Yet another day marked by paroxysmal manifestations about the Greek financial debacle in the German media. The crisis is real and (to a large measure) the utter disappointment and resentment of Greece's European partners is fully justified. But the German wrath has gone too far.
First came the gloomy, almost humiliating, interview of Greek Prime Minister George Papandreou in der Spiegel. The arrogant, condescending and prosecutorial style of the journalist conducting the interview is obvious. http://www.spiegel.de/international/europe/0,1518,679415,00.html
And then came this week's edition of the Munich-based FOCUS weekly magazine bearing the sensationalist title "Betrüger in der Euro-Familie" ("Swindlers/defrauders in the European Family" -- "Απατεώνες/καταχραστές στην Ευρωπαϊκή οικογένεια") on its cover page along side with an appalling image depicting Aphrodite of Milos (Venus di Milo) giving "the finger" whilst being wrapped, from the waist down, in the Greek flag. In fairness, this is beyond poor taste satire. It is an insult to the Greek flag and the dignity of the Greek nation. http://www.focus.de/magazin/videos/focus-titel-betrueger-in-der-euro-familie_vid_15672.html
On a more sober note, I would like to share a quote by my esteemed colleague Dr. Marios Evriviades, Political Scientist at Panteion University of Athens:"The Greeks may be all the Germans say (and worse) but in their history they [Greeks] neither invented gas ovens nor did they put them in use 24 hrs a day for five years in the middle of the 20th century. These same Greeks, incidentally, were the first to inflict on fascists their first organized defeat when Europe lived in fear and despair."
Christos D. Katsetos, MD, PhD, FRCPath
http://www.drexelmed.edu/Home/AboutOurFaculty/ChristosKatsetos.aspx
I thought the Der Spiegel questions were tough, as they had to be, and fair. Papandreou handled them well.
ReplyDeleteIt was a good interview. A phoney-friendly interview would have impressed no one and would have been laughable. The world is a hard place. The Greeks aren't going to get any favours.
So the Focus cover was harsh. What did you expect after what Greece has done? We made ourselves vulnerable to this kind of satire. Anyway, she's a beautiful lady and a great representative of Greece and, in a way, the cover backfired because Aphrodite (Greece) is giving the finger to everyone who puts Greece down. The cover also affirms Greece's connection to the ancient world. Look at it another way, ("reframe it" in your mind) and it's very positive. I know what you mean Mario, but lighten up a bit. It's only an "insult" if you see it that way. I'm sure the Germans are tired of the WWII thing and not impressed by it. You'd make your point better by repeating all the positive and friendly things in the Greco-German relationship of today.
ReplyDeleteStay cool Dr M. (Ataraxia)
best,
AdG
Carol the cover page that is depicting the "Aphrodite of Mylos" in an improper position, is a blasphemy to Greek history and the Greek people. Additionally the article followed, is using slander expressions and lies about Greek people. This is not journalism but a expression of racism.
ReplyDeleteCan you stand me for one more comment? As a whole, the Greeks are among the people in the world who are the most certain and confident in their identity. If we bark and howl every time someone makes a comment or an allusion we don't like, it just shows doubt and an insecurity and a lack of confidence. We see this often in the little people of Slav Macedonia. It's best to laugh it off and try to turn it around.
ReplyDeleteI think we should be proud of the Focus cover. I am. It says "f**k you" to the stone throwers whether they are in Skopje or Berlin or anywhere else. I'm going to frame it and put it up in my office.
Thanks for your reply, Akritas. I just looked up the Focus cover on the internet after reading your note in case I missed something. I saw the picture of Aphrodite with her finger out and the Greek flag draped around her midriff. I'm sorry, I don't see how it changes anything I said. Am I missing something? I still think its wonderful. It would be great if we could send an image of it to the racist Slavs at Maknews and Mina Breaking news. If I am being thick-headed and missing something, please tell me. I'm going to call a German friend and ask for a copy, so I can frame the cover. Seriously, can you send it to Maknews? They banned me from posting years ago.
ReplyDeletebest,
AdG
PS: I enjoy posting here but, again, for some reason I pop up as "Carol" instead of "Alfred di Genis." If you can make the correction, cool. If, not, that's cool, too. I know who I am.
Sorry, Akritas, one more note. As far as the article itself goes, I couldn't care less. The great Anglo-Irish wit and playwright, Oscar Wilde, said, "I don't care what people are saying about me, as long as they're talking about me." Anonymaty and nothingness is the worse fate. It is the fate of little people, not a great civilization like ours.
