EUROBLOWN: Why I’m betting that Germany will leave before Greece.

Yesterday in Brussels, Herman Van Rompuy opened the anarchic proceedings by saying he sensed “a strong will to compromise”. Something of a surreal soundbite and, as usual with the Nipponese Bard, completely wrong.

The popular maverick site Zero Hedge referred to this week’s Euro-bunfight as ‘yesterday’s dismally predictable non-event summit’  last night.  They’re right on the money about it being just as unproductive as advertised – but actually I think it was highly significant for any number of reasons.

First off, it’s abundantly clear the eurogonks clearly have no idea which way is up either socially or economically. As the ZH piece noted, when citizens start taking money from the banks, the game’s up. When sick people can’t get medicines, the party’s over.

Second, as I posted yesterday, the maths show conclusively that the ‘honour thy debts’ strategy was so hopelessly misconceived, everyone has paid a mountain of money, at the end of which we’re all €20bn worse off than we were two years ago. I have no quarrel with the argument that says avoiding responsibility is wrong, but there are and always have been degrees of wrong: it is just as much the responsibility of bankers to tot up the numbers and say, “They ain’t gonna pay, let’s write it off”. Instead, what they do – always and without exception – is start The Hunt for the Last Resort Paymaster. And they whine and bitch and threaten to leave the planet and all the other sh*t these cannibals think is appropriate….and scared politicos fall for it.

The bad news is that, after the Greek ‘bailout’ aka insolvency fiasco of March, the very devious behaviour of the eurocrats and the ECB has destroyed the EU’s bond market for the foreseeable future. Fitch’s report of earlier in the week  showed foreign investors had fled Spanish and Italian debt in huge numbers. Letting Greece off much earlier (and then demanding new rules) would’ve have cost – take a deep breath – over €400bn less. That’s because not only would we not have bailed the Greeks out, (€220bn and counting) we would not have the debt either (€220bn and counting). The banks would’ve had to to take the hit. Some would’ve blown over, but all of them  would’ve learned a lesson.

Cowardice, my friends, is a very expensive weakness. The aftermath of most of Europe becoming insolvent would’ve been, in the medium term, an end to deficit economics for good, strict rules on sovereign borrowing and lending, and the collapse of the globalised banking system. All these would be an excellent idea, because they are all stupid ideas, and dysfunctional in practice. The irony of the whole shebang is that it was set up to fail by bankers….and these same bankers warn of Armageddon if and when it does fail. So we’re screwed if it doesn’t, and dead when it does. Such is banker logic.

But the past is gone forever and cannot be changed. Even Einstein appreciated that. The future, however, is not pre-ordained. Unless you’re Mitt Romney, that is, in which case you know when Jesus is coming back, and where. For the rest of us mere mortals, history is there to be made. Not, however, by the folks at the Summit.

Third, it is blindingly obvious that a mad form of austerity economics as practiced by Merkeschäuble and the Friedmen has the Germans in thrall, and an outmoded form of Blairite ‘Third Way’ socialism is suffocating the southern brain in the form of Mr Blancmange & the Keynsians. Fear not, I won’t harp on about debt forgiveness again – my point this time is far more significant than even that one: nothing is going to get done as long as this situation pertains, and the situation will pertain unless something deservedly ghastly happens to the Merkeschäuble.

Do not doubt that oxymorons will proliferate as more and more Sprouts try to square the circle: but as long as there are only two opposite ideas, nothing will get done. Surrounded in Brussels and threatened at home, Angela Merkel’s days of driving a tank over everyone else are over.

Finally – and this is the last time I’ll say it – Greece isn’t going to leave the eurozone: Draghi won’t let them, the Greeks themselves are wrongly terrified by the idea, and anyway a more pro-bailout Party line-up will emerge after the June 17th elections. Somehow in some way, there will be a compromise at the end of  a long stand-off.

In short, it’s a shambles: such market confidence as is left (and I couldn’t find any this week past) will evaporate, and reappear over Spain, Italy and France in the less than ethereal form of further bond spikes. The eurozone – as this and thousands of other commentary sites have been predicting for two years – is finished. And my own view goes further: you can’t break up a currency area (with all the bitterness such would entail) and keep the EU going. It doesn’t work like that: the 67-year achievement of keeping France and Germany happy is about to end. It may take five years or five months, but it will end for this, and many other, reasons.

Everything from here on (bank-runs, pharmacy riots, coups et al accepted as possible) will be driven by events in Germany. As the dominant power – with a powerful banking community and an unforgiving electorate – it could not be otherwise.

I can tell you, following a few conversations yesterday afternoon, that the German banking community is exasperated beyond belief by yesterday’s truncated session in Brussels. Der Spiegel has already adopted a Grecophobic tone along with Bild Zeitung and several influential tabloids. The one thing bankers and voters have in Germany today is a fear of Germany beink pulled down by all ze uzzers who are just lazy schweinen loafink around in die strink vesten. Above that convenient bigotry – among the older professional – there remains a national obsession with the ever-present spectre of inflation. All these worrying factors are only going to get worse as the European Committee Car’s gearbox remains jammed in neutral. Look, it was a tank, now it’s a car, OK? This isn’t mixed metaphor, it’s events dear boy, events.

Germany only has one logical option now, and that is to get out of the euro. I also believe it is far further ahead on this project than anyone else in the eurozone, and – being Germans – they would run the operation like clockwork. Blitzausgang could begin at any time. One felt yesterday that this was clearly on the cards. The second Hollande started talking about eurobonds – which the French leader rightly considers a start along the road, if nothing else – Merkel said, “I believe that they are not a contribution to stimulating growth in the eurozone.” End of. The reality is that Berlin equally rightly fears eurobonds would only result in German taxpayers permanently underwriting the public finances of the entire eurozone.

“Italy can help persuade Germany to support Europe’s common good”, said Italian Prime Minister Mario Monti, once the memory of Merkel’s implacable features had faded slightly. Common good, one suspects, does not play well in electoral politics. But will Merkel ever accept the death of the euro?

The economic decision for Berlin sounds easy, but it isn’t: although they’ve enjoyed seven years in the last ten of strong export growth thanks to an artificially cheap currency, it’s easy to tot up the benefit, but not the likely cost. With at the very least Spain and Italy to come, the expense could easily blow Germany away.

The political decision for Merkel is also a complex one, and not getting any easier. To leave the eurozone would be seen by her opponents (and her own Party) as a crushing defeat for her Weltanschauung. But if couched in bellicose terms – suitably sprinkled with appeals to the Fatherland alongside more denigration of lazy spendthrift latins – it would also be seen as decisive leadership. It would further, I suspect, put the Opposition SPD on the back foot.

It’s very finely balanced, but perhaps geopolitics will tip the balance in favour of exit. When Berlin finally rejected Geithner’s amputation plan for Greece, my view was that the Bundesrepublik’s leaders were putting Germany first, not Europe. As the leading European power, she would have by far the most to gain from keeping Greece’s potential wealth out of American hands. Schäuble in particular is paranoid about US foreign policy aims, and Merkel has an instinctive dislike for Flash Tim and his leveraged bazooka: she regards the American view of borrowing to maintain debt (as do I) as certifiably insane. America may have bet the farm on Germany, but it’s going to have to find a new ally in Europe – and the Germans won’t let it be Greece.

