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Europe apparently put in a good mood by soccer, so they created a banking union
- cause In an effort to salvage the economies of many nations in the Eurozone, European leaders financially united their nations and created a banking union last night.
- effect The union, which effectively makes the Euro’s banking system more like the United States’, gave investors faith — the Dow jumped by 200 points this morning. source
I am also very happy that Spain is using Grândola Vila Morena in their protests too. ****
For the people who don’t understand, this song was used as a sign to start the 1974 revolution that overthrew dictatorship in Portugal. It is now being used in every single protest against the Government and austerity measures in Europe. *****
Greek PM gives people choice to stand against economic suicide
Making headlines around financial markets and international news is the announcement of Greek Prime Minister George Papandreou that he has proposed holding a national referendum for Greece to accept the terms of the most recent bailout package that was put forward last week:
Opinion polls in Greece show that most people do not support the austerity deal.
Mr Papandreou told a meeting of his governing Socialist party that Greek people would have the final say on the package, which is designed to reduce Greek debt by about 100bn euros. “The command of the Greek people will bind us”, he was quoted as saying by AFP news agency. He set no date for the referendum, but indicated that it would be held after details of the deal have been finalised with the EU and the country’s creditors.
The austerity package in question, or, in more frank terms, the characteristics of further imposed economic suicide in question, involve:
- New pay and promotion system covering all 700,000 civil servants
- Further cuts in public sector wages and many bonuses scrapped
- Some 30,000 public sector workers suspended, wages cut to 60% and face lay off after a year
- Wage bargaining suspended
- Monthly pensions above 1,000 euros to be cut 20% above that threshold
- Other cuts in pensions and lump-sum retirement pay
- Tax-free threshold lowered to 5,000 euros a year from 8,000
Not one euro, not one cent of this package, involves any kind of shared sacrifice from the wealthy. It’s simply the debasement of public sector workers (who needs teachers?) and of course, slashing pensions and retiree benefits. Because taking money out of the pockets of helpless old people is fair and responsible. Such a package will only further depress economic growth in Greece, as every single other “rescue” package has done.
This package will, like the others, only further shrink the economy because it will reduce public spending and therefore aggregate demand, thus worsening employment and growth, especially in the climate of continued weak private sector demand. Greece has been in recession due to mass unemployment which resulted from the collapse of their housing bubble, and cutting government spending only aggravates this dynamic. Even the IMF, as of September 2011, has forecast continued high unemployment and negative growth in its Global Report, Autumn 2011:
- 18.5% unemployment (2nd only to Spain’s forecast of 19.7%)
- -2% growth
And by implementing more austerity, these figures will only be aggravated, since reduced government spending, or, increased government savings on domestic purchases of goods, services, and social transfers, serve only to increase private sector deficits. These are accounting identities and there is no way around them.
Although, according to the BBC article linked above, Papandreou supports this package, it is only just and fair that the Greek people, for once, directly decide whether they will allow foreign banks to collude with their politicians in order to depress their economy and impose years and years of unemployment, social unrest, lower living standards, and mass emigration upon Greek society. And not only just to keep a currency that was fraught with structural flaws since the beginning, but to prop up the mostly French and German banks who lent so irresponsibly to Greece.
A defeat of the package via national referendum sets the stage for Greece to default and withdraw from the Euro. It is not a given yet, and there’s still a chance that fear-mongering by Europe’s financial elites in Germany and France will combine with the collaborators in Greece’s political leadership to scare the public into accepting the austerity deal and stay within the Eurozone.
But with today’s news, there’s at least a little hope. A default is not without precedent, just ask Argentina. Or, if the Greeks want to see what debt forgiveness is all about, they can look at the greatest debt transgressor of the 20th Century: Germany.
Moving forward, will Italy, Ireland, and Portugal follow suit?
The Fall: Germany Exiting the Euro?
Stepping Stones to an EU Inferno: The suppression of dissent in Germany. And I thought Australian politicians were poor.
The most startling source of Merkel’s temporary success was, however, revealed after the vote. A TV crew had asked MPs some basic question about the nature of the EFSF right before the crucial sitting of the Bundestag. They wanted to know how much money Germany will guarantee under the extension (€211 billion), which countries had received money under the scheme so far (Ireland and Portugal; Greece received assistance separately), and whether banks could be bailed out under the extended EFSF (yes).
Amazingly, the majority of parliamentarians could not answer these simple questions correctly. Some believed that only Greece had received money. Others thought that so far the EFSF had not been used at all. Almost none could tell the total amount of German guarantees. ‘A few billion, I guess?’ was a typical answer. And of course only a minority knew that the EFSF could also provide bank bailouts.