ReplyDeleteHere is a copy of a post I just sent to Mina Breaking News who featured the cover on their racist website. They will not print it of course:
"As a Greek, I absolutely LOVE the Focus cover of Greek Aphrodite giving the finger to all those, you included, who throw stones at the Greeks. I have already framed it and put it up in my office. It's Fantastic and she's beautiful! On top of everything else, it affirms to the world once more the direct connection between modern Greece and the ancient Greek world and it gives to all the Slav racists a big, big "FOCUS YOU!!"
And this: If we get upset and uptight and angry over a joke that we can have fun with, then we are no different than the Muslims who rioted over a cartoon of Mohamed. It's fine for them because that's who they are, but it's not who we are. We are not third world people with uncontrollable tempers and loads of self-defeating hostility. We are calm and cool and collected and clever enough to turn a joke around and if we are not that, well, then, it's what we want to be.
ReplyDeletebeat,
AdG
Just a reminder of the words of General Karl de Suire, the butcher of Kalavryta (WWII) about the Greeks "Ein Volk von Nichtstuenden, Schieber und Korrupteure" (a people full of racketeers and corrupters).
ReplyDeleteI agree with Carol!! When we are critisized we come acrosss as having very "thin skin". Let's keep our cool, and our humor!!
ReplyDeleteIf Greeks are allegedly “crooks” for the German “Focus”, then how Greeks should call the Germans considering the following:
ReplyDeleteDestruction of the Third Reich in Greece …
558.000 dead(125.000 executed, others died from hunger, hardships, etc.)
70.000 Greek Jews exterminated in a total of 80,000,
830.000 unable to work
3.700 cities and villages wholly or partially destroyed,
408.000 houses destroyed,
50% of Greek industry destroyed,
75% of road network (from a total number of 17.200 cars, trucks and buses, 11.650 were destroyed)
75% of railway (from 2679 km remained only 680 km)
73% reduction of the commercial fleet (From the 583 merchant ships, Greece lost the 434 on 1939),
60% reduction in farming production
25% of forests were lost,
100% reached the disaster in telecommunications
Source: Ministry of Reconstruction, 1947 – Research Iliadakis T., 1997, from the newspaper ”Ta Nea”, V. Karakasis / Irene Karanasopoulou, 23 Nov. 1998
What Germany owes…
- War reparations: By conservative estimates, the actual amount of Germany’s Debt to Greece is more than 14.4 billion dollars in 1938 prices. Professor A. Angelopoulos used for his estimates an interest rate of 3%. This means that the amount in dispute, exceeds the current $ 60 billion – or 17 trillion drachmas.
- Occupation loan: During the occupation, Germans and Italians picked up from the ‘Bank of Greece’ 4.05 billion in 1938 prices. From this amount, over 3.5 billion dollars, was taken by Germany. The rate of 3% of the amount exceeds 18 billion dollars (The claims by Italy are regulated by an agreement of 1947). This sum should be added to debt payments from Germany to Greece back in the World War I and remove the 115 million DM provided by the agreement of 1960.
why Germany owes …
1. Remainder of reparations from the World War I.
2. Claims for damages caused during the World War I.
3. Restoration of any kind of damage, budget expenditure and occupation expenditure caused during World War II and German Occupation.
4. Damage restoration caused to the Greek merchant shipping during the period that Greece had NOT entered the war (1-9-39 up to 28-10-40).
5. Compensations for all kinds of victims, including dead, disabled, hostages during the German occupation.
6. Damages for forced labor in German concentration camps.
7. Compensations to victims for the portion which falls under the former German Democratic Republic’s share.
8. Compensations for the amount of money received by the Bank of Greece to the German occupation authorities in loans, in addition to expenses caused by the German occupation (Note: the infos originate from the book by D. Kostopoulos “A war which has not ended yet”)
The German ambassador to Greece said today what should be obvious to all. The Focus article has nothing to do with the German government's opinion or relations with Greece. It is an article from a private media publication. If a publication from the Greek media wanted to, in turn publish something about Germany, that would be its privilege. Never mind WWII, it could inform the Greeks about something few of them know about, German behaviour in South West Africa when it was a colony of Germany's.
ReplyDeleteI totally agree with Carol.
ReplyDeleteGiven the EMU is a crock of shite, contrived by some neo-liberal morons, who never considered how such a monetary system would function under a shock -- well now we know.
Greece is not the only one that should tell the ECB to go shove it, Portugal, Ireland, Spain and Italy will soon be saying the same thing.
If you want to get an understanding of the issue read the following blog:
A Greek tragedy …
http://bilbo.economicoutlook.net/blog/?p=6545
España se está muriendo
http://bilbo.economicoutlook.net/blog/?p=7208
Exiting the Euro?
http://bilbo.economicoutlook.net/blog/?p=7362
First of - I am German and always honored the ancient Greeks, as well as I denounce anything related to the Third Reich.
ReplyDeleteBut let me ask you: so what?
Your ancestors had a great period and one (or two ;)) generation(s) from ours failed. Do you really think that this is argument in todays issues?
Fact is that greek governments of any kind cheated and betrayed their european partners. Another fact is that corruption is a widespread problem in your society and a cause for most of your problems.
So what is expected from us? That we just nod it off and pay for your faults, because our grandfathers made some far far more despicable things? Come on.
The title from the Focus is imho nothing special. See it from the perspective that you want to sell your title story to german customers. And you can't expect from the average person to recognize the Venus and immediately relate it with Greece - thus the flag. And the gesture .. well I honestly think that it fits, considering the actions of greek governments since they joined the Euro. ;)
They lied about the raw economical facts when they joined and ever since, while they never would have been a true candidate for the currency.
If a friend and partner cheats you, if they fail to use all the money they received from the EU for decades, to reach a competitive level - than yes, this can be understood as a "fuck you" from their side.
So far this would be an episode about your responsible politicians only, not about the people on both sides.
And while I understand that the shock and depression needs some kind of valve, I doubt that I could imagine anything cheaper than picking the Germans as the punching bags.
But yeah, it pretty easy. All those ideas of a strong and stable currency are based on the virtues of the Deutsche Mark. And haven't those pesky Germans done all those bad things? How dare they criticize anyone ever again for anything? Go to hell Germans!
Oh, and they should pay us for WW2 now that we remember how evil they are - and let us simply forget that they payed billions over billions via the EU funds. We owe them nothing and they owe us everything!
Sounds indeed very shallow and cheep this string, doesn't it? Imagine how strange it looks when we register that so many of you fail for it.
Do you really think that Greek is only being criticized in this manner in Germany? Do you really have any doubts that the people in the Netherlands, France and wherever they care the least bit about the stability of the Euro, think different of this issue? That their magazines have any different kind of satire than the Focus?
So let me close this with the request to stay calm and logic. You surely have problems, but we ain't a part in that.
Golwar there are two diffrent issues as regards Focus issue.
ReplyDeleteThe first is the racist attack of the magazine to the Greek people and heritage.
The second is the Greek budget problems.
Yes I know that Greek politicians lied about the raw economical facts not only to you (EU, Germany etc) but also lied and to the Greek people. Greek politicians are corrupted because all these years took money from diffrent compoanies and one of them was Siemens. You know in the corruption there are two parts. The venals(Greek politicians) and the concealers(among them and the Germans of the Siemens).
The Greek people was and is out of this.
Greece is coming under attack for both economic and political reasons. Europe’s got more problems than just Greece. Greece’s huge debts have caused concern among the 16-nation euro zone, but Spain or Italy has a larger economies and issues to match.
If Brussels(Germany and France) left us to their own devices, the consequences would also be dire. Confidence in the euro would be shattered, and the union would face a crucial test. What good is a common currency, many would ask, if some of the member states pay their debts while others do not? Furthermore, there is a threat of a domino effect. If one euro member falls, speculators will test the stability of other potential bankruptcy candidates. This could destroy the currency and political union.
So you must realize that you can attack our politicians but you cant attack the people. EU face a crisis and Greece is in the middle. If Greece go in the IMF the EU over. Next will be Spain, Portugal e.t.c.
The German government lied and did shifty foot-work about their budget figures for euro-entry but only as much as they had to. The Greeks (and others) had to lie more than Germany, so they did. Regarding our "ancestors", Golwar shows a typical and superficial understanding of Greek history. He should brush-up on the accompishments of the Greek world during the Hellenistic and "Byzantine" periods and the successful struggles and achievements against overwhelming odds since the creation of the Greek state in the 19th century, including the suffocating period of Bavarian rule. Germany's blight on civilazation (while at the same time contributing greatly to it) is much more than "one or two" failed generation that started two world wars. Germany has become the ever-lasting symbol of the worst, most inhumane, most sickening atrocities known to humanity. The Greeks are openly coming to terms with their failings, Golwar should come to honest terms with the ones he inherited.
ReplyDeleteGolwar is what in America we call "a wimp." He passes over the racism and hatred of the German press but cries when he gets return fire from the Greeks. I guess that's why the "thousand year Reich", unlike the Byzantine, only lasted long enough to murder, destroy and sicken the heart of descent people everywhere.
When it comes to corruption of the soul, the Germans have nothing to learn from anyone, but we would have hoped that, as represented by Golwar, they would have had a little more courage to take the hits and hatred they so generously dish out.
akritas, I understand that you expect some respect for your people - and they surely deserve it, no doubt.