No, I rather fancy Germany will leave the eurozone before Greece does.



151 thoughts on “EUROBLOWN: Why I’m betting that Germany will leave before Greece.

  1. Yes, Mitt Romney. The man who at least a few dozens of millions of Americans might vote to be president. He apparently, as a Mormon, believes that Jesus will be making his 2nd apperance in Missouri and that is also where the garden of eden was. He also has magic underwear. Nothing to see here. Move along now


  2. If Germany leaves the Eu… no one will be able to afford their goods. Cars that cost 30,000 Euros will become 60,000… Germany won’t leave because they need a currency that keeps their economy moving… internal devaluation will not work politically so… they need a counterbalance to their economic strength. The shocking reduction in orders and sales that they received this week will soon convince a bigoted bunch of bloated sausage hounds that they need to keep their markets solvent, and their goods cheap enough for the few economy’s that can afford them to keep buying them. That having been said as stupid and incompetent as Merkel is… who the hell knows? They have screwed it all up til now so it seems likely they will continue that pattern.


  3. Predicting the outcome of this gigantic cock-up is like trying to predict the result of a mixed hockey match played by two teams of lunatics playing with extra members and a blind referee. It will probably end in a huge bout of fisticuffs.



  4. The europatient was admitted via Causality (A&E), b.p. on the floor, hypoxic and drifting in and out of consciousness. Dr Ward recommends the Swiss Treatment. Dr Mud observed that the patient may be experiencing difficulty in ‘getting wood’ and recommends a trip down Viagra Falls, although rigor mortis could make such an expensive holiday unnecessary. Dr Max noted the patient’s peculiar gait. Further treatment should be supervised by JRJ (immaculate beard, sonorous voice, long dead himself) in the interests of his namesake. Carry On please..


  5. Maxbe you are right.
    But what about this peski ESM thing?
    Merkschäuble et al do all they can to pres it as fast as possible through the Parlament.
    This fits not whith your thesis.
    ESM = no more fiscal Souveranity = game over for Germany.
    They(the eurocrats) will send endless streams of payment requests to Berlin.


  6. Ain’t none of them leaving…It’s all a hoodoo.

    Billions wasted to date but many , many more billions to come.

    It’s a Bankers Enigma, when you can’t make a deal work throw more at it.

    More Debt really does cure More Debt.

    The Inflation coming, and how, will erode it all.

    Get real and ready for £6 Loaves….


  7. You still haven’t got it. The “austerity” plans you talk about have nothing to do with the debt. They are there to ensure that the Greek government raises enough money in tax to pay for pensions and medicine etc. This they are currently failing to do. Even if the Germans did not try and force the Greek government to face up to reality, reality itself would eventually impose itself on the Greeks. This has nothing to do with bankers. The only other alternative would be for the Germans to raise tax in Germany in order to provide funds to Greece to pay for their pensions and medicines whilst the Greek workers sat back and continued to refuse to pay tax themselves. If the EU really was a super-nation this might happen (just as the taxpayers of London fund the unemployed of Sunderland without too much whinging) but what we are actually seeing is that the Germans don’t really give a flying f*ck about the Greeks and are telling them to sort themselves out and pronto. They have been generous only in the extent that they have used ECB debt facilities to buy the Greeks a little more time to sort themselves out (time to be paid back later) but the Greeks aren’t showing any signs of wanting to sort themselves out and seem hell-bent on a kind of hunger-strike approach where they continue to refuse to pay tax until the point is reached where the rest of us will be forced to just out of sheer humanitarian reasons. None of this has anything to do with bankers. The Greek debt mountain and how to deal with it is another issue that can wait for another day.


  8. We sell way more stuff to non EZ countries than otherwise.
    And we don´t even have to lend them the money for it in the first place.

    Our EU idiots spout this falsehood for 2 years now, but it is still incorrect.
    Know that any further adventures of unknown cost to the working electorate will result in capital punishment next elections. Even the equally inept SPD and Greens, who initially couldn´t get their hands on Eurobonds fast enough, have realized that and retracted their previous statements on the matter.


  9. ‘H’ – I am reminded of an old Punch cartoon which depicted an ancient and, let’s be blunt about it, decrepit man propped up in a hospital bed. There was a profusion of wires and pipes sticking out of him, trailing all over the place and hooked up to machines and monitors which in turn were manned by a small army of anxious technicians. He was being interviewed by a cub reporter from the local rag, and said young gentleman enquired, “Tell me Mr. Pottington-Smythe … to what do you owe your extreme longevity?”

    (I always thought a splendid reply would have been, “F***ing onions – waddya think??”)


  10. I feel a major distraction about to come on.
    The US most definitely would like to get it’s grubby paws on the riches under the Agean as, would China and Russia no doubt. Looks like the game is now who can hold on to Greece. Germany is betwixt a rock and a hard place, they can’t stay in the Eurozone, they can’t leave either.
    Germany will support the ClubMeds whether it likes it or not. Funny really, keeps Germany in it’s cage too, just as France would like, two birds with one stone.


  11. A final comment on forgiveness -vs- default…
    Importantly, in the end creditors will lose money big time. That will be their come-uppance for making soft loans in the days of the EZ credit bubble.
    No one can doubt that, so it comes down to which route is more correct. It is human nature for creditors not to write off debts because they will always hope that debtors will find a way of repaying them. In this case, I suspect the lenders also knew that other EZ members would step in when necessary to help Greece out. All of this is human nature. No govt can legislate for human nature (Blair & Co tried it in the UK without success).

    In this situation, the Greeks didn’t want to default because they always knew how important the European Project was to Germany/France et al – no doubt they were told this many many times, so they never believed the slime about there being “no bailouts” – and they believed bailouts would appear as and when required to avoid disaster. They were right: the bailouts did appear and continue to appear. But despite severe austerity which is causing great hardships to the Greek people, Greece is still not running a balanced budget. ie it is still living way above its means, such is the profligacy of the Greek government (and of the British govt btw).

    Now the rubber has hit the tarmac, the choice is for Greece to default or debt forgiveness to happen. Either path will cost creditors a lot of money. I cannot see them willingly agreeing to forgiveness, so Greece has got to default and start the next day with a clean sheet. It is most likely that Greece will have to leave the EZ else other EZ members will be frozen out of money markets or suffer higher yields which they would not want.

    The other alternative is for the ECB to flood the EZ with new printed money but that has its problems in Germany and Euro-electorates. And it will not solve the medium/long term problems of this huge EZ mess.


  12. @BT You’re probably right, we should allow nature to take its course. Problem is, they’ve got so far beyond themselves that they think they can control nature.


