Category Archives: Europe

Germany’s treatment of Greece shows what the Right wants us to become

Summary: The Greek-eurozone tale is a common one, much like that of America’s inner cities. As usual, the Right begins its tightening with the weak and poorly behaved. People are told that they deserve their harsh fate.  But it doesn’t end with them, as austerity is a medicine always requiring another dose.  {1st of 2 posts today.}


Previous posts reported economists’ explaining the roots of the Greek crisis, so unlike the simple morality play in the newspapers. Yesterday’s post said that events in Europe result from similar political forces at work in America, both pushing the west to the Right. This provides evidence of that, in a small way, by Tyler Cowen, a conservative Professor of Economics at George Mason U: “Greece and Syriza lost the public relations battle“. It’s quite revealing, which we see at the opening.

One of the most striking aspects of the Greek situation is just how much the Greek government has lost the public relations battle.  They have lost it among the social democracies, and they have lost it most of all with the other small countries in Europe.

Conservatives respect public opinion (vox populi, vox dei), except when it’s just the views of the mob. But public opinion is malleable, and condemnation of the Left has been a knee-jerk reaction of the news media for centuries — as we’ve seen in America from the first great public relations campaign against William Jennings Bryan in 1896 (the most expensive Presidential campaign ever) to the demonization of Martin Luther King (“commie agitator”). The campaign against Greece ranks among the best of them, driven by a mix of fact and fiction.

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The Greek crisis shows Europe’s 1% winning, just like their cousins in America

Summary: Previous posts reported economists’ explaining the roots of the Greek crisis, so unlike the simple morality play in the newspapers. This post looks at its politics, a narrative of victory by Europe’s 1%, a milestone on their 2-centuries-long quest to destroy the Left. Progress requires sacrifices, so examples have to be made — such as the people of Greece. Nike, goddess of victory


  1. Devastated Europe
  2. What’s the cause?
  3. The Right triumphant
  4. What happens next?
  5. For More Information

Image of Nike, goddess of victory. By Emanuel Lakozas. She no longer favors Greece.

(1)  Devastated Europe

The crisis is one of Europe, not just Greece. As Paul Krugman shows, the people of Europe are paying a high price for their leaders’ policies. Due to its long-standing weakness and incompetent leadership, Greece is merely the worst affected.

GDP change in Europe 2007-14

From Krugman, New York Times, 29 May 2015.

Krugman explains the cause of these dismal results:

… what’s striking at this point is how much the origin stories of European crises differ. Yes, the Greek government borrowed too much. But the Spanish government didn’t — Spain’s story is all about private lending and a housing bubble. And Finland’s story doesn’t involve debt at all. It is, instead, about weak demand for forest products, still a major national export, and the stumbles of Finnish manufacturing, in particular of its erstwhile national champion Nokia.

What all of these economies have in common, however, is that by joining the eurozone they put themselves into an economic straitjacket. Finland had a very severe economic crisis at the end of the 1980s — much worse, at the beginning, than what it’s going through now. But it was able to engineer a fairly quick recovery in large part by sharply devaluing its currency, making its exports more competitive. This time, unfortunately, it had no currency to devalue. And the same goes for Europe’s other trouble spots.

(2)  What’s the cause?

The cause is often described as stupidity by Europe’s leaders. Journalist Ryan Cooper gives this hyperbolic assessment: “The eurozone has become a murder-suicide pact“. Continue reading

What can we learn from Greece’s crisis?

Summary: Now the final act has probably begun in the long divorce of Greece from the European Monetary Union. Ignore the predictions. They’re just wild guesses. Rather let’s take this moment to contemplate how Greece — and Europe — got here.  {1st of 2 posts today.}

“Europe will be forged in crises, and will be the sum of the solutions adopted for those crises.”
— Jean Monnet in his Memoirs (1978). He was one of the architects of the program to unite Europe (see his Wikipedia bio).

EU flag burning on the ground

Unnecessary death of a dream.

After years of confident assurances that all would probably work out for the best, Greece has gone off a cliff. This was long expected by readers of the FM website. In July 2007 they read that the European Monetary Union probably couldn’t survive the next recession in its current form. The cracks opened in 2010; in February 2012 I predicted it would not survive the crisis.

Europe’s lending and monetary stimulus programs to the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) delayed the crack-up until 2010 and extended the slow decline since then, Now the crisis has begun. It will almost certainly bring big changes to Greece. As for the rest of Europe, and to the unification program, who can say? Greece is small, but it might create large precedents for others to follow.

