, a stereotype, it has some strenght. In this case it was being used derogatorily towards Schauble. I agree with you re: the Ukranian affair, I think it is the work of Capital-Risk buccaneers / NATO bureaucracy / US hawks let loose, rather than German government.

    3. guest

      Not quite sure why Russia would bother supporting Greece.

      Look at the gas pipeline being built from Russia to Turkey. The last hop to service Europe (while bypassing Ukraine) would be a pipeline section to Greece. Not to mention those huge gas fields offshore Cyprus, in which Gazprom has been trying to get involved.

      This being said, I do not expect any significant bailout money from Russia in any case, only funds directly locked to Russian hard-nosed hydrocarbon commercial and geostrategic interests.

    4. JMarco

      Don’t foget Russia would like to have long pipelines built into Europe for exporting its oil products. I believe Syriza party realizes that troika/austerity believers will never allow Greece to lift itself out of this debt mess. Syriza will try to get as much funding as possible now while secretly preparing to exit eurozone. With any country in eurozone having the ability to kill any deal that would benefit Greece, Greece should leave eurozone and partner with whomever is willing to make a investment deal that can benefit Greece as well as the investor..

  5. Aussie F

    These issues go back a very long way. A declassified British document from 1990 offers some interesting insights, to say the least. To cut a long story short, Europeans were incapable of containing German ambitions in 1990. The situation now is immeasurably worse.

    “President Mitterrand said that he agreed. But he came back once more to his main preoccupation: what means did we have? There would be nothing worse than to remind the Germans of their obligations but then find we had no means to enforce them.”

    “They (the Germans) treated any talk of caution as criticism of themselves. Unless you were wholeheartedly for reunification, you were an enemy of Germany. Because the Prime Minister was such a close friend and they had a tradition of working together, he would tell her in strict confidence some things which he had said to Chancellor Kohl and to Herr Genscher. He had been very blunt with them. He had said to them that no doubt Germany could if it wished achieve reunification, bring Austria into the European Community and even regain other territories which it had lost as a result of the war. They might make even more ground than had Hitler.”

    “President Mitterrand said that he shared the Prime Minister’s concerns about the Germans’ so-called mission in central Europe. The Germans seemed determined to use their influence to dominate Czechoslovakia, Poland and Hungary. That left only Rumania and Bulgaria for the rest of us. The Poles would never come to like the Germans while the Oder-Neisse Line remained in question. Nor would the others want to be under Germany’s exclusive influence. But they would need German aid and investment. The Prime Minister said that we should not just accept the Germans had a particular hold over the countries of Eastern Europe but do everything possible to expand our own links.”

    1. Chris in Paris

      A profound and prescient document, thank you so much for linking this. Many people here I talk to have the same refrain who and where are the leaders of such stature today? None here in France. Arguably Chirac was the last.

    2. craazyboy

      Yes, well, at least the Brits, French and Italians read the Greek situation early on. The Brits sold Jaguar in one swell foop to India, Fiat bought Chrysler, and no one hears about Renault anymore. Better than selling to the Greeks, IMO.

      So you can’t assume just because we don’t live in Europe or Greece we don’t notice these things. Tho it is a little harder here when you drive down the road here and half the vehicles on road the aren’t even cars!

      1. Tsigantes

        True. “Half the vehicles aren’t even cars” ….the rest are trucks, buses and motorcycles, and bicycles too in the urban centres. While out in the country, tractors.

        Very strange!

    3. susan the other

      This is interesting for what it doesn’t say Aussie. It doesn’t, in all its frankness, talk about oil. In 1990 Russia was collapsing. Big George was getting ready to do Desert Storm – which for some reason he chickened out on a little prematurely if the goal was control of Middle East oil. But maybe Russia’s demise had everybody rethinking our Oil Politics. So I would have to guess that oil was not Germany’s goal back then. Nor now. At least not important compared to the old idea of Lebensraum and a greater Germany. Oil is a particularly American goal.

  6. vidimi

    i’m with Yves in that i don’t fully buy Rose’s reading of the situation. Syriza has been the big loser in the negotiations, not Germany. The Economist recently came down really hard on the former following their capitulation and I couldn’t find anything to disagree on – most unusual for an article published in that Talmud of neoliberalism. While Germany is going through a political crisis, that pre-dates the Grexit negotiations and, IMO, it would have been much more catastrophic for the Merkel government if they were to accede to Greek demands.

    I don’t see Germany as the prime actor behind the Maidan coup in Ukraine, either. That situation has been an unmitigated disaster for Germany, and the evidence doesn’t exactly point to them being the puppetmasters behind the curtains. for one thing, it was the US that channelled 5B USD into “pro-democracy” (everyone’s favourite euphemism) groups in Ukraine, not Germany, and as much as Germany would have liked to have Klitschko, a de facto German, accede to power, it was the American stooges who were installed instead. Fuck the EU indeed. Furthermore, many barons of German industries have been apoplectic from the developments, such as the CEO of Siemens, and I just can’t fathom Germany having thrown its top industrialists under the bus on purpose. Certainly, that would be unimaginable in a “democracy” like the United States.

    One thing he is right about, though, is that throughout Europe, people are starting to see that the emperor’s new clothes are remarkably transparent. I don’t expect the near-term ramifications of that to impact the neo-liberal order one bit, however. Whatever cosmetic changes happen in the EU, whether in Germany or to its west, it will be just another case of meet the new boss, same as the old boss.

    1. tiger

      “In that Talmud of neoliberalism”

      Very nice…
      It’s amazing the kind of veiled antisemitism that one finds on this blog’s comments sometimes. This kind of Jew hatred, all dressed up in fancy words. Not like your brethren, the middle eastern revolutionaries who are living in the past chopping heads. I came here because I know this is the best coverage of Greece, among other things. So I knew what I’m getting exposed to. But at least I’m calling you out on it. And to respond to your last sentence, indeed, you are the type of person that ought to be kept under a boss.

      1. lawyercat

        I’m not sure where you’re getting antisemitism from. Talmudic is used to talk about making incredibly fine grained readings and distinctions in kind of an arbitrary or over-narrow way. It’s saying that the economist does the doctrinal plumbing for neoliberalism.

      2. vidimi

        i thought twice about using that metaphor thinking i might get that kind of reaction but went ahead with it anyway. that is because neoliberalism is a religion and the economist probably its most respected interpreter. it’s not a sacred text, so using the Torah, Bible or Quran as a metaphor would have failed, but the Talmud works fine. I couldn’t think of a good-enough parallel for any of the other religions, so I went with that. I suppose I could have used cathechism, but that’s in hindsight.

        now a question for you, had I referred to it as a bible, quran or any other sacred text, would you have accused me of being anti-whatever? or are shrill cries of anti-semitism a default anytime a metaphor with Jewish religion is used?

        1. Doug Terpstra

          Don’t hold your breath for answers. Tiger is a familiar troll provocateur on various sites, probably paid by the ADL or its like, who does specific word search alerts and pounces on those who trigger his thin-skinned persecution complex. I suspect his irrational tantrums are actually designed to incite the anti-Semetism he is so intent on finding in the most innocuous comment. He is one of several obnoxious trolls who succeeded in getting Common Dreams to suspend its comments.

      3. vidimi

        also, you’ve definitely showed your class by comparing me to ISIL.

        one thing you are right about, though, is that beheadings are passé; the future is drones.

        1. rusti

          As an aspiring puppeteer, I find the other association in your post equally offensive and hope that the moderators will work hard to clean up this sort thinly-veiled hate speech against an honorable tradition of dexterous artisans.

      4. ambrit

        “veiled anti-Semitism”
        Hoo boy, you don’t get around much, do you? There’s plenty of outright antiJudiaism going on all over the web. Lest I be called remiss in the hair splitting process, doesn’t the term Semite cover a lot more than just the Hebrew Tribes, such as, the dwellers in the desert next door?
        As for your last sentence, well, pot calling kettle black comes to mind. However, the analogy is not complete because it implies an equivalence between the two statements. That equivalence is not sustained because one statement is presented as a description of a probable future event, while the other statement is an outright demand for action against another.
        Remember, the first victim of anger is always the angry one.

      5. hunkerdown

        Israel Inc. is certainly entitled to speak its brand messaging. It is not entitled to have its branding message heard, much less to be heard in precisely the way it wants to.

        If you don’t like being called legalistic, STOP BEING LEGALISTIC. Do you also whine when Christians talk about who killed their Messiah?

        1. Vince in MN

          Bigots always scream the loudest when they perceive themselves to be the victims, which is all the time. Constantly reinforcing the meme that they are being denied a place in the sun precludes any possibility of imagining being the victimizer. Quite the stunted view.

      6. Integer Owl

        Yikes. To those who are neutral on the subject of religion, you make a very good case as to why it should be avoided. It really is hard to see religion as anything more than dogmatic adherence to a faction, by proxy of the lottery that is what one is born into, when the basic principles of each religion boil down to the same compounds. Of course, there are different pollutants that uniquely couple with each religion, however I would have a hard time working out which one is worst.

    2. Irrational

      But the EU was not indisposed to help out Ukraine with financial assistance either!
      Other than that I agree with your analysis (and have no problem with the Talmud mention).

    3. Kemal ERDOGAN

      One thing he is right about, though, is that throughout Europe, people are starting to see that the emperor’s new clothes are remarkably transparent.