ReplyDeleteBut lets compare. We had a magazine which might have gone too far with a graphical summary of the current situation, fine.
And on the other side? In Greece it isn't just a magazine but indeed a lot of the people which go far further. They burn flags, they abuse (WW2) history when it benefits them, they tell that Germans lived in trees and ate bananas while they were civilized in ancient history.
This is from from common people on the streets as well as from bigger public organizations as Inka. And it are words and actions, not a picture which leaves room for interpretation.
And that just because of title screen that summarized what indeed happened more or less?
So who should be annoyed about the other side?
Corruption needs someone willed to pay, correct. But Siemens just payed where it was an expected part of the economic culture. They surely didn't spread it like a virus, but when it's afforded to do the business...
Not that I declare them saint, but it's too easy too fault others for the own sins.
About the current currency crisis - others indeed have problems too. It was a mistake to expect that countries in southern europe would switch their style once when they had a stable currency. You can't have one common currency and drive completly different economical styles and standards, as you mentioned too.
But while Spain didn't cheat but just is the biggest victim of the crisis, next to Iceland and Ireland, Greece did. And it makes a huge difference if someone was honest and at least tried his best to a certain point, or not.
As already mentioned, it was indeed a mistake on both sides. I guess Kohl & Co expected a shift towards our standards. And you can't blame them,as imho it isn't the worst gesture in the world to offer a place under a common umbrella so that we could unite on the same ground.
The problem is that Italy and Greece indeed liked what the Euro had to offer, but they never were interested in fulfilling what was expected from them as a member. And afaik noone was forced to join. ;)
Regarding iconoclast's links you really get a "whow" effect. More or less it is a request that the ECB should be a prime tool of economic politics. If the politicians fail to act responsibly, let just the currency dump and everything is great again?
And if it's just our problem - do it anyways as we don't care that it would cost the money of far more people elsewhere, who acted more mindful?
You might not like to hear my final point, but I'll have to tell it anyways - sorry.
As the Greek are the inventors of democracy - why is it that nobody seems to remember there that the people are also responsible for their governments?
Corruption isn't just a problem of the political caste. Nobody interfered to change something about the issues this country has. So is it really a mistake, an unexcusable act, when we blame more than just a handful of ministers?
I understand the general anger and frustration, hell I wouldn't feel any different.
But I don't understand at all the rage about Germany, while we would meanwhile have far more reasons to be royally pissed.
The only reason why we aren't yet, is because we like Greece and are used to being the devilish scapegoat anyways, hehe.
But each goodwill has its limits and I certainly hope that this tirade ends before real damage is caused (and before more people as Peter get the chance to cause the hate that they seem to adore so much).
PS
Let me add that Focus is well known as not being a magazine of the highest known standards. It surely isn't a political magazine as it claims to be, it tends more to the ideas of the yellow press. Nevertheless I see that pic as "normal" given the circumstances, I didn't read the related article however.
I apologise for the many typos in my above comments. But they still read like poetry, and I suspect Golwar gets the point.
ReplyDeletegw: "I didn't read the related (Focus) article however."
ReplyDeletePerhaps gw should inform himself a little better before he condemns an entire people. Is being accused of eating bananas really an insult?
...I mean, bananas have a a lot of potassium and are good for you, so I really don't see the objection.
ReplyDeleteGolwar as regards your final point "people are also responsible for their governments" of course agree and superadd.!!!
ReplyDeleteWe Greeks said that people have leaders that deserve it. But as I said the corruption has two parts.
Regarding the "rage against Germany", in my opinion is because the hypocrisy of your politicians, bankers e.t.c.. They know that in order to build Athens airport, buying weapons, make deals must bribe the politicians.
And the journalist of the "Focus"(not only this magazine but also and others as http://www.youtube.com/watch?v=mvhOMaf8wBA ) they know what happened in Greece all these years.
I saw the you tube video of the German presentation linked above, and I didn't get it. Why would the Germans want to say that the Turks are buggers and sodomites? I thought they were friends.
ReplyDeleteReading between the lines of the recent publication "Betrüger in der Euro-Familie" ("Swindlers/defrauders in the European Family" --"Απατεώνες/καταχραστές στην Ευρωπαϊκή οικογένεια") [FOCUS, vol. 22, issue number 8, February 2010], one may discern entrenched perceptions of dormant cultural racism traceable to the ideological tenets of Alfred Rosenberg's _Der Mythus des 20. Jahrhunderts_, (1934).
ReplyDeleteAs I was recently reminded by an esteemed colleague and longtime
friend, the aforementioned title "Betrüger in der Euro-Familie" also brings to mind the words used by a ruthless villain, General Karl de Suire, the infamous "butcher of Kalavryta", to characterize his Greek victims: "Ein Volk von Nichtstuenden, Schieber und Korrupteure" (Λαός από απολίτιστους αεριτζήδες και διαφθορείς -- an uncivilized people [full of] racketeers and corrupters).
