Greece And The Euro: A Matter Of Politics Not Economics

"The process of monetary union goes hand in hand, must go hand in hand, with political integration and ultimately political union. EMU [economic and monetary union] is, and always was meant to be, a stepping stone on the way to a united Europe"
(Wim Duisenberg, first president of the EU Central Bank) 

"The single currency is the greatest abandonment of sovereignty since the foundation of the European Community: the decision is of an essentially political nature"

(Felipe Gonzalez, a Spanish former PM, 1998)

"Europe will be forged in crises, and will be the sum of the solutions adopted for those crises."  

(EU founding father Jean Monnet)

As the eurozone goes through one of its periodic 'difficulties' there's much fuss being made about a possible Greek exit, or Grexit. Today "Greece faces a critical 24 hours as European leaders hold an emergency summit in Brussels that could break the deadlock around the country's debt crisis".

We have of course been here many times before and naturally such speculation results in a media plethora of economic analysis, graphs and statistics and goodness what else.

There's often incredulous analysis on why Greece hasn't yet left Euro and go it alone and why it should; the economic case is one which is largely obvious.

Yet to make such an economic case is to miss the point entirely. What is so often overlooked is that the euro, and indeed the EU, is a political project not an economic one. And as the quotes above make clear the EU, and its member states, make no secret of this. But despite proclaiming its political intentions so publicly it is a damming indictment that we can no longer rely on the UK media to even acknowledge this simple fact, which perhaps reflects the prevailing UK view in general.

But it's in this political context we must see the Greek crisis. The euro has always been a political project to achieve its "ever closer union" as per the opening sentences in the Treaty of Rome 1957. "Ever closer union" is the utter founding principles of the EU; they meant it then, they mean it now.

To achieve full political union requires salami tactics or the Monnet method. Normally with a currency union we should start off with political union first and then economics. However due to the difficulties of achieving the political union part first the EU quite deliberately put the cart before the horse. By doing so they ensured the euro was a flawed project from the outset.

By making it flawed meant it was inevitable that it would encounter a series of crisis. Each crisis needs a solution and that solution, if we may call it that, invariably would be a call for 'more europe'. More Europe, more power, more integration. Thus step by step a series of euro problems allows the march towards further integration to continue unabated.

What could not be achieved explicitly by the front door would be achieved less obviously via the back door on the back of an economic Trojan horse - of ultimately economic misery. The euro is the extension of engrenage or 'the Monnet method' writ large:

The Schuman Declaration was presented by Schuman on 9 May 1950 (9 May was later to become Europe Day). Monnet and Schuman believed that it was through economic integration that political integration would eventually be achieved, via a process called spillover. Monnet and Schuman were thus the first functionalist theorists of Europe. Indeed, this process of integration is often termed the 'Monnet method'.

Yet much of this obvious point seems so beyond our own media who seem to be willing the Greece to exit to reinforce their misplaced, wrong and self-important analysis that the EU is all about economics rather than deal with the real issues as they are.

Thus despite all the brinkmanship and threats of Grexit, ultimately someone will put up some money, more than likely Germany, to paper over the cracks and the eurozone crisis will be left on hold until a new treaty comes along. Bailouts are de facto fiscal transfers - essential for an economic union to succeed. All that is needed is to make them official via a new treaty.

It's with some irony that the UK is aggravating the Greek crisis by having a referendum in 2017. By doing so it is holding up the new treaty to try to resolve the euro crisis; the Fundamental Law of the European Union which now has to wait until the "English question" is settled.

Despite the dreadful economic statistics Greece will stay in, politics and EU integration ambitions ensures that it must.

Scotland And The EU

Today, in what appears to have been a low key affair, the Scottish first minister Alex Salmond launched his government's independence blueprint, calling it a "mission statement" for the future. Yet on first reading not a great deal has changed in the Nationalist's flawed case. The same problems remain as I noted here - there's still no coherent case on the issue of currency for example:

Alex Salmond has been pilloried after unveiling a blueprint for Scottish independence that assumes the English would continue to share the UK’s ‘crown jewels’ including the pound and BBC programmes.

Today's announcement appears to have been nothing more than a rebranding exercise. Certainly on the vexed issue of whether Scotland would remain members of the EU and if they would still retain the UK opt-outs on the Euro are still in doubt. The Referendum White Paper argues:

If we vote for independence, the eyes of the world will be on Scotland as our ancient nation emerges – again – as an independent country. Scotland will become the 29th member of the European Union...

Of course, as we are well aware, it cannot be both an independent nation and a member of the EU. Those two positions are completely incompatible. But crucially what the paper doesn't address convincingly is how Scotland will remain members of the EU on the same terms as it has now.