  13. A large part of the problem is no one actually knows what these people consider to be of paramount importance, exactly where the lines are drawn in the sand, and even if they did it changes continually, sometimes within hours as different events unfold or force a response. No one knows how far Merkel is prepared to allow the German economy to degrade, and sharply degrading it is on many fronts, in support of the Euro, she probably doesn’t know herself. Nor do we know just how much of a gamble she or any of the other European leaders, is prepared to take in any particular set of circumstances, how much short term pain is acceptable in light of potential long term gain. We do know that these people are instinctively mendacious, so much so they are likely to lie even when the truth would serve them better. It is part of the politicians’ mantra, always leave room for manoeuvre, never give up hostages to fortune, always leave the other side (i.e. everyone else) guessing. Thus blogs like this, independent commentators and analysts and the media grab at whatever crumbs they think they have seen and try to logically extrapolate from them. A quest doomed to failure because another part of the politicians’ mantra is; avoid following logical courses because they can be predicted. We can’t understand what their intentions are because they either don’t know themselves or refuse to reveal them.

    I know that is a statement of the bleedin’ obvious, but it should never be forgotten.

    As to Germany leaving, I have always said that Germany will leave as soon as it looks like they will be left holding the money bag.


  14. Magic underwear or not, the only second coming Romney will get is by using his mitt. The Naz doesn’t do encores.


  15. Actually there’re a couple more things in this game that you haven’t touched upon, which are pertinent. First and foremost, there’s Angela Merkel. Her career reads like the checklist for how to spot a high-functioning psychopath but there’s one key factor here: she doesn’t ‘get’ political or personal loyalty, and she doesn’t plan more than a few months ahead. There is no Merkel Grand Plan and there never has been.

    However, there IS a long-running plot to either oust Merkel, or at least limit her obnoxiousness. The most visible sign of this is the new German president. He was head of the main investigation of the East German Stasi files, and can be expected to know of (or be able to lay hands on) everything pertinent within them. The Stasi were obsessive record-keepers; absolutely everything they did was recorded in the files, and what they mostly did was record everything in East German political life. Merkel was quite successful in East Germany, not that she mentions it these days, so will unquestionably have a lot of skeletons hidden in the old Stasi files.

    The out-going German president was corrupt. This seems to have been known for quite a while, but only when the new guy was the only heir-apparent was the corruption exposed to give the old guy the bums’ rush. This suggests a cross-party consensus to form a long plot and limit Merkel’s power; this is credible since there’s pretty much nobody in German politics whom she hasn’t trampled on at some time or another.

    Merkel’s personality seems to crave power, just like Blair’s does. Her power and sense of self-worth is tied up with the Euro project and EU; in effect right now she’s controlling the entire thing and she really rather likes it. A lot of what we’re seeing out of the Eurozone right now is Merkel. Were Merkel to be forced to compromise, I think German politics might change quite radically. A lot of the politics over there is based on survivor guilt left over from the last war, but the younger politicians don’t have it and don’t buy into the whole ethos. What they do see is the scum of Europe littering Germany’s streets with their hands out, and indeed the whole of the EU living it up on Germany’s coin and hard work. They see it, their electorate sees it, and neither of ’em like it one little bit.

    For this reason, I tend to side with the Slog; Greece won’t leave its sugar-daddy unless kicked out forcibly. Germany on the other hand sees its self beset by sponging freeloaders and may well simply leave the Euro (if not the Eurozone) and let the currency go its own way. This will inevitably be the route of the old Zimbabwean Dollar.


  16. Every time you say this, dear boy, I am no nearer to understanding what ‘it’ is, let alone getting ‘it’. I do wish you would stop writing in obscure riddles and just say what you mean in English.


  17. Dan
    Yes, Merkel’s psychography is key: and her Stasi files do, I understand, still exist. She’s a shafter not a sharer.


  18. I’m not saying I believe in a 2nd coming. I believe that to be utmost nonsense. I’m just pointing out a basic tenet of Mormon beliefs. Like Christianity, but for Americans


  19. @Peter C: That’s all very true. Another issue with the EU elites is that when they sit down at the table to debate solutions to the mess, there is one major issue that’s not allowed to be on the table: the breakup of the EZ and probable scaling back of the grand EU Project to a Single Market Treaty. Yet it is arguably the only best solution, despite short-term pain.
    As a result, they waste their time dreaming up solutions which are not real solutions at all, but a band-aid sticking plaster. When it comes off, they go back to the table for another round. Meanwhile the consequences and costs of failure are rising…


  20. I think that most sloggers would agree there is a global power elite at work. Call ‘them’ what you will, but Germany leaving the EU is most definately not part of the plan. Electorates are the main stumbling blocks to these plans of course, but Germans see the EU as a mass vehicle for their pushing of exports and I dont think will ever want out as an electorate. As we’re witnessing in Greece or will shortly witness, the electorate there don’t want out either. Certainly pushed along by the ‘powers that be’ and their MSM propaganda and fear-mongering machine.


  21. One alternative, enabling some degree of face-saving for some players, may be to invoke a ‘temporary’ split into two currencies – the ‘Neuro’ and the ‘Seuro’, roughly based in the North and South of the EZ.

    That would enable the flaky southern states to devalue in parallel, while the hard-working, tax-paying, well-behaved northern states could carry on working and paying, but only for themselves. The German’s then wouldn’t have a problem with Neurobonds, and any Seurobonds placed would find their own level, a tad wilder I venture.

    There would be a stated ‘aspiration’ to merge them again at ‘some later date, subject to economic criteria etc’, enabling the myth of a common single currency to be preserved for all the mad Europhiles and the Brussels elite.

    Only question then is, into which zone would Hollande lead France ? The French would love to think they could hack it alongside the Germans but Frau Merkel would probably see France as a ‘Seuro’ user. Cue the next conflict……


  22. Terp – I completely agree the bankrupt EU needs Germany far more then Germany needs the EU. With a handful of exceptions the majority of the EU 27 are like a bunch of Heroin dependent welfare scroungers waiting for the German pharmacy to open and serve up the next round of free Methadone.


  23. @H…..b: Indeed they have. The EU construct resembles a giant super-tanker that’s been pointed towards a utopian world. Everybody on board has bought their passage (with borrowed money!) and believes in it. The Captain is high on [whatever] and nobody knows how to change course and can’t find the controls anyway, yet there’s an array of giant icebergs ahead of them getting closer and closer. They don’t know what to do to save themselves. They pray for a rescue ship to appear on the horizon but there isn’t one. The only power with the means to perform a rescue (the US) is itself in equally big trouble with its own ship-of-state and can’t afford it…

    Stay tooned for Part II of this desperate thriller …


  24. @ Dan,the German export model in the EZ is a ‘ vendor finance ‘model,where the IOU for an export to Greece is a claim on a Greek bank,lodged back in Germany and then onto the ECB.When the proverbial hits the fan,those BMWs are still in Greece,and the German banking system is left with worthless claims.


  25. Interesting. Would the two Euros each have their own central bank, set their own interest rates and generally be in control of their currencies?


