4 July 2015
PARIS – As the squalid drama of Greece’s bankruptcy unfolds, many alarmists claim the European Union is about to disintegrate. British and Americans are cheering the ills of the EU. On top of all this, it’s a blazing 39.8 C here in the City of Light.
In spite of all the bad news from Greece, we must not lose sight of the miracle on the Rhine.
Having covered 14 conflicts and observed the world’s problems and woes for decades, I never forget that the greatest miracle I have ever seen was the profound reconciliation between historic foes France and Germany. That was a real miracle. I say, “death to all borders.”
Millions of soldiers died along the Rhine River that divides parts of France and Germany in the wars of 1870, 1914, and 1940.
In August of 1914, huge mobs here in Paris cried “on to Berlin” and “re-conquer Alsace-Lorraine.” France’s then president, Raymond Poincaré, drove France into war against Germany to recover his beloved native Alsace-Lorraine, which France had lost to Germany in the foolish 1870 war. France had annexed German-speaking Alsace-Lorraine (or Elsass-Lothringen in German) over the two previous centuries.
The vanishing of the France-German border was entirely due to the creation of the European Union, a process that began in 1951 by the forming of the European Steel and Coal Community that linked France, Belgium, West Germany, Italy, the Netherlands and Luxembourg.
Today, the European Union has grown to 507 million citizens in 28 nations, the world’s most important economic zone. In spite of much legitimate criticism over its bureaucratic overload and constant bickering, the European Union leads the world in civilized government and concern for human and animal rights, and environmental protection.
The EU’s biggest mistake to date has been its too rapid expansion to encompass nations that were not ready for membership or association. Greece, Cyprus, Bulgaria and Romania were prime examples. Greece used Goldman Sachs to cook its books to meet EU minimum membership requirements. So, apparently, did Italy.
If Greece decamps the EU, or is kicked out, the union will not collapse. Greece is only 2% of the EU’s gross domestic product. Because Greece makes little and exports even less, its people have been living on borrowed money and not paying taxes. The bankers and high officials who leant so many billions to Greece should be fired.
The financial Grim Reaper has now arrived.
This weekend, Greeks will apparently vote on whether to remain in the EU under draconian conditions of austerity and restraint – realistic economics – or quit the EU and return to the old days of the ever-wobbly drachma, a notorious Mediterranean funny money worthy of Zorba the Greek.
One hopes the Greeks, an intelligent, patriotic people, will decide to further tighten their belts and remain in the EU. Slovakia, a nation of 5.4 million, did just this, and is now thriving. Unfortunately, Greece’s current far-left government appears to be ready to commit Hellenic hara-kiri rather than end or curtail cherished socialist programs and start seriously collecting taxes.
So what if Greece stumbled out of the EU? Initial panic from always volatile financial markets and a Greek chorus of doomsayers. But Europe would quickly return to normal once the shock had abated. A European-wide bank crisis is unlikely since most of Greece’s zillions in debts are now owed to amply-funded EU institutions rather than individual banks. The US and Canada have hardly any exposure to the Greek financial tragedy. Argentina reneged on its huge debts and lived to tell the tale.
A Greek exit would cause turmoil in Albania, which had some 200,000 guest workers in Greece (many now returning home), and in Bulgaria and Romania, where Greek financial institutions have been active. Cyprus, hanging on by its fingernails, would also be in for a serious crisis. But this is all peripheral stuff.
Bedrock Europe – Germany, France, Italy, the Netherlands – would ride out the storm. In fact, some observers, this writer included, believe the EU would be better off without the bleeding wound of Greece. So do many northern European voters and taxpayers. Neither Spain nor Italy are likely to pull out of the EU because the Greeks took flight.
Britain, which has always been a US Trojan Horse in the EU, would be delighted to see the EU lessened by a Greek departure. Many Brits would also like to depart so they could be misruled by their own politicians with no interference from Brussels.
As for the Greeks, self-proclaimed inventors of democracy, they have been woefully ill-served by their lousy, crooked politicians of right and left. Greece needs a financial and social revolution to clean out its Augean stables of corruption, peculation and malfeasance. They must be made to pay taxes – at bayonet point if necessary.
A worsening economic situation may tempt the Greek armed forces to seize power once again. Or the Chinese may buy Greece, lock, stock and bouzouki music.
If the Greeks were really wise, they would oust all the incompetent café socialists now misruling Athens and bring in a technocratic government of hired Swiss officials to pull them out of bankruptcy.
Copyright Eric S. Margolis 2015
. On top of all this, it’s a blazing 39.8 C here in the City of Light.
In spite of all the bad news from Greece, we must not lose sight of the miracle on the Rhine.
Having covered 14 conflicts and observed the world’s problems and woes for decades, I never forget that the greatest miracle I have ever seen was the profound reconciliation between historic foes France and Germany. That was a real miracle. I say, “death to all borders.”
Millions of soldiers died along the Rhine River that divides parts of France and Germany in the wars of 1870, 1914, and 1940.