While journalists report the exciting events to come — entertainment for America’s outer party (managers and professionals), because what difference does it make? — we can ponder how this happened and what America can learn from this.

We’ll see many economists explain why this resulted from incompetent politicians. This crisis would have been manageable if tenured economists at majored universities ran the world! Barry Eichengreen (Berkeley) says “Path to Grexit tragedy paved by political incompetence.” I suspect that a tag-team of Solon, Pitt the Younger, and Washington would have found this crisis difficult to handle.

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Stratfor: A high stakes cage match – Nationalism vs. the European Union

Summary:  The European Union appears to be starting its long-predicted endgame, when its  design flaws create insolvable crises. This analysis by Stratfor goes to the heart of the EU, describing the forces that seem likely to halt or reverse the 65 year-long march to unification. They make a bold prediction which, if correct, will change the course of 21st C geopolitics. {2nd of 2 posts today.}


How Nationalism Undermines the European Union

Stratfor, 29 May 2015


  • The loss of economic prosperity has hurt European integration efforts. Member states will now push to devolve power from the European Union to the national level.
  • Nationalist and anti-establishment parties in member states will undermine fundamental EU policy.
  • EU institutions will be able to manage this trend in the short term, but the economy will force Brussels to reshape the European Union.
  • Over time, nationalism will trump European integration and governments will repatriate power for the first time in EU history, leading to the collapse of the union.

On May 29, 2005, French voters rejected a proposed European Constitution in a nationwide referendum. A week later, the Dutch followed suit. This clear rejection of greater European integration was an iconic moment in the history of the European Union. Although it came in the form of a nation-state constitution, the European Constitution would primarily have collated all previous EU treaties into a single document. This symbolic act, plus the granting of more legislative powers to Brussels, would have been a major step toward a unified Europe formulated in the wake of World War II.

A decade since the Dutch and French referendums, the European project is in its deepest crisis. The economic turmoil that began in 2009 and produced the eurozone crisis has awakened nationalist instincts that undermine pan-Europeanism. These centrifugal forces have always been present and, historically, led some members to opt out of certain initiatives. The key difference in 2015, however, is that nations will choose to backpedal on integration — a first in EU history.

Integration and Sovereignty

The contest between nationalism and pan-Europeanism has been at the core of the European Union since it was first formulated in Rome in 1957. The union is an attempt to create a transnational entity out of a group of nation-states defined by different economies and political traditions, divided by a history of conflict. To unify these states, the European Union promised peace and economic prosperity. The resulting organization was a hybrid between a unified pan-European entity and a community of sovereign nation-states. In the ensuing decades, these competing visions have continued to clash, with nationalism succeeding several times in slowing the integration process.

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See our victory in WWII by what didn’t happen afterwards

Summary: On Memorial Day we remember the sacrifices by those who fought in America’s wars. But let us also remember the victories they won. None greater than in WWII. Here the eminent historian Martin van Creveld reminds us of what people expected for the post-war world. We did much better than that, showing what we are capable of doing in the future.

When after many battles past,
Both tir’d with blows, make peace at last,
What is it, after all, the people get?
Why! taxes, widows, wooden legs, and debt.

— Francis Moore in the Almanac’s Monthly Observations for 1829. We did much better.

From Clement Attlee's 1945 general election campaign against Churchill.

Clement Attlee’s 1945 campaign against Churchill.


The Things that did Not Happen

By Martin van Creveld
From his website.
7 May 2014
Posted here with his generous permission.


Seventy years ago, World War II in Europe came to an end. No sooner had it done so — in fact, for a couple of years before it had done so — people everywhere had been wondering what the post war world would look like. Here it pleases me to outline a few of their expectations that did not become reality.

Communism sweeps through Europe

In 1945, much of Europe — and not just Europe — was devastated. Tens of millions had been killed or crippled. Millions more had been uprooted from hearth and home. Scurrying about the continent, they were desperately seeking to rebuild their lives either in their original countries or elsewhere. Entire cities had been turned into moonscapes. This was true not only in Germany (and Japan), where British and American bombers had left hardly a stone standing on top of another, but in Britain (Bristol, Coventry), France (Caen, Brest), Belgium (the Port of Antwerp), the Netherlands (Rotterdam and Eindhoven), Hungary (Budapest), and Yugoslavia (Belgrade). Transportation and industry were in chaos.

With unemployment, cold — the nineteen forties witnessed some of the harshest winters of the century — and even hunger rife, many expected large parts of the continent to go Communist.