  26. I reckon they would ‘sell’ it as a rehearsal for the real thing – a later single EU economy with one central bank, common interest rates, bonds, etc. Nothing wrong with a pilot……


  27. @Dan: Fascinating stuff which I can easily believe.
    The one thing that puzzles me was her cosy relationship with her mentor Helmut Kohl. I understand it was him to pushed her up the ladder of German politics and into her leadership role today. Yet he was always seen as a ‘conservative’, but she obviously is not.


  28. Well well as the chaos reigns and the suicides pile up, I ask myself: how to profit from this debacle. Its not pretty but hey I didn’t invent the rules and only the strongest will survive. Here, then, are my 4 cents. Neither Greece or germany will leave the euro; the euro will hold together for the foreseeable future. A deal will be hashed out which allows inflation but somehow appeases german voters – they will be sold the idea of being an export powerhouse with a cheap currency and increasing global influence. The greeks are just too tired to contemplate leaving or rising up on mass – they will except their handouts and even agree to continued austerity and selling off of greek assests. Markets will sigh a sigh of relief and produce a weak rally through to the US election – which means no QE will be forthcoming this year. However, next year we will finally see a crash that makes 2008 look like a 5 year olds birthday party – the cause not being europe, not america, but China!

    Gold, silver, farmland, sterling or dollars outside the banking system, and shorts in china are the order of the day. Beyond that take a look at Greece to see the future of the UK, when the welfare finally can’t be paid anymore – its going to be far worse here. Stock up on drugs like Metformin – they have long shelf lives and will be hugely desirable in the event of pharmacy riots. Someones life might literally depend on it, so imagine what they’ll trade you for it. As I said, it ain’t pretty, but I didn’t make the rules…


  29. If Greece leaves the EZ, the world will focus in on Spain and Italy, and that will begin the unraveling of the markets faith in the sustainability of the Euro… the domino effect will pull the American economy into the undertow, the Russians will release bad news soon, due to the worlds decrease in fossil fuel consumption, and China finally announced this week it is in some real trouble… so, when the weak link that the euro is unravels the rest of the worlds economy’s… who will Germany sell their massively expensive stuff to? (due to the devaluation in the rest of the worlds currency’s)… Brazil? … good luck with that…


  30. @H…b: Ship of Fools:
    A few years ago during John Major’s govt, I was invited to an art exhibition in Covent Garden to display and sell paintings from a Brazilian I know. Having a rather more logical mind, I’m not really an arty person and rarely see in pictures what some others do. But in one painting, I saw everything. As I stared at it I rattled off to a friend what I was seeing. It was basically a ship heading for the rocks through choppy waters and it seemed to summarise Major’s leadership and government.
    Unknown to me there was a man from Coutts standing behind me listening to everything I said. When I went over to my Brazilian artist friend and asked him how much that painting was, he said “Oh, that man over there (the Coutts man) has just bought it”.


  31. It is very apparent that Germany is thinking veryyyy small indeed… since the beginning of this whole affair, Germany has been more concerned with placating it’s small minded voters, at the cost of allowing the euro and the rest of the world to stumble, and eventually fall… selfish, small minded, and in the end isolated.


  32. John, persuasive argument but I am not totally convinced. The knock on effects of Germany leaving may be worse than Greek leaving, as Finland, Austria et al will in no way want to be tied to a sinking ship without the Germans to help. Merkel and Schauble must know this, so any move they make will cause multiple side effects which make the carnage even worse.

    So if Germany wants to leave I suspect it will try and do this en masse – hard/soft euro fracture.

    I cannot see how any of the Latin bloc would want to stay attached to Greece as they are such an outlier in terms of behaviors and market dynamics even if they are small and they cannot deal with market perception of being attached to Greece without German oversight.

    The terror of doing anything and being responsible for the fall out from this keeps the euro together. So my call is

    – the show keeps on the road until things get a lot worse (eg Greek bombs going off in Germany or IMF staff getting fire bombed)
    – a lot worse may only be weeks away (Greek elections beckon for example)
    – Greece is booted out with support from IMF and if you are lucky the euro zone as well in its own right
    – Firewalls (probably a chocolate fireguard) put in place to stop contagion and bank collapses
    – Market carnage followed by North/South Euro split if they cannot hold it together, or German withdrawal if they are surrounded and outvoted. I still cannot see how the Finns, Austrians and Dutch will want to stay attached to the monster, or eve France for that matter

    I wish they would go straight to the final step by way of market compromise – north/south split

    What a mess but fascinating viewing


  33. @John: “Brazil?”
    I don’t think so. Although there are a lot of BMWs in Brazil that is due to the boom that’s been going on over there, but that’s now ground to a halt, so I expect to see a drop off in sales of imported cars. And people need to know that imported goods carry very high import taxes in Brazil, it is not an open free market economy, but run under classic socialist rules. Protectionism is the name of the game. That may support domestic production and jobs but the consumer pays the price in sub-standard quality and high prices from doemstic suppliers due to little competition.


  34. @John. With a pseudonym like “Just sayin” I had him down as a Cornishman and Jethro fan (the comedian not the band)


  35. I suppose the frightening aspect of all these predicted scenarios is, one of them is the real deal and we have no way of knowing which one.
    Unlike a Thai massage, this has no happy ending.


  36. “Why I’m betting that Germany will leave before Greece.”

    What odds did you get?


  37. At the end of the day I can’t shake the feeling that this is all one big bunch of bollocks… China is grinding to a halt, Russia’s economy is running on fairy tales, the states will be pulled under the tide (right after the elections), the Euro is disintegrating as we speak, and the BRICS are nothing without wealthier economies to fuel their production… the world’s economy has become consumer driven… now the consumers have no money, and there is no one left to exploit or lend from… if you follow all the financial and geo-political info doesn’t either end up in a huge round of global debt forgiveness, or a world wide economic disaster?


  38. Hi John

    It was always going to boil down to one question…

    Who leaves first Germany or Greece.

    A Greek exit will not save Spain, Italy or Portugal unless they leave as well.

    A German exit and euro devaluation would be a huge pressure release and could save the euro/EU.

    Mind you John it has been said in many circles that the chances of the euro surviving without Germany is pretty slim as Italy and France are not exactly smelling of roses these days.


  39. Will war in the Middle East have an effect on Germany as to whether it withdraws from the Euro or not? I ask the question for help. I suspect that it will have an effect, on the basis that war concentrates the minds of politicians and increases their level of anxiety.

    The Iran enrichment talks are not going well, at least, well enough for the Netanyahu government, which I believe will attack Iran on the basis of the “one percent risk”.

    If Israel believes that there is still a 1% risk that Iran is or will develop nuclear weapons, it will attack. Since this 1% risk is a non-rational, subjectively emotional assessment of Israel’s continuing existence, it will win out sooner or later. Israel will attack Iran because of the 1% risk.

    Since, therefore, war in the Middle East is inevitable, probably this year, what effect will this have on EU politics and, particularly, on Germany leaving the Euro?


