The Greek prime minister, Alexis Tsipras, has called a referendum on what describes the "unbearable" bailout plan the EU and IMF are offering.
Greece is due to make a consolidated payment to the IMF at the end of this month but doesn't have the money to so. Even if the Greeks vote to accept the bailout terms on July 5th, there's no guarantee they'll get the money as they'll have already gone into arrears with the IMF.
There is no hope of the Greeks ever paying their debts and recovering from their current financial crisis whilst they remain members of the EU and the €urozone. The best thing the Greek people can do is vote no to the bailout and leave both the single currency and the EU and pursue an Icelandic-style recovery.
On Sunday, Stuart Parr blogged
here about the German plan to enact Cypriot style bank raids on the savers of
Europe. To which I say: well, good. I’m all for it. And no, I haven’t lost my
marbles.
Let’s get one thing straight:
taking money from citizens is what governments – all governments – do. Unable
to create wealth, and with most people fairly unwilling to simply hand cash
over if it can be at all avoided, they are forced instead to find ingenious
ways to extract it from their citizens.
Colbert famously once said “the art of taxation consists in so
plucking the goose as to obtain the largest possible amount of feathers with
the smallest possible amount of hissing”. Indeed, from a certain perspective it’s
clear that the only factor separating a successful government from an unsuccessful
one is the extent to which they have mastered this skill.
So far our
government seems to be doing a remarkably good job on this front, for make no
mistake, it has been busily helping itself to our savings as surely
as the Cypriot government dipped into their citizens' pots. Our leaders have just been far more sneaky about it. How have they
done it? In two ways:
Firstly,
inflation. The 2% inflation target has been routinely ignored for over three
years now. Instead, in 2005 the consumer price index (CPI) inflation rate
ranged up as far as 5.2%, whilst the RPI has been even higher, all whilst banks
were paying out only 1-2% interest on savings. The effect has been to erode in real terms the value of the money in those accounts. Essentially, anyone with
money in a British savings account has been fleeced as surely as the Cypriots
have. But has there been rioting in the streets or a run on the banks? Nope.
The second
way is through quantitative easing. Let me hand over to Louise Cooper writing
in The Spectator(£) for this one: “QE
… uses digitally created money to ‘buy’ government IOU notes, or Gilts, thereby
reducing the interest rate at which government borrows. The Treasury, nowadays,
lends this money to banks (so-called ‘Funding for Lending’) and they, in turn,
can depend less on borrowing from their customers. This means they offer
derisory levels of interest, as anyone who is applying for a cash ISA will
attest.”
Of course the situation is even
worse than that. This government has made quite a song and dance about taking
the lowest waged out of taxation (by which they mean income taxation – these people
still pay plenty of other taxes). But the extra £700 in people’s pockets has
been more than wiped out by the huge cost of inflation caused by QE, estimated
to be as much as £779 a year for the poorest 10%. That’s before we even mention
the £400 a year extra on VAT, or the consequences of wages also dropping in
real terms.
By contrast,
the Cypriots made a rather poor fist of stealing their citizens savings. As I
commented at the time, they’ve overplayed their hand and given the game away. People
were lining up down the roads to guard their savings from being imperilled. In
fact, it’s something of a miracle that the move didn’t spark a run on the banks
across the Eurozone – and indeed if Germany continues to press in this manner,
it just might. Which is exactly why I’m in favour of it. Transparency is bad for governments but good for democracy.
So savings
grabs may be good for governments in the very short term if it allows them to
meet the terms of a bailout, but in the long run they can only serve to fatally undermine the
system. The goose is hissing loudly. It’s the measures such as our government
has been employing that are really insidious, as they produce no protest, just
a slow long descent into poverty. So go ahead Germany, make my day. Let the
citizens of Europe know that the EU is hellbent on stealing their money. They’ll
remember the lesson when they get to the referendum ballot box.
The Slovakian government has voted against increasing the size of the €uro bailout fund tonight.
The proposal was rejected by 21 votes and resulted in a vote of no confidence in the europhile Slovakian government.
According to the BBC, a new government will be formed soon and a second vote taken which is expected to pass. For the sake of the Greek people and everyone else suffering because their governments tied them into the political vanity project that is the €uro, let's hope the Slovakian government drags it out for long enough to force a Greek default and the collapse of the single currency. A poll on the Bloggers4UKIP Facebook page shows that more than three quarters of people who voted don't believe the EU will survive the collapse of the €uro.
So Portugal has finally caved in and asked the EU and IMF for a loan to tide it over until next pay day. Hands up if you're surprised ...
