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The G-20 Farce: Saving The Eurozone From Collapse

testosteronepit's picture




 

Wolf Richter   www.testosteronepit.com

The first summit of the G-20 in today’s configuration took place in November 2008 in Washington, DC, during the heady days after the Lehman collapse. Before, it was limited to finance ministers. Since then, twice a year, 19 heads of state, the President of the EU, finance ministers, the heads of the IMF and the World Bank, a gaggle of central bankers, and a whole slew of lesser characters get together to solve the problems of the world.

G-20 summits have a checkered history of accomplishments though they don’t lack in grandiose announcements. At the summit in London in April 2009, French President Nicolas Sarkozy announced with fanfare, “The era of bank secrecy is over.” Its big accomplishment: a blacklist of tax havens. And a whole new game of political football, namely deciding which country would get to see its name on the list and which wouldn’t. Yet, tax havens have since sprouted around the world far faster than President Obama’s “green shoots.”

But the crowning achievement was the G-20 summit in November last year in Cannes, France. At the beginning of the week, participants were still thinking that their sojourn in the ritzy town on the Côte d’Azur would be a relaxed affair of photo ops, handshakes (or stiff air kisses between German Chancellor Angela Merkel and Sarkozy), and fancy dinners, interrupted by rubber-stamping with great hoopla the previously negotiated Grand Plan to bail out Greece, or rather its public bondholders. It was its second bailout package, and it would be huge and solve all problems once and for all. And in between, attendees would also put Italy back on some kind of unspecified track though Prime Minister Silvio Berlusconi was mired up to his neck in legal problems while his country’s finances were spiraling out of control. And with the summit being heavily mediatized in France, Sarkozy would make it his jump-off platform for his reelection campaign, demonstrating panache, leadership, and crisis management skills.

Just then, Giorgios Papandréou, Prime Minister of Greece, who wasn’t even in the G-20, fired his bazooka. With a single sentence about letting Greeks decide via referendum whether or not they wanted that Grand Plan, he knocked the world’s financial markets into a vertigo-inducing tailspin—which blew up the summit.

The final communique was a bland slop that talked about a “worldwide strategy” for growth and employment, a “more resilient and stable monetary system,” and once again “reforming the financial sector.” It suggested that the world would need to get a grip on the “volatility of commodity prices,” as well as “promote agriculture,” and continue “the fight against climate change.” Meanwhile, the Eurozone had begun to disintegrate.

So they all arrived at the current G-20 summit in Los Cabos, Mexico, with their own agendas. While tiny Greece is still front and center, the summit has been escalated: bailing out Greece wouldn’t be enough. Now it would be about bailing out the entire 17-nation Eurozone and its currency. And even broader. President Obama made his agenda clear: he wanted everybody else to do “what’s necessary to stabilize the world financial system.”

But the finger-pointing already started. “Frankly, we are not coming here to receive lessons,” said European Union President Jose Manuel Barroso. Lest the most powerful man on earth should forget, Barroso added that the euro debt crisis “was originated in North America.” Presumably, if it hadn’t been for US subprime mortgages blowing up, Spain’s housing bubble could have continued ad infinitum, along with Greece’s profligate ways, and the debt crisis wouldn’t even exist. “But we are not putting the blame on our partners.”

Indeed, President Obama is going to be busy handing out lessons. There will be Russian President Vladimir Putin on Syria and Iran, Chinese President Hu Jintao on the yuan, and of course Merkel. Obama will push her to hand Greece unlimited amounts of money, bail out Spain and Italy while she is at it, and do whatever it takes to bail out the Eurozone as a whole. She would also have to calm the markets. But above all, she’d have to make sure that none of this euro effluent would cross the Atlantic and muck up his reelection chances.

Merkel, whose patience is running thin these days, has already preempted any unnecessary hopes Obama might have had by declaring, once again, for those who’d missed it the first 33 times, that the bailout terms wouldn’t be renegotiated and that the new Greek government would have to meet the commitments made to international lenders. And on the eve of the election, she’d expressed her exasperation with the Greek method of “making promises, breaking promises, and doing nothing.” It simply could not continue, she said, that those who didn’t fulfill their commitments could lead all others “by the nose through the ring.”

Even if Germany wanted to, it could not bail out teetering Eurozone countries to the extent needed to save the euro because the unstoppable juggernaut has built its recent success on a fragile and now shaking foundation. Read.... Relying on Fake German Strength.

But the world has other problems. As NATO-aided rebels in Libya overwhelmed Muammar Qaddafi’s forces, 36,000 Chinese engineers, tradesmen, and technicians fled Libya, leaving $20 billion in infrastructure and oil projects behind. China’s refusal to support the NATO attacks didn’t sit well with the rebels. Yet, less than one year later, China is back. Read.... The New Cold War.

 

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Tue, 06/19/2012 - 09:51 | 2539190 lakecity55
lakecity55's picture

President Obama made his agenda clear: he wanted everybody else to do “what’s necessary to stabilize the world financial system.”

----You guys have to do whatever it takes to get me re-elected, since I am the smartest guy here. Uh,, hold on, uh, my uh teleprompter uh is uh messing up.

Tue, 06/19/2012 - 11:16 | 2539530 Savvy
Savvy's picture

Dinner was necessary ROFL!!

 

"Tonight's dinner ran late, so the eurozone meeting was canceled for tonight. The president may have the opportunity for further meetings on the margins of the summit tomorrow," the official told reporters in the beach resort of Los Cabos.

http://news.ph.msn.com/business/obama-meeting-with-eu-leaders-scratched-2

 

Tue, 06/19/2012 - 09:08 | 2539039 silverdragon
silverdragon's picture

Hopefully, the fiscally responsible G20 members get to lecture the broke bums.

Tue, 06/19/2012 - 08:21 | 2538893 sessinpo
sessinpo's picture

Dog and pony show. Euro is not dead. National problems give more reason for centralized planners to demand more control, which the local politicians are more than willing to give up and sell out their own citizens. Nothing has changed. The game show continues.

Tue, 06/19/2012 - 06:15 | 2538720 falak pema
falak pema's picture

Everybody knows that Cannes is a place where you have an annual film festival, a red carpet event where the best ass n tits, gowns and screen clowns, strut their butts and incidently show their skills on the screen. Great media event and publicity caper to defend a mutli billion dollar tinsel town industry. 

Why the political world should ape the film world by putting on a media show with meager, old butts n tits, flaccid appendices and frozen smiles, is beyond me. It goes without saying that this is a seminal signal of the Times. These political clowns run around in name of republic and democracy. Whereas the real power is in the hands of the Oligarchs who have all the money. These shills only have ONE issue on their menu : HUGE NEVER ENDING DEBT SOCIALISED, by their very own past acts,  TO PROTECT THEIR MAD PAYMASTERS. Those very Oligarchs have thus created a superb world wide mechanism to transfer their losses on government and then organise hand wringing exercises in places like Cannes and Mexico, where the political front men discuss looking into the abyss and finding ways to distract public attention from the inevitable.

If our Wolfish friend here derides this farcical ritual of global political dimension he does not point his finger to ROOT CAUSES nor the the loss of values of human civilization that it entails in the first world. An issue which is foreign to his reasoning as this is presented as a problem of Euro sovereign debt, something that the state sector has created. Whereas the root cause is OLigarchy private sector ONGOING mayhem, in the globally integrated banksta world, hidden under the carpet and controlled from behind the curtain. 

We are talking about the loss of essence of human collective WILL to understand the basic issues of society, of a magnitude similar to pre Sarajevo 1914. And all we get is the wrapping around the political package of this sad, sad demise in the making of democracy and republic. 

We are like Otis Reading; sitting on the dock of the Bay...

while LAgarde collects 456 B dollars at ...Los Cabos. It translates literally as "the ends". She got her "ends", her tips,  dipped into the gravy soup.

Tue, 06/19/2012 - 11:58 | 2539721 seabiscuit
seabiscuit's picture

http://www.guardian.co.uk/business/2012/may/29/christine-lagarde-pays-no...

None of them pay taxes.