      Yes, indeed. Change of heart at the last minute would probably be result of pressure on Merkel from both Italy and France, arriving to the inevitable conclusion that their electorate might elect someone with spine against Germans

    4. Aussie F

      Antisemitism? I’ve heard ‘Talmudic’ used in a number of contexts, usually to describe a detailed body of doctrine and belief. It’s no more ‘anti-semitic’ than referring to something legitimate as ‘kosher.’

      Vidimi, you’ve clearly upset someone. I assume it’s your disobliging comments about the national endowment for democracy, an august institution that apparently must remain beyond criticism, rather like neo-liberalism and the sacred doctrines of American exceptionalism.

      It’s nice to know that some things never change.

  7. South Sunny Days


    According some Southern citizens of Europe, like me of Portugal, Germany is behaving well and defending our Portuguese interests. Our Government have been more hard towards the Greece new power than even Germany and we are very happy. Germany is a good ally against the new communism that exists in Europe. And in Portugal everybody or almost is happy with our Government against the Greek communism, the Spanish communism of Podemos and of course against ours new communists.

    In Portugal we feel that the ignorance in the USA about the new communism (or the old IV International) is funny. We know that the USA is decaying, are corrupts and the majority of the American opinion makers are ignorants about what is going on in our countries. We remember some pundits in the USA applauding the FED QE some years ago and now they fight these kind of fake economic and monetary policies. We know that an igorant American is a good ally of these new communists in Europe. We know that the USA is becoming more and more like the current Venezuela.

    Germany is ours best ally in these days. Portugal is recovering well and changing fast ours economy. We do not need “school-masters” from the USA. We ignore you as in the past some did to the old “gringo pistolero”.

    Best regards.

    1. Gaylord

      I doubt that this opinion represents a majority of “Southern citizens” of Europe, only the small minority that has benefited inordinately from Neo-liberal exploitation. To say that “Germany is behaving well” and to call Syriza’s stance “new communism” is absurd in the extreme. These statements are belied by the recognition of U.S. corruption which is equally in evidence among the enforcers of the Troika. What a mixed-up bunch of Hooey!

      1. Mr. Free Market

        “I doubt that this opinion represents a majority of “Southern citizens””

        And rightly you doubt!
        I’m from Portugal and I can assure you that the people are beyond tired of the current government, which won the elections by abjectly lying (and continues abjectly lying with the complicity of the media) to the people, and of course, is full of hardcore neoliberals as is the norm for quite some time in Europe.

        Unfortunately, there isn’t (for now) a non-neoliberal party that convinces the people to massively vote in them. The governmental “alternative” of the current hardcore neoliberal is the socialist party, which is a neoliberal party just bad as the french socialist party…

        I consider a waste of time believing that Portugal is a good example that “austerity” works, unless the objective of “austerity” is impoverishing the generality of the population while benefiting the international financial syndicate, if so, yes “austerity” works, works very well indeed…

        1. South Sunny Days

          Podes ser Português mas deves ser tão esperto como os comunas gregos. Esses agora amoucham e seguem religiosamente o que lhes mandam os demais europeus fazerem. Se não andarem na linha o caminho da porta já está aberto. Depois é só empurrar. E sem dinheiro não há revoluções comunistas que os valha.


      2. South Sunny Days

        Dear Gaylord,

        I do not know what is a neoliberal. In fact I do know that I pay more taxes but at least the minimum wages in Portugal rose 4% and we have deflation. In Portugal the poor are protected. Not by the civil servants but by the good Portuguese Government and people like me who pay taxes. Even higher than ever. No free lunchs.

        The Syriza is a new communist Government and are followers of the IV International. Guess what? An old nuch of communists.

        Best Regards

        1. Yves Smith Post author

          Puhleeze. 2/3 of them are solidly bourgeois. And I mean the MPs. From former Greek government advisor James Petras:

          The Syriza Left is concentrated at the mass base and among local and middle level leaders of local movements. The top leaders of Syriza in power positions are academics, some from overseas. Many are recent members or are not even party members. Few have been involved in the mass struggles – and many have few ties with the rank and file militants. They are most eager to sign a “deal” selling out the impoverished Greeks….

          Syriza’s compromises demonstrate that the looney right’s (The Economist, Financial Times, NY Times, etc.) characterization of Syriza as the “hard left” or the ultra-left have no basis in reality.

          1. South Sunny Days

            Je ne sais pas que vous entendez pour bourgois. Je suis rurale.

            But I do know what is a communist, a neo-communist and I have family that are proud to be communists and marxists. The majority decline to follow the IV. Syriza is a bunch of neo-communists. Like so much Americans who are neo-communists and “citizens”. Sorry, bourgois?

            The neo-communists Portuguese asked for a great public manifestation in support of the neo-communists of Greece. Only 200 persons were available to support the Greeks. Amazing, isnt it?

            The last word to the “bourgeois”. I was a blue collor worker in my youth and today I am a “bourgois”. Not because the communism help me but because I worked a lot to study and improve my own situation. How do you called in the old days? Self made man? Yep. I have very proud of my own “social mobility”.

            Kind regards.

          2. Nathanael

            The petty borgeouis always lead every revolution. They make the best socialists, really. Think Clement Atlee.

            Their interests are fundamentally opposed to those of the elite overlords, and they have the resources and education to fight.

        2. hunkerdown

          If you don’t know what a neoliberal is, then why are you farting your propaganda here?

          Neoliberalism, in four words:
          1. Because markets.
          2. Go die.

          Tell your supervisor it’s considered more credible if you take a few minutes to read the blog before placing your paid messages here.

            1. skippy



              The main points of neo-liberalism include:

              THE RULE OF THE MARKET. Liberating “free” enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers’ rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say “an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone.” It’s like Reagan’s “supply-side” and “trickle-down” economics — but somehow the wealth didn’t trickle down very much.

              CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care. REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance of roads, bridges, water supply — again in the name of reducing government’s role. Of course, they don’t oppose government subsidies and tax benefits for business.

              DEREGULATION. Reduce government regulation of everything that could diminsh profits, including protecting the environmentand safety on the job.

              PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs.

              ELIMINATING THE CONCEPT OF “THE PUBLIC GOOD” or “COMMUNITY” and replacing it with “individual responsibility.” Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves — then blaming them, if they fail, as “lazy.”

              1. South Sunny Days

                No, I do not know any neoliberal party in Europe of that kind.

                But I recognize some of those policies from the USA. Funny, isnt it?

                Thanks for your help.

                Do you see, a communist defends the colectivization of the economy and society. Some through the dicactorship of the blue collors workers others through the fight against the “enemies of the people” like in Venezuela. Today only in the USA they believe that the UE is “neoliberal”.

                But I do not recognize any such party and ideology, neoliberal, in Europe. Maybe some Americans need to live more time in Europe and study better ours countries. And even our past.

                By the way, in Portugal the minimum wage rose 4% even if we have deflation. Is that neoliberal in the USA?

                In Germany they imposed the begining of the minimum wages. Is that neoliberal in the USA?

                Kind regards

                1. skippy

                  “If one were asked to describe the formal economic and political processes that have shaped the condition of the eurozone since the eruption of the euro crisis in late 2009 in a terse and peremptory way, he or she might boldly and truly say this: “German Chancellor Angela Merkel’s policies spearhead the unraveling of the European project while European Central Bank (ECB) President Mario Draghi seeks to keep the (neoliberal) game going.”

                  Indeed, there is little doubt that Germany’s neo-mercantilism is the driving force leading a sizable segment of the eurozone’s economy on the path to stagnation and decline (1), while the ECB has been trying hard to carry out the role of a traditional central bank by fulfilling its duty as a lender of last resort in order to save the euro and preserve the eurozone.

                  The ECB intervened in the euro crisis in May 2010 by buying up government bonds from Greece (even when a 110 billion euros bailout package had been approved for Greece), Spain, Portugal and Ireland under its Securities Market Program. By 2011, the ECB was buying up Spanish and Italian bonds by the bucketload in order to force a drop in the bond yields of the two largest peripheral economies of the eurozone. With the end of the crisis in the periphery nowhere in sight, but Mario Draghi having already pledged in July 2012 to do “whatever it takes” to preserve the euro, in early September of that year the ECB introduced a new government bond purchasing program, known as the Outright Monetary Transactions (OTM) program.

                  Leaving aside the question as to whether or not ECB’s OTM program is legal (Advocate General Pedro Cruz Villalón opined in mid-January 2015 that while “the OTM programme is an unconventional monetary policy measure . . . it is compatible with the TFEU [Treaty on the Functioning of the European Union])” (2), the condition was that OTM would be attached to an appropriate European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) macroeconomic adjustment program. In other words, the imposition of austerity, privatization and market liberalization was a conditionality in the event of the implementation of the OTM program, which raises an important question: Is the ECB seeking to enforce an economic policy measure rather than just a monetary policy measure?