It was only a month and a half ago that the Portuguese government said it wouldn't be needing a bailout from the EU and IMF despite the cost of government borrowing increasing pretty rapidly. Unsurprisingly, they've run out of money and can't afford to make repayments on bonds that are maturing soon.
Even though this is a eurozone problem, we are going to have to contribute about £4bn toward the cost of bailing Portugal out thanks to the deal Alistair Darling did, with George Osbourne's agreement, to contribute 13.6% (the percentage of the EU budget we pay) of the cost of any bailout of the Euro.
Back in November, the Republic of Ireland came under pressure from France and Germany to accept an illegal bailtout from the EU. Ireland, of course, said it didn't need a bailout and that it was worried about the loss of sovereignty associated with mortgaging the country to the EU but what little faith investors had left in the Irish economy was undermined and a week later they accepted a €100bn loan from the EU (including several billion from the UK) and IMF.
The required changes to the Lisbon Treaty to make bailing out member states legal have been made (another broken promise by Cast Iron Dave) paving the way for the next bankrupt Eurozone country to be bailed out. Greece has already had €110bn from the EU and IMF, the Republic of Ireland has had £100bn and next on the list is Portugal who will be taking €80bn.
Portugal says that it doesn't need a bailout (like Ireland said) but France and Germany are trying to pressurise the Portuguese government into taking a bailout sooner rather than later (like they did to Ireland). The French and German stock markets fell by about 1 and a half percent each and the FTSE fell half a percent on the news and the Americans are fretting about the risk of European sovereign debt.
Portugal is going to try to sell €1.25bn of bonds on Wednesday to get its hands on some cash and the interest rates are expected to be high. Bonds are basically a type of loan taken out by governments from private markets with a guaranteed amount to be paid back on a specified date (assuming the country issuing the bonds doesn't default like Greece did). The amount of interest investors demand on the bonds is an indication of the risk - if they think there's a chance the bonds will be defaulted on then they will demand a higher percentage rate, just like a high street bank does based on peoples' credit ratings.
On Thursday, Spain and Italy (the other two bankrupt PIIGS countries) will issue their own bonds to try and raise cash and how well they do will depend on Portugal's bond issue on Wednesday. The ECB will probably buy more Portuguese bonds (it's already been buying up Greek, Portuguese and Spanish bonds to try and encourage investors) but as the ECB is the central bank of the failing Eurozone, it's a mystery how they expect investors to be reassured by their purchase of potential toxic bonds from the bankrupt PIIGS countries using their own money!
The order of the fall of the PIIGS has already predicted - "Portugal, Spain and Italy will be next" - Portugal will be bailed out in the next couple of weeks and then Spain will follow shortly thereafter. Or will it? Can EU member states (or the IMF for that matter) afford the €250-300bn it will cost to bail out Spain? Will Spain be the straw that breaks the kamel's rücken and leads to Germany pulling the plug on the Euro?
The EU's political elite will defend the Euro and the EU project to the bitter end but the money will run out soon and Germany has been lucky so far to have pretty much escaped the consequences of the collapse of two Eurozone economies. Next time they might not be so lucky and when the impending collapse of the Euro starts to hit Germans in the pocket they will be out of it.
We may not be in the Eurozone but it clearly governs our actions.
Officially the bailouts that have been happening within the EU/Eurozone are illegal under the relevant treaties. But as there seems to be no court to enforce these treaties, this fact has been ignored.
Prior to the last election and subsequently, after the establishment of the coalition government, David Cameron and his Conservatives have promised the people of the UK that there will be referenda on any future changes to our relationship with the EU that may impact UK sovereignty.
Putting these two issues together, a significant treaty change and the promise of referenda one might have expected a referendum on the proposed changes to the Lisbon Treaty. However, if this is what you expected then you would be disappointed as William Hague has said that there will be no referendum on this matter.
The Conservative governments argument against holding the promised referendum is that the change only affects Eurozone countries, of which the UK is not one, so the change makes no difference to the UK.
There can now be no argument against having UK referenda on any treaty changes within the EU - even if only Eurozone countries are being targeted. While we are in the EU, then regarding the Euro and Eurozone 'we are all in this together'.
We may not be in the Eurozone but it clearly governs our actions - so where is our referendum?
Thanks to James Goldsmith, we were spared the financial death throes that Eurozone members such as Ireland are now experiencing. We can only hope that the Euro is shredded by the markets, forcing deadly fissures to appear in the EU façade and 'community'.
If Ireland takes IMF cash, it will largely be under the thumb of Britain - the country whose embrace it could not wait to escape as it rushed to the bosom of the EU.
If Ireland takes Merkel's (expropriation) of EU cash, then it can expect to lose its sovereignty to the EU and to be forced to raise its corporation tax, thereby reducing its competitiveness.