[NB. Translation is mine; perhaps a German scholar could offer a more accurate rendering of the word "Nichtstuenden".]
Quoting from the 1949 essay by W. R. Loader entitled "Greeks Ancient and Modern" published in _Greece & Rome_ (1949) 18:121-125:
"During the recent German occupation of Greece the occupying authority published a number of brochures in which it was argued that the modern Greeks have nothing whatever in common with the ancient Greeks. These brochures were circulated among German troops with the object of stifling any sympathy or admiration which the ordinary
soldier might feel for the present-day Greeks as descendants of the ancient Athenians and Spartans. (It is pleasant to record that that object was not always achieved.)
In part, this propaganda was a revival of Fallmerayer's theory that the Greeks, as a race, vanished in the Middle Ages, their blood being at
first diluted and then swamped by that of Slav invaders. It was also in the line of Nazi party doctrine, since Rosenberg in Der Mythus des o.
Jahrhunderts contended that the modern Greek was merely a feeble Levantine who had, in common with the ancient Greeks, only the name of Hellene."
[W. R. Loader. Greeks Ancient and Modern. _Greece and
Rome_ (1949), 18:121-125 Cambridge University Press
doi:10.1017/S0017383500010639]
I would also direct interested readers to the following blog post (http://bilbo.economicoutlook.net/blog/?p=7909) entitled "Doomed from the start"
ReplyDeleteAn excerpt below, but i suggest people read the entire article.
"Der Spiegel carried an interesting article yesterday (February 9, 2010) entitled – Part 2: Is Germany to Blame?. It was a two-part series the first part being – How Brussels Is Trying to Prevent a Collapse of the Euro.
The article notes that various EMU nations (Spain, France, Portgugal) are being told to pursue harsh austerity packages and in some cases restructure their economies to promotes “economic sectors with higher productivity”. Labour deregulation is also being pushed.
In relation to these pressures, Der Spiegel says:
Resentment is growing in the countries most directly affected. But that frustration is not directed, as might be expected, toward the Commission. Instead, it is increasingly surplus countries coming under fire — with Germany at the forefront.
Representatives from Spain and Portugal especially — but also from France — hold Germany accountable for their current woes. They aren’t alone in that opinion either. “The Greek crisis has German roots,” says Heiner Flassbeck, chief economist at the United Nations Conference on Trade and Development (UNCTAD), in Geneva. It was German wage dumping that got the country’s European neighbors in trouble, he says.
The point being made is that Germany pursued an aggressive low-wage strategy which hammered their workers to ensure that their export prices relative to the other EMU nations would be attractive.
The Germans have always been obsessed with its export competitiveness and in the period before the common currency they would let the Deutschmark do the adjustment for them. With that capacity gone in the EMU arrangement, they pursued another strategy which was to deflate labour costs not via high productivity growth but rather by punitive labour market deregulation.
Der Spiegel reports that “Germany’s position is that the countries now in crisis are themselves at fault for their situation. They lived beyond their means for years, the German government says, financing their economic boom on credit. Now the financial crisis has revealed their weaknesses”.
There is truth in both positions of-course.
But the Germans were aggressive in implementing their so-called “Hartz package of welfare reforms”. A few years ago we did a detailed study of the so-called Hartz reforms in the German labour market. One publicly available Working Paper is available describing some of that research.
The Hartz reforms were the exemplar of the neo-liberal approach to labour market deregulation. They were an integral part of the German government’s “Agenda 2010″. They are a set of recommendations into the German labour market resulting from a 2002 commission, presided by and named after Peter Hartz, a key executive from German car manufacturer Volkswagen."
cont.
..cont.
ReplyDeleteThe article then continues:
"What the graph shows how even prior to the crash the introduction of the Euro has been very damaging for German workers who a result of these developments, the euro has been a costly disaster for almost everyone involved: for German workers, who have had to live with almost non-existent real wage increases; and for the rest of Europe, where economies were once again subjugated by the German export steamroller."
"First, the nations’ leaders agree to surrender their currency sovereignty – they didn’t have to but chose to. They largely mislead their citizens with spurious arguments about optimal currency areas and the rest of the sophistry that the neo-liberal economists happily fed them.
In doing so, they give up their monetary policy independence and so differential circumstances cannot be dealt with by variations in interest rates.
Second, they then invented ridiculous fiscal constraints which have no basis in anything that relates to the way the real economy and the monetary system interacts. Mostly these constraints were a reflection of long-standing suspicions (racism, etc) – that is, they were ideological and political.