                  I think this argument can easily be made in the sense that the ECB has been acting since the beginning of the euro crisis as a bulwark against the unraveling of the European neoliberal project, and it receives additional strength from the latest ECB intervention into the eurozone crisis with its own, unique quantitative easing (QE) program. As for the impact of the OTM-related announcements in 2012, the mere claim that “no ex ante quantitative limits are set on the size of Outright Monetary Transactions” (3) was able to lead to a crucial decrease in Italian and Spanish government bond yields although bond markets in Germany and France showed no reaction to the policy. (4)

                  During the week of January 19, the ECB announced its long-awaited QE program worth 1.1 trillion euros, with the aim of stimulating growth in the eurozone economy (5) and warding off inflation. (6)

                  The ECB’s interventions under former golden boy Draghi (prior to his appointment as ECB president, Draghi had served as Goldman Sachs’ international vice-chairman for Europe and governor of the central bank of Italy) may have managed so far to keep the euro game going by providing liquidity to the system and leading to a significant drop in sovereign bond markets (with the exception of Greece) but have hardly made a dent on the feeble performance of the eurozone economy. One should not expect anything different with QE for various reasons.

                  Firstly, the amount of money to be spent is too little to make any effective impact on the real economy of the eurozone. With official unemployment in the euro area standing at more than 11 percent, and in countries such as Greece and Spain at 25.8 percent and 23.7 percent, respectively, the injection of 1.1 trillion euros into the eurozone economy through a government bond-buying program cannot be expected to help spur sustainable growth by boosting demand that would lead to an improved job market. Furthermore, monetary policy is rather ineffective when interest rates are already near zero. The eurozone’s problems in general (most of the indicators of economic health have not even returned to pre-crisis levels in the eurozone) stem from very weak demand growth. The eurozone is in dire need of a superactive fiscal policy geared to stimulate job creation and increase wages. QE cannot do those things nor can it stimulate the expansion of credit when there is no demand for credit. (7)”


                  1. South Sunny Days

                    My dear Skippy,

                    So you think that I got impressed by the opinion of the communists? :)

                    Those rubbish articles are spread trhough all Europe and even in my homeland. We are used to them but maybe the Americans got impressed by this kind of political propaganda. They are not used to read communist propaganda and get impressed by this kind of opinion makers.

                    God bless the internet for the acess to the communist political propaganda and for the first time, some Americans can read “alternative views” about the current affairs of the World.

                    Best regards.

                2. skippy

                  “The European sovereign debt crisis, which was caused by member states’ public debt but increased because of the actions taken to rescue the banks after the 2008 crisis, demonstrates at least three things. First, that currency does not exist without a state. Second, that capitalism cannot be managed by the market alone. And third, that the austerity measures will not bring Europe out of the crisis but will in fact continue to make it worse – until the euro crashes.

                  However, the most important point to emerge from the crisis is that Europe’s political reinvention will depend exclusively on the social struggle against neoliberal politics. Neoliberalism, the absurd idea of economic government based solely on the market and its ability to self-regulate, is at the root of the great illusion of a leaderless Europe supposedly unified by a euro that has controlled the internal economic and social differences according to the logic of the financial markets.

                  And yet, neoliberalism is still the only language used by European politicians to confront the crisis and to face the social conflicts that will break out over the next few months. There exists no European government; only management of austerity measures and of repression.

                  The European banking stress tests were of little use – they only breathed a bit of life back into the German and French banks that had been exposed to the sovereign debt of the outlying countries of the EU. The recent economic successes of Germany – the increase in exports, in particular to areas outside the eurozone – cannot reverse the direction of the euro’s crisis.

                  In fact, the cracks between the economically strong countries and those that are industrially weak, conditioned by the politics of the European Central Bank, can only get worse. In all likelihood, the final outcome of this crisis will be the exit of Germany from the euro – it’s just a matter of time. Greece or Spain’s departure from the eurozone would not heal the cracks inside the central block of the EU or the divide between Germany – which is focusing more on Asian and South American markets – and France, which has been losing economic power and political credibility for some time.

                  The US crisis and the slowing down of growth in countries such as China, India and Brazil will give the coup de grâce to the euro and to the political desire to preserve the European project. The drying up of methods to stimulate the economy used by the Obama government and the Federal Reserve, the slowing down of growth in China to avoid bursting the real-estate bubble, and the increase of interest rates in India in the face of rising inflation will prevent any successful attempts to relaunch the European economy by taking advantage of the weak euro and the strength of the German economy.

                  In this context, the austerity measures imposed on all eurozone countries will be impossible to carry out. There will be a stampede away from the plan of European stability – and very soon, as Hungary has shown us – with repercussions on economic and social policy within the member states. We are watching the de-Europeanisation of Europe.

                  If this is the result of making capitalism more and more focused on finance over the last few decades, then it is from its crisis that we must find a way out of neoliberalism, which is its main cause. The solution is not, at least for the moment, in writing a new European constitution. It is in starting up constitutional processes from the ground up, movements to fight against the austerity measures that are still, in the most part, to be implemented.

                  We must resist the reduction of salaries, oppose cuts in public services, redistribute the wealth that financial capitalism has appropriated, and convert economic growth into sustainable development. The Europe characterised by its people and its differences will only be saved if neoliberal Europe is destroyed.”


    2. Nathanael

      If you look at opinion polls, your opinion is a minority within Portugal.

      The fact is that communism is popular because it gives poor people a chance. Your government is not giving poor people a chance, and your economy is falling apart.

  8. Steve H.

    “KYIV, January 22 /Ukrinform/. Ukraine and the People’s Republic of China have agreed to strengthen trade relations at the highest level, including realization of previously signed agreements on a swap line between two countries’ currencies totaling 15 billion Chinese renminbi (about USD 2.44 billion ).”

    Looks like a dog whistle to me. If China is taking hryvnia (and they may want paper bills so there’ll be at least one use for them), they’ll likely take drachma. Corroding TINA like mercury on aluminium.

  9. brazza

    You asked for comments from Europe, so for what its worth … my observations are that in Italy and Spain news of Greece were not nearly as ubiquitously reported as in UK, and then only once it became clear that Greece would capitulate, and only to screech football slogans to amplify or diminish Renzi’s or Rajoy’s role in the negotiations. It appeared to suit to use the outcome to snuff out any growing sympathies. Also curious is that fellow-victims appear to be anxious to underscore their virtuosity by labeling those laxy, dishonest Greeks louder than everyone else. After reading some of the comments in left-leaning, and financially independent “Il Fatto Quotidano” I had to rush for the puke-bucket. In Spain even Podemos (who leads in the polls) barely gets a mention in the press. Information is very much a tool to be used with strategic intent, also leveraging the still-lagging penetration of the internet, and the ludicrous inability to read other languages. Journalism? The Free Press? Bollux!

    1. John Jones

      For me as someone of Greek background this is not surprising. I think many in any European country whether North or South or West or East had low views of Greeks well before this crisis. This has been my experience.
      The negative views or perceptions about Greeks were already there in people’s minds. Which was why it was so easy for leaders to portray Greeks a certain way and to blame them for the cause of the crisis.

      What else is really disapointing though is when I see racism in suppossed left leaning or leftist people.

    2. deadeconomists

      A short report about the press in Germany: A few weeks ago, the country basically had a monoculture of pro-austerity editorials (except for some decidedly left-wing newspapers and magazines). However, over the last week or so, fissures in the walls have become visible. In the yellow press, esp. in Bild, the propaganda machine is still churning away, getting more hysterical by the day; but in almost every other big newspaper and magazine, at least one or two articles have appeared that articulate doubt about the German hardliner course and cautious sympathy with the Greek program. (A good example is this Zeit article by Robert Misik: Even in the Pravda of Big Money, FAZ, somebody wrote that debt relief for Greece would make perfect economical sense. The text was only published in the online FAZ, in an economist’s blog, but still. Admittedly, these other voices are exceptions, drops of water in an ocean of bile; but it’s not the total brainwash it used to be.

    3. Brooklin Bridge

      Most surprising to me is that even Podemos and Le Pen refrained from any public solidarity, support or even comment on the corporal punishment given to a party in Greece that was, for once, openly and clearly focusing the discussion on Austerity and it’s failures.

      1. Chris in Paris

        Actually, Marine Le Pen took a very decisive public position in support of Greece. She gave a speech in the European Parliament on 17 Feb and moreover there is a communiqué from 5 Feb on her site setting out the FN position.

        1. MyLessThanPrimeBeef

          Many have commented that what we have, here or elsewhere in the world, is a Kampf between the 0.01% and the 99.99%, and not left versus right, so an interesting follow up question to the above 2 comments would be, has Syriza refrained from publicizing that support, that public solidarity, coming from the extreme right?

          1. Oregoncharles

            Is LePen really on the extreme right? Evidently their immigration policies are, but someone here said their economic policies are very populist (not a contradiction, despite our better selves). As she made clear by supporting Greece’s negotiating position.

            This is a genuine question – I’d like to see the previous casual reference confirmed.

            The British anti-immigration party supported them, too, very loudly (in the Euro-Parliament). There might be a convergence going on.

            1. vidimi

              economically they are socialist, against the TTIP, against austerity, etc. It’s a pity they are islamophobic and racist, which taints their otherwise reasonable economic views.

      2. Paul Tioxon

        The European Left is composed of parties from 23 countries and began its meeting in Istanbul last Friday, the date of the Greek meeting with the Eurozone creditors. This is a loose organization, but they are all in contact with one another and yes, Syriza is a member. Just click on the map of the country to see the party name. If you notice, many of the national parties are communist parties. So, when Syriza is called neo-communist, you should take a closer look at the left from their own sites and not rely on the WSJ, Bloomberg, NY Times etc, exclusively. Obviously, there is no Kremlin to direct all of the communist parties, but they still hold onto the strongest left wing political analysis.
        There are socialist, leftist, green and assorted anti-systemic political parties, meaning they are opposed to global capitalism. Descending into the world of leftest politics is no easy matter, but at least you will have some idea of the difference between Europe which has proportional representation in a parliamentary system and the USA, with a 2 party majority rules form of representation. I would not be swallowing the easy denouncements of Syriza as some sort of not really left wing party because they have not toppled financialized capitalism in 10 easy steps. What Syriza stands for is not victories like some sort of soccer world cup match, but the absolute demand to be consulted about their fate as a group of human beings at the hands of private banking interests.