  40. Bank of America/ Merrill Lynch says

    Greek exit = 2pc drop in UK GDP…

    We’ll take it, anything is better than a slow death from all the uncertainty over the Euro.


  41. @BT:

    Quite so. The break-up of the EU or the scaling back to Single Market, not that it ever was such even in its EEC guise, cannot be debated or even envisioned for several reasons. The first is the national European political elites simply have too much political prestige involved, secondly the ordering and governing of the EU is not really in their control, that is the role of the Commission and the Nomenklatura, under treaty national governments can only control how and when additional sovereignty is passed to the EU and thirdly, there is no way such a realignment would or even could go quietly, there are simply too many intertwined EU tentacles throughout European governance, too many interdependencies not to mention the €120 billion A YEAR euro-redistribution from the northern states, that is an awful lot of infrastructure projects and farm subsidies that suddenly wouldn’t be funded any more just for starters.


  42. Yes, Germany rides into Town and rescues the fallen €uro after pulling the rug .The €uro will now be called the $Giro as all the Brits smell this new money and finally join in as many are use to this new currency .


  43. John, this line (you have to think of the big picture) is exactly the angle our desperate politicians are trying to sell now.
    Now tell me: Which nation would you expect to gladly surrender their last remaining wealth (we are talking about ordinary people here) to save some globalist utopia, much less a floundering currency system?
    Would the Greeks? Surely not, and why should they?


  44. No way Jose! If all European and world anxiety would discover the harbor of a new D-Mark it would take refuge there and the D-Mark would strengthen so much that Germany would not be able to export one single bratwurst, much less a Mercedes Benz. Like Massachusetts needs Tennessee so does Germany need the weaker European countries!


  45. It all sounds like the bankers perennial dream, realized previously in so many other times and places:

    Destroy an economy or economies and then buy up everything for next to nothing. Then start the game again.


  46. @david stoddart;

    No. If you study it from its inception it was always the design to create a Federal European State that was above national politics, run by a self-selecting, non-political commission of bureaucrats based on Franco-German agreement and design. I have no doubt the French in general couldn’t see anyone else but French intellectuals driving it through taking most of the top positions and no doubt there many in Germany who thought they could always finagle control, but the objective was, and still is, to remove politics and democracy from the equation so that Europe could be governed sensibly and in the best interests of all, a modern manifestation of the political intellectual hubris that has burdened the world at least 2 and a half millennia.

    We would do far better to follow the old style of absolute monarchy; right, you’re in charge for the next year, make the laws, resolve disputes, etc, then come next spring we’ll stuff you in a wicker basket and sacrifice you to the Gods to ensure things stay good, maybe sooner if things look dicey.


  47. I’d settle for 2% right now. At the rate things are going, we will be lucky to get away with a drop of 10% over the next three years. People’s savings are diminishing anare not being replaced because of low interest rates.


  48. What a shame we live in a world where people have been conditioned to believe that a world wide economic disaster is a far more ‘realistic’ or probable a scenario than global debt forgiveness could ever be. Was not always so.


  49. I’ve been betting on horses for a few years, profitably. The Eurocrats remind me of an addicted gambler, unable to admit he’s a losing gambler, throwing good money after bad over and over again.


  50. Germany, Turkey and Greece to join the BRICS, to become the STRIGGBC.

    China gets to spend it US$$ in redeveloping what is in reality a very attractive European country – new infrastructure, new low cost employees, Russia gets to site it’s “defensive” nuclear missiles in Germany and a second Mediterranean port. They all get the energy rights, and output from the Greece/Turkish/Syrian/Palestinian/Egyptian/Cyprian offshore wealth.

    Possibly the ex Yugoslavian countries will take a fresh view on their loyalties.


  51. Pingback: EUROBLOWN: Why I’m betting that Germany will leave before Greece. | Machholz's Blog

  52. Why do we, the electorate, allow ourselves to be ruled by a class of people with so little courage, which is inevitable based on their lack of competency at economics, business, or even mathematics.

    Both in the UK and across the whole EU the political class have just decided to allow events to run their course. With fingers in their ears they are all smiling while chanting “we want everyone to stay in the Euro”. Maybe they should brush up on the famous quotes of Gorbachev who said the solution to the problems of the USSR was to have “more socialism”.

    Woe to us in the UK who mock the Greeks… how they have loved their early retirement and unfunded lifestyle. We are only about 3 years behind. Right from the beginning of the new government, they chose to announce a budget based on the “inevitable” return to growth after a recession. If the amount of growth that has happened and will (not) happen over the 5 years was put into the calculations 2 years ago, they would have had to announce across the board massive pay cuts in the public sector and a slashing of benefits.

    So, anyone in the public sector, on a decent wage… get ready to live on at least 30% less in real terms in a few years time. Your enforced pay cut combined with inflationary losses over the next few years are a certainty. If in doubt… just to the maths!


  53. A couple of serious questions:
    1) how would German conversion to DM work tactically? Do a bank holiday and close the borders (corpus christi 7.6.2012 and keep the banks closed on Friday?) What happens to Euros held by German citizens outside Germany? Shut down all electronic transfers during those 4 days? Wouldn’t everyone holding Euros in every other Euro country bank during those days immediately electronically transfer their Euros to non-Euros banks (run to US$)? Searching for ANY currency that wasn’t Euros before Monday morning. Seems like it would be a very difficult process to manage and have the potential to destroy the bank deposits of all other Euro countries overnight. Has anyone heard any details on how a German exit would work?

    2) John W, tell me do you still have those Euros in the Spanish bank?


  54. Centre Policy Studies: “SMALL IS BEST”

    It certainly is. I’ve been saying that for a very long time. Good to see that expert economists have finally come round to agreeing with me :-)

    Sadly, the political elites are wedded to exactly the opposite, hence the chaos and economic collapse going on.


  55. @JE,Gorbachev also said ,as regards East Germany’s failure to reform,a comment directed at Eric Honecker,’Those that delay are punished by life'(1990)..EH ended up in South America,followed by the collapse of the USSR,principally because Gorbachev would only have limited democracy and economic reform.We are watching a rerun of a collapse of an empire.


  56. BT, your link invites us to come to our own conclusion based on the whereabouts of US naval units. My response is that this is largely irrelevant in that Israel will attack Iran without giving the US warning, so that the latter will never have the opportunity to get its ships into position near the Gulf of Hormuz on time.

    I heard recently that Obama asked Netanyahu to give him at least a day’s warning of Israel attacking Iran. He did not get a reply, let alone the reassurance he requested.

    I also think the possible damaging effect on Obama electorally when Israel attacks will count little with Netanyahu and his fellows since, for them, the over-riding issue is the survival of Israel and not a US president’s political survival.

    I think Merkel might give up on the Euro when the potentially bigger issue of war with Iran starts. Perhaps a nation-state looks inwardly more when there is a life-and-death threat out there to the state, for Islamists may attack nations beyond Israel if the Middle East war spreads.