If Ireland does a deal with Britain, it will be even more firmly yoked to Britain than it ever was - this time, via the serfdom which accompanies unpayable debt.
What a a fine mess they've made. If only they'd listened to us and not signed that blasted treaty.
Ah. But the politicos were following a carefully crafted plan - and script. Just as Cameron and Hague are doing today, while they try to convince us of the opposite.
In 2008, before the ratification of the Lisbon Treaty, Eric Deakins, MP for Walthamstow West 1970-74, MP for Walthamstow 1974-87, and junior minister for Trade (1974-76) and the DHSS (1976-79) in Labour governments under Wilson and Callaghan respectively, witnessed and have spoken out against the dishonesty exhibited by a succession of leaders in committing Britain to the European Project.
Described are the aims of the Treaty of Rome, and how in subsequent years the process of integration into a European political entity has gradually been forced through, against the wishes and without the knowledge of the majority of British people.
Little by little, we are being roped in by the EU, aided and abetted by their new best friends, Cameron and Hague, who know a thing or two about twisting language to sound like the truth, so to disguise a cleverly crafted lie.
If we do not make a stand, Britain will be in the Euro one day - or in an incarnation of it, the end game being complete political union under an unelected body of totalitarian technocrats, who will transform Britain into an ex-nation of serfs. Except for the politicos, of course, who will be rewarded handsomely.
Ex-Labour MPs Nigel Spearing and Eric Deakins tell of how the British people were duped. They were both Members of UK Parliament at the time of Britain's entry into the 'Common Market' and witnessed how it was pulled off.(7-video autoplay).
After literally days of feigning resistance, the Vichy Irish government have caved in to pressure from their puppet masters and agreed to hand over effective control of their economy to the European Empire in exchange for a cauldron of leprechaun's gold.
The EU now controls the Greek economy and the Irish economy. Portugal, Spain and Italy will be next and then what happens? We can't afford to bail out the entire continent and the French and Germans certainly aren't in a position to, not when their economies are hobbled by EU regulations.
The collapse of the Euro has been predicted by Ambrose Evans-Pritchard for some time, and now, speculation (pardon pun) is gathering pace as people begin to grasp that the massive Greek bailout is but a mere sticking plaster. It merely buys time.
Most pundits (Bob Chapman amongst them) believe that the Euro is toast and that Greece will never be able to repay its debts, even if its loans are restructured.
Germany would be hit harder than any other nation, should Greece default - or any of the PIGS, and for this reason, there is speculation that it has begun printing German Marks.
The Germans were not keen on relinquishing their highly regarded Deutsche Mark for the Euro in the '90s, for fear that should any member states be reckless with their economies, Germany's economy would be forced to bail them out. So the Maastricht Treaty was designed to reassure German taxpayers that bailouts between member states would be illegal and that each member state had to be fully responsible for their own fiscal policies - including debts they incurred.
At the time, the German economy was strong, Ireland's economy beginning to boom, EU states generally growing and nobody seemed to foresee the possibility of future economic busts - despite the huge disparity between the social and economic fabric of the member states.
Ireland's current spending shortfall this year is €26bn while its spending requirement is €60bn, which means that it must borrow approximately €400m per week to keep the public sector going. Ireland's debt servicing costs are already the most expensive in Europe because the markets regard it as risky. Ireland is in a bit of a hole.
In October, it faces its second referendum on the same Lisbon Treaty with bogus guarantees and the EU and Brian Lenihan are trying to convince them that should their economy crash, their only hope would be bailouts from the EU.
Firstly, Ireland can slash its public sector and save itself a ton of money - so giving the markets confidence in its handling of the economy. That would have the effect of easing the cost of its credit and reducing the likelihood of its economy crashing.
that their only hope out of their financial crisis is to keep borrowing (it isn't);
that the EU will bail them out should their economy fail (it can't and it won't).
And we all have to pay for the privilege of delivering this fiction to them, to persuade them to sign up to a treaty that none of the people of the member states wants!
Merkel, who faces an election this year, is latching onto a line from Article 100 of the Maastricht Treaty which permits a bailout for a member state in the case of "natural disasters" or "exceptional occurrences beyond its control." She says this allows some "interpretive room for manoeuvre." Update: Der Spiegel gives the low-down on Germany's economy.
The Irish aren't stupid but people do crazy things when scared - which is precisely what the EU intended. We have a duty to tear the veil from their eyes, in any way we can.
I suggest we get busy blogging - and flooding their newspapers with comments.
wonkotsane is an author at Bloggers4UKIP.
;)
Posts
