Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.
Display:
yep, but the basis of solidarity has to be honesty, transparency, accountability, trust, reciprocity and mutuality.  I recognise that we are talking about unequal relationships in many cases, but why should German taxpayers bail out Greek Oligarchs any more than the EU tolerate/support the emergence of a military Junta in a member state?  

We are working through many issues regarding true democracy, transparency, accountability etc. in many member states.  Tolerating it in one member state does the other members states no favours whatsoever.

In that sense the EU IS going through an existential crisis.  The many areas of agreement and solidarity encoded in present Treaties have proved inadequate to deal with the Global banking/financial/economic/political crisis and the absence of sufficient fiscal integration and mutual oversight has proved key in this instance.  

Other issues that perhaps need to be tackled on an EU wide basis include media monopolies/oligopolies, banking regulation, financial transaction taxes (Tobin Tax) etc.  Even Merkel has recognised that existing Treaties are inadequate, but is it feasible to propose a new Treaty so soon after Lisbon?  Expect national oligopies/bourgeoisies to go ape-shit, and not just in the UK.
 

Frank's Home Page and Diary Index

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun May 16th, 2010 at 05:35:31 AM EST
[ Parent ]
You forget mental capture by ignorant economists.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Sun May 16th, 2010 at 06:28:43 AM EST
[ Parent ]
yep, but the basis of solidarity has to be honesty, transparency, accountability, trust, reciprocity and mutuality.

And if the demands currently placed on Greece were about any or all of those things, nobody here would be complaining.

But they're not, so we are.

I recognise that we are talking about unequal relationships in many cases, but why should German taxpayers bail out Greek Oligarchs

What's happening right now is that the Greek taxpayers' children are bailing out the German oligarchs.

The "Greek bailout" is mostly a bailout of German banks, and the Greek taxpayers (and the Greek poor, through lack of public services) are going to pay for it (it's a loan, not a gift). A Greek default would be a bailout of the Greek (ordinary citizen and oligarch alike) at the expense of the German oligarchs.

Me, I fail to see the problem with fucking over some oligarchs - hence my acceptance of a default scenario.

(Similarly, capital controls is a way to prevent the Greek oligarchs from absconding from the country - they helped make the mess; they can damn well stick around for the cleanup.)

More generally, Greece will default unless either
(1) Germany stops depressing domestic demand in the service of a mercantilist inflation policy
(2) the EU establishes redistribution programmes that counteract the German mercantilism (which would effectively turn the German mercantilist policy into subsidy by the German taxpayer to the German export industries)
(3) Greece imposes capital controls to bring its trade into balance.

The cash flows being what they are, there is no question about that fact. The only question is how much the Greek people are going to suffer first.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 16th, 2010 at 06:29:42 AM EST
[ Parent ]
the EU establishes redistribution programmes that counteract the German mercantilism (which would effectively turn the German mercantilist policy into subsidy by the German taxpayer to the German export industries)

You mean the German taxpayer hasn't been already subsidizing the German export industries?

Let's look at German economic policy under both Schröder and Merkel:

  • stagnant real wages in Germany - check!
  • unconstitutional reduction of the German social safety net - check!
  • running deficits during the growth part of the business cycle - check!
  • increasing public debt even when above the 60% GDP threshold - check!
all this while running a substantial trade surplus - which is only possible with supply-side tax cuts to "stimulate" growth, which was stagnant precisely because of the suppression of internal demand. Let's also recall how in 2005 Germany lobbied to relax the enforcement of the Growth and Stability Pact which it was violating. Let's also remember how Germany kept its borders closed to new EU member states labour on the grounds that their economic growth was sluggish, while at the same time going on a capital shopping spree in the new entrants, siphoning business profits off from the periphery into Germany.

So the German oligarch have already been bleeding the German people dry for at least a decade. Meanwhile, the German banks lent money to the peripheral economies so they could buy German products. In 2009 the German government has been busy bailing out the German banks.

It is impossible - unless you're a Serious Person - to take any pronouncements coming out of Germany seriously.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun May 16th, 2010 at 06:48:42 AM EST
[ Parent ]
You mean the German taxpayer hasn't been already subsidizing the German export industries?

Yes. The German worker has. But the German taxpayer hasn't. Taxpayers include (in theory) the employers.

At the moment, the subsidy schemes are from workers to employers and from net importers to net exporters. A redistribution system that evened out the current account imbalances would add a redistribution scheme from taxpayers to export businesses on top of those.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 16th, 2010 at 07:45:55 AM EST
[ Parent ]
Paying taxes is for little people.

And politicians no longer address themselves to workers but to taxpayers...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun May 16th, 2010 at 07:50:20 AM EST
[ Parent ]
The basis of solidarity doesn't matter. What matters is that conservatism is correlated with a perception of belonging to a smaller "we" which is the subject and object of solidarity.

Oligarchs are extremely narrow-minded and selfish. Conservatives such as Merkel somewhat less so.

The EU is doomed by lack of solidarity in the face of any crisis (let alone one of the magnitude we're facing) as long as the EPP is the dominant political force, as it is currently.

Market worship has both been a cause of the crisis and a factor in making it worse.

There is also a moralistic undercurrent to all this, that somehow pain is virtuous. How Christian (Democrat).

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun May 16th, 2010 at 06:38:48 AM EST
[ Parent ]
How much distaste do German leaders and German banks really have for Greek oligarchy?

The Greek debt problem is not new.

It has been there for a while.

In the interim, Greece and Germany traded favors. Greece received political support and Germany received huge orders from Greek on armaments and other projects.

Were Germany actually concerned about corruption and oligarchy in Greece, one place to begin nipping the Greeks in the bud would be: stop bribing them to buy your stuff.

This doesn't mean that Germans are to blame for Greek corruption, but the Germans certainly should not act surprised.

When you look at the banking crisis continentwide, a lot of dirty behavior seems to be tolerated by these leaders.

by Upstate NY on Sun May 16th, 2010 at 09:44:26 AM EST
[ Parent ]

Display: