BAD GERMANY, BAD EUROPE:
Abstract: I agree with much of what Soros said on the bank and currency crisis in Europe. Under his calm language, his indictment of Germany is frightening. I add fuel to the fire, naturlich.
[This is the European centered part of Soros’ discourse.]
Soros:The fallibility of market participants, regulators, and economists must also be recognized. A truly dynamic situation cannot be understood by studying multiple equilibria. We need to study the process of change.
PA: In the case of European Monetary Union (EMU), even the equilibrium analysis was flawed from the start. It is not a question of Europe not being an optimal currency area (as American Europhobic destroyers often have it). It was much more basic than that: the nature of money was misunderstood.
Soros: The euro crisis is particularly instructive in this regard. It demonstrates the role of misconceptions and a lack of understanding in shaping the course of history. The authorities didn’t understand the nature of the euro crisis; they thought it is a fiscal problem while it is more of a banking problem and a problem of competitiveness.
PA: As Soros himself would say further on, it’s even deeper than that: the possibility of making “fiat money” was denied. Thus European states were cut at the heel. “Fiat Money” goes at the heart of the concepts of money… and state.
There is also a massive corruption problem, and it is not confined to banks. It implicates the very nature of today’s constitutions.
The very nature of representative democracy is to put a lot of power in a few hands. This is also what plutocracy does. Make interact together the very few elected ones with the very few who have a lot of money, boost all of this with the fractional reserve privately money creating banking system, and churns out the rule of wealth, an aspect, with titanic corruption, of plutocracy.
Soros: And [European Officials] applied the wrong remedy:you cannot reduce the debt burden by shrinking the economy, only by growing your way out of it. The crisis is still growing because of a failure to understand the dynamics of social change; policy measures that could have worked at one point in time were no longer sufficient by the time they were applied.
PA: They applied the wrong remedy deliberately. Merkel, Sarkozy and the Brussels’ fauna are in cahoots with the private financial pirates; they are their legal arm. All they wanted to do is that their friends, the pirates, recover their principal, after squeezing hard enough the colonized. So they set-up an aid system nominally for the latter, but, truly for their bankster friends.
The delay in the correct measures was also deliberate. The allies of plutocratic banks (Merkel, Sarkozy, Barroso, etc.), have used it as a tactic to do nothing.
Always doing too little, too late, is an efficient way to do nothing, while claiming one meant well. Let’s not be fooled by Merkler and her kind.
The basic, deliberate flaw at the base of the EMU, is to make money creation a plutocratic affair. It would have emerged anyway. It emerged now, because we have a plutocratic bubble.
That bubble, in turn, was caused by the arrogance consecutive to the Bush-Obama(-Blair-Sarkozy-“Citizens-United”) years, when the plutocrats’ influence has started to look unimpeachable, and this once-in-a-civilization chance to grab power once and for all has made them frantic!
The same happened after 150 BCE in Rome. Then, the plutocrats won, and Rome started its long decline. This time the decline is guaranteed to be short and brutish.
Soros; Since the euro crisis is currently exerting an overwhelming influence on the global economy I shall devote the rest of my talk to it. I must start with a warning: the discussion will take us beyond the confines of economic theory into politics and the dynamics of social change. But my conceptual framework based on the twin pillars of fallibility and reflexivity still applies. Reflexivity doesn’t always manifest itself in the form of bubbles. The reflexive interplay between imperfect markets and imperfect authorities goes on all the time while bubbles occur only infrequently. This is a rare occasion when the interaction exerts such a large influence that it casts its shadow on the global economy. How could this happen? My answer is that there is a bubble involved, after all, but it is not a financial but a political one. It relates to the political evolution of the European Union and it has led me to the conclusion that the euro crisis threatens to destroy the European Union. Let me explain.
PA: Agreed that there is a political bubble. But to say there was not a financial bubble is, simply false. The financial bubbles in Greece, Ireland and Spain were blatant. So was a general real estate bubble. For years, decent, hard working upper middle class people could not afford to live decently in the world’s most expensive cities, although those concentrated much of the GDP of the world (this is an allusion to New York, London, Paris, Tokyo, among others). So the main producers of added value work could not afford to live where they added the value, making the West’s economy inefficient (and society unjust).
Actually there is even, worldwide, a plutocratic bubble, the one Soros does not want to see. But I agree with him that the European Union is threatened at this point. Mountainous decisions have to be taken in days, in a system made to produce a few mice in a decade.