In Scotland's favour there is a kind of precedent that echoes their potential position and that is the one of Greenland. Greenland as part of Denmark joined the then EEC in 1973, despite 70% of the Greenlandic votes having been against membership in that referendum. However when Greenland gained home rule in 1979 it still remained a full member of the EEC. It wasn’t until it had a separate referendum on leaving in 1981 that it decided to leave. Even then it still has a special relationship with the EU as part of its overseas countries and territories.

Yet the EEC has moved on and we are now post Lisbon, so there is now no real precedent for how the EU should deal with a region of a member state seceding from the European Union, a situation the white paper itself acknowledges:

Article 49 of the Treaty of the European Union provides the legal basis, and defines the procedure, for a conventional enlargement where the candidate country is seeking membership from outside the EU.

As Scotland joined the EU in 1973 this is not the starting position from which the Scottish Government will be pursuing independent EU membership. Article 49 does not appear to be the appropriate legal base on which to facilitate Scotland’s transition to full EU membership.

This though is at odds with earlier comments made by EU Commission President Barosso who is of the opinion that Scotland would have to reapply for membership:

A letter from Mr Barosso to the House of Lords economic committee, which is examining the independence question, also confirmed his position that a new independent state would "become a third country with respect to the EU".

"What I said, and it is our doctrine and it is clear since 2004 in legal terms, if one part of a country - I am not referring now to any specific one - wants to become an independent state, of course as an independent state it has to apply to the European membership according to the rules - that is obvious."

Asked whether an independent country would have to renegotiate its terms, Mr Barroso said: "Yes.".

Ploughing on regardless convinced Article 49 does not apply, the white paper argues that there would be a "continuty of effect":

We recognise that specific provisions will need to be included in the EU Treaties as part of the amendment process to ensure the principle of continuity of effect with respect to the terms and conditions of Scotland’s independent EU membership, including detailed considerations around current opt-outs, in particular the rebate, Eurozone, Justice and Home Affairs and the Schengen travel area.

So apparently all an independent Scotland has to do is pursue membership of the European Union by seeking an amendment to the EU treaties rather than applying as a new member:

The alternative to an Article 49 procedure, and a legal basis that the Scottish Government considers is appropriate to the prospective circumstances, is that Scotland’s transition to full membership is secured under the general provisions of Article 48.

Article 48 provides for a Treaty amendment to be agreed by common accord on the part of the representatives of the governments of the member states.

Article 48 is therefore a suitable legal route to facilitate the transition process, by allowing the EU Treaties to be amended through ordinary revision procedure before Scotland becomes independent, to enable it to become a member state at the point of independence.

The problem is that Salmond with his assertions of "seeking an amendments to the EU treaties" via article 48 is now entering 'David Cameron territory' with his similar claims of trying to achieve the goal of repatriating powers. Article 48 is here - it only allows the EU treaty to be amended by unanimous consent.

This then becomes a paper which assumes the UK and the EU will agree with whatever Salmond demands. Unanimous consent which requires agreement of the UK - that Scotland has voted to leave - and countries like Spain, Belgium and Italy who have their own separatist problems and would be determined not to encourage further such sentiments. One suspects therefore Salmond's chances are going to be close to zero.

It illustrates yet again the problems of an ill-prepared independence case. It's difficult to see as a consequence any other option than Scotland voting to remain members next year particularly factoring in the status quo effect. But the lessons, which are so relevant to an EU referendum, are still not being learnt south of the border.

Thus sadly those who campaign to leave the EU are currently doomed to failure.

Update: Captain Ranty is not too impressed either, expressed in his own inimitable way.

China In Your Hand?

As Richard North notes the forthcoming announcement of the construction of a giant new nuclear plant at Hinkley represents a staggering escalation in costs. However leaving aside the continuing folly of the UK’s energy policy it’s intriguing that much comment has been made about the fact that it is Chinese, not UK, investment that is involved, as indicated by this Telegraph piece (pictured above):

But others were less sanguine about China possibly coming to dominate Britain’s nuclear industry. “It’s troubling how far the Government is bending over backwards to allow this,” said Paul Dorfman, research associate at the energy institute of University College London.

Que much teeth-nashing - sorrowful that a country which was once at the forefront of nuclear power is now having to rely on Chinese investment to "kick start" our nuclear industry. But as is typical of our increasingly isolationist and "Little Englander" media, it ignores the wider picture. And it misses the insidious, and in this case the subtle, nature of our membership of the EU.

The UK and China have been forging a closer relationship for some time now; and crucially it has been doing so in the process of an increasingly close relationship between China and the UK government to support internationalization of the Chinese currency – Renminbi (RMB).

