Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
S&P 500 Just 2% Below Record High, But There's More Stock Market Uncertainty - 19th Jul 18
Stock Market Technical Picture - 19th Jul 18
Gold Market Signal vs. Noise - 19th Jul 18
Don’t Get Too Bullish on Gold - 19th Jul 18
Bitcoin Price Rallies to Upper Channel – What Next? - 19th Jul 18
Trump Manchurian President Embarrasses Putin By Farcically Blowing his Russian Agent Cover - 19th Jul 18
The Fonzie–Ponzi Theory of Government Debt: An Update - 19th Jul 18
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

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