Soros: I contend that the European Union itself is like a bubble. In the boom phase the EU was what the psychoanalyst David Tuckett calls a “fantastic object” – unreal but immensely attractive. The EU was the embodiment of an open society –an association of nations founded on the principles of democracy, human rights, and rule of law in which no nation or nationality would have a dominant position.
PA: Although I see what he is trying to say, Soros is starting to thread very dangerous ground here. The European Union has to be, or there will be another war. It is not a bubble, it is the main weapon against insanity.
Europe is not a “fantastic object’, it is a necessity.
Soros: The process of integration was spearheaded by a small group of far sighted statesmen who practiced what Karl Popper called piecemeal social engineering. They recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.
Germany used to be in the forefront of the effort.
PA: Sort of. Although German politicians used to be in the forefront of the effort in the 1920s, after Germany fell into Nazism, it was of course unable to lead mentally. If nothing else, Nazism had decapitated Germany. Instead, after the Nazi disaster, Germany followed the lead of French statesmen, who had brandished the olive branch (say by not insisting to recover the entire West bank of the Rhine; the same generosity was mysteriously applied to Italy, although clearly major ex-French speaking parts of Italy such as Val D’Aoste, and next to Turin, used to be part of French speaking Savoy, and, after Mussolini’s forced Italianization could/should have very well be annexed!).
One can observe Soros’ drift into anti-European, pro-plutocratic and (implicit) anti-French bias. All students of the early European Union know that Robert Schuman and Jean Monnet, two Frenchmen, played the leading roles, and the German role consisted mainly to salute the French led effort, and goose-step behind it. The tables of collaboration had been turned around.
Many surviving Nazi generals knew all too well that they got incredibly lucky in 1940, and had been in excellent position to observe the self defeating nature of the war against France. So, although still influential in German society (!), in the 1950s, they pushed for the symbiosis with France, that Hitler himself, at Speer’s urging, had to admit had to happen. That drove Hitler to many a feat of rage.
But if even Hitler had to collaborate with France, the country that he hated so much, how could any German refuse to collaborate with France?
If Hitler had to collaborate with France, then why did he start the war? Hitler obviously felt. The answer, as the Nazis insisted at Nuremberg is that it was France, not Germany, which had started the war. Well, France had to start the war, it was a question of civilization, and the proof was Auschwitz.
Hitler and Rommel had admitted earlier that the French strategically destroyed the Afrikakorps at Bir Hakeim (don’t believe what all Anglo-Saxon Wikipedia says about it; they quote from some vengeful Nazi). The resistance at Bir Hakeim to the fury of the entire Afrika Korps deprived it from its only chance to surrender and destroy the British army protecting the Middle East. The scythe move in the desert before Tobruk, was blocked by the tiny army of (ironically named) general Koenig.
By the time of this strategic French victory (May-June 1942) the Americans had not fired one shot against the Nazis yet. If Israel exists today, it’s thank to Bir Hakeim. OK, back to our Jewish survivor here.
Soros: When the Soviet empire started to disintegrate, Germany’s leaders realized that reunification was possible only in the context of a more united Europe and they were willing to make considerable sacrifices to achieve it.
PA: Soros here is starting to get really crafty. He knows very well that what he says he is not true: it’s the French (and, especially Mitterrand, who I do not like, but was right on that) who insisted upon the Euro, in exchange for supporting Germany’s reunification. As Mitterrand had (unlawfully?) financed his good friend Kanzler Kohl’s re-election, it was hard to say no. The French idea was precisely to make European Unification impossible to reverse.
(Mitterrand used similar methods on Thatcher, by supporting her crucially for the Malouines/Falkland war, he extracted from her the Chunnel and the Single European Act…)
So why is Soros lying? Because he is trying to put in sharp contrast the alleged wisdom of Germans in the 1990s versus the sort of neo-Nazism we are now condemn to contemplate the apparent rise of. Here we have the spectacle of a Jew, Soros, being too crafty by half, and much too polite with proto-fascism, the sort of process philosopher Hannah Arendt, also a Jew, loudly, and justly, decried in the 1930s and 1940s.
Soros: When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement. At that time, German statesmen used to assert that Germany has no independent foreign policy, only a European one.
PA: That’s the least Germans could do, after fostering, for a century, a policy of systematic assault against other nations, starting with a war against Denmark in 1864. This policy was ended by force, in an action started by France (leading) and Britain (following belatedly), on September 1, 1939 (Ultimatum to Germany) and ended May 8, 1945 (capitulation without condition of said Germany. Now some Germans are saying they are tired of the “Nazi blackmail”. Well, then, they should not practice it, again.
Soros: The process culminated with the Maastricht Treaty and the introduction of the euro. It was followed by a period of stagnation which, after the crash of 2008, turned into a process of disintegration. The first step was taken by Germany when, after the bankruptcy of Lehman Brothers, Angela Merkel declared that the virtual guarantee extended to other financial institutions should come from each country acting separately, not by Europe acting jointly. It took financial markets more than a year to realize the implication of that declaration, showing that they are not perfect.
The Maastricht Treaty was fundamentally flawed, demonstrating the fallibility of the authorities. Its main weakness was well known to its architects: it established a monetary union without a political union.
PA: This is true, but that was a deliberate plan, to force unification from the top down.
There was an more proximal flaw. As created the European Central Bank was deprived of many fundamental powers that all other central banks have had, since there are central banks. (The first central bank was the Bank of England, with a tight relation to the financing of the Royal Navy, followed later by the Banque de France.)
In general, sovereigns have always struck coinage. However, under Dutch (highly leveraged) influence (“Glorious Revolution”, 1688, truly an invasion), Britain set-up a highly leveraged plutocratic system, the fractional reserve. (That it is plutocratic was observed by the Rothschild themselves, who were at the core of it.)
Soros: The architects believed however, that when the need arose the political will could be generated to take the necessary steps towards a political union.
PA: The main architect was the French, Jacques Delors, a socialist and loud Christian. He amplified thus the system put in place by French banker, Rothschild servant, and also French president, George Pompidou. A law of 1973 outlawed the financing of the French state by its central bank (something all other central banks do). Instead the French state had to go to plutocrats to beg for money.
As leveraged banks are truly state institutions, this established a further control of the French state, hence Europe (after the European Monetary Union), by private individuals, the bankers.
Soros: But the euro also had some other defects of which the architects were unaware and which are not fully understood even today.
PA: Those architects claimed to be socialist, while ruling that banks would rule thereafter. In other words, if they were not arrogant idiots, they were deeply corrupt (yes, I am talking about Delors… somebody I long viewed as a European hero, and now looks more like a European horror!)
Soros: In retrospect it is now clear that the main source of trouble is that the member states of the euro have surrendered to the european central bank their rights TO CREATE FIAT MONEY. They did not realize what that entails – and neither did the European authorities.
PA: Not just that: the power of the ECB to create fiat money is ALSO very restricted (it cannot be lent to states directly, governors can’t be overruled, etc.) As it is, it left only the plutocrats with the power to create, through private banks, money in Europe.
As I already said, can one be that idiotic without being deeply corrupt?
Money is nothing without a state. A state is nothing if it cannot project power, and this it is does through military power, first of all, and financial power, when it is in a good mood. The stick, and the carrot. The way the EMU was set-up, there was not carrot in control of the state, the carrot was in control of wealthy people and their managers. Nor was there a stick. And the state does not really exist, either.
Soros: When the euro was introduced the regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital; and the central bank accepted all government bonds at its discount window on equal terms. Commercial banks found it advantageous to accumulate the bonds of the weaker euro members in order to earn a few extra basis points. That is what caused interest rates to converge which in turn caused competitiveness to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms and became more competitive. Other countries enjoyed housing and consumption booms on the back of cheap credit, making them less competitive. Then came the crash of 2008 which created conditions that were far removed from those prescribed by the Maastricht Treaty. Many governments had to shift bank liabilities on to their own balance sheets and engage in massive deficit spending. These countries found themselves in the position of a third world country that had become heavily indebted in a currency that it did not control. Due to the divergence in economic performance Europe became divided between creditor and debtor countries. This is having far reaching political implications to which I will revert.
PA: Perfect analysis, nothing to add.
Soros: It took some time for the financial markets to discover that government bonds which had been considered riskless are subject to speculative attack and may actually default; but when they did, risk premiums rose dramatically.
PA: Soros is admitting here implicitly the culpability of money changers (such as hedge funds… there are 20,000 of those; one, failed for being on the wrong side of trades in Italian government bonds; it was headed by J. Corzine ex-gov of New jersey, ex-head of Goldman Sachs… Billions disappeared mysteriously…)
Soros: This [speculative attacks] rendered commercial banks whose balance sheets were loaded with those bonds potentially insolvent. And that constituted the two main components of the problem confronting us today: a sovereign debt crisis and a banking crisis which are closely interlinked.
