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Why Greece Must Leave Eurozone

Politics / Eurozone Debt Crisis Jun 09, 2015 - 04:42 PM GMT

By: Raul_I_Meijer

Politics

French Economy Minister Emmanuel Macron and German Vice-Chancellor Sigmar Gabriel published a piece in the Guardian last week that instantly revived our long nourished hope for the European Unholy Union to implode and be dissolved, sooner rather than later. The two gentlemen propose a ‘radical’ reform for the EU. Going a full-tard 180º against the tide of rising euroskeptism, the blindest bureaucrats in European capitals are talking about more centralization in the EU.


Here’s hoping that they follow up with all the energy they can muster, and that we’ll hear a lot more about the ‘reforms’ being proposed. Because that will only serve to increase the resistance and skepticism. Let them try to ‘reform’ the EU. We’re all for it. If only because if they do it thorough enough, referendums will be required in all 28 member nations, which all need to agree, in a unanimous approval vote.

The gents know of course that that is never ever going to happen. So sneaky ways will have to be found. Something Brussels is quite experienced at. They’ve shown many times they won’t let a little thing like 500 million citizens get in their way. We’re curious to see what they’ll come up with this time.

Meanwhile, though, the rising skepticism threatens to rule the day in many countries, and Greece is by no means the leader in the field. Germany has a rising right wing party that wants out (just wait till Merkel leaves). Marine Le Pen has vowed to take France out as soon as she gets to power, and she leads many polls. Britain’s Ukip is merely the vanguard of a broad right wing UK ‘movement’ that either want out or have treaties thoroughly renegotiated.

Portugal’s socialists are soaring in the polls on an EU-unfriendly agenda. Spain’s Podemos is no friend of Brussels. In Italy, M5S’s Beppe Grillo has gone from skeptic to outright adversary over the past few years. There are varying levels of antagonism in all other countries too.

Now obviously, not all countries in the union carry the same weight, politically speaking (why do we so easily agree that’s obvious, though?). You have Germany, then a big nowhere, then France and Britain.

Greece, equally obviously, has no say. They can elect a government that wants to change things even just at home, and be told no way. If Germany would elect such a party, all EU policy would change in the blink of an eye. A true union of sovereign nations it therefore is not. And that of course was never possible, it was just something people wished for who never contemplated the details or consequences.

Still, given that the whole project has always been represented as a one-way street from which escape is not possible, the weight of the smaller nations should not be underestimated. Perhaps all it will take is one defector to make the entire edifice unstable. Statements to the contrary are made only by people who eat hubris for breakfast, lunch and dinner.

If either France or Germany leave -the former looks far more likely right now-, it’s project over. The same would probably hold for Italy. Spain would be a grave blow. Britain might be quite a bit easier (no euro), though negotiations -let alone referendums- over treaties could cause a lot of havoc and unrest. While various bigwigs try to fool you into thinking that letting small nations leave can be ‘ringfenced’, that is utter nonsense, they have no way of knowing.

David Cameron tries to convince himself that he can get away with establishing some sort of status aparte for Britain, but others may want such a status too, and they may have a list of points they want to discuss if and when treaty changes are put on the table. Multiple that by 28 and before you know it either nothing changes, or everything does.

The Union was hastily and sloppily cross-stitched together when everyone was still exclusively dreaming more of mass lift-all-boats profits in the offing, than caring about the fineprint of compromise squared treaties or considering possible future consequences if and when the profits would turn out not to be unlimited. Ergo, everything that happens now is an improvised play performed by 28 at best mildly talented actors trying to convey an air of confidence. That’s all that is left.

Throw all this in a pile, and renegotiating any EU treaty will to a high degree of probability be akin to opening Pandora’s cesspit. And besides, any changes would never pass if a referendum were held. Macron and Gabriel are all too aware of this pesky factoid:

“What’s important is the project,” Macron said in an interview with Le Journal du Dimanche. “Treaty change is a method that would ensue and that we have to prepare in due time,” he said, warning that European people would probably reject a new treaty if asked in a referendum.

Meanwhile, British demands to opt-out from “ever closer union” could be accommodated by a special “protocol” to the EU treaties, according to Manfred Weber, a Christian Social Union MEP who is a close ally of German Chancellor Angela Merkel. But in return, Britain would have to accept losing its veto in areas where others forge ahead with deeper integration, the German MEP warned.

In 2005, both France and Holland rejected the EU constitution in respective national referenda. But Brussels just ‘forged’ ahead as if it didn’t matter. Today, however, let’s see them try that again.

Ten years ago, the profits were still in vogue. But things have changed, and problems are everywhere. Problems that Brussels seeks to ‘solve’ by gifting itself with ever more centralized powers. But the undoubtedly biggest problem of all they have is that not 10% of Europeans would vote to give them these powers. So please, please, try.

As for Greece, all the negotiations really are just a matter of fiddling while Rome burns. But that is not because Greece is in trouble; it’s because of what the EU has become. A club that depends on its ability to scare members into submission, the same vein the IMF operates in. The negotiations are about amounts of debt that were imposed upon Greece by the troika when it decided to bail out banks of Europe’s most powerful member nations and put the Greek people on the hook.

Europe’s high and mighty will yet come to regret the decision not to restructure these banks, because this will be the catalyst that blows up the Union. The reason why will become apparent as debt rises further and asset markets start falling off so many cliffs.

Greece should get out as fast as it can, all member countries should, especially the poorer ones. There is no benign or even economically viable future for any of them in the Union. A future inside the union is infinitely more frightening than one outside.

What is evident by now is that the troika creditors don’t come to the table to negotiate, they come to impose their will. And those countries that carry the most debt are most vulnerable to the threats flung across the table. If you don’t get out, in time Germany will decide what you can eat, what your children learn in school, and how you are to behave. You will no longer live in sovereign nations.

