Wednesday, June 20, 2012

The Oracle of the Wise

The Melting Euro

Despite the success of the “pro-bailout” parties in last weekend’s Greek elections, Greece is not yet out of the fiscal woods. JLH has translated an article outlining the German perspective on the Greek meltdown. He includes this note:

Here is a short article that was published yesterday at the German-language blog about Greece that reveals for the first time — to me at least — the existence of a German committee of “five wise ones” who are tasked with assessing the future.

One of the members of this group of five, who each serve for five years, has laid the blame for Greece’s problems at the door of the “Troika”, which refers to the European Commission, the European Central Bank and the International Monetary Fund, acting in concert.

The Five Wise Ones and the all-powerful Troika… Even the Grimms could not have created a more fabulous power structure! But wait. Wait until you hear the wisdom that flows from this moment of reflection. Just think, to create this much confusion in the USA, all we have is our president and Ben Bernanke.

The translated article from the Griechenland-Blog:

The Recommendations of the Troika Are Primarily Responsible for the Greek Crisis

June 19, 2012

Peter Bofinger, a member of the federal government’s “Council of the Wise,” lays the burden of the Greek crisis on the false prescriptions of the Troika.

“Not only Greece itself, but the economic prescriptions of the Troika are responsible for the deepening of the crisis in Greece,” emphasized the member of the federal government’s “Council of the Wise Ones” on economic matters, Peter Bofinger, and he notes: Exiting the crisis requires as an outcome the changing of the prescriptions, and not merely their cosmetic improvement.

“Greece must be saved. Brussels cannot whistle past the graveyard and watch as the country slides into anarchy and catastrophe. On the contrary, Brussels has a vital interest in helping Greece get back on its feet, chiefly through stimulus programs. Besides, the negative developments in Spain and Italy show that Greece is not the only party responsible for the crisis. The false prescriptions for its therapy bear the most responsibility for the crisis,” Bofinger said to the Sunday edition (June 17, 2012) of the Greek newspaper To Vima.

A Greek departure from the euro would be catastrophic for everyone

Mr. Bofinger characterizes a possible exit of Greece from the eurozone as “catastrophic for all” and expresses the hope that “those responsible will do everything in their power to avoid this greatest of all misfortunes.” He adds further:

“The Greek parties say, ‘No, we will not fulfill the obligations.’ and the other side replies, ‘OK, then we will throw you out of Europe.’ If it really comes to that kind of head-on collision, both sides will suffer colossal damage. An uncontrolled exit would be catastrophic for Greece. But the same would be true fort the rest of the Eurozone, because it would rattle countries like Portugal, Spain and Italy. The best thing for both sides would be a compromise based on finding new macro-economic conditions.”

The member of the federal government’s “Council of the Wise” also emphasizes: “Greece will not be able escape the crisis alone. The first thing it must do is to slow the rate of the collapse, by postponing the enactment of the savings measures. The second is to take recovery initiatives through structural reforms, like opening closed professions. All of this. however, is not enough for the country to come out of the valley of depression. There must also be financial support from outside.”


Anonymous said...

The Troika are the ' Money Power'
that JFK referred to in his serious
conspiracy speech. These are the
criminals who need to be named, isolated and dismantled for Western
civilisation to be able to breathe

Anonymous said...

Greece has been spending beyond its means for a long time. Germany, France, and the other European countries have been paying for the balance. They are now demanding that Greece stop its spending or they will withdraw their subsidies.

There is no good solution to the problem. If they continue to subsidize Greece to maintain the financial structure of Europe, Greece will continue to spend beyond its income.

Greece should never have become economically integrated with countries like Germany and France. Its like giving a person welfare, and expecting him to develop sound financial habits.

The choice seems to be to continue to subsidize Greece spending beyond its means, or to let Greece pull out and declare default. Probably that would be the best way to limit the damage. Pay now or pay later.

Anonymous said...

The EU needs to go period. Superstates never last. Just ask the Soviets and that's what the EU is, a variant of the Soviet Union.

The reason the EU never worked was that the nations never fitted together - many are weak and some quite powerful. Combine that with predatory lending and trade practices of the the most powerful member - Germany was sure to cause things to eventually spiral out of control.

As for Greece. Well no one forced the German and French bankers to pour billions upon billions into a country that could not pay back the loan under any realistic circumstance. The same goes for Spain, Portugal, Ireland, etc.

What Greece and the others should do is withdraw from the EU and default on the debt. Let the fat cat German bankers and big shot investors take a hair cut. Sure a lot of banks will go under but they need to for being stupid and greedy. New banks will arise to take their place.

In the short term Greece will have it hard and need to reform itself but it will come back. It's better than being a b*tch to the German bankers and authoritarians of Brussels.

Anonymous said...

'Here is a short article that was published yesterday at the German-language blog about Greece that reveals for the first time — to me at least — the existence of a German committee of “five wise ones” who are tasked with assessing the future':

Sorry to correct the author, but there is nothing mysterious about this institution. It has been around since 1963 and at occasions been mentioned by the media, it's official title being 'Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung', or German Council of Economic Experts; in popular terms 'fünf wirtschaftsweise' = five sages of economy. See . They even have their website, .

Michael Laudahn

Anonymous said...

To the unknown Michael Laudahn:

Sorry to correct the corrector, but in your eagerness to find something to criticize you ignored the qualifier that it was new to me, not mysterious. I did of course look it up at the time and find all the all the stuff you mentioned. Anyone else who was interested and did not know probably did the same,

I plead guilty to being new at "Europe-watching." and therefore sometimes both surprised and either horrified or amused by what I find. I also plead guilty to sometimes being, like you, a Besserwisser.


Anonymous said...

You are unfortunately not able to discuss as anglosaxons can do. And I just don't want to enter into typical german-style haggling which they take for 'discussions'.

Yes, germans do have a considerable deficit there (unfortunately, postwar re-education was not orderly terminated), and judging by what I have seen from you so far, you are no exception. I don't know how far I myself have come, in my own attempts to escape from this trap of inferiority... .)

Michael Laudahn

Anonymous said...

Danke, Michael. Das war sehr bedachtsam.


Baron Bodissey said...

Translation of what JLH said above:

"Thanks, Michael. That was very deliberate."

Nemesis said...

This of course only reinforces the necessity of nations being left to be nations and not part of some made up utopian society that can only ever exist in a dreamers mind!

And to anonymous 6:10....Kennedy was murdered to stop him from exposing the workings of secret societies and the Military Industrial complex. Just ask Donald Rumsfeld where over 2000 billion dollars has disappeared to in a little over thirty years.

Anonymous said...

Nemesis we ARE singing from the same
hymnsheet. 'Military/industrial complex = 'The Money Power'.These people are also referred to as in
'...banker-engineered wars'.