The eurozone is now repeating what had often happened in the global financial system. There is a close parallel between the euro crisis and the international banking crisis that erupted in 1982. Then the international financial authorities did whatever was necessary to protect the banking system: they inflicted hardship on the periphery in order to protect the center. Now Germany and the other creditor countries are unknowingly playing the same role.
PA: Once again, for pedagogical and diplomatic reasons, Soros is extravagantly polite with the German authorities. There is no way they do not understand that they are destroying Europe. (…And helping Putin’s Russia. BTW, Merkler speaks Russian.)
Soros: The details differ but the idea is the same: the creditors are in effect shifting the burden of adjustment on to the debtor countries and avoiding their own responsibility for the imbalances. Interestingly, the terms “center” and “periphery” have crept into usage almost unnoticed. Just as in the 1980’s all the blame and burden is falling on the “periphery” and the responsibility of the “center” has never been properly acknowledged. Yet in the euro crisis the responsibility of the center is even greater than it was in 1982. The “center” is responsible for designing a flawed system, enacting flawed treaties, pursuing flawed policies and always doing too little too late. In the 1980’s Latin America suffered a lost decade; a similar fate now awaits Europe. That is the responsibility that Germany and the other creditor countries need to acknowledge. But there is no sign of this happening.
The European authorities had little understanding of what was happening. They were prepared to deal with fiscal problems but only Greece qualified as a fiscal crisis; the rest of Europe suffered from a banking crisis and a divergence in competitiveness which gave rise to a balance of payments crisis. The authorities did not even understand the nature of the problem, let alone see a solution. So they tried to buy time.
Usually that works. Financial panics subside and the authorities realize a profit on their intervention. But not this time because the financial problems were reinforced by a process of political disintegration. While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo.
PA: Merkozy caused a lot of damage, in other words.
Soros: This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been. That is the political bubble I was talking about.
At the onset of the crisis a breakup of the euro was inconceivable: the assets and liabilities denominated in a common currency were so intermingled that a breakup would have led to an uncontrollable meltdown. But as the crisis progressed the financial system has been progressively reordered along national lines. This trend has gathered momentum in recent months. The Long Term Refinancing Operation (LTRO) undertaken by the European Central Bank enabled Spanish and Italian banks to engage in a very profitable and low risk arbitrage by buying the bonds of their own countries. And other investors have been actively divesting themselves of the sovereign debt of the periphery countries.
If this continued for a few more years a break-up of the euro would become possible without a meltdown – the omelet could be unscrambled – but it would leave the central banks of the creditor countries with large claims against the central banks of the debtor countries which would be difficult to collect. This is due to an arcane problem in the euro clearing system called Target2. In contrast to the clearing system of the Federal Reserve, which is settled annually, Target2 accumulates the imbalances. This did not create a problem as long as the interbank system was functioning because the banks settled the imbalances themselves through the interbank market. But the interbank market has not functioned properly since 2007 and the banks relied increasingly on the Target system. And since the summer of 2011 there has been increasing capital flight from the weaker countries. So the imbalances grew exponentially. By the end of March this year the Bundesbank had claims of some 660 billion euros against the central banks of the periphery countries.
The Bundesbank has become aware of the potential danger. It is now engaged in a campaign against the indefinite expansion of the money supply and it has started taking measures to limit the losses it would sustain in case of a breakup. This is creating a self-fulfilling prophecy. Once the Bundesbank starts guarding against a breakup everybody will have to do the same.
PA: Yes, Germany is rotting at the head, and it’s not just the heads of Chancellor Merkel and her government. Launching a self fulfilling prophecy of evil is no small matter, morally speaking.
Soros: This [a self-fulfilling prophecy of breaking up] is already happening. Financial institutions are increasingly reordering their European exposure along national lines just in case the region splits apart. Banks give preference to shedding assets outside their national borders and risk managers try to match assets and liabilities within national borders rather than within the eurozone as a whole. The indirect effect of this asset-liability matching is to reinforce the deleveraging process and to reduce the availability of credit, particularly to the small and medium enterprises which are the main source of employment.
So the crisis is getting ever deeper. Tensions in financial markets have risen to new highs as shown by the historic low yield on Bunds. Even more telling is the fact that the yield on British 10 year bonds has never been lower in its 300 year history while the risk premium on Spanish bonds is at a new high.
The real economy of the eurozone is declining while Germany is still booming. This means that the divergence is getting wider. The political and social dynamics are also working toward disintegration. Public opinion as expressed in recent election results is increasingly opposed to austerity and this trend is likely to grow until the policy is reversed. So something has to give.
