Thursday, April 29, 2010

The crisis in Greece

Yes, Goldman Sachs did execute a currency swap worth billions, without reporting it, and, yes, the books were doctored and the size of Greece's debt was hidden so that the criteria for joining the Euro could be fulfilled and, of course, this didn't only happen to Greece. It was, more or less, an open secret that many of the countries who joined the Euro did not meet the convergence critera. Therefore, when the economist Paul Craig Roberts says, “the question is whether Germany, the European Union’s dominant member, wants to hold the Union together enough to guarantee the troubled debts of its weaker members,” it is a question we can answer. The evidence would seem to suggest that neither a real effort nor the necessary political will was ever there to bring about a real political and fiscal union. Or how else might we explain the xenophobia that is being whipped up by the mainstream media and tiny minded politicians in Germany in particular?

Furthermore, it is not only the raw rhetoric of the nationalists and xenophobes that shows that the political will necessary for a real union is missing. There is also the knowledge that such a union is not possible without some sort of fiscal federalism and real inroads into the nation state. Unfortunately,  the so-called "rescue package" that has being botched together by the European Central Bank and the International Monetary Fund means that fiscal federalism is just not on the agenda. Therefore, not only are we are also being confronted with the myth of the "efficient and hard working Germans" bailing out the "inefficient and lazy Greeks" at a time when Greece being helped should be taken for granted much in the same way as it might be when the US government bails out California, but we also find ourselves with even less hope that the one concrete measure that is necessary  if a real political union is to take shape might be implemented. It is this that is the most poignant consequence of the present crisis; the European Union has not only shown itself as being incapable of conducting itself as a real political entity.

Of course, political considerations aside there are also very real social consequences and we can ultimately expect to see massive cuts in the public sector all over Europe. Moreover, while, almost paradoxically,  the "us and them" mentality, the xenophobia, which has been spouted out by newspapers like 'Die Bild Zeitung', will give some countries, such as  Germany, a certain period of grace  for the time being,  it would, nevertheless, be foolish to think that the massive wave of cuts in public spending that the IMF and the European Union will be imposing on Athens, will stop at Greece. This is another important consequence of the present crisis iand not only does Europe remain politically very much under Washington's heel but there is also no social alternative that might combat the dictates of a neoliberalism, which is simply bad news for the planet as a whole.

1 comment:

Jordan Jordanovich said...

Very good posting that really hit the nail on the heard. And the situation is sad, right!