        It is a political struggle now, it is not about dead beats, but a social problem that needs to be treated as a social problem and not as an overdue bill. The power that Greece has a nation is not as great as the larger populations with better organized financial institutions, better export economies and much larger, more powerful ideological opposition in the adherents to austerity etc. What they do have now is a determination to start to write their own history and not have it handed to them off the shelf in the form of some predatory loan contract that they can not possible pay back without destroying themselves as a nation.

        The willingness to keep saying no in the face of the realpolitik that has to be dealt with and can only be changed over time with the right opportunity. The opportunity may not be completely realized to absolutely reject all or most of the terms of austerity, but the preparation to seize the moment when the Greeks can turn back the austerity terms is always present in the negotiations of Syriza and by the mass support demonstrated in the streets by people in Greece and all over Europe. Syriza does not yet possess the will to power, but the will to resist and prepare for the day when they will have the power and will move swiftly to undo all of the austerity. First things first.

        1. Brooklin Bridge

          Interesting comment, but I’m not sure who, if anyone, it is in reply to or directed at. If to my comment above, then I don’t get: I would not be swallowing the easy denouncements of Syriza as some sort of not really left wing party because they have not toppled financialized capitalism in 10 easy steps.

          Above, I expressed surprise that (mistakenly) Le Pen and (correctly) Podemos had not shown more support. What has that to do with Syriza or the implicit sarcasm in such an exaggerated (not to mention false since I never claimed anything like that) claim about Syriza failing to topple the evils of capitalism in 10 easy steps?

    4. Nathanael

      Divide-and-conquer by nation or ethnic group is standard propaganda used by upper class elites to suppress middle class / lower class solidarity. No surprise.

      The way to overcome it is for Greece to leave the euro and have an economic boom. The facts will be undeniable.

  10. ChrisFromGeorgia

    Moreover, the US example shows that even terrible hegemons can continue to throw their weight around despite producing disastrous results.

    Ding ding ding, winner!

    The Germans have a lot of catching up to do. They’re still at the rookie stage.

    They might not quite make the “Bombing third world countries with reckless abandon, creating genocidal dictators and post-apocalyptic warlords” level, but they can still hone their game considerably.

    1. Jim Haygood

      ‘Public prosecutors in Germany are not independent, but take orders from the government.’

      One gasps in shock … until the names Janet Reno, Alberto Gonzales and Eric Holder come to mind.

      Looting, comrades. It’s not a crime; it’s a way of life.

      1. susan the other

        It has me wondering about just how naughty Schaeuble was under Kohl. Smuggling arms? Making a fortune. I see him in a new light. No wonder this whole summit had him panicked. Not only is the world weary of austerity, it is also weary of oligarchs, smugglers, and arms traffickers. Wolfgang’s whole life was flashing before him.

  11. /L

    As expected, the institutionalized neoliberal austerity order of EU prevailed, did anyone really expected that a couple of firebrand lefties from tiny Greece would get the EU elite on its knees?
    There is only one option to get out of the austerity mill, grexit. Varoufakis and leftist dreamers of an imaginary EUrope that could be in utopia have to come down to earth. As Carl Sagan said:
    If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. it is simply too painful to acknowledge — even to ourselves — that we’ve been so credulous.”

    The greeks, spaniards and so on voluntarily gave away their sovereignty to the EU elite in the vain hope that they would get better “management” and after all these years of misery they still don’t want it back, still dreaming of the a EUrope that never was and will not be.

    1. /L

      The EU elite makes Don Corleone look like a decent fellow, he made offers to individuals, the EU elite makes offers that cant be refused to entire countries, remove your unwanted democratically elected leaders or else… And now Spain is kneecapping democratic public protesting against the EU mandated austerity regime, by threat of prison or hefty fines. Democracy have to go if the euro-dream shall survive.

    1. /L

      And they also refuse to see that the refuge flood from MENA is due to idiotic neoliberal Washington consensus austerity nonsense, it makes it impossible for these countries to even have half-decent economic politics to handle immense population growth.

      1. ChrisFromGeorgia

        Yes it makes you wonder whether it’s all part of some diabolical master plan – bomb the middle east and N. Africa into the stone age, create chaos and refugee flows, then utilize those refugees as entry-level debt serfs to prop up the ponzi scheme of neo-liberalism.

        1. MyLessThanPrimeBeef

          Imperial exceptionalists believe these serfs are a net plus for the empire, ignoring the cause of that migration in the first place and whether it was a net negative for their home country.

          Many who care about them are genuine humanists and they look at the picture at the other end as well.

    2. Andrea1

      The Schengen Agreement specifies that the entry point of refugees is the first country they are registered in, where they enter the EU for the first time.

      The refugees (of whatever type.., cases are very varied, see lone male, dying woman with 3 kids, persecuted person, political dissident, 10-person family with roots or contacts in/for host country..) cannot submit requests for asylum in any other country besides the point of entry.

      (On the ground they do, but that is another story.)

      Whatever happens subsequently, they should be (law) / can be (pragmatics ) / are (de facto) returned to that first, entry point. Is this just on the books? No, refugees are regularly sent back – not to the Mahgreb, Iraq, Ethiopia, Sudan, Syria, and more, now Ukraine as well, but to Italy and Greece for ex.

      The Southern EU countries, Malta, Portugal, Italy and Spain and particularly Greece (to the East, at a crossroads with various borders and with ample sea access) should never have accepted these accords.

      But they did, all keen ra-ra Euroland, they reckoned they could put up with that, or didn’t think it out, who knows. (Btw the conditions for unofficial migrants in Greece are .. I’ll just say appalling.)

      Note the problem is absolutely MASSIVE, we are not talking about a few sad women w. 3 children, or drug dealers, etc. (see Google, even a superficial search will turn up alarming numbers. I don’t have the heart for now.)

      The end result, which was certainly intended, was to make these countries shoulder the burden and opprobium of dealing with these illegal immigrants, with little or almost no help from anyone.

      PS. I am not an expert in this area, but I follow the news on this matter.

      1. MyLessThanPrimeBeef

        I see them not as illegal immigrants, evicted victims of imperialism and neoliberalism.

        Why would anyone voluntarily leave his/her home, sweet home, if that home is located, if not inside the garden of Eden, at least the Shire of Middle Earth, unless he/she has been evicted?

  12. Paul

    What people have to understand about public opinion in Germany, about the bizarre hold of neo-liberal/neoclassical pro-austerity dogma on public discourse is, first, as Yves pointed out that economic discourse in Germany is intensely conservative and anti-keynesian, but also, and maybe more importantly, that to the German government, and to a degree also to its people, this crisis just does not feel as urgent as it does to the rest of Europe and the world. Think about it: unemployment is low, busines is still going well, wages are even increasing moderately after ten long years of stagnation, there is no fiscal deficit for the first time since the 60s(!), something that makes Schäuble very popular because it is seen as HIS achievement, etc… And in addition to this, the social democrats are incredibly weak, Merkel and the CDU are very popular and completely unchallegend and there is not only no strong political anti-austerity narrative or movement on the scene, but, on the reverse! and even worse!, ALL the political energy is entirely on the right with anti-immigrant movements and the new eurosceptic party Alternative for Germany (AfD), which is, if that can be believed even more neo-classic and conservative economically than the CDU (it was founded by a marginal and ideologically pure professor of neoclassical economics). So not only is there no pressure from the left or even a reasonable centre on the government to reverse its course, but instead their major concern is that they may be outflanked on the right by the AdF. And all the while, for the majority of the people, not to speak of the business community and the industrialists, things are more or less okay well and the problems of the South of Europe just seem far away and simply not urgent. So, unfortunately I think that domestically the German government ist far from being in a political crisis, as much as I would like it to be…

    That’s at least what the situation looks like from the vantage point of this despairing German leftist…

    1. voxhumana

      And this despairing USian leftist would make the same observation about the situation here using, perhaps, a broader brush stroke.

      I can’t respond to your suggestion of relatively low unemployment in Germany because I’ve read otherwise and wonder if the true unemployment numbers are fudged just as they are in the USA. If they aren’t then Germany’s circumstance is far better than ours. But whatever the real circumstances, in both countries, there can be no doubt that a dumbed-down complacency exists, one that successfully insulates those who are doing well enough from the genuine despair and grievances of those whose piece of the capitalist pie has been cruelly denied. And the left has been thoroughly neutered.

      IMHO, Huxley’s “Soma” is even more pernicious than Orwell’s “Big Brother” at a time when both writer’s predictions have proved to be, essentially, correct.

      1. Paul

        You are right, the employment situation in Germany, as in the US, can only be called good relative to the disasterous situation in other countries, and just as in the US the quality of jobs is getting worse, they are less well paid, more precarious, lower benefits and security, etc. And like in the US there is a lot of boosterish talk about a boom while the economic situation remains highly unstable, especially for working people. So yes, you are right, but nonetheless, unemployment is a little bit down. But again, this just goes to show that those people who really count in the German economy, especially the exporting and manufacturing industries, can do really well, have very high profits, while the rest of the population lives in a sort of undeclared stagnation. At least for now it is still working out for German capital…

      2. Nathanael

        Germany has a genuinely low unemployment rate.