China is seeking to replace the US dollar, with the RMB, as the major world reserve currency. To help fulfil the criteria it is doing so with increasing co-operation of the Hong Kong and London financial markets, as noted by the South China Morning Post:

With Hong Kong’s support, London has become the leading offshore RMB centre in terms of payments with Hong Kong and China.  According to the Society for Worldwide Interbank Financial Telecommunications (SWIFT), London now accounts for 28 per cent of offshore RMB settled transactions.

Thus China has an enormous vested interest in the health of the UK financial sector. One can imagine therefore that it won't be best pleased to see the increasing efforts of the EU to impose ever draconian rules deliberately designed to damage one of the UK’s most important parts of its economy:

George Osborne has launched an unprecedented legal challenge against European plans for a financial transactions tax.

The move, which will be seen as a further sign of fraying relations between the UK and the rest of the continent, is designed to force the European Commission to reconsider the levy on Europe-related financial activity.

And:

Chancellor George Osborne stood isolated after European Union finance ministers vowed to press on with proposals to curb bankers' bonuses.

He told a meeting of EU finance ministers that he could not back the plans, which he fears could damage London's financial centre.

By cosying up to the Chinese - which is not to everyone's liking - Osborne has a big player on our side when defending the City from EU laws. A big player that is effectively helping to prop up the Euro. A bigger game is being played here.

If one is to be generous we could argue that George Osborne has played a bit of a blinder, however a more realistic criticism would question whether the heavy reliance on the Chinese been so necessary if we weren't members of the EU?

Confused?

 

Apparently Jane Austen is set to appear on a £10 note after an outcry that no bank note would have otherwise featured a woman.

Jane Austen is to become the face of the new £10 note after a public outcry that every banknote featured a man.

New Bank of England governor Mark Carney today unveiled the new design as a tribute to ‘one of the greatest writers in English literature’ which will appear from 2017.

The move comes after the Bank faced criticism that a plan for Winston Churchill to feature on the new fiver meant there would not be a woman on any English note.

Or as the BBC reports:

Author Jane Austen is to feature on the next £10 note, the Bank of England says, avoiding a long-term absence of women represented on banknotes.

Have I missed something? There was me thinking that the Queen was female. Oddly enough a similar outcry hasn't been made against the woeful lack of women on Euro notes (after all there are plenty of important women to choose from).

The EU Is Only Half Finished

As Richard North observes, that the pro-EU Guardian has featured prominently on its front page a Eurobarometer survey which is telling us that public confidence in the European Union has fallen to historically low levels, is of significance.

Not surprisingly there is much hand wringing within that publication of the "fundamental questions of the EU's democratic legitimacy" and what to do about it. But as any serious student of the EU knows democratic legitimacy was never on the table; removing democracy (or preventing "populism" if we are to use the negative redefinition of the term democracy) was always the intention of Jean Monnet - a man who was never elected to public office. The Guardian is thus discovering that the lack of public mandate - or populism - is coming back to haunt the EU in spades.

Conversely though, despite that the EU is not democratic in the sense its Monnet-inspired bureaucrats are not elected, it does not tell member states what to do. As a consequence I'm often dismayed by a significant part of the Eurosceptic movement in their arguments. EU member states choose to belong, they choose to participate, obey and they can choose to leave. That it is the "4th Reich" and the "EUSSR" are easy, lazy and inaccurate criticisms - the truth is the EU cannot force a nation state to do anything; the UK has not been reduced to pleading "please Sir can I have some more?", instead the UK chooses to be in this position. 

And one of the fundamental reasons that the EU cannot force the UK, or any other member state, what to do is that it is not yet, as a project, complete. While the EU has steadily hollowed out member states' institutions, it has not yet fully grasped the baton of power itself to the extent in most cases that there is no-one in charge and no-one in overall control. It's still in a transitional phase, a halfway house where international and supranational EU bodies are at odds with each other, neither one nor the other. Nation state governments have been undermined, yet there is nothing functional to replace it. It's a theme I've touched on before.

One is reminded of Christopher Booker from 2009 when writing about the flaws of the theory of evolution. I don't intend in this piece to either agree or disagree with evolution but merely to highlight that this paragraph from Booker's article which makes for a perfect metaphor of the current state of the EU:

Years ago, a good illustration of this was Attenborough himself claiming to 'prove’ Darwin’s theory by showing us a mouse and a bat, explaining how one evolved into the other. He seemed oblivious to the obvious point that, as the mouse’s forelegs evolved by minute variations to wings, there must have been a long period when the creature, no longer with properly functioning legs but as yet unable to fly, was much less 'adapted to survive’ than it had been before.

It makes for a wonderful analogy that can be applied to the progress of the EU; a project that has removed the "properly functioning legs" from its member states but as yet has not acquired the wings to enable it to fly, making it less adapted to survive. Nothing illustrates this better than the farce that is the Euro - a currency that needs political union to succeed but is unable to complete that very objective thus leaving it in limbo.

Such a mess arises from the strategy of integration by salami tactics and stealth - the implementation of the Monnet method - a tacit admission from Monnet himself that the project was always flawed. The creation of the European Council in 1974 was another admission of failure. Monnet's frustration by the unwillingness of sovereign nations in giving up their power led to the establishment of the European Council as a mechanism to help "Europe through the difficult transition from national to collective sovereignty" - a process that was understood to be one way only. A process that is still ongoing albeit in fits and starts. Yet by trying to force onto a people an artificial system of government without taking them with you in terms of approval was always going to end in tears.

Ironically this "difficult transition" has led to precisely the kind of disorganization that Monnet hated. Early on in his biography he said:

[My father's] view of mankind was optimistic, but I have not inherited it completely. Quite early in life, events taught me that human nature is weak and unpredictable without rules and institutions.

So it's not suprising he concluded his biograghy thus:

"The sovereign nations of the past can no longer solve the problems of the present: they cannot ensure their own progress or control their own future. And the Community itself is only a stage on the way to the organised world of tomorrow."

So it comes to pass that Monnet who abhorred the concept of the nation state will, via his "pet project", inadvertently reinvigorate nationalism across the EU and who, abhorred the natural somewhat chaotic democratic functions of every day life, will end up leaving behind a complete mess.  If it wasn't so serious, one would be highly amused by the irony.

No, No, No!

The Fatal Flaw

The theft of Cypriots' savings without so much as by your leave is quite jaw dropping in its brazenness. As Zerohedge notes, bank accounts are private property so what has happened is effectively the confiscation of private property - the equivalent of the government driving off with your car on a whim.

Of course the situation is being described as "exceptional and unique", as were the bailouts of Ireland, Portugal, and Greece. A precedent has been set and it's not difficult to envisage that this will happen again (it's a possible trial run) or that contagion, in the form of bank runs, will happen across Europe.

But it's seems to be forgotten among the outrage that our own Government is not adverse to similar actions themselves, only it's called something different.

If you want to raid savings accounts you can call it; quantitative easing, inflation or devaluation of the sterling. Different names but a similar effect. Or confiscate shares without compensation to shareholders that were still trading on the market at 90p at the time as per the nationalisation of Northern Rock. Or raiding dormant accounts. Or indeed bailing out a Eurozone country with taxpayer's money, despite promises to the contrary, but calling it "compensating British troops". When were we consented about this?

The EU's fatal flaw is its openness on the theft, an openness that is necessary because, unlike a successful currency union like the one that exists in the UK, it cannot disguise it via other methods due to the inherent shortcomings of the Euro. It is hamstrung by a flawed currency of its own making. It is being hoisted by its own petard.

However we should not be under any illusions that anything would be any different should we leave without a sea change in democracy at home...

The French Regret Loss Of The Franc

In answer to, one has to admit a slightly leading question, "Eleven years after the introduction of the euro, do you regret the loss of the franc?" the French news website, Atlantico, has a poll which found that 62% of French people now regretted the loss of the French Franc. As shown in the table above (click to enlarge) in 2002, just 39% regretted the loss of the French Franc.

Such numbers are obviously not surprising given the Eurozone turmoil, but it is a reminder of the precarious position the EU finds itself in. To govern a country, or a population, you need either consent or fear. The EU has neither.

So launching a fundamentally flawed currency in those circumstances is folly on sticks. This poll merely demonstrates once again that the concept of the EU is built on sand, and when it starts to all go wrong it has no where left to go.

hattip: The thoughts of an independently minded MEP

A Slow Death

The bad news in the Eurozone keeps on coming; France is in trouble and is likely to be another Eurozone country to go pop, Greece unsurprisingly is still buggered and Eurozone unemployment swells to a record high:

In latest confirmation that the eurozone crisis is far from relenting, unemployment in the 17-country bloc reached a staggering 18.5 million in September, according to the European Union's statistical office, Eurostat.

The figures showed a marginal increase on August’s rate of 11.5 per cent, with the number of those out of work increasing by 146,000. But in comparison to last year’s September records, when unemployment was at 10.3 per cent, 2.2 million more Europeans find themselves out of work.

Similarly, youth unemployment (joblessness under the age of 25) recorded a 2.3 per cent annual increase on last September’s figure.

Across the whole 27-nation European Union unemployment reached a rate of 10.6 per cent, increasing by 169,000 since August.

Unemployment rate spiked in countries at the epicentre of the crisis. Spain posted a September-to-September increase from 22.4 per cent in 2011 to 25.8 per cent in 2012, with Portuguese unemployment swelling from 13.1 per cent to 16.7 per cent over the same period.

