Crisis is a Greek Word 36

The economic crisis in Greece has many ironies, one of which is that an appalling fiscal mess, left by a very right wing government, is the responsibility of a left wing government to clear up. It is the same Augean task (to stick with Greek cultural heritage) as will face whoever takes over from this very right wing government in the UK.

Being nothing but a lowly party member, I cannot pretend that the Mervyn King scenario had not occurred to me too. I had considered that a Cameron administration, with a tiny majority, propped up by some Northern Irish bigots, would inflict such pain on the majority of our society that, before falling after a few years, they would put the Tories out for a generation at least.

In so doing, they would greatly enhance the cause of Scottish and Welsh independence, and with the Lib Dems the second most popular party and the challenger in the large majority of Tory seats, the Tory demise would sweep in a radical change in more promising circumstances. All that had occurred to me.

But it was of course the Thatcher scenario. She was the least popular Prime Minister ever. But then she engineered into a massively popular war the crass Argentinian invasion of the Falklands , and never looked back. The Tories could pull such a trick again. Accompanying another war, they might crank up still further the appalling reduction of our civil liberties.

On top of which we need to pin down electoral reform now, while there is the best ever chance. PR and a 100% elected House of Lords will transform the political landscape of the UK for ever. Let’s look for an outcome that secures that – it is more important than the pleasant prospect of watching Cameron fall on his arse. So I am out again today campaigning for the Lib Dems. This is the first chance to change the two party system for a generation.

Back to Greece. The European ideal – which at its internationalist core I regard as a good thing – is suffering from overreach. The Eurocracy have always been expansionist, and taken the view that to secure expansion is more important than the detail. Thus Greece and Portugal in particular were admitted to the Euro when everyone knew that it was a fudge, and that their dim relationship with the convergence criteria was based on fake statistics.

The same is true with the accession criteria, which in areas like corruption, transparency and the rule of law Bulgaria and Romania were deemed to meet, when plainly they did not. On human rights, dreadful treatment of their Roma was ignored. All that too will come back to haunt the Eu.

The problem with faking the convergence criteria, and the fundamental flaw in the Euro, is that there is no real mechanism to enforce a broadly similar fiscal policy across the single currency. The system of peer review relies on the (in this case Greek) government’s own falsified statistics, and has few teeth even if it had good information. The result in effect is that individual countries can practice free quantitive easing – just print themselves money. This devalues the money everyone else has in their pocket, as the Eurozone is now noticing rather sharply.

We are already lending Greece more money through the IMF than the amount we would need to give if we were part of the Eurozone rescue package. I do not think these loans will halt the markets, who have identified the fundamental weakness in the Euro’s structure and will go for it mercilessly.

There is much speculation that Europe should boot Greece out of the Euro and we should see a return of the drachma. I think broadly that should happen. But there is an alternative to the return of the drachma – which Greece would simply create far too much of, and would soon have toilet paper status. Greece could be kicked out of the Euro, but still use the Euro as its currency, merely losing the ability to create it, with the government having to raise the money by bonds and import cash physically from another European state. That is on a more institutionalised and thorough scale the way the dollar works in countries with junk economies. Once Greece has really reformed it can rejoin the Euro properly.

Humiliating, but it is actually a very Greek idea. King Croesus’ Lydia was the first state whose currency was so sound it was used internationally. It remains a famously good idea over millennia.

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36 thoughts on “Crisis is a Greek Word

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  • Courtenay Barnett


    There is a lot of mis/disinformtion out there.

    One has to be sensible.

    Not everything published has credence, and sometimes it is necessary to wade through the hidden agendas and information ( of varying sorts) to arrive at sense.


  • Georg


    I’m an American, so perhaps I am missing something, but what reason is there to retain the Lords at all? WIth the establishment of the Supreme Court, Lords provides only the weakest limitation to the authority of Commons. Lords has no say on money bills, can only delay other legislation, and has historically refrained from blocking manifesto-related legislation for fear of losing the authority to delay altogether.

    Whether you want a proper bicameral legislature with an elected Senate, or are content with Commons as the sole legislative body, there seems to be no real room for Lords in the future of the UK.

  • Freeborn

    Conspicuously absent in Craig’s account,and in the election campaign generally,is any reference to the central banking system that operates across Europe.

    The idea that PR can transform our democracy is fatuous in the extreme.When we consider that central banking is designed to legally counterfeint national currencies for the private gain of a small elite it is obvious that plutocracy-or what we should more accurately call:synarchy-will be the political system that results.

    Britain where central banking began is and has been ever since that day a plutocracy.The political leaders and all our elected representatives are subservient to central bankers and the military-industrial complex.The latter being the contemporary embodiment of the “standing armies” our rulers financed through the central bankers who were only too eager to provide the service.

    The coming economic tightening of the money supply that Mervyn King has belatedly referred to as “austerity” is the rearguard action to which the central bankers who engineered the Crash in the first place always have recourse.

    King’s warning may at least give the British people pause for thought.Anally retentive people have an infinite capacity for self-delusion that helps explain why most of the electors have litle idea that central banking is the only real issue in this election.

    Andrew Carrington Hitchcock has a great timeline called The History of the Money-Changers at which explains the full history.

    Read it before you waste your time and energy voting.

  • Apostate

    I just can’t begin to imagine who writerman’s “people”-you know the guys with a sword in one hand and a gold ingot in the other-could possibly be!

    Since we’re all so PC and “anally-retentive” I won’t even go there!

    Let’s just assume writerman is referring to us-the British people!

    Yea,we’re the sad fucks who embraced the central banking scam that came via Venice and Amsterdam in the 17th century.

    Following the current “Ostrich election” where we all bury our heads in the sand so that central banking will not even figure as an issue the British people will be utterly dispossessed.

    National Insurance,Income Tax,Carbon tax,petrol duty,death duty-we’re all gonna pay big time.

    Maybe we just got so dumbed-down,PC,fat,atomized and arrogant we deserve what’s coming.

    Societies that debase themselves by allowing central institutions like the family to founder and the social fabric to be thus ripped apart are meat and drink to the cannibalistic central bankers.

    Time to pay my people,oh my people.

  • tungsten


    You must be some kind of corporate media junkie.

    Last I heard Tarpley was,like other astute economic analysts,such as Gerald Celente et al,lambasting financial terrorism as the source of our current meltdown.

    Likewise LaRouche’s party are making concrete proposals to properly regulate the financial system.Such proposals are being supportively heard in Peking and Moscow,as well as the US itself.

    Time you stopped relying on Channel 4 News to tell you what’s happening in the world.

    Your economic illiteracy and intellectual myopia are part of the reason why we’re where we are now.

    Wake up,dude or end up running a cathouse with Larry from St Louis!

  • Owen Lee Hugh-Mann

    “Aren’t the tories quite well allied with the Lib Dems on civil liberties? No ID cards, stop DNA database?”

    No Brian, only the LibDems have pledged to scrap both the ID card and biometric passport; the Tories intend to go ahead with biometric passports from 2012. If you want to travel abroad from then, you will have to be happy to add your fingerprints to the government database. This will be ideal for fishing expeditions by the police and thanks to the inadequacy of the British 16 point recognition system, with the database expanded massively to include all UK passport holders, the number of false positives will be huge. Given the way that the police pluck arbitrary figures out of the air when they want to argue against the chances of a false positive in court, a lot of people will be wrongly convicted. And what’s the betting that once all passport holders have been added to the database, the government will then make it compulsory for the rest of the population, to make the law “fair” for all?

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