Stephen Hill says that the EU needs to heed the red tide rising across Europe
Alexis Tsipras's success in the Greek elections has unleashed a left-wing Red Spring: it comprises Syriza in Greece, Podemos in Spain, Le Front National in France, the Grillini and their two allies in Italy and the decidedly subversive UKIP here, who were all winners in 2014's Euro elections, versus the Brussels Bureaucrats, in a game of who blinks first.
Any idiot can see the single currency is itself the cause of the economic malaise now gripping all of Europe: one size doesn't fit all, or indeed anyone at all now. This outcome to EMU was predictable, as I wrote in 1993: the idea of a common currency across twelve different economies was 'the stuff of economic nonsense. It would be the most certain way known to man of causing a depression.'
This prophetic symposium book, Visions of Europe, began on its front and back covers and first lines, by stating that a thirteenth Nation, called Bureaucracy, had entered the EU unannounced, via the Maastricht Treaty. Say no more.
Unemployment stands at 25 million-plus and rising, with youth unemployment at 50 per cent in Spain and 44 per cent in Italy, and deflation across the euro-zone stuck at minus (-0.6 per cent).
The ECB's ’1.06 trillion QE is just tapping on the gauge to see if it can be made to move out of the red… but don't hold your breath, as Europe is heading for decades of Japanese-style permadeflation and record unemployment – until the eurozone expires in its present form, that is.
Syriza is a force for democracy that cannot be ignored, except by the Brussels bureaucracy that sees it as an affront to their harmonised flat-earth, EMU-driven power.
Take two reactions to the Greek democratic election:
’Elections change nothing. There are rules… Nobody should think that we can be put under pressure easily. We are relaxed.' Wolfgang Schauble, Germany's finance minister
’Mr. Tsipras must pay, those are the rules of the game, there is no room for unilateral behaviour in Europe.' Beno’t C’ur’, ECB
The stench of anti-democratic bureaucracy, of inflexibility, of ignoring reality, of supercilious superiority lies lurking in every word. The EU bureaucrats will shuffle around and avoid eye-contact, and work up a non-solution to appease, so as to hold their beloved eurozone together.
Here is one scenario: they park the existing Greek debt of ’250 billion down some silo in Frankfurt, like the EFSF, and advance new money for privatisation by some Treuhund or other, cut a bit more rope from Target2 here, a bit more down the banking conduit there, and so on… and the Greeks will never repay any of it. No wonder they want to stay in the eurozone!
But if they don't stay, don't even try to imagine the explosive global consequences.