  57. JE, we, the electorate, allow them because it is in the nature of representative democracy to delegate governing decisions, like the ones you refer to, to others.

    We, the electorate, would never be able to do this ourselves so we elect the delegates for us. Of course, we get imperfect leaders who disappoint us, but I don’t think that we, the electorate, would be able to any better. In fact, mobocracy would be next of kin to anarchy.

    In consequence, we have to accept that imperfect human beings will always elect imperfect human beings who will make imperfect decisions over imperfect situations. In other words, we’re all doomed!


  58. If Germany leaves first… others will join them for sure…
    Austria, Croatia, Finland, Slovenia, Slovakia, Italy (Monti has taken Angela’s side on everything) and Netherlands..

    Any similarity with the WW2 Axis powers is purely coincidental !


  59. Just appeared on the Times behind the paywall …

    Merkel’s secret plan to save Greece like East Germany

    “Angela Merkel is secretly preparing a six-point rescue plan to revive Greece in the same way that East Germany was modernised after the fall of Communism.

    The German Chancellor’s plan to transform ailing eurozone countries through privatisations, soft investment rules and the relaxation of employment laws and practices will be presented to the European Union for discussion in the coming weeks, according to tomorrow’s Der Spiegel magazine.

    It is likely to provoke an outcry in Greece because its core message will be to “behave more like the Germans” to build a sustainable future.

    Chancellor Merkel will present her proposals as Germany’s contribution to the call for a European growth strategy, championed by the new French President, François Hollande, and aimed at all countries that are suffering in the economic crisis.



  60. Pingback: John Ward – Euroblown : Why I’m Betting That Germany Will Leave Before Greece – 25 May 2012 | Lucas 2012 Infos

  61. Germany has to leave the Euro, it is so out of step with the rest of Europe. Once France basically admitted it had no knickers on and was really a south european trollope, the game was over.
    The start of the Euro only worked because Germany had spent a decade rebuilding the eastern half of the country, and her finances were in a poorer shape; so there wasn’t the big disparity there is now.
    A decade of powerhouse growth, and she is back to her plump and robust health. The Greeks want to stay in the Club, but won’t pay their banking debts, and plan to dispute their legality as a stalling tactic. Germany has no appetite to settle on behalf of Greece, then Portugal, then Spain, then Italy. But the Greeks, if they have to tighten their belts even more, will want to pick a fight with someone.
    All those who can, in the poor south, have moved their Euros into foreign accounts, so a new drachma, peseta, escudo(?), lira, is a bit inoperable for a while.

    So Germany goes then, I am sure they are ready right now.
    I am sure they can work the import/export costs pretty well on a high-rated Deutchmark (much better than the clueless Swiss); and as a side-benefit, they get to watch the French Banks drown.


  62. Small Is Beautiful?

    I seem to remember a certain UK advisor to our National Coal Board suggested as much 30 years ago. Pity no-one took any notice.


  63. @JW….””””No, I rather fancy Germany will leave the eurozone before Greece does.”””””

    It isn’t going to happen, John. No-one leaves the Eurozone. Once you’re in, you’re in for ever. The Project may slow down, or may even stop temporarily, but it NEVER goes back.



  64. @AJC “privatisations, soft investment rules and the relaxation of employment laws and practices”

    hmmm now where have I heard that recently?


  65. You get the sense that one Spanish region puts its hand up and asks to go to the toilet the others will follow.
    This layman only understands that there might have been a billion euros spent on an airport south of Madrid, now empty and someone has to get a slapping. Probably not the guy who built it


  66. Well, you can lead a horse to water….but a pencil must be lead…..sorry, I’ll get my coat!


  67. Maybe Germany should adopt Greece, and then they can both leave the eurozone together and establish the DrachMark. The Greek spendthriftiness could help keep down their joint currency, and Germany could prop up Greece indefinitely (and get permanent access to a nice vacation spot) without worrying about having to do the same for the rest of the periphery.


  68. @aflatoxin: I think the ‘big is best’/’small is best’ argument goes in cycles depending on political aspirations of the moment. In reality there are many things that operate better as ‘big’ and others as ‘small’ and it is this that should guide our political elites, not their political ambitions.


  69. I’d sooner have anarchy (which simply means ‘no government’, not the Mad Max crap that TPTB have tried so very hard to paint it as since the word was invented) than what we have now.

    Time we faced the facts, democracy has been conclusively proven, time after time, in place after place not to work very well. Ditto Communism and it’s various socialist offspring. Yet we’re constantly fed the line that those are the only options available. Really? Since neither of them work, why don’t we invent something new that might?


  70. @John Mark: Yes that link does as you say. But I recall the US had more heavy metal in the Gulf or on its way several months ago.

    Whatever rumours may exist about Israel going it alone against Iran, I don’t share that view. They might make the first strike but straight after that they need the US behind them. So the US would need to have all its floating warfare in place. They still have some, as seen in the StratFor chart. At the very least it would need US satellite and intel support and if Iran retaliated, one helluva lot more support from carriers/fighters & bombers and other floating hardware to clear mines in the Gulf etc. What the US seems to have there at the moment is sufficient for policing the Straits of Hormuz, not for full-on warfare with Iran. I believe the choice facing Obama right now is whether he wants to have a full-on war (that is what it most likely would be with Iran) or not, and he’s finding the decision difficult. Perhaps he’s waiting for the smoking gun to appear…
    If there is a war with Iran, it’s difficult to speculate how far it might spread. Would China and Russia get drawn in? Other M/E countries? Europe? If it became a biggy, I’d expect to see the US use it as an excuse to reset its huge debts to some countries, especially those who did not support it.

    All IMVHO of course…


  71. Pingback: GREECE BREAKING: Athens caretaker government forced to raid recapitalisation budget to keep going | A diary of deception and distortion

  72. Well if you can’t get Metformin, then you’re probably also on a “can’t get food” diet. Maybe the two will cancel out…


  73. Yes, I think this is true, and the reduction in diesel and petrol prices over the last couple of weeks backs it up.


  74. Woodgnome, you may be right that the word “anarchy” itself only means “no government”, but the two dictionaries I have just looked at also include violence and chaos, for examples.

    The French Revolution was anarchy so that even the dreaded Robespierre got his head cut off (if I’m not mistaken). In anarchy, in “no government” NO ONE is safe. At least, where there is government, you can have a police force and judiciary accountable to that government in some way or other.

    It was not until Napoleon became the government, I believe, that the random killing of anyone at any time ceased. Anarchy no longer; replaced by autocracy. The latter, though frightful, was much better for the average French citizen than the former, I suggest.

    In some parts of Mexico at the moment, there is anarchy, there is “no government” where it is very difficult for police and army to stop that multi-person killings by one drug gang against another and against innocents coerced into drug running. NO ONE is safe, not even the police themselves.

    There is an assumption in your post that there actually is yet another form of government that human beings have just got to sit down and devise. I think that assumption is false, if you will pardon me. There is no form of governance devisable by mankind which can, at its best, function better than representative democracy, at its worst.