In fact, it was only Eastern Europe that became Communist. And then not because its inhabitants, war-ravaged as they were, liked Communism, but because Stalin and the Red Army forced it on them. Many west-European countries, especially France and Italy, also witnessed the rise of powerful left-wing parties. So did Greece, which went through a civil war as vicious as any. None, however, succumbed to the red pest. By 1950 production was back to pre-1939 levels. By the late 1950s, though eastern countries continued to lag behind western ones as they had begun to do as early as 1600, most of the continent was more prosperous than it had ever been.

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Today all roads in Europe lead to Greece, where its future lies in the balance.

Summary:  So many of the threads of history today run through Greece and the Middle East (not for the first time). The range of possible outcomes is wide, from wonderful to horrific. Yet we know too little to make accurate predictions (I suggest making free time by ignoring the confident guesses that overflow the news channels). Here we examine the key facts.

EU flag burning on the ground

Unnecessary death of a dream.

The Greek-Troika negotiations might have large effects on the future of Europe. Here’s my analysis (it’s similar to Tyler Cowen’s , but with more detail).

(1) The news tells us little.

Cowen nails this: “The further apart the various parties appear to be, the more the whip of concession gets cracking. The closer to an agreement they may seem, the greater the incentive to play hardball and demand further concessions.” Also, press releases seek to influence public opinion, not inform us.

(2)  Do both sides have a negotiating strategy? Does either side?

Cowen: “quite often leaders in critical positions simply do not know what they are doing. By no means is that always the case, but it is more often the case than narrative-imposing journalism encourages us to perceive.”

Both sides certainly have a clear understanding of what they want. Do they have a clear negotiating strategy? Or do they just stumble along, responding to events? History overflows with examples of the latter, with July 1914 at the top of the list.

Both sides quite sensibly keep their cards hidden, so we can only guess. Some of their public statements seem disturbing. Like the following from Helena Smith’s interview with Greece’s finance minister, Yanis Varoufakis (The Guardian, 13 Feb). Is he sincere or posturing as a tactic?

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The Truth and Beauty of Madrid and Lombardia (Down and Out)

Summary: The fate of Europe depends on many factors, not least on the support of the people in Europe’s periphery for the European Union. Today we have an excerpt from Truth & Beauty that gives an accurate picture of conditions in this pivotal region, with a comparison to Russia’s time of troubles.

“Labor reform means slavery”. AP photo by Emilio Morenatti


This is a follow-up to Social unrest coming to Europe? If not, why not?, 21 March 20013.


  1. A missing element in our world
  2. Down and Out In Madrid &  Lombardia
  3. About Truth & Beauty
  4. About the author
  5. For More Information about Russia


(1)  A missing element in our world

As the long economic crisis continues — with stability maintained in the developed nations only through unsustainable levels of fiscal and monetary stimulus — one barrier to change becomes ever more obvious: the lack of alternative ideas for organizing the political and economic machinery of society.  That is, finding new modes of social organization that are attractive to some combination of the our elites and the mass public.

Without new alternatives we might remain locked in a crisis with no exit. Our only hope lies with the eventual success of conventional economic policies — and the political apparatus that implements them. Or the ability of our societies to recover (ie, heal themselves), eventually.

To illustrate the abyss into which this has plunged the worst affected nations, today we have an excerpt from “A Hard Rain (’s a Gonna Fall)“, the April 5 issue of Truth & Beauty, by Eric Kraus and Alexander Teddy. They shine the clear light of common sense on the world, cutting through the fog of misinformation emitted by the western news media. This is reprinted with their generous permission.

(2)  Excerpt from T&BL “Down and Out – In Madrid and Lombardia”

T&B has been on the road in Southern Europe. We find nothing remotely encouraging to say – this year, not even the weather was significantly better than Moscow – and the employment situation far, far worse. If the situation were not so grim, there would be something funny about the governments of a continent in deep recession (or depression, in its South/ Western corner) lecturing Russia – with its slow–but positive growth and 5% unemployment – about the virtues of a liberal economic policy.

Perhaps surprisingly, nowhere in Europe is the popular mood one of rebellion or of any longing for a violent overthrow of the existing order – there is no Marxist revolution anywhere on the horizon; rather, one senses a quiet despair, escapism and cynical pessimism. Unemployment is endemic and systematic, in Spain and Portugal the unemployed do not even hope to find a job. People find ways to cope – the welfare state, the informal economy and family structures provide some support – but in terms of building a career, family and future, the prospects are grim.

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