by Hazel Lewry
The European Union that is, which appears now to be shaping up to little more than a massive shadow of the 1707 Union.
One thing that is decidedly clear for me at least, is that when any nation or independent people surrender hard fought rights to another polity, suffering takes place. Often the suffering is extreme, and it’s extreme for all parties.
Never doubt that England has also suffered through our 1707 Union, her treasures and children have also been squandered through that “Britishness” experiment. Sadly for the English it worked better south of the Border than north.
England and English almost seems like a dirty word these days, at least in political circles. You’ll hear Westminster politicians refer to the UK, GB, “the country” but rarely ever England.
In the larger story of Unions there’s now that goliath the European Union with all its myriad facets. England with Scotland as subunits of the United Kingdom are quickly being subsumed into Euro-Central. This is an ongoing decades’ old process. It should stop, and looks likely to do so irrespective of UK opinion.
On Saturday I became aware of a little reported item. The EMU and IMF representatives left Greece, apparently without warning and completely unscheduled. I waited for the follow up.
It came quickly in the form of a brief statement that Greece wasn’t following EU directives.
This didn’t surprise me as the EU directives are nonsensical, just like Cameron and Clegg’s Tory agenda and much else of what emanates from Westminster.
I’m not an economist, but even an imbecile can understand austerity is both good and bad. Economically at the national level it’s good in the good years, it’s bad in the bad years. The only reason not to follow that ancient wisdom is for a few fat cats to garner near global domination over our finances.
It’s simple sums as they say – and this is a very simplistic overview.
When you’re making more than you need you put away for that rainy day. When the sun isn’t shining you use that reserve. Unless you’re Westminster and believe the “no more Boom and Bust” mantra until it’s past obvious there’s a lie somewhere.
While individuals and households must tighten belts when there’s a recession, governments should do the opposite in almost all cases. Austerity simply doesn’t work in a recessionary or depressed economy.
When the private sector is depressed, it’s not hiring, it’s laying off. That means longer dole queues.
Longer dole queues mean less money for those people, more foreclosures, less spending, the economy has a real danger of going into a tailspin.
The tailspin can be derailed by government. Depressions and recessions are the time for capital projects. Government spends, the economy is stimulated, people can continue to earn, buy, pay and generally fulfill all life’s commitments.
The key is that government spends wisely. It doesn’t buy useless white elephant vanity toys like Trident, it invests in its people and its infrastructure.
If a contract for a project can’t be won domestically, unless its beyond vital, find another project.
People are the lifeblood of a nation. While they earn, produce and contribute the nation is healthy. When they don’t the nation is sick, sometimes terminally so. The UK has cancer and it’s spreading thanks to austerity.
This brings us back to the European and IMF officials fleeing Greece. That country has been the ultimate object of austerity. They’ve even been told to sell off their public assets. Perhaps someday soon we’ll see the Acropolis on Ebay, though there’s probably some mogul got their eyes on it already as part of the next loan instalment. A bit like England’s national forests.
This is where we realize there must be another loan instalment for Greece, and another, ad infinitum. The problem is austerity. The Greeks can no longer control their own destiny. The Greeks are in an overbearing union.
The Greeks are now in a position of having to accede to the EU’s and IMF’s demands or face the hell of national bankruptcy. But even if they do as instructed will they avoid bankruptcy?
Welcome to Scotland’s last three centuries, or it would be without our myriad natural assets.
Austerity for the Greeks means public layoffs into a depressed economy where the private sector is also shedding jobs.
That equates to an exploding unemployment and social welfare bill. Unlike the UK, the Greeks don’t have Scotland to fall back on, to enjoy near uncountable billions from over the centuries. The Greeks must go to the EMU and the IMF.
The problem for both the Greeks and the EU is that under austerity the economy only goes from bad to worse as more cash is allocated to a blend of debt servicing and sustenance for the unemployed.
Think the UK is different, not a chance. With an estimated £3 trillion in debt at around 5% that’s a little over £2,300 per year from each of us just in interest. UK is borrowing more each month just to pay that interest. The UK vanity projects go on, Greece doesn’t have this vanity issue for the most part.