    For me, democracy is the “least worst form of human governance devised by mankind” and the least worse that can be devised. The problem lies, not primarily with the form of governance, but with our human nature. Mankind is, on average, a cruel, bloodthirsty, egocentric and innately deviant peoplehood, and that is the reason why human governance is so darn difficult.

    There is another form of governance of human beings, which has never been experienced nor tried out. It is one I do look forward to personally, but I don’t expect anyone else on the Slog to do so. I would like to see a Christocracy on the earth, which would be an autocracy with Christ as the autocrat. I hope it will come about, but it will not be a form of governance devised by man, which you believe is still possible.


  75. Pingback: GREECE BREAKING: Athens caretaker government forced to raid recapitalisation budget to keep going NEWS LONDON ONTARIO - Alternative / News London Ontario - News, sports, entertainment, business, travel, homes and auto sections.

  76. BT, I follow your line of reasoning. However, Obama may have withdrawn his naval hardware deliberately, so that the congregation of his ships would not encourage Netanyahu to declare war against Iran.

    I share your view that Israel won’t go it alone without the USA, but I read on Haaretz recently that, if Netanyahu was to declare war, especially this side of the US election, the US government would feel bound to join Israel and would necessarily fight against Iran. This view might have arisen from the Jewish electorate in the US, which largely, I think, supports Obama and the Republicans who support Israel.

    In other words, it is politically and electorally impossible for Obama to let Israel carry on alone a war with Iran that it starts without America. This must include the US’ stated declaration that it will never allow Iran to have nuclear weapons, and that it is and always has been Israel’s friend. Now, a friend would not leave Israel to go it alone, at least, it would not be able to leave them alone for long.

    That period of time would allow the US’ naval assets to get to Iranian waters, although subs are probably stationed there already, there is a Mediterranean US fleet, and air power can move from Deo Garcia, even Britain and Europe, much more quickly than the boats.

    Even so, what are your thoughts on possible Merkel reactions to war declared in regard to Germany and the euro?


  77. @Woodgnome/@John Mark: Anarchy may equate to zero government but democracy is simply the method of *selecting* the individuals who will be in government – as opposed to (say) a dictatorship.

    IMO where we’ve gone wrong is to believe that democracy is all that’s needed for successful government. Recent events tell us it is not so. Worse, we have learned the hard way that people who go into politics are often dishonest, corrupt, incompetent and often have their own agendas.

    The solution is probably to introduce a proper constitution which clearly defines the roles & responsibilities and limits the powers of a government that’s democratically elected under the constitution.


  78. BT, I agree, namely that democracy allows a country to get rid of a bad ruler or government without bloodshed. It is, perhaps, the only form of governance which allows this to happen.

    I also agree that the quality of democracy can be improved such as by a constitution, for example. However, I also believe that democracy necessarily builds up debt because the removeable politicians need to spend on those who vote them into power.

    This spending on the electorate is constant, incessant and impossible to avoid. Hence, rising debt throughout the democratic world. I am doubtful as to whether democracy is going to be able to continue to exist if serious debt reduction takes place, such as by hyperinflation and the consequent austerity.

    In fact, I think democracy is self-destructive because of its need to spend and to spend on the people.


  79. Terp… the fact is the Greeks have already given up their wealth to save the rest of you. Greece is paying for everyone’s sins.


  80. Pingback: John Ward – Greece Breaking : Athens Caretaker Government Forced To Raid Recapitalisation Budget To Keep Going – 25 May 2012 | Lucas 2012 Infos

  81. @John Mark: No no no. I wrote “a proper constitution which clearly defines the roles & responsibilities and limits the powers of a government that’s democratically elected under the constitution.

    I would expect to see a constitution – which would be the supreme law of the land and owned by the people – to require the elected government to balance the budget each year, save in the event of a national emergency or natural disaster. No PFIs off the books etc etc.
    I would also expect to see a Bill of Rights included which would define rights that people acquire at birth which are inalienable and cannot be taken away by any government with whatever majority it got eg freedom of speech etc.
    A properly drafted constitution would not be the problem as it would seriously reduce the powers of elected politicians and force them to behave responsibly, subject to criminal prosecution for violation. Exactly what powers it granted to an elected govt would be for the people to decide during the drafting and voting process.


  82. I find your faith in Bank Of America and Merrill Lynch to be hilarious considering the accuracy of EVERYTHING, any of the American companies involved in creating this fiasco have stated for well over the last 5 years. Why does anyone believe anything American banks say? Next, you will tell me you trust the credit rating agency’s? do you still believe in the tooth fairy?


  83. @John Mark: “Obama may have withdrawn his naval hardware deliberately, so that the congregation of his ships would not encourage Netanyahu to declare war against Iran”

    Yeah, that’s certainly a possibility especially as he’s known not to like the idea of going to war with Iran. I agree with everything you wrote.

    On Merkel and the Euro…it’s difficult to speculate. If a war spread and became a real biggy involving China, Russia and Europe (there are people in the US who believe the time is right for ‘total war’ to re-establish America’s global dominance), all bets are off. Her advisors would certainly make it clear that she cannot be involved effectively whilst already fighting a currency war with the EZ. In this case she might decide to close ranks, cut her losses and pull out of the Euro altogether.


  84. @John: Well, the reason for having a peg (if Germany pulled out of the EZ) would be to prevent the new D-Mark rising through the roof and wrecking their export economy. So I guess if the USD/GBP fell even more than they already have, the peg could be adjusted downwards.


  85. The only things saved so far are some banks balance sheets, and even that only for a while.
    The EZ as a whole is beyond salvation…


  86. From the DT:

    The comments came amid rumours – detailed by the bank of Tokyo Mitsubishi-UFJ – that a Greek exit is now imminent. The bank said there was speculation that a “planned departure” would take place over the weekend of June 2 and 3.


  87. Hi John, great blog.
    If all this were to happen over the extended UK Bank Holiday Jubliee Weekend…
    what timing…!
    John, in your scenario, do you see Germany re-valuing upwards and
    by how much?
    Who would join them?
    Who (of 25/27) would be in the ‘rump’ of the Euro?
    What would be the approx ratio of Dmark to Euro?
    What value do you see for GBSterling?
    Where do you see USDollar price/value?
    Wouldn’t the Chinese slip in a devaluation of the Yuan, when the opportunity arose?
    The Japanese Yen, a tactical devaluation?

    Wow! What prospects…


  88. ‘…and scared politicos fall for it.’ And that is the sad crux of the matter. All have short term personal interests in mind.


  89. Friday’s El Pais was again reporting the ‘stuff the invoices in a drawer’ game as played by the autonomous regions in Spain. Apparently there are €1.8bn of these admitted in a couple of the 17 autonomous regions, that is, in addition to those already admitted around the country. The numbers are very large and do not appear in the relevant accounts payable ledgers. Some date from 2009. El Pais thinks there will be a lot more. After all, even the most compliant and high margin (healthcare) suppliers must be paid one day and the truth will out.