        However: they’ve been suppressing wages. So working people are getting less and less money year over year. And they’ve slashed unemployment payments, so that people who are out of work will take any crap job they can get and accept abuse by their employer.

    2. susan the other

      Paul, if Steve Keen and the MMTers are right Germany will be in for rough times if it maintains a zero deficit. Their poverty rate has already gone up to 12%.

    3. Klaus

      Well, as despair seems to be the common denominator here, may I add a very much despaired liberal conservative German’s perspective: a mostly spot-on analysis from Mathew, in my eyes.

      Just a word on the bitter, spiteful man: Schäuble displayed a telling Freudian slip in a presser about three weeks ago, which to my knowledge has only been aired once (on PHOENIX), saying something along the line of: “If you look at all the recent achievements, we are on a good way toward…” here he briefly interrupted himself … “No, not a German Europe, that’s of course absolute nonsense…” and on he went. The day after, the German papers simply distributed a dpa release which quoted him saying that he dismissed foreign criticism that a “German Europe” was looming as “absolute nonsense”. So much for our quality press.

      Paul, I think, the very success and popularity that you correctly describe constitutes the dilemma the administration faces. It is left with the choice to alienate either their own electorate or the EU people outside Germany (I am talking about the masses the German tabloids have coined “Wutbürger” – “raging-citizens”). This is a major political crises. Their major concern this time may in fact not be financial but rather political contagion which may in the worst case sweep away the ruling political establishment throughout the EURO countries. AfD being the likely absorber of disappointed tax-payers in Germany (only ze Germans can be stupid enough to vote for an even more radical neoclassical approach than the one they have suffered from over the past two decades).

      There lies a touch of irony in the fact that the textbook machiavellian ploy to force a debt conversion onto the greek people which shifted all the risk from apparently irrecoverable debt from private/financial sector creditors onto the shoulders of all EURO-taxpayers (without any referendum, of course) has so brilliantly played out, that it now comes back haunting its inventors.

      All 18 remaining EURO-governments have perfect arguments to “protect” their own people from fall-out that might result from actually helping one of their neighbours (the Greeks just happen to be the first No. 19). It’s everybody against everybody else. So much for the flowery talk of our much beloved “community of values”.

      And on the home front? It’s not the rating agencies and the investment banks and those who forced us to destroy our tax and social security system and our statutory pension insurance who are in the line of fire, let alone those who just a few years ago burdened us with this new credit-risk. No, the enemy are the fellow European citizens suffering the same fate of being ripped off by the super-rich.

      The pressure from German media on the Government to withstand any Greek proposal is astonishing. Budging just the slightest bit might well be considered political suicide. Just look at the thousands of reader-comments in German newspapers filled with unveiled hatred against fellow Greek Europeans over the past two weeks. These Greeks are sitting in the same bloody boat headed toward working poverty – well, to be honest, they have been given the front seats. But they are the perfect projection-screen for German frustration. I had always hoped, the no-speed-limit-autobahn would forever provide a relief valve for German wrath – apparently it’s not sufficient… I would not bet on our political class to have to balls to draw that hatred onto themselves.

      As much as the German situation might seem comfortable, the implosion of the EU as a result of the stupid Euro experiment, just like the sword of Damocles, dangles but on a string above our heads. Let’s hope some of those in charge are smart enough to prevent the unspeakable and find a way to relief the pain of the innocent suffering all over Europe.

      1. Nathanael

        Can you explain to me why Merkel keeps winning elections? From my simple analysis, it seems to me that she is:
        (1) losing or gaining by very narrow margins in East Germany
        (2) losing or gaining by very narrow margins in mercantile northern Germany
        (3) lowing or gaining by very narrow margins in the industrial heartland of West Germany
        (4) racking up enormous margins in Bavaria (and to a lesser extent its neighbors), which guarantees her victory.

        What’s going *on* here? What is up with the Bavarian voters?

        1. Klaus

          Sorry, this might come a little late, but since you asked, I will give you my opinion – maybe you still read this:

          Don’t only blame it on the voters! Germany’s political system is in the mature stage of a typical real existing representative democracy where power becomes much more important than policy. In a nutshell that means: don’t mess with the big guys. And the big guys do not tend to be you and me but rather Deutsche Bank, BMW and the few major shareholders of the like. That being so it is no wonder you find a political consensus for neoclassical policies that distribute from the have-nots to the have-alls.

          So in effect it’s not about Merkel or Schäuble, until very recently 4 of the 5 parties present in the federal arena offered identical political core agendas rendered in surfaces that glitter in very different colours: CDU (Merkel, Schäuble), SPD (Schröder, Gabriel), FDP (Westerwelle, Lindner), Grüne (Green-party, Fischer, Trittin) – just to give you some names. The superficial differences play out in various ways of creating an overblown control state.

          Bavaria is a special case, where Merkel’s party, the Christian Democratic Union is not present and thus cannot be voted for on a federal level. Instead the Bavarians founded a twin party (Christian Social (sic!) Union) supposedly focused on Bavarian interests. This little twin has always partnered with its larger twin on national level. So, the Bavarians can only be blamed for voting for Merkel indirectly.

          There is one leftist party present in national parliament appropriately named Die Linke (The Left). This is a merger of an SPD Spin-Off that was created by dissidents that dispised the anti-social policies of the Schröder-SPD-government during the 2000’s depression and the left-overs of the ex Socialist Single Party of the German Democratic Republic (SED), then called PDS. “The Left” is the only party offering an alternative to neoclassical policies and has a few profound economic thinkers within their ranks (Wagenknecht). Anyhow, since the merger with PDS, the party has been dead in the water, as German media has found a perfect permanent spin that keeps most voters from voting for Die Linke: “If you want The Wall back – go ahead, vote for Die Linke.”

          The recently created Alternative for Germany AfD is surfing the anti-Euro wave. They have very cleverly hidden their radical neoclassical core. However, media tries to bring them down by constantly throwing brown dirt at them. Recent regional election results show, that they pose a real threat to the establishment (which is probably emphasized by their probable coziness with big business).

          Most of the people I talk to are desperate for an alternative or have simply given up. Non-voters are in the range of 30 percent, not so much because of lack of interest but rather because of the fact that our political establishment is like dog-turd on your shoe: no matter what you vote for, you never get rid of them. They have sealed the system for newcomers almost hermetically. An

          Against the backdrop of Germany’s recent history, many people are simply scared of making a mistake by electing a supposedly “radical” party. That is especially true for the elder who still show the highest voting tendency around 85%.

          A second big problem is that best-agers mostly have not realised, that neoclassical policies constantly shift wealth from the lower 99,9% of citizens to the 0,01% at the top. As living standard in Germany is one of the highest in the word, that problem is still far too abstract for a lot of people as to have an influence on their voting behaviour. People simply don’t understand or even care for the redistributional effects of a debt based currency system combined with tax rules that burden consumption and working income and relief capital gains.

          A third problem is the electing mechanism itself: Non-voters are not reflected in the composition of parliament. To go to extremes: we would still be goverene.

          Just look at the last elections: Based on a brand-new electoral law (it had to be changed, as the fomer one had been declared unconstitutional), Merkel’s CDU effectively gained 24.4% of votes, SPD 18.38% and CSU 5,4%, all of them far beyond the non-voter’s share of 28.5%. Together the CDU and SPD coalition now holds a staggering 71% of all seats in parliament – enough to change our constitution. Mirror that with the effective results! So much for democracy as a form of government where the minority has to accept majority rule. For everybody in Europe who still hopes for democracy to return, Syriza’s win is a light at the end of the tunnel (with all the risk, this metaphor implies).

  13. an.on

    another recent article on the subject that references Polanyi. article also discusses those “free-trade” agreements lurking under the surface:

    ‘Loaning’ the Greek state money to replenish bank coffers emptied by looting, to support a trade imbalance that has benefited Germany and that under no configuration of circumstance can be repaid is economic warfare.

    a thread that seems to have been lost in the soap-operatic narrative of late is how much of these new “bailout” funds are going right back into the international banking system. the Greek government was under the gun to produce a list of reforms for approval simply to receive funds to recapitalize its banks, which were supposedly bleeding money because Greek citizens were lawfully withdrawing their deposits from the system. so how much of this now-approved funding will stay in Greece and how much is earmarked to flow right back out of the country to recapitalize non-Greek financial institutions?

    I may have completely erroneous, simplistic view of the matter but it appears that the real tug-of-war is between Greek depositors & the international banking system and that the governments of Greece & Germany (as well as the IFKAT) are simply proxies.

  14. Tom

    What Matthew D. Rose writes can´t be taken serious. Sorry, one should get at least a few facts right. About Ukraine and German national interest enough has been said by other commentators. As to Schaeuble certainly he was involved in financial scandals in the late Nineties. But Rose gets the sequence wrong. I happened to be in Washington then and had some very interesting talks about Kosovo and Yugoslavia. There is no doubt in my mind that the scandal blew because Kohl didn´t want an intervention in Yugoslavia. Then as now the US listens to everything in Germany and has great influence in the mass media. As a result of the scandal Merkel replaced Kohl at the head of German conversatives and Schroeder was elected at the national level. He acquiesced to American demans that German ariplanes flew along to bomb Belgrad. Later Schroeder dismantled the old and much fairer system of unemployment support and enabled the big restructuring of German industry which resulted in Blackstone et al now owning the biggest German companies. (Before the structure was similar to the way things are organized in Japan (Zaibatsu) which herself copied the German model). Schroeder then cynically exploited German opposition to the Iraq war (he dithered until the last moment but understood it was the only way to win the election) whereas Merkel supported Bush and got thrashed at the polls. Schroeder became the most hated German politician in Washington and after his defeat at the polls Putins man in Berlin.