With both public and private sectors dumping quality citizens onto the perpetual unemployment scrapheap the tailspin kicks into high gear.
The next part of the puzzle emerged on Monday, when the financial bodies declared that the UK, the EU and the US should “think again” and revise policy because “austerity wasn’t working”. Now there’s a surprise.
Basically there appear to have been some intense meetings at which it has now been realized the European fiscal hand grenade is about to be set off.
Greece has no way of salvaging a prosperous future under its current diktats of Union.
Greece is “condemned” like Scotland to suffer under policies inflicted upon it that serve the best interests and political ambitions of others rather than her people.
Greece, unlike Scotland, is a constant drain, and will now be so for the foreseeable future. This is where the problems really start today. There’s no dire need for the EU to “hold onto Greece” except for the knock on effects of the Euro. Westminster needs Scotland.
The European Monetary Reserve is now being suggested to quadruple. The problem is that takes guarantees and underwriting of the loans to that bank. This basically means the Germans and French need to step up to the plate. Forget the UK being in that select group, the only way the UK can underwrite anything at present is by borrowing the money and dumping those extra interest charges on us all as well.
Three months ago I was in Germany. In Munich and Frankfurt they were fed up with this scenario. They’re looking at Greece a bit like their personal trams fiasco and looking for any way to stop the line there. The Germans don’t want to run the fiscal tracks to any other sick man of Europe.
The Germans are probably breathing a collective sigh of relief with the French that the UK never joined the Euro.
The problem for the EU is that the German government is now being forced to listen to German popular opinion.
There’s a court case going through Germany’s constitutional Court on Wednesday against the backdrop of new comments by recently incumbent IMF head Christine Lagarde in which she now urges nations “to abandon short-term austerity and introduce some measures to drive growth” provided a credible debt strategy is used over the medium term.
Consternation will have been created in Berlin by her particular comment that Europe needs to take its foot off the fiscal brake and shift to “growth-intensive measures” until the danger has passed, insisting specifically that Germany has leeway to “stimulate demand”.
In Germany the IMF is not exactly looked upon with fondness and glowing admiration. The feeling amongst average German and French citizens is that “enough is enough”.
Against this background Germany’s constitutional court is expected to rule on Wednesday that Berlin’s participation in EU bail-outs is allowable so long as the Bundestag is given a veto over future payments. They may not do what’s expected.
Some are anticipating that the court will go further, concluding that the nexus of rescue policies subvert EU Treaty law and German fiscal sovereignty and must therefore be curbed. This would amount to a “sudden stop” for EMU debt markets.
If this takes place the European game of houses that plays so heavily in the affairs of previously sovereign states will come to a sudden and crashing halt. Fundamentally, it will be out of cash.
The judges know the risks, yet they ruled two years ago on the Lisbon Treaty that German democracy is “inviolable” and that Berlin is duty bound “to refuse further participation in the European Union” if the constitutional order of Germany is threatened.
It remains to be seen if the quiet but popular mood will be reflected in the court, or will the court set aside Germany the state, for Europe the state.
We do know that that German patience with Athens is already expiring. The Bundestag’s deputy president recently went on record telling the international financial community that Greece cannot bring its debts under control.
“We must consider whether it would not be better for the currency union and for Greece itself to go for debt restructuring and an exit from the euro,” he told the Frankfurter Allgemeine. Debt restructuring is bankruptcy.
The pin will have been pulled, Italy, Portugal, Spain and Ireland may then look closely at Iceland, where the people told the bankers, make your profits, take your losses, we’ll cover neither.
Iceland is not the pariah that was forecast. Instead that tiny nation is now slowly hauling itself back to a secure footing. If the other “sick men of Europe” follow Iceland, the world financial order as we know it today will change very quickly indeed.
The grenade has been built, finance is the fragmentation part, Greece is the primer, Germany holds the pin. Will Germany pull that pin on Wednesday or will she stay her hand once more, delay what seems to be the inevitable for another day.
One thing is starkly clear; giving up massive portions of a nation’s sovereignty just doesn’t work.