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  • What is incomprehensible for me is the way euro-scepticism is manifesting itself in Greece. According to a recent euro-poll 80% of Greeks think Europe is in the wrong path. This is euroscepticism for you. But now here is the weird part.

    Syriza in Greece represents a form of euroscepticism light. It has the notion that Europe is salvageable if only Europe were to become a “just” Europe with greater solidarity among members. (emotional position but not real politic)

    Yet in all other European countries (especially in the UK and France which are methodically creating the new European axis to replace the German dominated Europe) euroskeptics seem to be true conservative types.

    Therefore one has to conclude that there is certainly a European conservative movement in the making as a potential game changer and the European Left is sort of a bystander, non-actor type in such new developments.

    Does anyone care to explain why?


    • Dean,

      I think you are referring to conservative nationalist movements. It is clear in the UK and maybe France but not that clear in countries like Italy or Spain. The 80% poll in Greece is countered by the 75% of Greeks that want to remain in the Euro. Fairly confused.

      Syriza is not a nationalist movement (more ultranationalist), they are just political adversaries (far left) of the ruling parties in Europe. Even though they have a strong showing in Greece, their support drops off very quickly in Europe. After all parts of Europe including Merkel’s homeland have experienced communism first hand and are allergic to the 100 year old rhetoric about the rule of the working class. Somehow that rhetoric is still in the mainstream in Greek Universities today (some things never change.)

      So Syriza is looking to make Europe even more social than it is while the nationalist parties are looking to take back power and control from Germany.

    • I can offer a “kafeneio-level” explanation 🙂

      Euroskepticism across Europe and in Geece is not focused on a single part of the “left-right” spectrum (Farage and Le Pen count many leftists among their supporters and similarly Tsipras counts many rightists). Yet, in most European countries, euroskepticism is largely consolidated as of recent (indeed, most often to conservative parties).

      In Greece however, there are two additional dynamics at play, which are not present as strongly in the political arena of other European nations, which counteract such consolidation.

      The first dynamic is the scaremonging campaign regarding eviction from the Eurozone. This campain of fear scatters euroskeptics among parties which are more or less absolute re. EZ membership.

      The second dynamic is the fuelling of civil/cold-war reflex (the fascists vs. communists polarization) which is still ritually permeating even the youngest generation of citizens. Thus the “theory of the two extremes” and other propagandas.

      Both of these dynamics are artificially amplified by the “systemic media” (operated by the “pro-european” kleptocracy) in order to keep the euroskeptic majority divided, and thus exploit the non-linearity of the electoral law [N.B. for non-Greeks: our electoral law awards 50 additional parliament seats (out of 300) to the party which gets the highest ballot count–no matter how low a percent of the total vote it is].

      Yet another application of the age-old “divide and conquer” doctrine.

    • o.k. Vasili.

      This is an acceptable explanation, however, here is the tricky part.

      Samaras is wrong in peddling the Merkel europhile line in Greece and to a population which has been clearly victimized by her ideology which also happens to be the same Christian conservative ideology adopted by ND. (see Plan Z Grexit plan).

      He so off base in promoting the beneficial use of rope in the house of the hanged man. Yet Syriza can’t bring him down. Why?

      What would it take for Greeks to realize that a German dominated Europe is not a place to live? Syriza might not be the answer for Greece (given the left radicalism) but there has to be some sort of logical explanation for all Greeks to understand how badly and wrongly they have been victimized.

      And once you realize such you come up with counter measures. The first thing you attack is what is dear to you enemy: namely europhilia. It’s unacceptable for Greeks at this point (Yanis included) to promote soft lines that there is another Europe which is gentler, kinder and more just. That’s nonsense. There isn’t such thing. Nor can any thinking person promote more integration a la united states of Europe. If the core of Europe was a UK-France axis maybe; as long as the core of Europe is German then such is suicidal and can’t be promoted.

      Under the present circumstances not only you have the right but the obligation to fight against the enemy. And the only way to do this is to hit where it hurts the most. In this case, every Greek and European (X-Germany perhaps which seems to be infested with Christian Democrat ideologies) has the duty to be a dedicated eurosceptic. That’s the only language your enemy understands.

