Classic Cocking Up

Greece
Now a turn-up for the books! No serious commentator thought that Greece would ever be able to squeeze living standards cruelly at the behest of the EU - and of Germany, in particular [as displayed in the viciously silly 'Nazi' propaganda]. Nobody could say exactly how the impossibility would be articulated. Now we know!

In a brilliant piece of intuitive populism, the Greek government has opted for a referendum. This will enable the vast majority of the population to refuse to give effect to the EU requirements. The country will have to default on its public debt, and drop out of the Eurozone. Within the zone, all hands will turn to preventing contagion from running to Italy: 'the markets' will not focus on Spain or Portugal, but go for the big scalp. The EU and the Eurozone should be able to defeat the markets if they really summon up the will and exercise the relative power of governments. More of that in the coming days.

As far as the Greeks are concerned, they will be on their own: presumably within the EU on a similar footing to Romania [unless they opt out, which is unlikely]. They will be subject to the Laws of Political Economy, which few [if any] of their Economists understand. The experience will be painful.If any reader wants to get ahead of the game, and learn the Laws, link to Personal Political Economy via this site.

Saint Paul's Cathedral
has now endured all the reputational risk that is available in the present incident: so the only sensible course is to achieve the removal of the 'protesters' and the attendant mob within a few days. The incident will then be a single event in the popular memory, over and done with [ideally] in three weeks.

Then the toil will begin.

The Bishop has taken charge of the cathedral, and has indicated that his priority will be to restore the church's role as the leading commentator and preacher on Ethics in business and public life: as Dean Inge was in Saint Paul's pulpit in the interwar years, when he became a nationally known irritant to the powerful and complacent. His books of sermons and his essays sold hundreds of thousands of copies.

This prophetic reality will not be achieved quickly: it will take the cathedral years to recover from its concentration on magnificent services and raising tens of millions of pounds for a magical restoration. The Bishop has a formidable intellect and a great presence: but even his abilities [as well as his time] will be stretched, and he must stay the course in his new leadership role.

Crisis and Perspective

Without moving from my desk in 114 Batovce I can look down the village green past the baker's shop and the news kiosk to the church, surrounded by red tiled roofs; and beyond to the hills that mark the northern limit of the Danube Plain. In a short walk I can see the manifold evidence of an improved standard of life in the EU, NATO and [latterly] the eurozone: we have improved roads, restored buildings, an up-to-date supermarket and a useful general store that occupies the old Co-op premises. The veg man still sets up his stall three times a week, good local wine is between two and three euros a bottle and a half-litre of excellent beer in the pub costs less than one euro. We have an excellent local administration, led by a sensitive and intelligent Mayor. Economic growth is strong; and while unemployment is rising jobs are still being created in modern factories in the major cities.
Slovakia was emerging from the mire of communism - and still outside the European Union - when lying became institutionalised among the EU insiders; most obviously in the late 'eighties in the matter of the ERM [exchange rate mechanism], the scheme under which the currencies of member states were meant to 'converge' as a first step towards creating a common currency. If the exchange rate of any member currency moved to more than 2.5% above or below the average value of all the member currencies, the central bank and the government of that country had to take the necessary measures to bring the exchange rate back into conformity with the rules. There was a huge amount of fudging of figures: so although the range between the most divergent country above the average and the most divergent below the average was supposed to be a maximum of 5%, much higher diversion was tacitly tolerated. Not even that fudge could accommodate Italy, so the Italians were allowed a special range up to 7.5%: making the 'official' maximum divergeance between the lira and the currency furthest from it in strength 10%. Britain was a Johnny-come-lately into the system, tried to keep the rules with gold-plated rigidity, almost bankrupted the Bank of England in the process, and withdrew in ignomony in 1992.
The core EU countries then proceeded to create the common currency, the euro, on the understanding that the 'weaker bretheren' might not always be efficient in action or honest in their reporting of it. Member governments retained their power over taxation and spending policy, which they were supposed to exercise in accordance with the 'Growth and Stability Pact' so that the economic policies of the eurozone might converge and make the currency viable. Among the first to breach the Pact were France and Germany; and thereafter hypocrisy was institutionalised alongside making false returns and empty promises.
New members continued to join the euro, presumably hoping that there was enough validity in what was said in support of the system by the leaders of the major EU member states; and Slovakia was admitted on January 1, 2009.
Now the Slovaks have become pretty well aware of the rotten state of the EU. They presented the lowest turnout of any member state in the latest European Parliament election, and their parliament has hesitated to agree to any bail-out for profligate medacious south Europeans: they may still decide to stop any drain of their resources into the black hole created by the debts of the 'pigs' [Portugal, Ireland, Greece and Spain]. They are probably prepared to surrender more economic sovereignty to a strong and honestly-run eurozone [one national magasine a couple of weeks ago had a front cover asking 'IS THIS THE END OF SLOVAKIA?' as a sovereign state]; but that is a far cry from continuing to accept the pack of lies on which the currency was originally floated.
David Cameron is free to demand 'action' from the euro-states: but following the news from a village in one of the healthier member economies one becames aware of the seriousness of the issues that have to be resolved before the longer term future of the euro can be defined. On the same day [22/9/11], Cameron told the United Nations that they had a duty to oppose oppressive regimes that attacked their own people; and failed to mention Zimbabwe. That is the same sort of selective blindness as that which enabled European politicians and Brussels eurorats to con seventeen nations into accepting the euro: so, as usual, we have the pot describing the kettle as smoke-tarmished.