Serious thing we all should think about
I feel misunderstood. Misunderstood in my nationality. And that feeling was brought home to me right now when I watched the news. And it’s not a feeling I have once a month, or which is only brought along by the news.
Germans are assholes. All Germans are nazis. All Germans want to rule the world. I’m German. I love war. I love to ruin the Southern European nations. I attack foreigners. I hate blacks. I am racist. I concentrate on getting all the money the poorer nations have.
Is that how you all see us, see me, because we are Germans? Because there was - more than 60 years ago - an idiot who was like that?
I’m totally angry when the Hungarian president calls our demand for more democracy in Hungary “nazi methods”. When people in Greece hate us for being from that country. I don’t want to discuss the political subject about that - if Merkel’s right or wrong. What I want to say is that YOU are racists, those who show us the nazi salute. Those who reduce us on our past forgetting who we are in real. Ignoring that we’ve changed. We are a new generation. So why don’t we just break down the walls and the stupid prejudices?
In times of crisis Europe finds its solution
I have made a translation of a chronicle on the website of the Swedish think tank Global Utmaning, here:
“Malaga, summer 2011. The temperature is 34 degrees, but under the shading curtains above the inner city’s elegant shopping streets the wind blows comfortably, as if in an air conditioned shopping mall. The heat is more palpable in the city’s less privileged ourskirts, both in the sun and in the social climate. A notice in the newspaper tells the story of a demonstration in Rincón de la Victoria in support of a woman who has both lost her job and not been able to sell her old home because of the economic crisis. Now the bank requires two homes and a bridging loan she cannot pay. About one hundred indignados prevent court officials from gaining access to the woman’s home, while invoking the Constitution’s right to housing.
A single woman’s struggle against her bank gathers one hundred protesters in the outskirts of Malaga. Something is happening in Spain, as in many other European countries. The economic crisis that became a banking crisis that became a euro crisis has become a matter of confidence in the entire European integration project. The common currency, which much more than a currency was an integration approach, has become counterproductive.
The driving force behind European integration has always been economic. The entire EU’s creation rests on the idea that a common market integrates the member states with each other and prevent nations from going to war. Only by giving up its dominance in the coal and steel industries to a supranational authority, France could agree to German sovereignty after the war. After the fall of the Berlin Wall in 1989 the idea of a common currency was a natural step in the same logic. Only by giving up its strong D-mark for a single European currency, France and other countries could agree to the reunification of Germany.
But now there is a crisis. In part a crisis for the euro as a currency, but in part also for the European recipe prescribing economic projects as solutions to political problems. Meanwhile, history shows that it is in times of crisis that the EU is forced to find a solution that often takes integration a step forward. And the most chronic of the EU’s political problems – the general lack of confidence and commitment to the entire integration project - still waits for a solution.
It has long been said that people affect society much more as consumers than as voters. It is certainly true on deregulated European markets, as it is true on global markets where the EU should be a powerful tool for small European nations to act collectively and gain influence. But so far the European integration has not given citizens the same opportunity to influence the markets, as it has given national politicians and officials.
The world’s largest common market consists of much more than import regulations, customs forms and bar codes. It consists of five hundred million European consumers who have the same goods and services to choose from, the same rating symbols and bar codes to decipher, and often the same currency to pay with. The EU is certainly much more than a giant department store, but it is as a consumer that most citizens encounter the EU in their everyday lives.
If citizens are provided a greater opportunity to organize themselves in their role as consumers to approach the decisions of EU institutions, it would not just be a way to try to legitimize the European integration project. It would be a way to gather citizens around various interests that don’t stop at national borders, and provide European democracy with a content. It would also be a way to enable a more democratic public interest to balance the individual, private and not least national interests that influence the decisions in Brussels far too much and far too often.
Under the shading curtains in Malaga’s inner city, next to Plaza de la Constitución, one of all the indignados has scribbled a political message on a temporarily restructured wall. ”Plaza de la Libertà” it says, with an arrow pointing to the square. But the ”R” has been replaced with a hammer and sickle. The Constitution’s right to housing may not be enough for the scribbler, who only relies on a communist revolution to give citizens freedom.
I seek no revolution at all. I do not want to overthrow the political power in the EU or even the power in the market. What I seek is a cautious and almost bureaucratic process to integrate citizens with the decisions made in the market so that invisible consumers can become visible citizens. You cannot create a functioning democracy and believe that it is once and for all given, regardless of what happens to the power in society. You cannot transfer power to supranational institutions or to international markets and believe that national democracy will follow by itself. When the power moves, upwards or sideways, democracy must be given a chance to follow along. “