But it was Greece that recorded the most dramatic surge in joblessness, as unemployment figures shot from 17.8 percent in July 2011 to 25.1 per cent in July 2012 – the most recent month when figures were available. August data will likely be posted next week.

Overall, the record high in unemployment paints a bleak picture of the eurozone, plagued by declining consumption and waning business confidence.

Much as it is desirable for us to wish that the whole stupid project would just collapse in a big bang, it's more likely that it will suffer a slow and protracted death, thus taking us all down. Instead of making Europe a major player on the world stage, as puffed up unelected EU politicians like to reassure themselves with, it will instead do precisely the opposite - a kind of self inflicted industrial strength dose of Rohypnol - the rest of the world will take what they want and move on.

We are chained to a corpse, and no amount of pathetic arguing of semantics over the EU budget will change that.

Still, a little schadenfreude can be had that Ted Heath's other legacy - leaving his house to the nation - is up for sale because no cares about visiting it:

Charity closes Ted Heath's house after it flops as a tourist attraction with less (sic) than 40 visitors a day

I particularly like this quote ( my emphasis):

A charity is set to close Ted Heath’s house after it failed to be a lucrative tourist attraction because the ‘memories of Sir Edward Heath receded into history’.

God moves in mysterious ways...

And So It Rumbles On...

I haven't done a Eurozone post for a while largely because it consists of soporific repetition, however rumble on it still does:

And:

And:

It all reminds me of this post by the FT in 2010 regarding the sterling devaluation crisis in the 1960's:

To some who went through the unsuccessful struggle from 1961 to 1967 to stave off sterling devaluation, the series of crises surrounding the euro will be drearily familiar. First there is a surprise loss of confidence. Then there is a series of rescue operations, usually taking the form of international guarantees of one kind or another. These are backed up by domestic restrictive measures leading to a domestic recession of sorts. In time the financial pressures ease and near-normality is seen to return. But then, when few are looking, there is another crisis, another set of international rescues and another set of domestic restrictions. And so on. Eventually the struggle is abandoned, and political and financial leaders work to pick up the pieces.

During the period when sterling devaluation was known as “the great unmentionable” a tiny band of Treasury officials kept “a war book” on how to deal with the unmentionable if it nevertheless happened. Harold Wilson, the prime minister, ordered that the “war book” be physically burned, which it was of course not. It is difficult to believe that such a manual does not exist in Athens, Frankfurt and perhaps other European centres.

Can we put it out of its misery yet...?

Bubble, Bubble

I've long since stopped watching PMQs regularly. A charade and a farce it most definitely is, not least because it has ever-increasingly retreated into non-relevance.

And so it proves again today. A cursory look at any order paper for Parliament will reveal meaningless debates on topics that are no longer decided here. Now Parliament's impotency has infected the 'highlight of the week' - PMQs. Today there were lots of questions about the Leveson enquiry, yet none about the Eurozone and its possible devastating impact on the UK, nor the economy nor about Syria or nor any other serious subject.

Andrew Neil sums up the frustration from viewers here on today's Daily Politics show:



Serious politics has AWOL

"Greece Won't Leave The Euro?"

From the same chap who thought VAT was a Thatcher invention, we now have this

(hi Mum!) I'm going to stake what little credibility I have here: I don't think Greece will leave the euro. Not now and probably not ever.

I'm saying nufink...*

*Can I have a job writing for the Telegraph being paid to talk bollocks...?

"The Euro Has Been A Massive Success..."

"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened." - Winston Churchill

...so argues Ken Daly, husband of former Tory MEP Margaret Daly in the Euro crisis discussion on BBC's Sunday Politics (West) show below:



One can only wonder what would constitute a failure - the bar must be set pretty high. But blinded by ideology, Mr Daly will cling onto his beloved project 'till the bitter end. And one imagines that when it all collapses he will be in a rocking chair somewhere, bitterly lamenting to anyone in earshot, that there was nothing wrong with the EU it was just implemented wrong.

The discussion, which begins circa 2:20 minutes in, also features Tory 'Eurosceptic' David Heathcoat-Amory - who currently has a book out titled; "Confessions of a Eurosceptic". Bearing this in mind it's interesting that despite being prompted numerous times by the presenter, not once does he explicitly argue for us to leave the EU completely. Instead he concentrates on Euro membership and its failings.

The argument to actually leave was made by Labour's former MP David Drew, who is also vice Chairman of football club Forest Green Rovers, (a club which banned burgers and other meat products last year at their ground). David Drew does correctly identify the disconnect between the people and politics because of the "power draining away to Brussels".

But Drew aside, the whole discussion had the air of arguments that haven't moved on in 20 years - riddled as it was with EU cliches. Note the constant references from the BBC presenter of "banging on about Europe" - I lost count of how many times this was mentioned, or that it is an 'obsession'. Spot also the irony as the BBC presenter says (with some feeling) that no-one cares about the EU - this during a programme on the issue because of the Eurozone crisis which is dominating the news.

As is usual, events are moving faster than politicians can keep up with them, as the Eurozone, and possibly the EU itself, balances precariously on the precipice of disaster, our MPs are faffing about over whether to promise some kind of referendum or not. They are so far behind the curve that not even binoculars are enough for them to see it.
 

This does mean however, there is one instance where we can emulate EU strategy - the beneficial crisis. As our MPs naval gaze and the Eurocrisis continues, we can use it as an opportunity to leap into the void and show a way forward. July 14th hopefully will produce the beginnings of that way forward.

Will It? Or Won't It?

It would seem that the Euro is going through another of its periodic epileptic fits again, where much chatter resides on alleged major developments:

The European Union is working on an emergency Greek exit plan as the break-up of the euro looms, a senior Brussels official has revealed. 

That the euro cannot continue in its current form is pretty obvious - I just wish they would get on with it. So while we tire of the seemingly never-ending circus of crisis, it is inevitable that at some point a breakup or exit must come to pass - the tricky bit is gauging when.

So it's tempting, as it's a Friday - which is a good time to announce bad economic news or fundamental economic changes ahead of the weekend to prepare for Monday morning - to take this report seriously:

(Reuters) - De La Rue (DLAR.L) has drawn up contingency plans to print drachma banknotes should Greece exit the euro and approach the British money printer, an industry source told Reuters on Friday.

 However, according to Business Insider:

Is Greece Already Stepping Back From The Ledge?

A couple of new polls have the conservative New Democracy party leading, and a report in Ekathimerini suggests that New Democracy is shoring up its coalition.

The Greeks want change, but they don't want to leave the Euro, and if it looks like SYRIZA's leader Alexis Tsipras is overplaying his hand, and risking a GREXIT, then he may get punished.

In short no-one knows. Yes the Euro's flawed, and yes it will breakup but when is another question. My guess is Greece will still be in the Euro this time next week.

Inevitable

Economic problems + Mass Immigration + Removal of people's democracy = A move to extremist parties:

A neo-Nazi party who advocate forcing immigrants into work camps and planting landmines along the border are today savouring unprecedented political success in Greece.

Golden Dawn party will enter parliament with 7 per cent of the vote after the electorate shunned the main parties who they blame for plunging the nation into austerity.

The obscure extreme-right group are one of the biggest winners in a poll which has plunged Greece into a fresh political crisis.

As UKK41 says it's depressing. It's also inevitable:

Asked if he worries about that prospect, Thomas Nikolaou, an unemployed mathematics professor, who until now backed Pasok, said: 

“This trick didn’t work now and it won’t work in the future. I voted for (the extreme right) Golden Dawn (party). I lost my job, I can’t feed my family and I have nothing else to lose. The only power I have is my vote and I will give it again to those who say no to this madness. 

“All I can think of is revenge against the politicians who destroyed my life and millions of others.”

So it's with deep irony that by trying to eliminate the nation state and democracy the EU will encourage precisely the very situtation it wanted to prevent.

Forcing Greece Out

As previously mentioned on this blog, and by Richard North, and by Mary Ellen Synon, it looks like Greece is on its way out of the Euro - forced by the Germans. It's nice to see the BBC catching up eventually, and the fact they're starting to report it, reluctant as they always are to mention EU matters, indicates how close this scenario is coming to pass.

The MSM Fiddles As Greece Burns

The Talking Clock makes an excellent point about the priorities of our nation's 24 hour news coverage. Last evening's coverage, on both the BBC and Sky, was dominated initially by the sad death of Whitney Houston (which albeit warrants a mention) and then for hours by pre BAFTA footage of self- congratulatory celebrities walking down the red carpet. Apparently, and this was important, they were adopting a 'green' theme - actor Colin Firth was wearing an 'Eco-friendly sustainable suit', whatever that means? All of this coverage despite that the event had a two hour time slot on BBC One anyway.

Meanwhile on the European continent - on our doorstep - Greece was experiencing severe social, economic and political turmoil. People were rioting, buildings were burning and Greek politicians were voting on approving a new austerity package the failure of which to pass the Parliament could have resulted in Greece exiting the Euro and possibly the breakup of the currency itself.

Not that any of us would have known this following the 'standard' media outlets. We had to instead rely on social networking sites and foreign news channels, such as Russia Today, to follow the unfolding events.

The MSM is retreating rapidly into an ever decreasing circle of relevance.

By Default

It's another Euro crisis, so it's another deadline. It's reported that this weekend bankrupt Greece faces the ultimate decision of whether to stay in the Euro or not.