In my judgment the authorities have a three months’ window during which they could still correct their mistakes and reverse the current trends. BY THE AUTHORITIES I MEAN MAINLY THE GERMAN GOVERNMENT AND THE BUNDESBANK because in a crisis the creditors are in the driver’s seat and nothing can be done without German support.
PA: Europe is so organized that one country can block everything if so determined. However, even Thatcher’s Britain never did this. That Germany is thus cornering Europe, on the first real threat that European integration faces in 65 years, is astounding, considering history.
Soros: I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window.
Correcting the mistakes and reversing the trend would require some extraordinary policy measures to bring conditions back closer to normal, and bring relief to the financial markets and the banking system. These measures must, however, conform to the existing treaties. The treaties could then be revised in a calmer atmosphere so that the current imbalances will not recur. It is difficult but not impossible to design some extraordinary measures that would meet these tough requirements. They would have to tackle simultaneously the banking problem and the problem of excessive government debt, because these problems are interlinked. Addressing one without the other, as in the past, will not work.
Banks need a European deposit insurance scheme in order to stem the capital flight. They also need direct financing by the European Stability Mechanism (ESM) which has to go hand-in-hand with eurozone-wide supervision and regulation. The heavily indebted countries need relief on their financing costs. There are various ways to provide it but they all need the active support of the Bundesbank and the German government.
PA: Even the famous anti-European magazine “The Economist” said as much about all the preceding.
By the way, there is more than 1.1 trillion dollars ready to help (before leverage), allowed by existing treaties. However, let’s notice that, in spite of funds being at the ready, and dedicated for Greece’s research and high education, they have not been disbursed for two years. So, it’s not because the money is here, that Germany will allow to use it. Is Germany deliberately trying to sabotage Europe?
Soros: That is where the blockage is [Germany]. The authorities are working feverishly to come up with a set of proposals in time for the European summit at the end of this month. Based on the current newspaper reports the measures they will propose will cover all the bases I mentioned but they will offer only the minimum on which the various parties can agree while what is needed is a convincing commitment to reverse the trend. That means the measures will again offer some temporary relief but the trends will continue. But we are at an inflection point. After the expiration of the three months’ window the markets will continue to demand more but the authorities will not be able to meet their demands.
It is impossible to predict the eventual outcome. As mentioned before, the gradual reordering of the financial system along national lines could make an orderly breakup of the euro possible in a few years’ time and, if it were not for the social and political dynamics, one could imagine a common market without a common currency. But the trends are clearly non-linear and an earlier breakup is bound to be disorderly. It would almost certainly lead to a collapse of the Schengen Treaty, the common market, and the European Union itself. (It should be remembered that there is an exit mechanism for the European Union but not for the euro.) Unenforceable claims and unsettled grievances would leave Europe worse off than it was at the outset when the project of a united Europe was conceived.
PA: After so much insanity deployed and allowed to rampage, the British and French military budgets will also have to be cranked up… To insure that further insanity is contained, looking forward, all the more since, as in the 1920s and 1930s, Germany is flirting with the dictators of Russia.
Soros: But the likelihood is that the euro will survive because A BREAKUP WOULD BE DEVASTATING NOT ONLY FOR THE PERIPHERY BUT ALSO FOR GERMANY.
PA: However, Hitler started a war, just so that he could lose, as Salvador Dali pointed out. A country with a culture so idiotic and criminal that it could develop Nazism, over several generations, as the great philosopher Nietzsche pointed out at the outset, is perfectly capable to keep on acting dramatically against its own interests, just in the hope of punishing everybody.
Punishing everybody, that’s what Germany did in 1914, and 1939, launching wars it had no moral right, nor reason, to wage, and a quasi zero probability of winning without enormous devastation to itself.
Maybe Germans like so much to be the bad guys and to lose, they want an encore?
Soros: It would leave Germany with large unenforceable claims against the periphery countries. The Bundesbank alone will have over a trillion euros of claims arising out of Target2 by the end of this year, in addition to all the intergovernmental obligations. And a return to the Deutschemark would likely price Germany out of its export markets – not to mention the political consequences. So Germany is likely to do what is necessary to preserve the euro – but nothing more. That would result in a eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments. That would turn the European Union into something very different from what it was when it was a “fantastic object” that fired peoples imagination. It would be a German empire with the periphery as the hinterland.
PA: Soros is 100% wrong here. There will be no German empire. Germany is completely delusional and delirious at this point. German domination of Europe will not happen, because German culture is on its way out, whereas French culture is on its way up.