      Syriza’s approach that once in power would change things in EU procedures is naive and non-practical. It’s a romantic view of the world with zero basis in geostrategic reality.

    • Kostantine:

      Here is an excellent piece by Ambrose Evans Pritchard which explains that we have had an unconstitutional coup in Greece and we continue to be in a state of permanent EU dictatorship:

      The revelations about EMU skulduggery are coming thick and fast. Tim Geithner recounts in his book Stress Test: Reflections on Financial Crises just how far the EU elites are willing to go to save the euro, even if it means toppling elected leaders and eviscerating Europe’s sovereign parliaments.

      The former US Treasury Secretary says that EU officials approached him in the white heat of the EMU crisis in November 2011 with a plan to overthrow Silvio Berlusconi, Italy’s elected leader.

      “They wanted us to refuse to back IMF loans to Italy as long as he refused to go,” he writes.

      Geithner told them this was unthinkable. The US could not misuse the machinery of the IMF to settle political disputes in this way. “We can’t have his blood on our hands”.

      This concurs with we knew at the time about the backroom manoeuvres, and the action in the bond markets.

      It is a constitutional scandal of the first order. These officials decided for themselves that the sanctity of monetary union entitled them to overrule the parliamentary process, that means justify the end. It is the definition of a monetary dictatorship.

      Mr Berlusconi has demanded a parliamentary inquiry. “It’s a clear violation of democratic rules and an assault on the sovereignty of our country. The plot is an extremely serious news which confirms what I’ve been saying for a long time,” he said.

      There has been a drip-drip of revelations. Italy’s former member on the ECB’s executive board, Lorenzo Bini-Smaghi, suggested in his book last summer that the decision to topple Berlusconi (and replace him with ex-EU commissioner Mario Monti) was taken after he started threatening a return to the Lira in meetings with EU leaders.

      I have always found the incident bizarre. Italy had previously been held up an example of virtue, one of the very few EMU states then near primary budget surplus. It was not in serious breach of deficit rules. It was in crisis in the Autumn of 2011 because the ECB had raised rates twice and triggered what was to become a deep double-dip recession. Yet the blame for this disastrous policy error was displaced on to Italy’s government.

      Fresh details emerged this week in a terrific account of the crisis by Peter Spiegel in the Financial Times.

      The report recounts the hour-by-hour drama at the G20 Summit in Cannes as the euro came close to blowing up. It culminates in the incredible scene when President Barack Obama takes over meeting and tells the Europeans what to do, causing Chancellor Angela Merkel to break down in tears: “Ich bringe mich nicht selbst um.” I won’t commit suicide.

      That particular spasm of the crisis – and there have been three episodes (May 2010, Nov 2011, and July 2012) when the would have splintered without drastic action – was set off by the shock decision of Greek premier Georges Papandreou to call a referendum on the austerity terms of his country’s bail-out. He thought a vote was needed to stop Greece spinning out of control, and to pre-empt a possible military coup (as he saw it).

      Papandreou was hauled before the star chamber and literally crushed into silence by French leader Nicolas Sarkozy, who was waving his “Position commune sur la Grèce” like an indictment sheet.

      The FT report then reveals that the Commission’s Jose Manuel Barroso took charge of the executive details, orchestrating the Putsch that ousted Papandreou in Greece. In this case the EU picked ECB veteran Lucas Papademos to take over.

      Parliamentary formalities were upheld in both Italy and Greece. The presidents appointed the new leaders in each of the two countries. Both Monti and Papademos are honourable and dedicated public servants. Yet these were clearly coups d’etat in spirit, if not in constitutional law.

      David Marsh from the financial body OMFIF has called for a “Truth and Reconciliation Committee” to expose the abuses that have occurred in EMU affairs from the beginning. Something must be done to hold accountable those responsible for the fateful error of launching monetary union, and for the chronic mismanagement of the project thereafter.