In August of 1914, huge mobs here in Paris cried “on to
Berlin” and “re-conquer Alsace-Lorraine.” France’s then prime minister, Raymond Poincaré, drove France into war against Germany to recover his beloved native Alsace-Lorraine, which France had lost to Germany in the foolish 1870 war. France had annexed German-speaking Alsace-Lorraine (or Elsass-Lothringen in German) over the two previous centuries.
The vanishing of the France-German border was entirely due to the creation of the European Union, a process that began in 1951 by the forming of the European Steel and Coal Community that linked France, Belgium, West Germany, Italy, the Netherlands and Luxembourg.
Today, the European Union has grown to 507 million citizens in 28 nations, the world’s most important economic zone. In spite of much legitimate criticism over its bureaucratic overload and constant bickering, the European Union leads the world in civilized government and concern for human and animal rights, and environmental protection.
The EU’s biggest mistake to date has been its too rapid expansion to encompass nations that were not ready for membership or association. Greece, Cyprus, Bulgaria and Romania were prime examples. Greece used Goldman Sachs to cook its books to meet EU minimum membership requirements. So, apparently, did Italy.
If Greece decamps the EU, or is kicked out, the union will not collapse. Greece is only 2% of the EU’s gross domestic product. Because Greece makes little and exports even less, its people have been living on borrowed money and not paying taxes. The bankers and high officials who leant so many billions to Greece should be fired.
The financial Grim Reaper has now arrived.
This weekend, Greeks will apparently vote on whether to remain in the EU under draconian conditions of austerity and restraint – realistic economics – or quit the EU and return to the old days of the ever-wobbly drachma, a notorious Mediterranean funny money worthy of Zorba the Greek.
One hopes the Greeks, an intelligent, patriotic people, will decide to further tighten their belts and remain in the EU. Slovakia, a nation of 5.4 million, did just this, and is now thriving. Unfortunately, Greece’s current far-left government appears to be ready to commit Hellenic hara-kiri rather than end or curtail cherished socialist programs and start seriously collecting taxes.
So what if Greece stumbled out of the EU? Initial panic
from always volatile financial markets and a Greek chorus of doomsayers. But Europe would quickly return to normal once the shock had abated. A European-wide bank crisis is unlikely since most of Greece’s zillions in debts are now owed to amply-funded EU institutions rather than individual banks. The US and Canada have hardly any exposure to the Greek financial tragedy. Argentina reneged on its huge debts and lived to tell the tale.
A Greek exit would cause turmoil in Albania, which had some 200,000 guest workers in Greece (many now returning home), and in Bulgaria and Romania, where Greek financial institutions have been active. Cyprus, hanging on by its fingernails, would also be in for a serious crisis. But this is all peripheral stuff.
Bedrock Europe – Germany, France, Italy, the Netherlands – would ride out the storm. In fact, some observers, this writer included, believe the EU would be better off without the bleeding wound of Greece. So do many northern European voters and taxpayers. Neither Spain nor Italy are likely to pull out of the EU because the Greeks took flight.
Britain, which has always been a US Trojan Horse in the EU, would be delighted to see the EU lessened by a Greek departure. Many Brits would also like to depart so they could be misruled by their own politicians with no interference from Brussels.
As for the Greeks, self-proclaimed inventors of democracy, they have been woefully ill-served by their lousy, crooked politicians of right and left. Greece needs a financial and social revolution to clean out its Augean stables of corruption, peculation and malfeasance. They must be made to pay taxes – at bayonet point if necessary.
A worsening economic situation may tempt the Greek armed forces to seize power once again. Or the Chinese may buy Greece, lock, stock and bouzouki music.
If the Greeks were really wise, they would oust all the incompetent café socialists now misruling Athens and
bring in a technocratic government of hired Swiss officials to pull them out of bankruptcy.
Copyright Eric S. Margolis 2015
This post is in: Europe, European Union, Finance, Greece
Excellent column, as usual. However, the cooking of the books by Greece and Goldman Saks was done to enable the country to join the euro, not the European Union, of which it was already a member. Greece joined the former European Economic Community (Common Market) in 1981 and was one of the original signatories of the subsequent Treaty of Maastrict, which created the full economic union and put its member countries on the path to the common currency. Greece was not an original member of the euro and should never have been allowed to join the currency union at all – it now probably wishes it hadn’t joined. (Britain and Denmark opted out of the euro from the beginning, and are very happy they did. So is Sweden, which used a sneaky trick to stay in the EU and finesse its way past the eurozone convergence criteria in order to keep its krona.)
Near the end of the column, Eric mentions that if Greece leaves the EU and its economy goes down the drain, its armed forces might be tempted to retake control of the government. Interestingly, I said much the same thing in a comment yesterday on the Globe and Mail website. The last period of military dictatorship in Greece, from 1967 to 1973, certainly brought about political stability to the nation and it might be the only way now to bring about both political and economic stability to that troubled country. It would be harsh medicine, of course, but Greece now faces no good alternatives to its current mess.