The eurozone must fail. And so must the EU. That is better for everyone who’s not inside the power circles, in the long term. What countries should do now is ‘ringfence’ themselves as best they can from the nuclear fallout the failure will lead to. Focus on resilience.

While the leadership everywhere dreams of ever more centralized power, economic reality dictates decentralization. It can only be halted through propaganda and violence. But that will merely be temporary.

Even if Brussels somehow ‘solves’ the Greece issue, others nations will follow, be targets of financial markets, and once it comes to Italy or Spain, who are both in very precarious places, the EU and the ECB are simply not strong enough to absorb the blow. And then where do you think that leaves you?

I’ve said many times before that all governments, power structures and supra-national organizations are a magnet for the last people you would want to lead them: sociopaths. That’s not an opinion, it’s a description of the dynamics of human group psychology. Greece itself before Syriza is a prime example of this.

The smaller the countries, states, regions that politicians are allowed to rule over, the less likely leadership posts are to attract sociopaths. Other considerations count too, remuneration, chances to forge ties with an elite and serve their purposes. Larger entities are certain to attract pathological minds. Exceptions to the rule are far and few between. Also: the more a society manages the field of propaganda, the likelier it is to get -and keep- a sociopath as its leader.

The US is a good example. So is the EU. And obviously, the IMF, World Bank, NATO, FIFA. We always fail at ‘doing large scale’ for the benefit of the people. The large the scale, the less the people benefit.

Just when its moment of glory seems to arrive, globalization will lead towards decentralization and protectionism. Just as stability leads to instability.

The EU’s socio-pathological trait is evident in the way the organization’s leaders deal with Ukraine, with the refugees off its southern coasts, and, inside its very borders, with Greek society, unemployment, hunger and hospitals. There is no compassion, no conscience.

In the EU, the idea(l)s have become the problems, argues Stratfor’s George Friedman:

Is The European Union Already On The Brink Of Inevitable Disaster?

The fact of the matter is that a free-trade zone in which the black hole at the centre, Germany, absolutely overwhelms all of its competition, and the competition can’t protect itself, is untenable.

[..] many of the great ideas that the European Union began with have turned, as it frequently happens in history, into the problems.

Q: [..] ..you said a group of squabbling nations, and you’ve alluded to the history, from the Franco-Prussian wars right up to 1945, the history is very, very unpleasant indeed. Is the corollary that Europe will eventually descend back into war?

George Friedman: Well, the question is really has it ascended? From ’45 to ’92, Europe was occupied by the Soviets and the Americans. The fundamental questions of sovereignty were not in the hands of London or Berlin or Rome, it was in the hands of Washington and Moscow. In ’92, the Soviet Union collapsed, and for the first time since WWII, Europe became genuinely sovereign. And for 16 years, they made a go of it. For the last seven years, it’s been rather disastrous, and the question is, can they reverse it?

And if they don’t reverse it, what prevents them from returning to the kind of history that is normal in Europe? And what I’m arguing is that basically, the period of ’92 to 2008 was an interesting aberration. We are now back to the old normal, and how bad it becomes really depends on a bunch of (inaudible) issues. But first we have to really recognise that the Europe that was envisioned in the European Union is not going to return.

We had better not forget that. If Europe will never be what it was supposed to be, then why would anyone want to be part of it, apart from the few that profit most? If the corollary truly is that Europe will eventually descend back into war, isn’t it time to take care of your own? And isn’t that, really, what the Greeks are already trying to do today?

Very timely for this article, Tyler Durden posted a piece by Jeff Thomas today that delves deeper:

The New World Order – A Faustian Bargain

[..] most people in any given country seem to believe that the political parties that rule them do not collude in their own collective interest and against the best interests of their respective constituents.

Similarly, they are unlikely to accept that fascism exists in their country—that members of their favoured party collude with industries. Further, most people seem to disbelieve that the leaders of their own country collude with the leaders of their country’s enemies in such a way that might create loss or danger to their own people. This is naive. Such collusions are the norm rather than the exception.

Those who tend to be more informed, readily acknowledge that collusion exists between all of the above, to one degree or another. If this group errs, it is often in the opposite assumption—that the collusion is all-encompassing.

There can be no doubt that a New World Order is being sought by some—this has been made clear for at least a hundred years by many who regard themselves as an Elite. It is therefore an open secret.

In my experience in dealing with political leaders (and political hopefuls) from several jurisdictions, I’ve found there to be a consistent sociopathology (by definition, the desire for dominance over others, undeserved self-confidence, lack of empathy, a sense of entitlement, lack of conscience, etc.).

Sociopaths are drawn to political leadership for obvious reasons. First, they’re prone to collusion, as they recognise that it may further their interests [..] Trouble is, the same sociopathology would drive the same individuals to seek to dominate each other.

It has been postulated by many that those who see themselves as an Elite are nearing the completion of what they perceive as world dominance. However, should they succeed, they will betray their partners the very next day, as it’s their nature to do so.

First, there most assuredly are extremely domineering forces (regardless of how closely associated they might be), which, in the near future, will do immense damage to the cause of freedom in the world, particularly in those countries where they are most dominant, or will become most dominant. Second, the situation does appear to be reaching a head.

The two greatest uncertainties will be how much damage will be done before the dust has settled, and how protracted the period of destruction and struggle for dominance might be. [..] The best that can be done is to work at placing ourselves as far outside of their sphere of influence as possible.

That describes how the EU functions, and why Greece -first of all, and first thing in the morning- needs to leave. There is no future in the EU that anyone wants to live in. It’s not a tide that will lift all boats, it will sink them.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)© 2015 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.
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6 Critical Money Making Rules