  15. Tom

    Just for interest: the wording of Greece´s letter. One should by all means read it. Most of it is promises of reform that has been expected of Greece for the last five years. And I am not talking about austerity. Really mundane stuff like the organisation of tax collection, a national register of land deeds, the establishment of a funtioning judiciary et al. I maintain if Syriza manages to pull off what no other Greek government has been able to do (including finally taxing gigantic church holdings) he will be able to get away with an awful lot as everybody would prefer to keep Greece in the EU. The problem though is if Greece cannot get these things right no amount of debt forgiveness or anti austerity will help. All funds will be simply disappear into the pockets of politicians maintaining their client networks. Let´s wait four months and see.

    1. lolcar

      The problem though is if Greece cannot get these things right no amount of debt forgiveness or anti austerity will help.

      100% backwards. Even if they get those things right, without debt forgiveness nothing will help. Plenty of countries around the world muddle along with porous tax collection systems and corrupt governments – those factors are no explanation for 25% unemployment.

      1. Tom

        Both is right. Ordinarily though countries like Greece aren´t part of a currency union which unites countries which are completeky mismacthed. The whole thing would be more of an internal problem if Greece wasn´t in the union. As things stand Greece has an inept bureaucracy even by (Southern – ) Italian standards

        1. MyLessThanPrimeBeef

          It sounds like every greed, neoliberal, bribing and polluting corporations should be setting up shops in Greece, attracting investments, creating jobs, with its ‘porous tax collecting system’…a chance to become the China of Europe.

  16. Tom

    @Yves. Here your quote of Polyanis book:”Under the liberal and Marxist assumptions of the primacy of economic class interests, Hitler was bound to win. But the social unit of the nation proved, in the long run, even more cohesive than the economic unit of class.” I haven´t read the book but I wonder whether Polyani mentions that several thousands opponents of Hitler were killed when he came to power (the exact numbers will never be known as this was the “wild” phase before the SS slaughtered the SA in 34) Furthermore there were up to 150 000 in concentration camps before the war and the majority were political opponents. Finally I wonder whether he mentions that the West gave all the concessions to Hitler that it had refused Weimar Germany and last but not least i would suggest reading up Isaac Deutscher (Trotzkite and Trotzky´s biographer) about the strategic air war in the 40s. According to Deutscher it was no accident that most industrial capacity was left standing but working class areas bombed to smithereens. F There was and is an international of capitalists just as there was of their opponents. Rose´s view is coloured by the fact that he was Berlins best investigative journalist but neither got the recognition that he deserved nor ever made a great career. Now he seems to believe that that had been because of some fault of the national German character. In fact these things are the same all over the world. — You don´t need to fantasize about German hegemonic ambitions to explain what happened in Greece. Just follow the money

  17. Willy

    “That does not sound like a very prudent national strategy.” No, it doesn’t but at present it does keep the euro low, doesn’t it? And given the situation of low-growth and deflation, the southern European countries will not recover for years to come, keeping the euro even longer at a competitive rate for Germany, hence providing them with an excellent position in the export market, now China and India are set on growing domestic demand, and the US is showing a mild “recovery”.
    So maybe they’re not looking at Europe anymore for much of their export?

    Could it be this kind of insanity at work? I’m only guessing here. However you look at it, right now Germany has growth and very low inflation. They’re happy in the short-term.

    But why can they not see the long-term consequences when the rest of the European economies will be destroyed, it will also destroy much of their export market?

    1. Tom

      Good article. I hope the authour is wrong with his pessimistic take. Surely big money hates Syriza. But the creditors also have somethig to fear. I for one believe Syriza has a fighting chance. If they can demonstrate that they are able to do get some real reforms done they have not a bad negotiating position. If the rest of the Euro zone thinks that helping Greece means throwing good money after bad they might well conclude that better to risk Grexit. That is least is my take.

  18. M.Black

    A comprehensive elucidation not of Germany’s failure, but of Syriza’s — from Stathis Kouvelakis, a member of Syriza’s central committee:

    The money quotes, first on strategy . . .

    How is it possible that, only a few weeks after the historic result of January 25, we have this countermanding of the popular mandate for the overthrow of the memorandum? The answer is simple: what collapsed in the last two weeks is a specific strategic option that has underlaid the entire approach of SYRIZA, particularly after 2012: the strategy that excluded “unilateral moves” such as suspension of payments and, even more so, exit from the euro . . . .

    and then on deceit . . .

    But to present a defeat as a success is perhaps worse than the defeat itself. On the one hand it turns governmental discourse into cant, into a string of clichés and platitudes that is simply summoned up to legitimate any decision retrospectively, turning black into white; and on the other because it prepares the ground, ineluctably, for the next, more definitive, defeats, because it dissolves the criteria by which success can be distinguished from retreat.

  19. Benedict@Large

    The Assassination of Greece
    by James Petras, February 20, 2015

    Petras’ bio sketch: James Petras was Director of the Center for Mediterranean Studies in Athens (1981-1984) and adviser to Prime Minister Andreas Papandreou (1981-84). He resigned in protest over the PM expulsion of leading trade unionists from PASOK for organizing a general strike against his ‘stabilization program’.
    Petras is co-author of Mediterranean Paradoxes: The Politics and Social Structure of Southern Europe. His latest books include Extractive Imperialism in the Americas (with Henry Veltmeyer); and The Politics of Empire: the US, Israel and the Middle East.

    1. mpr

      I agree with much of what Paul Mason has written on this, but I think he is overstating how much of shock the final agreement was. No doubt compared to Syriza’s election promises, what they plan to do in the next four months is more modest, although I’m sure they would – and have – argue that some of the changes are just delayed.

      But irrespective of Germany’s position, a lot was determined by YV’s proposal that they run a surplus of 1-1.5%.
      Given that, what they could do is largely determined by how much they improve tax collection.

      In other words, imagine a negotiation where Germany and its supporters were simply taken off the field. What would the most optimistic outcome have been ? Perhaps a more lenient supervision of the reforms and their costs. No one would have agreed to give Greece money to run a primary deficit.

      That’s why I think Germany was basically routed in this negotiation: compared to what Syriza promised in the election, there may have been a lot of concessions, but compared to what they could remotely realistically expect, and what YV proposed, not so much. And it was, after all, the YV position which was their negotiating position, while Germany and Schauble were yelling that they wanted a three line document agreeing to everything in the previous memorandum.

    2. Calgacus

      Yes. He is well informed and informative. He wrote the preface to Lapavitsas & Flassbeck’s Against the Troika. The developments so far have been pretty much as they expected – p.141:

      A SYRIZA government is likely to be disabused of its illusions rather rapidly. If it attempted to implement its programme, it would face major confrontation and conflict with the EU, that would also raise the prospect of exiting the monetary union. The outcome of such conflict cannot be predicted with certainty, and that is precisely where hope lies for both Greece and Europe. The hostility of the EU establishment and the existence of a dysfunctional and failing monetary union should not be accepted as binding constraints by a government of the Left that has the interests of working people foremost in its mind. SYRIZA should be prepared for conflict by mobilising its domestic strength, while also relying on considerable international support. The prospect of exiting the EMU is neither forbidding nor unmanageable, as has been shown earlier.

      Stathis Kouvelakis’s The Alternative in Greece and The scathing letter of Syriza MP and Economist, Costas Lapavitsas are quite critical of the recent events, but to do not consider them as determinative, as final as some do. The “Good Euro” strategy has been defeated, but whether Greece will continue to suffer, whether Syriza is a disastrous sellout depends on what happens now. As Mason said today,

      Since this realisation, many ordinary Greeks, and some previously pro-euro politicians and advisers, have come to the conclusion that Syriza should prepare Greece for a “controlled exit”. Instead of “we were kicked out”, it would be sold as “we escaped” – and I think however positively today’s deal is spun, the push for Grexit will grow stronger as constraints become obvious

      1. Nathanael

        This is the political tightrope which must be walked — the people must be convinced that the euro is a chain around their necks. Which it is, but the Greek people don’t generally realize it yet. Only once they have been convinced can Syriza make the move.

        The problem of Golden Dawn always looms — as an opportunistic fascist party, they will seize any opportunity to claim that the current government has done the wrong thing, even if the government is doing what they called for last week.

  20. Carole

    The Greek Deal – A game changer or a mere name changer?
    Sony Kapoor is Managing Director of Re-Define and Strategy Adviser to the Systemic Risk Centre at the London School of Economics

    …First, the IMF and the European Commission are not playing the same role they did before. In fact, in the negotiations, both, particularly the IMF, fought from Greece’s corner, particularly in terms of the need for more fiscal space and debt relief. The IMF has recognized it messed up on its concept of “expansionary austerity” and, while the European Commission has not had an explicit “mea culpa”, both President Junker and Pierre Moscovici are more sympathetic to Greece’s predicament and challenges than the previous commission was. Staffers too have recognized that they might have gone a bit overboard with the last programme.