Now we have been at 'deadline hour' many times before, which has so far always proved false, so a little cynicism is in order. But the indications are that the momentum does appear to be heading towards a conclusion - I do agree with Richard North when he writes "There is definitely a sense that we are moving to the end game".

The pressure on Greece is intense and there seems to be a non-too subtle attempt, on behalf of the EU and Germany, to force Greece to default, and possibly exit the Euro. The likely reasons for the EU's bullying are manifold.

The cost of trying to save political face by keeping all the countries in the Euro has been superseded by the embarrassment of the Greek crisis to the Euro project, which has no prospect of ending anytime soon. Greece is an economic basket case - so the EU needs to get rid of, in part to try to improve the currency's 'respectability'. That Greece will default has always been a matter of when not if - a reality the EU has long known about. After over 2 years, weariness is creeping in. Greek promises are never kept and more importantly for some European politicians elections are due this year. Taxpayer's money to keep bailing out Greece is not popular to say the least.

The constant bailouts, or rhetoric, has also conveniently given time for the Eurozone to prepare for the inevitable Greek default - in short economic sandbagging. As Louise Armitstead argues in the Telegraph:

The bankruptcy of Greece is no longer the threat to the eurozone that it once was. For all the frustration caused by the constant delays - Greece missed four deadlines last week alone - the time has not been wasted. Banks have busily untangling themselves from the thicket of Greek debt; repricing and restructuring debt and taking large write-downs. In total foreign banks have slashed their exposure to Greece by 60pc.

In a note last week, Willem Buiter, Citigroup’s chief economist, said: “In early September 2011, we argued that the cost of Greek exit to the rest of the world would be very high. We now consider these costs to be much lower because the 'exit-fear-contagion’ could be contained.”

In essence preparations are being made to hang Greece out to dry, a view echoed by Jeremy Warner:

There is only one way of interpreting the set of fresh demands tabled by eurozone finance ministers last night in return for agreeing a new €130bn bailout for Greece – that they are now quite deliberately trying to push Greece out of the euro. All pretence at European solidarity has been abandoned, to be replaced by the vengeance of Shylock.

There is now no chance whatsoever of Greece making it in the eurozone. Economically and politically, the country is in meltdown. Richer Greeks...are all getting their money out as fast as they can, as those of us who have been gazumped in the London property market by Greeks bearing piles of wonga know only too well.

It's a disgrace what's going on, little short of the rape of Greece by its own countrymen, but it is an entirely rational and logical response to the grossly overvalued currency they find themselves with.

Greece has very little option now but to impose capital controls and leave the euro. The longer it leaves things, the more desperate will its plight become.

Despite enduring economic, social and political hardship strangely most Greeks still want to be members of the EU and the Euro. Sadly they are about to find out the hard way that membership of the EU, and more specifically the Euro, only works one way - it means doing what the EU orders when a member, and being jettisoned overboard without concern when an inconvenience. The other Euro members are saving their own skin but not without causing economic and social meltdown, without a care, in another country first.

But no doubt if the inevitable Greek default doesn't lead immediately to a Euro breakup, much rejoicing will occur in Brussels, along the lines of 'we're dealing with the problem'. However next up will be Portugal, and then... well close your eyes and put a pin randomly into a map of Europe.

Ten Very Happy Years

Today is the tenth anniversary of the Euro's launch in the form of coins and banknotes, three years after it had existed as a virtual currency. The launch was celebrated by fireworks, parties and solemn speeches ushering in a 'brave new world'.

Strangely though ten years on celebrations across the EU have, in contrast, been rather muted:

In Brussels, there will be neither a ceremony nor even a news conference to mark the occasion. That set the tone for other countries, many of which were doing the minimum: preparing to circulate a 2-euro commemorative coin for the anniversary.

So it would be rather remiss of me if I didn't indulge in a little gloating, As Richard North at EUReferendum puts it:

"If you cannot have the occasional gloat then, frankly, life ain't worth living."

Today, several Euro members are on the edge of bankruptcy. Europe is pitifully reduced to asking the IMF and China for help and the euro itself is on the brink of unravelling.

Have I said "We told you so" yet?

The Mail is also jumping on the gloating bandwagon by laying the boot into the BBC:

What a difference a decade makes. Ten years ago, the BBC announced ‘Euphoria in Euroland’ as it hailed the birth of the euro.

But with the single currency now facing collapse, the Corporation’s coverage of today’s anniversary has been notably more restrained, as senior executives prepare to defend their ‘pro-Brussels bias’ during a showdown meeting with Eurosceptics.

So here, as a bit of New Year's fun, are a few quotes from some of our great and wise 'leaders' such as Nick Clegg:

The euro, despite the foolish assumption of many commentators that it should be judged according to its external level with the dollar, has already provided great internal stability to the eurozone

And:

The euro has done more to enforce budgetary discipline in the rest of Europe than any number of exhortations from the IMF or the OECD. If we remain outside the euro, we will simply continue to subside into a position of relative poverty and inefficiency compared to our more prosperous European neighbours.