    To me this is simple fraud by the politicians of the autonomous regions. They deliberately and hugely understate the liabilities of their local governments, and that’s without even mentioning the debt at town hall level. Those involved should be prosecuted and thrown out of office. Then the central government will have to pay off the creditors all around the country, adding to a probable bailout of the country by several €bn.

    This sort of behaviour is simply unacceptable and I suspect mirrored around the southern EU countries. When will Brussels put some pressure on to clean things up? When will our politicians in the UK finally realise that we are dealing with other EU countries that frankly cheat in their accounts? This has been going on for decades now.


  90. BT, thank you for persevering; I did not focus on your post well enough; must have been tired. I need to think about your idea of a Constitution and a Bill of Rights. I am persuaded of its rightness, even goodness, in theoretical terms, but I need to ponder on the obstacles to its coming into law.

    I feel that there are forces which would either hinder the people from being sufficiently involved to achieve this,

    or which would move the global population away from ANY form of democracy on account of the politicians’ interest in developing a world governance.

    Democratic leaders continue to give up their national power in order to form types of supranational power. How likely, then, is it that your ideas of improving democracy would be carefully brought into being when supranational governance is the flavour of the age?

    I need to go on thinking about this. BTW, thanks for your thoughts on Merkel and war and euro.


  91. Anyone that opens negotiations with the phrase “we have a strong will to compromise” hasn’t a scoobie about how to handle negotiations.


  92. If there really is a plan for Greece to exit the EZ over that weekend, then it’s a very closely guarded secret. Officially, as per MSM, the EU political elites are working their nuts off to prevent such a thing.


  93. @John Mark: Here’s a few things to help thinking… :-)

    I’ve had extensive discussions on this subject in various places over recent years as I’ve watched our political elites assume ever more powers and more and more corruption has crept into our system of governance. It is so bad today that even the Civil Service is up to its neck in dishonesty and corruption.

    Most people would not object to a system of absolute power by govt IF the elected government and Civil Service managed our affairs and economy in the nation’s best interests. But they don’t: there is a daily stream of dishonesty and corruption which proves this. We even now have corruption in the police with cash-filled brown envelopes and phone hacking etc.

    The Brown years as Chancellor were only the latest example of a gang of agenda-driven politicos who wrecked society and drove the economy into the ground through a mixture of political dogma and breathtaking incompetence. And when the sh*t hit the fan, Brown then poured hundreds of £billions of taxpayers money into rescuing the banks without another person ever needing to agree to it. We are now saddled with £1 trillion of national debt and rising. The economic crises continues.

    This is really a crises of democracy.

    The only solution I can see is to severely reduce the powers of govt and to impose a strong set of rules on them which also seek to reduce corruption and gross mismanagement. They could do so much…after that they’d need to get approval from elsewhere (eg Parliament).
    The Bill of Rights would ensure that our personal rights are inalienable.

    The sort of Britsh Constitution I have advocated is along these lines:

    – a strong written Constitution with Bill of Rights, not drafted by political elites. It would be owned by The People and would be the supreme law of the land. It is for The People to decide what powers they give to an elected government. It could only be changed by a large majority vote by The People.
    Violation of the Constitution would be a serious criminal offence.

    – it would set out the roles & responsibilites of government.
    “If it ain’t on the list, it’s none of their business.”

    – governments would be elected under the rules of the Constitution.

    – the Constitution would be supervised by a Constitutional Supervisory Board (CSB) not appointed by the political elites. Thus, every new Govt Bill would require sign-off by the CSB. No sign-off = no new Law. Much of the Blair anti-terror laws and the CCA would never have got through IMO.

    Exactly what govt’s roles and responsibilities would be are a matter for The People to decide when drafting it. Personally, I’d like to see one that reduced the power and size of govt to about half of what it is today. Perhaps down to one third over time with a commensurate reduction in state spending.


  94. BT, thanks for you many thoughts on this matter, which I will go on considering and hope to respond to when time allows.


  95. hiya over there in loverly olde euro-land….and thanks a bunch for the tip-off angrilla, you are such a honey…i’m not quite sure about the vaguely peticuarly incorrect feline muff, but i’m shooting across directly to pick up one of those darling inflatable arse baskets for my hubby – he’s such a fan of the sockit game and the tasteful design of the item’s upholstery will complement the colour-scheme in the white house just fine.


    oh yeah, please leave me a space in the supermarket car-park for my brand new freightliner m2 business class trailer-truck – barack says it’s more than equal to the task of towing home the weekly shop and i’m even dropping off an icbm to one of our army bases in munich (whilst i’m passin’ thru). hope evrything’s cool with you ang. in a while crocadile…


  96. please follow this link to read the politically sensitive statement made by frau angrilla murkl on the subject of the euro, which was rapidly deleted by the cia in a fit of paranoiac pique.

    (for without this entry mrs missile obama’s subsequent comment makes little sense whatsoever).


  97. Pingback: EUROBLOWN: Nazi debts, Papandreou accusations, and Greece staying in the eurozone: none of these can save the euro now. | A diary of deception and distortion

  98. Pingback: Πόλεμος ΗΠΑ – Γερμανίας για την Ελλάδα | ANTINEWS

  99. Pingback: – Πόλεμος ΗΠΑ – Γερμανίας για την Ελλάδα

  100. Justsaying, I must inform you, that,
    All Greek workers and employees, are paying taxes like hell, as the state ist already taking its taxes, actually, before the worker gets his salary in his hands.

    The same goes for pensionists.

    They, the pensionists, paid their taxes on all their capital declared when they were working and then when they became pensionists they are paying again taxes on their pension, and the state orders cuts in it inspiet of them having prepaid their pension

    Even somebody who has no income or work, home or any other meaans of living, (he sleeps in the street and eats refuse), if he makes a statement to the Greek revenue service, then he is liable to be fined 300 Euros.

    The only people who are not paying taxes are the free enterprisers, doctors of medicin, e.t.c.


  101. Pingback: Πόλεμος ΗΠΑ – Γερμανίας για την Ελλάδα « ΑΝΕΞΑΡΤΗΤΟΣ ΣΑΡΩΝΙΚΟΣ Blog

  102. Pingback: Ο πόλεμος Μέρκελ-Ομπάμα για την Ελλάδα> Ένα άρθρο που τα λέει όλα! « ΟΡΓΙΛΟΣ

  103. Pingback: SYRIA EXCLUSIVE: Israel publicly condemns Assad, having secretly helped ensure his survival. | A diary of deception and distortion

  104. Pingback: GREEK CRISIS: Merkel’s ‘unexpected’ U-turn – Spiegel | A diary of deception and distortion

  105. Pingback: John Ward – Greek Crisis : Merkel’s ‘Unexpected U-turn – Spiegel – 10 September 2012 | Lucas 2012 Infos

  106. Pingback: Πόλεμος ΗΠΑ – Γερμανίας για την Ελλάδα |

  107. Pingback: Germany: EUROBLOWN Why Im betting that Germany will leave before | Euro Economy

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s