    This time, the ECB is taking a more hands-off role than previously. Do not expect a repeat of previous letters from the ECB to the Irish and Italian Prime Ministers that were little more than veiled threats. Thanks to the recognition by the ECB that it has had far too much political exposure of late with the publication of the said letters, as well as with German opposition to its program of quantitative easing, it will keep a low profile. Of the Troika, the IMF had the most benign stance on fiscal policy, and the team from the ECB most aggressively pushed for austerity. An equally important reason for the ECB’s newly found reticence is the opinion from the Advocate General at the European Court of Justice who pronounced that the ECB should not be a member of the Troika. The final judgement is not due for a few months, but the writing is clearly on the wall.

    Take these secular developments and add in the aggressive anti-Troika stance taken by the Tsipras government for whom the continuation of the Troika in its current form was a red line, and the Troika is actually dead. Syriza deserve credit for dealing the fatal blow. The “institutions”, whatever form they might finally settle into, will never quite be the Troika of yore. That is indeed good news. In all likelihood, despite initial rebuff, the OECD will likely play a more important, and one hopes sensible role in the future.

    …What are these potentially important changes and concessions that Greece has won?

    First, Greece has won a very important victory on process. The Eurozone has accepted that it is legitimate for the Greek government to put forward its own proposals as an alternative to reforms prescribed by the creditors. This is more than it appears on the surface, given the very top-down regimented and legalistic approach followed by the Troika so far. Governments have fallen in vain attempts to try and water down or change the Troika’s prescriptions in the past. We had a system where the Troika was awarded walkover victories and programme countries such as Greece and Portugal were not even allowed on the field. Greece may have lost 7-1 to Germany in this first match-up, as Brazil did in the world cup final, but at least it has won the right to play the match.

    Second, what Greece wanted when the new government came in was time to put forward its own policies, but without having to sign up to the existing program – a bridge – in the words of the new government. It has got a bridge up to April, but not on the terms it wanted. There are sufficient concessions in the reforms put forward by the Greek government and these are likely to be accepted by all other Eurozone governments and their parliaments, which allow it to credibly claim that things have changed. It will be able to rethink future privatisations to maximise revenue over the long term, which is sensible. It has some scope for increasing humanitarian spending that it rightly prioritises. It has the green light to put far more focus on tackling tax evasion, fighting corruption and taking on entrenched interests than before and has been able to win concessions on some other issues with this promise. Being a party that has thus far not been part of the clientelist state, Syriza is more likely to actually deliver on these. It will also focus more on creating an e-government, transparency and on investments essential to help build up productive sectors. Many of the reforms in the programme that has been put forward are sensible and reasonable. It has a few more weeks to put more flesh on the bone and put forward an alternative program to negotiate with the creditors when the “bridge” runs out. There will be a rematch, and the score, one hopes will be better than 7-1.

    Third, the government has won some important time to take care of basic organisational issues and teething problems at home that come with any change in government, particularly if you have never held the reigns of power before. Most of all, it has won a precious few weeks to demonstrate to its creditors and Eurozone partners that it is a serious government and that Syriza has actually moved beyond the rhetoric of the election into the slow business of taking Greece out of its great depression. What Syriza does in the next few months will be closely watched and scrutinised for intent, as well as competence. In a situation when minister Schäuble was once again, as in 2012, ready to push Greece out of the Eurozone and many Greece’s partners had lost trust in the country, this is perhaps the most important victory.

    To be clear, Syriza is not really getting the “fair chance” we called for and that we think it deserves after the destruction wrought upon Greece by previous governments and the Troika. It will have to govern with one hand tied behind its back, given the shortage of funds and the tight leash from its creditors, but at least it is being given half a chance. This means that rather than being dismissed as the “loony left”, as many have called it, and bullied by some of its more aggressive Eurozone partners, Syriza may actually have a chance to be judged on its record.

    …In our opinion, the deal is also good for Europe.

    It has been remarkable that defying history and developments elsewhere in Europe, the Greek people have, after enduring a great depression, elected a party that is pro-European, pro-Euro and pro-migration. This contrasts sharply with the rise of the anti-European anti-migrant far right in France, the Netherlands and elsewhere. We fear that if such an outcome led to no changes whatsoever in the terms of Greece’s bailout, despite the economic evidence also clearly being in favour of a different approach, that it would lead citizens elsewhere to conclude that the Euro is not compatible with democratic expression. The bullying and humiliation of the Greek government enjoying the support of 75% of Greeks would be hugely counterproductive. While it appeared to be touch and go for a while, the moment has passed and the European behemoth has moved, though not much, to accommodate the some of the legitimate demands of Greek citizens and voters. This is good for democracy and good for the pro-European constituencies across the whole of the EU.

    The other good thing that the election of Syriza has done for Europe is to force a discussion of important issues that have been brushed under the carpet for far too long. For example, debt sustainability, the pace of austerity, and the manner in which the Eurozone is governed, are only some of the critical matters that have received a lot of airtime in recent weeks thanks to Greece and Syriza’s confrontational strategy. No matter how much conservative political and bureaucratic types may dislike the style of Greece’s Finance Minister, few would disagree that it has brought a breath of fresh air to an otherwise stultifying political space that citizens feel disconnected from. This impact goes far and beyond, showing that EU citizens’ interest in the EU political processes can be reignited.

    Whether Syriza fails or succeeds, it has brought a new and different approach to the EU that for many of us, exposed to the soul-destroying mechanics of decision-making in the Eurozone, is a breath of fresh air. One can only wish Syriza, Greece and the Eurozone the best of luck.

  21. Oregoncharles

    ” exposing Germany as a lousy hegemon, which he argues is producing a political crisis in Germany and fracture lines in Europe.”
    Some very interesting poll numbers:

    Again: Merkel LOST the last election; her government rests on a shaky coalition. If there’s a “political crisis” in Gernany, as there damn well should be, the SD can pull the plug on her any time they care to. Germans have good reason to be discontented; the neoliberal policies have been very much at the expense of their living standards and wages. So far, sliming the southern tier has served as a distraction – but how long can that last?

    Then there are the upcoming elections in Spain. Podemos is anti-Euro; so is the NF in France, and the opposition parties in Italy. Any one of those could take down the Eurozone.

    Syriza’s whole strategy has been to play for time and try to rally the opposition; they appear to be doing OK at that, regardless of the details of the immediate deal.

    1. Nathanael

      Very interesting report.

      “Almost 50% of respondents said they had noticed an increased surveillance of left-wing dissidents by police and the state, and the report authors noted overall that a sizeable proportion of the German population are moving increasingly towards the left of the political spectrum, and are more likely to hold both anti-fascist and anti-capitalist views.

      “The study also revealed that attitudes are divided among the populations of east and and west Germany. In the east, 60% consider socialism to be a good idea that has been poorly implemented compared to only 37% of people in the west.

      “One of the report’s authors, professor of political science Klaus Schroeder, told German media this week that he had been shocked by the increasing numbers of those on the left who are motivated by violence, a phenomenon he believes is being underestimated by the general public.”

      Good news, frankly. Left-wingers shouldn’t resort to violence early (it’s pointless and politically counterproductive), but when the elite uses violence against you to try to enslave you, *eventually* you have to do a Lincoln or a Lenin and use violence back against them.

      The internal dynamics of Germany, which has NEVER been unified, are important here. Every time I look at the election numbers, the Christian Democrats are coasting on a giant base of Bavarian votes which seems to be untouchable. What is *up* with that?

      Schroeder was a classic turncoat sellout fake-left-wing politician in the Social Democrats, and he got turfed out for it. Since then, left-wingers and moderates have been trying to work out who to vote for. The Greens have been doing very well but have had some growing pains. The Communists (Die Linke) are quite popular but nobody is willing to go into coalition with them.

      But the Christian Democrats seem to be able to pull any sort of insane crap and they still get that core of voting supporters (mostly in Bavaria), which keeps them in power. What is *up* with that?

  22. MarcoPolo

    My Spanish friends, with whom I am in contact nearly every day, seem more focused on domestic corruption. I don’t believe they followed the Greek story as closely as I have. And I don’t think it has had major impact on them. There was an article in El Pais in which Rajoy was quoted as having said that with the money that Spain had lent to Greece € xxx might have been added to Spanish pensions. As though that money had just been lying around and he would have done that if not required to send it to Greece. Every Spaniard saw the lie knowing that it would have been transferred into Swiss accounts long before going to Greece.

    And the Portuguese who writes up-stream; I’ve never heard anything like that from MY Portuguese friends.

    1. MyLessThanPrimeBeef

      It makes going after those Swiss accounts all the more important.

      They need to find out what happened to the money…in Greece, America or Spain.

      1. Kurt Sperry

        The front pages of the Italian papers yesterday were full of the news that the Swiss and Italians had reached a deal to share banking data and end secret banking between the two countries. This is huge in Italy, where high income people have Swiss banked to avoid paying taxes for probably decades.