      We are told that the euro crisis is now over. I do not see how one can safely reach that conclusion when Italy and Portugal are contracting again, and France is back to zero growth; or when lowflation/deflation is causing the debt trajectories of Southern Europe to spiral ever higher; all against a background of G2 monetary tightening in the US and China.

      There will be another spasm to this crisis. So who will Europe’s elites topple next, and what other conspiracies will they hatch to perpetuate a monetary venture that serves no worthwhile moral purpose? They must be stopped.

      The FT’s Peter Speigel has a follow-up in today’s edition, with lots more details. These include confirmation that EU leaders not only broached the subject of Greek exit/expulsion from the euro at Cannes, but that this was followed up by a secret Plan Z.

      A GREXIT task-force under Germany’s ECB’s board member Jorg Asmussen worked on emergency plans with four clandestine teams and EU lawyers in Brussels. They were careful enough not to reveal anything in emails, which could be leaked.

      Merkel’s advisers in Germany were split into the “domino” camp that feared contagion from GREXIT, and the “infected-leg” camp headed by finance minister Wolfgang Schauble that pushed for amputation.

      It seems as if Angela Merkel was finally persuaded by Jorg Asmussen that kicking Greece out of the system might snowball and lead all too quickly to a “eurozone of 10”. Greece got its €34bn bail-out in the nick of time.

      Though I should not say this about a competing newspaper, it is worth spending £2.50 today on the pink sheet for the story.

    • @Dean,

      I mostly agree with you.
      Greece’s “europhilia” has to be moderated—and certainly the governement’s. Yannis (and by induction SYRIZA, who follow Yannis’s analyses quite closely) has also been advocating a clearly more confrontational policy. Indeed, in the interview in this post, Yannis morally compares the economic policies of the EZ to fascism! Unusually strong language for him!

      Still, (look at my comment to Yannis above), I am of the opinion that at some point he has to address the option of returning to monetary sovereignty as a viable–if costly–outcome of the confrontation. But this is not to be a few days before an important election…

    • But as romantic as Tsipras is, you are also not in tune with the reality that 75% of Greeks want to have euros in their pockets. Being part of a small group that sees things as they are does not suggest that the majority will follow and see the light as well.

      So the realistic approach is to keep going and try to do the best day in day out hoping that one day other Europeans will first wake up to the fact that Germany is inducing tremendous pain in the economies of its partners.

  • About the debt-deflation-vortex
    You mention in the begging of the video that real income is increasing and 1 min later that people have less and less income to serve their debt. First you refer to real income and then to nominal income , which is really irrelevant since people serve their debt with real income. Increasing real income cannot possibly be catastrophic for the people of Spain because even if we assume that Debt to GDP ratio is incerasing because debt is growing faster than GDP, still this case is better than an other, in which real GDP wouldn’t increase. I can accept that this is not optimal but i dont understand why is it harder to repay your debt, while having increasing real income.
    Looking forward for your comments
    best regards

    • You are precisely wrong. Real income is the ratio of nominal or money income and the level of average prices. People pay their debts with nominal or money income. Not with real income. If nominal income is falling they can not repay their debts even if their real income is rising (due to falling prices or deflation)

  • Yianni,

    Greece now borrows at 2.13% for short term paper.
    This is not about Greece but about a huge demand for yield in the face of 0% interest rates in the US and
    now in Europe. There is simply no place to earn a decent risk-free yield.

    This is a construct of Bernanke and now Yellen. This provides some relief in Greece. Soon we will be in bubble
    territory but probably not there yet.

  • Admittedly this video is about 5 months old but why can’t we get a Greek political leader to talk as clearly as this? This is a flawless leveling of charges, very effective and to the point. Indeed this is not about Samaras or Greece, rather it’s a general charge against the collective European nonsense and those who dare present themselves as europhiles. How dare you speak of the united states of Europe? To be a europhile is a crime against humanity:

  • Dear Yannis,
    I would like applaud you for courageously denouncing the immoral EU/EZ policy of orchestrated deflation as morally comparable to fascism.

