Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
The Hottest Commodity Play In 2018 - 23rd Apr 18
Stock Market Correction Turns Consolidation - 23rd Apr 18
Silver Squeeze, Gold Fails & GDX Breadth - 23rd Apr 18
US Economy Is Cooked, the Growth Cycle has Peaked - 23rd Apr 18
Inflation, With a Shelf Life - 23rd Apr 18 - Gary_Tanashian
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

The Absurd Bizarro That is Europe

Politics / European Union May 26, 2014 - 07:09 PM GMT

By: Raul_I_Meijer

Politics

The headlines speak of an earthquake. But just about absolutely everyone who’s been shaken manages to declare victory, including incumbents who have lost, which is the majority of them, in some cases painfully. And European stocks are rising too, in some cases to all time highs. It all adds up to a perfect illustration of the absurd bizarro Europe has become.


Despite the huge surge in anti-EU sentiments, Brussels claims that because pro-EU parties still have a majority in the European parliament, the people of Europe have voted for the EU. There are a few problems with that claim that they would rather not discuss. Almost two thirds of eligible voters did not vote, attendance was as low as 18% in Czech and 13%(!) in Slovakia. It’s safe to assume a larger number of non-voters are not pro-EU (there’s a difference between anti and not-pro) than the number who are. Not pro-EU voters often have the problem that there are no parties to vote for that they like in other issues than being euroskeptic. In a democratic system, that’s a dangerous gap and a big political deficit.

The picture painted by the establishment is that only “extreme” (i.e. nazi) elements oppose what the EU has become. This is what you might call ‘useful nonsense’. As is the claim that “you can’t be against Europe, because you are Europe”. As if Europeans have no right not to like what the EU has become. Still, many people would rather stay home than vote for a Farage or a Le Pen, even though they’re the only voice in their countries that share their opinion on Europe. When you add it all up, it’s safe to assume there are many more euroskeptics than the elections appear to show.

There are also big differences between the euroskeptics, who therefore don’t – and can’t – form a “block” in the parliament the way the established parties do (for some reason, you need parties from 7 different countries to cooperate to be recognized as a block). For instance, Farage refuses to discuss forming a block that Le Pen is part of. What all of this means is that the center-right EPP block is still the biggest, which is readily spun into a positive development, even though it lost 62 of its seats, plummeting from 274 to 212:

With partial results and exit polls suggesting that the centre-right EPP had claimed 212 seats in the European Parliament to 185 Socialists, Jean-CLaude Juncker, the former prime minister of Luxembourg, was presented as the next president of the EU executive by jubilant party supporters. “As lead candidate of the largest party, I have won the election,” he told reporters in the Parliament hemicycle. “The EPP has got a clear lead, a clear victory.”

You lose 22% of your seats and declare victory. It fits perfectly into the overall messages emanating from the parties, and it would be funny if it had no consequences. Both the French and Greek winners (right wing Le Pen and left wing Tsipras) have urged for early elections to be held in their respective countries. Don’t count on it. Le Pen called for the French parliament to be dissolved, and PM Manuel Valls described his country’s vote as very serious, before, about two seconds later, announcing tax breaks, presumably in an attempt to stem the bleeding.

French President Hollande’s Socialist party suffered a huge and bitter defeat, and there are crisis talks in Paris today, undoubtedly in a room so full of spin doctors cabinet ministers will have a hard time finding a seat. How legitimate and credible is a President with only 14% of the vote, with Le Pen getting 25%? Nevertheless, Valls said Hollande and the Socialist government were elected for a five-year term with a specific “road map”, and they’re not going to change that. Not even if 6 out of every 7 French(wo)men who did bother to vote are against them. You got to love democracy. It’s as if ‘democracy’ means everyone is free to make up their own definition of the term, and all definitions are equally valid.

In fact, most incumbent governments have lost, and, spinning aside, need to address the issue of their legitimacy in a serious fashion, but are for now mostly stuck in “well, we’re still sitting here and what are you gonna do about it?” mode. That is as curious as it is dangerous, but the how and why may not be apparent if and when an economic recovery is plucked out of the hat. It’s when that doesn’t happen that the dangerous part begins. With distortions such as Italian and Spanish bonds selling at about the prices as US Treasuries, things may seem to be picking up, but that won’t last.

And the autostrada may now seem free and open for Mario Draghi to come with stimulus measures, but not so fast. The big winners of these elections are, with perhaps one or two exceptions, not in favor of going about things the ECB way. Nigel Farage’s victory puts more pressure on Cameron’s Conservatives to finally get serious about renegotiating the terms under which the UK is part of the EU. Tsipras’ victory means that Greek eurozone membership is by no means assured, and may only be salvable through monetary policies which other EU nations cannot accept. Or another coup.

The best hope for Brussels’ bureaucrats may be to hope that everything will disappear from people’s minds and attention spans, but without substantial economic improvements that is not likely. Why would the people in Greece, Italy and Spain keep on believing that staying in the EU is a better option than leaving, if that leaves them with sky high unemployment numbers and crumbling health care systems? Moreover, what exactly do the Greeks have to say in Brussels? Not much. And that is a problem that many EU nations have: who defends their specific needs and wishes if and when these don’t sync with those of larger nations?

Because the appropriation of seats in the European parliament has been set up with a system of “degressive proportionality”, which means the larger the state, the more citizens are represented per MEP, It’s not even as bad for the Greeks as it could have been. Degressive proportionality means Malta with 400,000 people has 6 seats, or one seat per 67,000, while Germany with 82.5 million citizens has 99 seats, i.e. one seat per 859,000. That’s nice, but in the end Germany wins. the Greeks may look “proportionally advantaged”, but their 21 seats are less the 26 Marina le Pen picked up last night, and much less than Angela Merkel’s 30.

Germany has a total of 96 seats in the 766 total parliament, France has 74, and Greece their 21. And the “membership will make us rich” story Greece was fed has already lost most of its luster lately, while the Germans and French who outnumber the Greeks by more than 8 to 1 in the EU have done very little to lift the unemployment burden in Athens. Instead, the troika continues to force them to sell their assets, like for instance 110 of their best beaches, to the world’s elite in the name of “development”.

If Greece leaves the eurozone, returns to the drachma – and devaluates it – and negotiates, or simply declares, inevitable defaults on parts of its debt, does anyone believe it could possibly fare worse than it does now? Athens can’t get out of where it is today because it has no say in how that could be achieved. The ultimate insult added to the grave injury the EU has turned out to be for the Greeks is that they’re not even their own boss anymore. Instead, they’re mere servants to a bunch of autocrats and bureaucrats who are selling off their land and their treasures from under their feet. I don’t know about you, but I’d rather be poor and independent.

Perhaps Greece can adopt some elements of the election program of the German satire party simple named ‘Die Partei’, which even won a seat (yeah, that’s what it’s come to). They intend to rotate that one seat between members, a new one every month, who will then be eligible to be placed on a 6-month retainer. “We’ll ‘squeeze the EU the way a small Mediterranean nation does’”. Other points from Die Partei’s campaign: build a wall around Switzerland, abolish Daylight Savings Time, and maximize personal wealth at $1 million, the rest to be divided amongst the poor. They now have a seat in the European Parliament. How fitting is that?

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2014 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
Raul Ilargi Meijer Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules