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Slovakia hates being in a Greek Tragedy
The European Union has become its own worst enemy. By design, there is no real leadership at the top of the structure. This is now undermining the unity of the Union, when it needs it most.
The US has its separately elected President of the United States
while Russia has its Putin. Europe, however, has ministers with
overlapping responsibilities, who may or may not be authorized to take
any action.
The endless parade of finance ministers in front of microphones, each
with a specific sound bite for their own economy while taking pot shots
at neighbor’s budgets, is damaging the appearance of unity. In fact, to
the rest of the world, Europe appears to be coming apart at the edges.
The soft weak underbelly of the Union has been exposed for all to
see. The Union is dissolving into a tit for tat exchange between
sovereign finance ministers. Each is now trying to show how strong they
are, by showing how weak a sister state is. Some states now want to
sacrifice other states in an attempt to regain their own stability.
The core problem is that the EU is suffering from its intentional
lack of a central leader. The second major intentional structural
weakness is its lack of a central funding mechanism for the bureaucracy
itself. These two simple rules, which provide checks and balances to
central banks and legislatures, are missing in Europe.
Fundamentally, this keeps the ECB from being able to issue Euro bonds
to fund EU financial needs. It also opens up the EU to rogue actions
taken by its members, like Ireland guaranteeing their banking system
without permission from the ECB or EU itself. One of the ECB’s current
fears is that Ireland is going to go rogue and start generating
electronic Euro’s to stimulate the Emerald Islands economy.
The buck does not stop anywhere in the EU. The bureaucracy grinds on
with, or without, a legal mandate to do so. There are no checks and
balances on the system as it exists today.
You only have to look to the different rescues packages that are
being hatched to follow the different cross currents in play. When
everyone is responsible for bailing out everyone else, what limited
*REAL* capital is available starts to matter.
The
stabilization fund does not seem to have been designed as a real
bail-out fund. As such, with the line of nations that need help seeming
to grow weekly, the smaller nations in the EU who are struggling on
their own, are looking at larger and larger draws on their own limited
capital as a % of GDP.
Austria, with its banks heavily invested in loans in Eastern Europe,
does not want to help fund the Irish bail-out. If there is a bail-out,
Austria and its banks will need to keep their capital closer to home.
This is about sovereign survival, disregarding the effects of a failed
EU itself.
“In the financial sector, stabilization has been achieved, as the accelerating rise in lending shows,” he said.
“However, in 2011 Austrian banks will have to strengthen their
own-capital balances further in order to satisfy the requirements of
Basel III and other regulatory measures.”
In Slovakia the conversations are even more pointed, with Slovakia
requesting that Greece accept reality and default on its debt. If
Greece were to do so, Slovakia would be free from its proportional share
of helping Greece with its continued funding.
“I believe that a debt restructuring would be a better
solution for Greece,” Slovak Finance Minister Ivan Miklos told the Thema
weekly newspaper, according to an advance copy of the Sunday edition.“I think the (bail-out) loan to Greece was a fatal mistake from the
beginning. Setting up the European stability fund was also a mistake,”
Miklos was quoted as saying.But Miklos said restructuring the debt would help Greece more than
the bail-out. “Very simply, we do not believe these (bail-out) programs
will help overcome the debt crisis that is expanding in Europe,” he
said.“Our refusal to participate in the (loan) for Greece was not a
hostile act towards the country. It was an expression of our belief that
your economy can be cured more effectively with a restructuring.”
The European Union longer term credibility is suffering from the
seemingly endless number of damaging sound bites being released by what
appears to be every finance minister on the continent. If press
release sound bites were bullets, this would be called an active
shooting war. The airing of dirty internal politics and national
priorities is going to undermine any attempt at building an economic
coalition.
It
is economic warfare in Europe again. This time, like past times, the
groups are dividing up along economic self interests. There is no sign
of “Union” in European politics.
What is clear, however, is that the Icelandic solution is the
elephant sitting quietly in the corner of the room. If nations with low
national debts, write off their own banking system, organic growth is
possible. It just takes the will of the people to speak.
As Claus Vistesen pointed out in his article today at Fist Full of Euros,
“Finally, I crucially assume that you can’t have both austerity and growth at the same time.
If you want growth it will cost a higher fiscal deficit and if you to
run down the fiscal deficit you must endure deflation (negative nominal
GDP growth in essence) and it is this latter which the ECB and EU are
pushing. Especially this last assumption is absolutely crucial to
understand since it is this situation the periphery faces with an
internal devaluation in the euro zone.”
The Slovakian finance minister has broken new ground this weekend by
pointing out that the Greek government is naked. What happens next
concerning the continued funding of the Greek Bailout will be
interesting.
Everyone knows the Greek government cannot service the old debts, let
alone the new debts being heaped upon it by the EU & IMF rescues.
Slovakia, at least, is not shy about asking why it must help pay for the
Greek hangover.
The only question is when is it acceptable for the Greeks to
acknowledge what Slovakia has pointed out. Greece is going to be unable
to service the debt it already has. So why continue to throw good
money after bad? or said another way. Do you want Austerity or do you
want Growth? You can not have both.
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wikipedia is zionist and anyone who opposes them and their lies is a white supremacist.
Personally, I have no opinion of the man, just started to notice that he gets quoted. He does seem to be somewhat of a hero/sage on the "Stormfront" blog. What do you think the conection there is?
Nice easy money propaganda. Back to facts:
more facts on http://wiki.mises.org/wiki/Inflation_in_Nazi_Germany
Expect next war, for example between North and South Korea. North regime could be used secretly bought by US to fight an long and balanced "war" just to produce endless news feed to distract anyone from financial crackdown.
Never-ending wars is modus operandi for 21th century.
Hey man us should actually issue a few more facts in there buddy. Here's one!
Brief research pulls this site: http://www.psywarrior.com/WWIIAlliedBanknotes.html