Or this from Chris Huhne:

If we get rid of sterling and adopt the euro, we will also get rid of sterling crises and sterling overvaluations. This will give us a real control over our economic environment. Our manufacturers, farmers and other trading businesses would be able to rely on the exchange rate against our main continental trading partners staying unchanged forever.

And this from Michael Heseltine (my emphasis):

We see [the dangers] today in the exchange rates where our own non-membership of the eurozone is threatening great swathes of British manufacturing industry. The effect of [the introduction of euro notes and coins] will unleash a range of competitiveness which is simply not understood.

You see the most extraordinary things said about the plans to encourage British industry to change its capacity to trade in euros, as though changing over your tills and cash registers is somehow a contribution to the sacrifice of your sovereignty. If you have 300m people who have nothing but euros to spend you have to be barking mad not to be able to take the euros.

And Peter Mandelson:

The price we would pay [by not joining] in lost investment and jobs in Britain would be incalculable. Outside the euro, there is little we can do to protect industry against destabilising swings in the value of sterling.

Not forgetting Tony Blair:

Even if it [taking Britain into the euro] is unpopular, I will recommend it if it is the right thing to do.

Europe's economic fundamentals are sound: sounder than they have been for over a generation. The EU's economies are growing and it is important to underline that they are now creating jobs in Europe faster than almost anywhere else in the developed world.

And:

The decision to launch the single currency is the first step and marks the turning point for Europe, marks stability and growth and is crucial to high levels of growth and employment.

Let's have this one from Yves-Thibault de Silguy a former EU Commissioner in 1998:

Britain can not survive as a serious international power unless it joins the single currency. We can live without you, but you can't live without us.

Or Charles Kennedy:

The euro, despite gloomy predictions from anti-Europeans, has proved to be a success. We cannot afford to be isolated from our biggest and closest trading partner any longer.

Or Wolfgang Muchau in the Financial Times in 2006:

There is not the slightest danger of a break-up of the Eurozone. On the contrary, I expect the Eurozone to be exceptionally stable in the long run. Make no mistake, the Eurozone is here to stay.

And:

The world’s two large reserve currencies, the dollar and the euro, offer more protection from speculative attack than a free-floating offshore currency unit. The UK will at some point have to make a choice whether it wants to be in the Eurozone or whether it wants to seek an alternative use for those rather tall buildings in the heart of London.

Nostradamus has a better accuracy rate than that.

Still, the Euro managed to limp along and make it to Christmas, but the expectation must surely be that the crisis will return with a vengeance in the first few weeks of the New Year, certainly the noises are that a breakup in one form or another is being anticipated.

So will the Euro survive 2012? We'll have to wait and see but the chances are not good.

I despair...

...I really do. I can't cope with today because of 'bollocks overload'. Apparently Cameron has gained a spine (when did that operation occur?) and stood up for Britain against the EU. Cameron has seemingly suddenly turned into Churchill and defended our shores against the might of Europe. Yeah right!

Cameron has always shown himself to be a europhile ever since he became leader so why has he only now performed a u-turn so large that it's visible from space? The short answer is, he hasn't.

Despite the wisdom of the all seeing eyes that are journalists (who think this is a summit not a council meeting) there has been no veto, in fact no treaty changes can be made without an IGC. This is evident in the weasel words that are being used (my emphasis):

PM declares: 'I had to pursue Britain's interests... I effectively wielded the veto.

Effectively does not mean he has. And...

Cameron faces virtual isolation

Virtual eh? Not the same thing.

The golden rule with Cameron is to accept that he is a europhile, so if he appears to make statements to the contrary then there will inevitably be a massive catch So why are most falling for his guff?

Cameron is playing to a pliable British press to convince his party that he really is eurosceptic, when strong evidence shows conclusively the opposite. This is obvious in this piece by the Mail:

This is the moment that Nicolas Sarkozy demonstrates exactly what he really thinks of David Cameron's veto of the EU Treaty change.

After the gruelling all-night sitting in Brussels, Mr Cameron approaches the French president with his hand outstretched, ready to shake and show there are no hard feelings.

But not only does Mr Sarkozy refuse to acknowledge the PM, he actually does a swift swerve aside, waving pointedly to someone - anyone - on his right.

I bet now Cameron and Sarkozy are laughing in private, saying to each other "brilliant we got the timing just right" but Sarkozy saying; "shit, I still look short in the photos"

Boris Johnson has concluded that Cameron has played a blinder - in a sense he's right: Cameron is stupid but he's cute enough to play to the gallery of Tory voters who are more stupid and gullible than him.