    If Europe is mostly inhabited by fair, freedom-loving people (as I believe it is), they have to hear from the lips of candid intellectuals that in a society where the economy is deliberately pushed into deflation, the cards are not dealt anymore in terms of merit, effort and social virtue but in terms of amassed wealth, class, blind chance, cronyism and political favoritism. Indeed, the cards are dealt as in fascism.

    If Europe is mostly inhabited by fair, freedom-loving people (as I believe it is), this message is the strongest andidote to the poison of ethnic typecasting (“profligate southerners, cruel and exploitative northeners”) that seems to seep deeper and deeper into the European zeitgeist—a recent exhibit being Tuesday’s pontifications from the “impeccable” Jean Claude Trichet about “fiscally irresponsible” nations deserving their misery (http://www.independent.ie/opinion/analysis/trichet-like-a-broken-record-when-what-we-need-is-fresh-thinking-30258327.html).

    Yet, I remain distinctly more pessimistic than you… waiting for “a month, a year or a century” (or ‘as long as it takes’) the people of Europe to overturn the present state of affairs in unison is not the socially optimal option in my—and Keynes’s!—opinion (much less so for Greece). A deadline for achieving unaninmity has to be set, and that implies a decisiveness to reclaim monetary sovereignty if needed, despite the high costs, if the deadline expires. Waiting has its own mounting costs in terms of misery and injustice.

  • Could not agree more with your analysis!!! It is also my own as a former banker and financial professional. Of course, I believe the best course is an orderly break up, as Nouriel Roubini was suggesting a few years ago. I support the concept of the nation state, flexible currencies and reduced powers in Brussels.

    The reality is that this will likely not happen. Brussels will do everything to keep their concentration of power. More Europe is more concentration of power for them. For me, the best hope is a UK departure under UKIP from the EU and a French revolt and break up of the Eurozone via FN, seconded by Netherlands and Italy. Already the Italians under Professor Borghi realize that in case of break up, the first country out of the Eurozone will have the maximum benefit. Historically, the Italians broke up the Latin Union. The Eurocrats and Berlin will fight this and avoid any substantive change.

    Break up is likely to be crisis driven and very ugly. Greece will be the least prepared. Greeks have lost faith and pride in their country under present leadership and have a tragic dependency syndrome based on EU bootstrapping theories and the pollution of the political system under the weight of the EU.

    • Dean this is really Schäuble’s legacy.
      The problem is 1. he is still in the same position 2. the majority of Germans share his tactics 3. Greeks are clueless.

  • Yanis – are you following the FT series on Greece exiting the Euro? Today reveals “Plan Z” …. an acknowledgement that a country can leave the Union. Interesting revelations.

    • Nothing we have not known for ages. Merkel was torn on this and she decided in the summer of 2012 that, on, any exit from the Eurozone would probably bring the whole things down. Together with the ECB’s OMT, that decision stabilised the markets. But it did nothing to render the Eurozone viable in the long term…

  • Quite frankly and as Peter Spiegel’s revelations conclusively prove, the situation Greece finds itself today is a product of pure blackmail and extortion.

    Therefore, instead of Tsipras and Samaras arguing whether there was a Grexit bluff or not, the most serious argument is how come Samaras is asking the Greek people to support a clearly illegitimate construct born of extortion. This does not make Syriza the automatic winner of the argument, rather, it makes Samaras the clear loser of this europhilia syndrome which is most inappropriate of all places in Greece.

    Furthermore, it appears that the typical Yanis accusation of “collaboration” and “Quisling” government is a weak one. Collaboration assumes a degree of agreement on the subject of collaboration. What we have here is clear black mail on the part of “Europe” which couldn’t care less about Greece while its true mission was to save the euro currency at all costs. The terms which “Europe” laid out were neither negotiable nor voluntary. They were criminal under any judicial system definition anywhere in this world.

    And if you have any doubt as to who benefits from the euro then consider that at the time of conversion 1 German Mark = 1.99 euros. Only an export junkie benefits from the lower value euro which is clearly a heavily subsidized currency aka the new German mark.