  23. nohomehere

    yves , Hello Im back and I have another question for you . If you don’t mind , I respect your hard work and value your astute opinions . On the subject of the use of quantitative easing as a means of replacing missing liquidity . I have read two different very informed men, a Dr.Hudson and the other is M. Armstrong . It caught my attention one day that the two seemed to be saying the exact same thing . Hudson said , that already in Babylonian times and throughout classical antiquity usury was denounced as exploitation of needy borrowers by the well to do. Zero sum profiteering from other peoples needs would have Impoverished communities, leaving them pron to external attack and internal collapse! and it was as i was catching up on my daily read of the economic tom foolery exposed by martin armstrong , I noticed that he was saying that the threat to the global economy is a collapse in liqudity and government was extracting to much money causing a collapse in liquidity. My question to you is ! Do you think that the two are talking about the same thing? Do you see this to be what is happening to greece and in fact the poorer southern members of the EU , a lack of liquidity because of extraction thru austerity ,could this indeed be a type of usery extracting the life blood out of the athenian society? and could this infact lead to a of collapse and contagion in the rest of the EU or for that matter , the rest of the world if one is not already in progress ? Thank you ! more than a single question, sorry!

  24. VietnamVet

    I read the Washington Post every day. Also, I was raised with duck and cover training in grade school. Starting a civil war on nuclear armed Russia’s border is more than cognitive dissidence. It is insanity.

    I agree that history rhymes. It is totally believable that Germany would be replay its role in the outbreaks of World War I and II as a prelude to WW III. I cannot understand what is happening with the United States. Apparently, the State Department and the connected Transnational Elite have decided to go for broke and take down Russia. Instead, Russia has conducted another text book case of ethnic Russians defending their homeland against Nazi invaders.

    Finally, the Congress is debating a War Powers Act against the Islamic State. To have any chance of success the Turkish border has to be closed to end ISIS’s safe haven to resupply arms and fighters and sell bootleg oil. Either the US fights another futile war against ISIS or a colors revolution hits Ankara. Together with a Grexit, NATO’s southern flank is on the verge of crumbling apart without any hints of it in the corporate media.

    1. Nathanael

      The US is following the path of the collapsing Roman Empire, and the path which the collapsing USSR was on under Brezhnev, before Gorbachev.

      The US government refuses to follow the path of Gorbachev or the path of Clement Attlee in dismantling the British Empire.

      There’s your historical reference points. Don’t assume that anyone running the US government is *sane*. They’re all completely bonkers, and very dangerous.

  25. Lexington

    I agree that history rhymes. It is totally believable that Germany would be replay its role in the outbreaks of World War I and II as a prelude to WW III.

    Pray tell, which role was that? The one where it went to war in support of its ally Austro-Hungary after the Russian Empire declared war on the latter, or the one where Nazi Germany and the Soviet Union carved up Poland between them?

    While we’re at it, what role do you see Russia replaying in the prelude to World War III?

    1. VietnamVet

      WWI started when Austria-Hungary declared war on Serbia. Austria could not risk a move against Serbia without German support since Serbia was backed by Russia. Russia mobilized to defend fellow Slavs. Germany mobilized and WWI was on. Imperial Germany wanted a war and they got it.

      The Molotov–Ribbentrop Pact signed by Nazi Germany and the Soviet Union split Poland in half allowed Germany to invade starting WW II. The Third Reich wanted war for revenge for WWI and they got it. The madness of Operation Barbarossa and declaring war against the USA resulted in Germany’s destruction.

      The Western Transnational Elite of Germany and the USA wanted NATO on Russia’s border, to control of Ukraine’s resources, and a Kremlin regime change. They may not have wanted a civil war in Europe but they sure got it. As soon as the American Civil War was over, the French were persuaded to leave Mexico. Likewise, Russia is defending its borderlands. If Germany and the USA do not back down but continue to escalate the insanity by supplying defensive weapons and then troops, the Ukraine civil war will inevitably escalate into WW III.

      Meanwhile, Germany is intent on plundering Greece to pay off its debt from scam loans made by French and German banks. A NATO member state is being pillaged from within the alliance. Even if the world somehow avoids WW III, the unbridled neo-liberal greed insures that NATO and the Eurozone will split asunder.

      1. skippy

        If I may Vet…

        Unification or Death (Serbian: Уједињење или смрт, Ujedinjenje ili smrt),[1] unofficially known as the Black Hand (Црна рука, Crna ruka), due to a mistranslation, was a secret military society[2] formed on 6 September 1901 by members of the Serbian Army in the Kingdom of Serbia.[3]

        It was formed with the aim of uniting all of the territories with a South Slavic majority not ruled by either Serbia or Montenegro. Its inspiration was primarily the unification of Italy in 1859–70, but also that of Germany in 1871.[4][5] Through its connections to the June 1914 assassination of Archduke Franz Ferdinand in Sarajevo, which was committed by the members of youth movement Young Bosnia, the Black Hand is often viewed as having contributed to the start of World War I by precipitating the July Crisis of 1914, which eventually led to Austria-Hungary’s invasion of the Kingdom of Serbia.[6]

        The Black Hand was founded on 6 September 1901.[3][7] The conspirators’ first meeting was in the same year. In attendance: captains Radomir Aranđelović, Milan F. Petrović, and Dragutin Dimitrijević, as well as lieutenants Antonije Antić, Dragutin Dulić, Milan Marinković, and Nikodije Popović.[3] They made a plan to kill the royal couple − King Alexander I Obrenović and Queen Draga. The birthday of Queen Draga was 11 September 1864 (Old Style), and, in honour of this occasion, preparations were being made to hold a celebration at the palace Kolarac.[3][7] The main weapons of assassination chosen organised the successful assassination of King Alexander I of Serbia and his consort Draga; he confirmed that Captain Dragutin Dimitrijevic, who had personally led the group of Army officers who killed the royal couple in the Old Palace at Belgrade on the night of 28/29 May 1903 (Old Style), was also the Black Hand’s leader.[8]

        Skippy… Captain Dragutin Dimitrijevic was quoted as saying royalty had it uses until they didn’t,if memory serves.

      2. Lexington

        Just for the record, it might seem that my grasp of history is a bit wanting, but let me assure you that is very far from the case. It is therefore unnecessary to lecture me about basic historical facts that can be verified by consulting any introductory work on the subject. That having been said I’d like to comment on the following:

        WWI started when Austria-Hungary declared war on Serbia. Austria could not risk a move against Serbia without German support since Serbia was backed by Russia. Russia mobilized to defend fellow Slavs. Germany mobilized and WWI was on. Imperial Germany wanted a war and they got it.

        Speaking of basic historical facts, if Serbia didn’t want war it probably wouldn’t have provided arms to the terrorists who murdered the heir to the Hapsburg throne. If Russia didn’t want war it’s ambassador would not have encouraged Serbia to defy Austro-Hungarian demands with the promise that Russia would back it to the hilt, up to and including war. Russia would certainly not have honored such promises. If Austro-Hungary didn’t want war they would have moderated their demands on Serbia and given diplomacy more time to work. From where I’m standing it seems like a lot of people wanted war in 1914, and many of them weren’t even German.

        Your argument, boiled down to its essentials, is that

        1. nohomehere

          Lexington, I have often wondered if their is not a hidden heir to a hidden austro hungarian throne,metaphorically speaking,about the throne that is! Might there be a living heir and thus future emperor of europe! Then you definitly would have recreated the imputus and authority to unite Europe philosophically, avoiding the incidentals of EU currency as a bonding agent, allowing for a electronic or digital currency with a single debt to bypass the euro and the dollar, problem solved? Was not the EURO created to unify europe, a long sought dream? Maybe there is a birth certificate that no one has seen ! I have been expecting a revival of the holy roman empire and emperor for a long time! The right to rule was through bloodline and eternal by God ordained by the Catholic Pope and decendency from the merovingians ,and The Quinotaur, down thru the habsburgs who efficiently married every throne in europe, curiously these ruling blood lines often rule seperately but when threatened by outside hostility quickly united to form a strong unit! Actually one heir with the bloodline could be! Yes? No? A real threat would be all it takes, maybe they will see the immigration of musselmen as the new ottoman surge ? Or the incursion of russia against NATO allianace ? I think it might just be the falling apart of the economic union a sufficient threat and Particularly the perception of the US as purveyors of austerity and tensions between russia . Or am I just , Paranoid ! What is your take? Oh and Skippy or vietnam, I would appreciate your chimming in on this one question if you are still there!

        2. Nathanael

          Both Germany’s government (imperialistic and undemocratic) and Russia’s government (extremely imperialistic and undemocratic) wanted war. So did the Austria-Hungary government, but it wanted a *little* proxy war, and Germany insisted on making it a giant world war.

          Obviously the Serbian terrorist independence movement wanted war; and they basically got what they were aiming for out of it (Greater Serbia).

          France and Britain (democracies more or less) didn’t want war. The German government *egged them into the war*. The preemptive invasion of France was really stupid. While there was a Russian-French military support treaty, it’s not clear to me that France would have actually complied with it when push came to shove; the preemptive invasion of France guaranteed that France would, and the violation of Belgian neutrality brought Britain into the war.

          Please note that the end result of the war was the total destruction of the Russian government, the German government, and the entire Austro-Hungarian Empire.

  26. Alan Harvey

    I’m with Matthew Rose. Barely a month after the election, the entire conversation has changed. Germany under Schauebel has come out of the closet, or has had the closet door ripped off. The polarity of the situation is increasingly clear. The radicalization of populations has begun, not incidentally because the German bad guy is playing his role so well. Was there a way to play Syriza’s hand that would have won? Not with the cards it is holding. Best is to stay in the game and let the popular support grow.

    Sorry I was not able to read all the comments. Many are very good.

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