The G8 was almost galvanized into action at its most recent dinner club meeting. Reich Kanzler Merkel continues to shirk German responsibilities and condemns the Greeks to more pain.
Another dinner club meeting has passed for the G8 nations without any adequate determination on the Euro Crisis which some claim will destroy the global economic system.
The root of the problem continues to be the German belief that they can rule Greater Germany (Europe) on somebody else’s money. The rest of the world naturally takes the view that if Germany is determined to create the Fourth Reich, they will have to dig into their own pockets either to buy the munitions for another crack at occupying Europe, or to find the GreekGeld to buy off the Greeks and keep the Euro afloat.
The extreme Parties are expected to increase their share of the votes at the next Greek election, called because the recent election failed to produce enough politicians to agree on forming a government. There is absolutely no guarantee that the next election will produce a conclusive result and then the Greeks will have to consider where to go from there. The prospect of a political war of attrition with frequent new elections remains a strong possibility.
The Greek politicians do seem to have reached one consensus. It seems that they believe the way forward is to hold a gun to the collective Greek head and threaten to blown its brains out if the EU and the IMF do not shower the with free money and no strings attached. There is a certain logic in this because the amount of money required to keep the Greeks in funds is very small as a proportion of EuroZone funds, but the concept runs into difficulties because any attempt to pay GreekGeld will encourage similar demands from Ireland, Spain, Portugal, Italy and France and the combined assets of the Euro Zone and the IMF are currently inadequate. The only way to solve that problem is for the IMF to continue to break its charter and agree to underwrite the EuroZone debts, which would require IMF members to agree to pay in huge additional sums which is unlikely in view of the recent opposition from the US and UK to agree a blank check to fund the EU political elite in their political project to keep the Euro afloat.
Politicians are finally beginning to appreciate that there is no free lunch and that there really is a crisis that must be responded to at something approaching light speed. Unfortunately they are currently rabbits frozen in the headlights of the oncoming car as demonstrated by Cameron concentrating slicing fruit on his iPad, Clegg trying to work a three day week and cut his hours, and Milliband desperately searching for something approaching a policy (although that might be a good thing for Britain – even better if the three old failed Parties could be swept away by a dynamic political force)
The economic arguments continue.
Those trying to bounce the world into underwriting German political ambitions claim that a failure to cave in to German demands will see Europe in flames, certainly in civil war and possibly in a new major armed conflict caused by Germany. This is the new Munich and this time there must be no appeasement. Had the world stood up to the German bully there would have been no war in 1939. If the world now stands up to the new German bully there will be no war in 2012.
The global economy faces a grim but not necessarily explosive crisis.
What ever any country does during the coming months, there will be pain and it will no longer be confined to a few profligate EuroZone countries. The global economy is now far too integrated to remain completely unaffected by the political ambitions of the EuroZone political elite. For eight years European leaders have hoped to borrow their way out of what was originally a significant, but not lethal, crisis that demanded restructuring and action. The experience has demonstrated that like any credit junkie, an attempt to borrow a way out only makes the lack of credit worse until a default or bankruptcy is inevitable. By encouraging other countries to join the madness, the EuroZone has ensured that the eventual resolution will be that much more painful.
Eurocrats are now panicking because they see the example of Iceland and realize that the real threat to them is that the Greek people will go back to their own currency and begin to recover. If they show the same determination as Iceland to deal honestly with their own economic crisis, they will bounce back very quickly and avoid the lifetime of economic oppression that EuroZone membership guarantees. In that situation there could be a stampede for the Euro exit led by Germany.
The collapse of the Euro does not mean economic Armageddon. Those countries that fail to seize the new opportunities will of course feel the pain, but as one country recovers it helps to pull its trading partners out of crisis and a movement begins that will produce a new boom. Provided that politicians learn to manage growth, the global economy could see a long period of sustained growth and the re-establishment of gentle managed curves in economic development. In the process it will be essential to bring the climate fraudsters under control.
The bright light at the end of the tunnel is that at least the people of Europe are making positive responses. In Britain, the recessions made in Downing Street by Gordon Brown and Ed Balls resulted in them being soundly rejected by the British voters. Unfortunately, the voters were denied a real alternative and ended up securing a Coalition Government unable to make all the tough decisions necessary. In Greece the voters struck back and again found a lack of credible alternative to support. In France the voters ejected the Poison Dwarf Sarkosi and again failed to find a credible alternative. The story is repeating through Europe. The first stage of ejecting the old ruling elites of professional politicians is a positive step. What is now required is the growth of credible alternatives where committed patriots step forward to serve rather than to rule and line their pockets.