Third, Germany then introduces harsh labour market reforms to not only screw their own workers but also to ensure that the other EMU partners are behind the 8-ball.
Fourth, the EMU bosses refuse to introduce any fiscal redistribution capacity to ensure the member states achieve similar growth in real living standards.
Fifth, when the whole things meltdowns due to its design and the German strategy, the nations which are now in extreme crisis are told they have to introduce harsh pro-cyclical fiscal policies to savage living standards of their citizens."
Golwar,
ReplyDelete"Regarding iconoclast's links you really get a "whow" effect. More or less it is a request that the ECB should be a prime tool of economic politics. If the politicians fail to act responsibly, let just the currency dump and everything is great again?
And if it's just our problem - do it anyways as we don't care that it would cost the money of far more people elsewhere, who acted more mindful?"
I suggest you read the following primers on Modern Monetary Theory (see here: http://bilbo.economicoutlook.net/blog/?cat=11), that actually describes how the modern monetary system actually works, as opposed to how the majority of the failed neo-liberal economic sophistry made to look like scientific theory thinks that it works, which they base most of their theory on gold-exchange standard that is no longer applicable. You need to invest some time to work through the theory, before you can comment, as the way you have, above Golwar.
For the EMU it is a monetary system contrived in hell. This system promotes instability *not* stability.
The EMU is most tailored for Germany, and the problem that Greece is experiencing is not an Greek only problem. Go speak to the Portuguese, Irish, Spanish, and Italians. Look at their Debt/GDP figures.
Greece, like Portugal, Spain, Ireland, Italy are not the problems, the EMU is the problem. The EMU was founded on a flawed idea of an Optimal Currency Area, which just doesn't exist.
Everyone has been conned again by this neo-liberal economic garbage dressed up as "wisdom." It is a disaster for the whole of Europe. Low growth, high unemployment, and low wages. That is what these neo-liberal policies have brought.
Golwar,
ReplyDeleteHerr Kohls idea was certainly noble, although the implementation and execution of the idea based on currency union alone as the sole basis of that unification was naive, to say the least, and would suggest a deep lack of understanding of how a monetary system operates by the beamters who put this monetary system together.
This red herring discussion about Greece "lying" is just that a red herring, as has already been pointed out that other countries have flouted these rules when it suited them, in fact, recently both Germany and France far exceeded their 3% Debt/GDP limit although their penalties were overlooked by the remaining EU members. So as the saying goes people in glass houses shouldn't throw stones.
Now you say Spain did not "lie" to get into the EMU. But if you think more critically, the entrance criterion was a set of subjective criterion that is not based on any sound economic grounds, but rather based on ideological and political grounds. Such as the Stability & Growth Pact (SGP) of Debt/GDP not to exceed 3%. There is nothing special about the number 3, it might as well have been 4, 5, 7, 9, 12, 2, or what ever.
Spain at the time managed to achieve convergence criterion, which is based on satisfying some arbitrary numbers hurdles. So what, I say. Since if that were the measure of all being OK, then why is Spain in the mess that it is in, since this criterion didn't save them. This equally goes for Portugal, Ireland and Italy as well.
You see, it is not that Greece provided some creative accounting figures that made Greece be in the difficulties it is in, for if that was the main reason, Spain et. al. shouldn't be in the mess they are in as well. But they are!
No the problem is the EMU is flawed. The only functional model is when monetary and fiscal policies are working in the same direction. This implies devolving sovereign independence of a nation state to a Federated Government of Europe, that is, the United States of Europe. And that is not what we now have.
Golwar, you can't have it both ways.
The following article is also interesting to read, an excerpt is below:
ReplyDeletehttp://bilbo.economicoutlook.net/blog/?p=8322
"Then I read about spending explosions …
The Washington Post carried a story on Sunday (February 28, 2010) entitled – Germany’s frugality bemoaned for inhibiting euro zone growth.
The article was about the imbalance in spending within the EMU with the Southern European countries splurging and buying “everything from BMW sedans to Miele washing machines” which has kept Germany afloat – “where stagnant wages and a culture of conservative consumers has led to years of anemic domestic demand”.
It is clear that aggregate demand in the Eurozone has been below that necessary to sustain full employment and the crisis has exposed that more brutally than ever.
It is also clear to me that part of the problem has been the artificial rules placed on government spending by the Maastricht treaty which have forced the private sector overall to use debt to maintain growth in spending. That was always going to be an unsustainable growth strategy.
But the hyperbole is something again.
The journalist Anthony Faiola, opened with the line:
Greek extravagance touched off the biggest crisis in the 11-year history of the euro. But the world’s most ambitious monetary union faces a less obvious problem that might be even harder to lick — German frugality.