France rests on universalism, Germany on tribalism. Just to get the workers it needs, Germany is forced to draft non Germans into tribal Germany.
Let me explain more: in 1940, France had less than 40 million inhabitants, and Germany more than 80 millions. Nowadays, France has 66 millions, and her population augments by 350,000/year, internally (no immigration, thanks to the ferocious and ungrateful Sarkozy, now eliminated). These 350,000 new French a year are real French of fangs and claws, not the imported kind.
Whereas, even with significant immigration, the German population is decreasing. A fiortiori, the part of Germany of genuine German culture, so to speak.
Already now there are 30% more young French people than young German people (and, as I hinted, many of the latter are not really of issued from German culture). Merkel herself had no children. Her nasty cultural disposition will not be passed to her children.
German median age is 5 years older than the French (although the French live two years longer).
Verily, part of the senile reaction of Germany to the Euro crisis is directly imputable to Germany’s aging and scared behavior.
Soros: I believe most of us would find that objectionable but I have a great deal of sympathy with Germany in its present predicament. The German public cannot understand why a policy of structural reforms and fiscal austerity that worked for Germany a decade ago will not work Europe today.
PA: Soros is right, “most of us would find” that sympathy for Germany should be limited. In some ways Germany is a plutocracy led by rich Mittelstand owners. I know some. Those mini plutocrats are the kings and queens of Germany. They work the little people hard, while scaring them with destitution. Those who know history will be reminded of the old landed aristocracy, especially of the Prussian type, which was a major, probably the major factor, in the rise of German fascism and racism (craftily, their tool, Hitler, electorally campaigned against them)
There is no minimum hourly wage in Germany. The states force some of the poorest people to work for one Euro an hour.
Soros: Germany then could enjoy an export led recovery but the eurozone today is caught in a deflationary debt trap. The German public does not see any deflation at home; on the contrary, wages are rising and there are vacancies for skilled jobs which are eagerly snapped up by immigrants from other European countries. Reluctance to invest abroad and the influx of flight capital are fueling a real estate boom. Exports may be slowing but employment is still rising. In these circumstances it would require an extraordinary effort by the German government to convince the German public to embrace the extraordinary measures that would be necessary to reverse the current trend. And they have only a three months’ window in which to do it.
We need to do whatever we can to convince Germany to show leadership and preserve the European Union as the fantastic object that it used to be. The future of Europe depends on it.
PA: The future of peace, too. To believe that a fractious Europe, after such a stab in the back, the deliberate destruction of the European Union by Germany, would stay long at peace, is delusional. In any case, socialist France has already constituted a vast coalition, and, differently from 1939, Spain (conservative), Italy (conservative), and the USA (more to the right than any European country) are in it. Even Britain is scared out of its wits that German driven selfishness will drag it further down the abyss.
So what are German officials thinking of? (Besides the desire to self destroy?) Well, the siren song of the ex-KGB officer, Putin, is obvious in the distance. Putin is trying to seduce Germany, which gets already all its gas from there (more than 22% of total German energy usage). The mutual seduction between Germany and Russia in the 1920s and 1930s had a deplorable effect on both, a mutual feedback loop of brutish behavior.
Brutish behavior is what we see today when Bundesbank officials talk as if they ruled Greece. They don’t. What is happening in Greece, as Soros said, is more the fault of the creditor countries than Greece’s. The aid programs to Greece have been, truly, mostly aid programs to non Greek banks which financed their friends in Greece (often plutocrats they had dirty deals with).
The arrogant, offensive and injurious attitude of so many German officials shows that those who did not learn humility from history cannot be trusted.
So are we back in the 1920s and 1930s? Is the collaboration between Germany and Wall $treet based plutocracy back on the front burner? (It sure sounds that way; major Wall $treet banks, such as JP Morgan, have come out with astounding pieces of propaganda, as a reader kindly informed me)
Are we back in the 1920s and 1930s? … When Germany was secretly plotting, and training with Stalinist Russia? That blossomed in the formal alliance in 1939, of the USSR and Nazi Germany, in a vain attempt to block France’s thirst for justice.
So is Merkel working for the Putin, that is for the KGB, or Goldman Sachs and its ilk? Both maybe? Like Hitler, in the end, rather ironically, did? (The Fuehrer basically said so himself in his political testament…)
There are very good reasons to suspect all these schemes, and they will be further divulgated soon. It would be all very funny, if it were not so disconcerting.