Tuesday, July 14, 2015

Where is Martin Luther when you need him?

The ugly just got uglier - via The Automatic Earth:
The structure of the EU itself guarantees that Germany will always come out on top. But they can only stay on top by being lenient and above all fair, by letting the other countries share some of the loot. 
To know how this works, watch Marlon Brando, as Don Corleone, talk to the heads of the five families in the Godfather. You need to know what to do to, as he puts it, “keep the peace”. He’s accepted as the top leader precisely because the other capos understand he knows how. 
The Germans have shown that they don’t know this. And therefore, here comes a prediction, it’ll be all downhill from here for them. Germany’s period of -relative- economic strength effectively ended this weekend. The flaws in its economy will now be exposed, and the cracks will begin to show. If you want to be the godfather, the very first requirement is you need to be seen as fair. Or you will have no trust. And without trust you have nothing. It is not difficult. 
Germany will never get a deal like the EU has been for them, again. It was the best deal ever. And now they blew it, and they have no-one to blame but themselves. And really, the Godfather metaphor is a very apt one, in more ways than one. Schäuble could never be the capo di tutti capi, no-one would ever trust him in that role. Because he’s not a fair man. But he still tries to play the role. Big mistake. 
The people here in Greece are being forced to pay for years for something they were never a part of, and that they never profited from. The profits all went to a corrupt elite. And if there’s one thing Don Corleone could tell you, it’s that that’s a bad business model. Because it leads to war, to people being killed, to unrest, and all of that is bad for business.
Though in fairness to Wolfgang Schäuble he did actually make the Greeks an offer they could have accepted, according to Ambrose Evans-Pritchard:
In an odd way, the only European politician who was really offering Greece a way out of the impasse was Wolfgang Schauble, the German finance minister, even if his offer was made in a graceless fashion, almost in the form of diktat. 
His plan for a five-year velvet withdrawal from EMU – a euphemism, since he really meant Grexit – with Paris Club debt relief, humanitarian help, and a package of growth measures, might allow Greece to regain competitiveness under the drachma in an orderly way. 
Such a formula would imply intervention by the ECB to stabilise the drachma, preventing an overshoot and dangerous downward spiral. It would certainly have been better than the atrocious document that Mr Tsipras must now take back to Athens.
It may be too late for Tsipras to go back and ask him for more details, but the chances are the Greeks may well refuse the Don's offer anyway.

I mentioned before that Europe needs a second Reformation.  Rather than seeking a better Don Corleone (a dubious ambition to say the least) we would be better seeking a second Martin Luther, willing to speak truth to power almost 500 years after the last one. Though it's unlikely he'll be a German this time round...




1 comment:

  1. Completely agree, the current EU vector is dominated by outdated dogma and the demands of the boomer pensioners.

    ReplyDelete

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