So we read about the “debt-fueled splurges” of Southern Europe (Greece< Spain, Italy, Portugal) and "Southern European profligacy" and "Greece must slash spending and put its books in order to restore faith in the euro" etc.
According to Faiola, the Germans now are feeling indignant towards the Greeks (we will just add the Greeks to most other European nations that Germany feels indignant towards - same old story really) because while they have:
… made painful cuts in social services even as countries like Greece had an explosion in government spending.
Okay enough already! I decided to see how bad government spending in Greece was and so I did what one might reasonably do and I consulted some relevant data.
I just love the way journalists use phrases like “Greece had an explosion in government spending” as if it means something and is based in fact. I was expecting a sharply upward-sloping government spending curve – outstripping everything.
The following graph is taken from the National Accounts data available at the National Statistics Office of Greece. It shows real GDP growth (indexed to 100 at first quarter 2000) and the other main components of aggregate demand – consumption (C), investment (I), government spending (G) and net exports (NX).
Unless you have a different definition of exploding I cannot see evidence of any expenditure item exploding.
I see a spike in G in recent quarters driven by a collapse of net exports and investment (that is, reacting to a major collapse in aggregate demand – a strong portion of the reaction being automatic stabilisers). But General Government spending over this period has not even grown as fast as real GDP.
I wonder if the journalist actually has studied the data before writing the article. I sent him an E-mail over the weekend suggesting that maybe he hadn’t taken the time to examine the expenditure data. No reply!"
It is well-known that Germany did some fancy accounting footwork (including the inclusion of its gold reserves) to qualify for the euro. Like some other countries, Germany lied as much as it had to, and so did Greece. What Germany did not do was imitate the suicidal insanity of the re-elected ND government which turned on the opposition and made a scandalous spectacle of Greece having cheated massively to qualify. It was this pointless attack that started the anti-Greek screeds in the foreign press. It is a sad fact that Greek governments, regardless of their political orientation are more concerned with destroying the opposing party than correctly governing the country.
ReplyDeleteThe following article is also a worthwhile read, regarding the EMU fiasco.
ReplyDeletehttp://neweconomicperspectives.blogspot.com/2010/02/memo-to-greece-make-war-not-love-with.html
Yes Carol, I'd agree with your observation.
ReplyDeleteIt would be interesting to have all the other EU nations audited to see what skeletons they may also have hiding.
The difference in Greece is the political elites were prepared to sacrifice their citizens for their political point game scoring.
When will we wake up, and get rid of these political dynasties that don't have, at heart, the interest of the people that they are "supposedly" representing.
The following is also a worthwhile interview.
ReplyDeletehttp://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=4827
An excerpt below indicates that Italy is in a worse predicament than Greece. Italy is at 120% Debt/GDP compared to Greece of about 12% Debt/GDP.
The simple reason behind this media hysteria, which the FOCUS magazine, is just one of them is the speculative prostihia that is casino capitalism, which has been unleashed on the whole world by the neo-liberal economic malakes over the past 30 years, has found Greece to be an easy target.
"JAY: And perhaps this might be the most important piece of this story is that in the next year, two, three years, not just in Greece, the fight's going to be who's going to pay for the bailout of the economy. It was interesting on Fareed Zakaria's show on Sunday on American television, ABC, Fareed was giving his own prescription of what's necessary in the coming years, and it was all about cuts to health care, cuts to Social Security benefits, pensions. And we know that when President Obama was elected, within days of his election, he met with conservative columnists, some of the best-known conservative columnists in the United States, and it was all about them saying to him, when the time comes, are you going to be willing to put entitlement programs on the table, and he assured them that he would. And this really is—what we're seeing in Greece is perhaps the storm to come right across Europe and North America.
ENGDAHL: It could well be. It could well be. The situation in Italy is worse than that of Greece in terms of public debt to GDP. It's well over 120 percent, and that is extreme. The only other country in the world who comes close to that is Japan, and Japan is a fiscal basket case with a demographic crisis to boot. And Italy has very poor demographics in terms of the aging of its population. The problem is Italy seems to have gone down the same route as Greece, with JPMorgan Chase and various exotic derivatives to hide the real dimension of their problems. So under the Berlusconi government, people are very skeptical that the truth is coming out as to the true fiscal situation there as well. So it could be quite likely that in the euro land there's going to be a very, very rough patch over the next two to three years as these questions come to the surface. You can't put these things off forever, but the question is what you do about it. And the euro construct is an artificial construct. It's to my mind primarily a power construct of certain European elites. But the underlying strategy of those European elites is one that I call "schizophrenic". On the one side, they have a fear of orienting their economies toward the east, which is really where the dynamic growth is in Eurasia, from China down through Kazakhstan, Russia, the Middle East, and on into Eastern Europe, over the next 20, 30 years. That is going to be where the growth in the world economy is going to be most dynamic. But these European elites like ["jis-CAR-da-STANG"] and the people who drafted this European constitution, they are quite afraid of playing a subsidiary role to that dynamic Eurasia, and therefore they hang on like a security blanket to the NATO umbrella of the United States, even though they know, when you talk in private, that the United States is sinking like the Titanic, that the "American century" is a has-been. So it's really a state of political paralysis in Europe."
Here is another article (http://www.creditwritedowns.com/2010/02/germans-break-stability-and-growth-pact-terms-too.html) which states that the SGP is a joke and completely unworkable.
ReplyDeleteGermany recorded a budget deficit of 3.3 per cent of gross domestic product last year, one point more than the most recent forecasts, but still well below the level for most of Europe’s larger economies.
According to the figures released by the Federal Statistical Office on Wednesday, it is the first year since 2005 that Germany has breached the Maastricht stability and growth targets, intended to keep deficit spending by European Union members to less than 3 per cent.
However, the outcome is more likely to be criticised by other EU members for demonstrating how tight a rein Germany has kept on public spending in the midst of the current economic crisis.
As I mentioned before, it was the Germans and the French breaching the magic 3% deficit hurdle which gave all comers a green light to do so. In a depression, as we now have in Spain, Ireland and Greece, it is completely understandable that deficits would be the order of the day. We now see that even the Germans can’t keep below the SGP hurdle. The SGP is a joke and completely unworkable.
I think the real problem is excessive deficit spending during economic expansions. If the Eurozone wants to rein in large deficit spending during economic expansions, they’ll need to choose another mechanism.
And remember, Spain’s problems are very much related to its current account deficit. for every current account deficit, there is a current account surplus. Germany’s surplus is as big a problem as Spain’s deficit. Spain, in particular, wouldn’t have as large a deficit if Germany didn’t have as large a surplus – or if the ECB’s monetary policy had been more appropriate for economic conditions in Spain instead of Germany.
A small correction to my above post, where I said a SGP of 3% Debt/GDP ratio, it should read a SGP of 3% of Govt. deficit. The private debt/GDP ratio should be less than 60%.
I can see your points on both sides and I would like to offer another parameter.I have been living in Greece all my adolescent life and all I remember my parents and their friends to desperately want was our country to join the European community just to feel secure from another war.To be able to sleep and relax without fear and another genocide behind their doors.
ReplyDeleteThe greek people were all very tired.*
What we wanted was protection under the European umbrella.
After the invasion of Turkey in Cyprus all everybody believed was that if our borders became European borders only then we could feel secure and make a progress.
This is what everybody wanted.
Peace!!!!
But this never came.I don't feel secure under the European umbrella.Forgive me but I don't .And I don't know where to turn and give my children a protected nest to grow and become free of fear like all other kids in Europe.
I feel we were used.And we are still being used.
Our main enemy is Turkey and both America and European community keep on selling turkey guns and modern systems so analogically we have to follow and this vicious circle never ends.
We keep on buying weapons of all kinds from European countries and they keep on tantalising us with their foreign affairs departments just to sell their weapons and keep their factories open and their people working .
We are a union,a family.They could have very well proceed in a fair attitude towards the Cyprus problem which is in European community as well,or send a strict message to FYROM .Make it clear that our borders are the European union's borders.They should have make it clear so that we wouldn't have to worry about new wars and if that was the case all the union would stand by our side.
Nothing like that happened my dear German friends my dear European friends...and since we were buying weapons no money was left for factories or green development ,which Europe never wanted us to have .So Europe made it sure that we would go on buying their cars their polluting technology their clothes their wines their songs and their cheese ......and now we are bankrupt.
We did make mistakes and those of us who struggle to survive in this country know better why we have been living our present day as our last.Every day we open our eyes and see that we have made it through the night we smile, kiss our kids ,wish them a good day from the bottom of our heart and go to work and by the end of the day we drink a little bit and dance to cast out the devils of our solitude and our friends'arrogance and ingratitude.Because even our politicians have always been by all means legally elected but always pinpointed by the strong countries of Europe.We managed to get rid of the king you have imposed on us but still you govern us the same lobbies govern.
*Thessaloniki was liberated in 1912,and burnt down in 1917
1918 First world war
Nearly a mllion of refugees come to thessaloniki in 1922
Italy declares the war in 1940
1974 invasion of Turks in Cyprus
How much can a generation suffer and be completely honest..?
We are blame but not in the extend you present it.