And from Casablanca:

Woman: What makes saloonkeepers so snobbish?
Banker: Perhaps if you told him I ran the second largest banking house in Amsterdam.
Carl: Second largest? That wouldn't impress Rick. The leading banker in Amsterdam is now the pastry chef in our kitchen.
Banker: We have something to look forward to.

 

Tue, 06/19/2012 - 09:01 | 2539013 Baron Robber
Baron Robber's picture

+3.14159 26535 89793 23846 26433 83279 50288 41971 69399 37510 58209 74944

you said it very, very well

Tue, 06/19/2012 - 07:12 | 2538821 ThirdWorldDude
ThirdWorldDude's picture

+3.14 (you deserve a pie)

I couldn't have said it better myself.

Tue, 06/19/2012 - 07:42 | 2538845 falak pema
falak pema's picture

then I want : 3.14159 ! that's what I learnt in school !

Tue, 06/19/2012 - 09:02 | 2539016 Baron Robber
Baron Robber's picture

not to step on TWD's toes as I was following his lead

Tue, 06/19/2012 - 10:42 | 2539387 falak pema
falak pema's picture

nothing like crispy pie, hot out of the oven!

Tue, 06/19/2012 - 12:20 | 2539811 ThirdWorldDude
ThirdWorldDude's picture

I like my pie round, hence rounding up to 2 decimals.  :)

Tue, 06/19/2012 - 01:08 | 2538603 sockratte
sockratte's picture

sounds like grexit still possible in the near future...

Tue, 06/19/2012 - 00:59 | 2538582 tlnzz
tlnzz's picture

They should be talking about saving the Eurozone from the World banking cartel. All the money in the World won't save the bankers when the pissed off mob catches up with them.

Tue, 06/19/2012 - 05:31 | 2538759 Peter Pan
Peter Pan's picture

Somehow this gathering of the G20 gives me a feel of what the last party at Pompeii must have been like before Mt Vesuvius blew its lid.

Yes the feeling of deja vu is quite quite strong for many of us who read ZH.

Mon, 06/18/2012 - 23:59 | 2538494 xcehn
xcehn's picture

"When a top letter says that the similarities to 2008 are becoming almost eerie, you just have to pay attention....Currently, our gut feel is that if an accident is coming, it’ll likely happen this year....The Adens currently recommend asset allocations of 20% cash, 40% precious metal vehicles, 40% long term US government bonds."

http://www.marketwatch.com/story/eerie-comparisonsto-the-crash-of-2008-2...

Mon, 06/18/2012 - 23:55 | 2538488 bankruptcylawyer
bankruptcylawyer's picture

I just don't understand how anyone thinks the 'international globalists' ----are going to somehow unite the world in harmonius internationalist commerce when the forces of nationalism------military superiority----ulitimately dominate the drive to export arms to the rest of the world. 

at some point, the markets for selling weaponry cannot be supported by currency wars---the imbalance leads to a measurable DOMESTIC demand for weapons realtive to those of foreign markets. 

 

CAN ONE THINK THE CYCLE OF NATIONALISM AND INTERNATIONALISM CAN EVER BE BROKEN BY SOME SUPPOSED TRADE CARTEL WHOSE PRIOIRITY IS TO INCREASE TRADE AND GLOBAL WAGE ARBITRAGE?

 

Mon, 06/18/2012 - 23:14 | 2538369 newworldorder
newworldorder's picture

It all about MOPE. Come on fellow readers, you were not expecting anything else?

That is all that is left, along with the desires of the worlds population for the debt financed music to keep on playing. The G20 will do their best to oblige each other for as long as possible.

Mon, 06/18/2012 - 22:27 | 2538227 Mad Mad Woman
Mad Mad Woman's picture

From what I saw on tonight's news, Putin & Obama were NOT having a good time at this summit. Both men looked rather tense. I don't think things are going well at all. It will be an interesting week none the less. We're in the final act of this sordid play, and this summit is the last hurrah. It won't be long till it all goes to hell in a hand basket. Batten down the hatches, I see a really rough patch coming soon.

Tue, 06/19/2012 - 09:56 | 2539208 lakecity55
lakecity55's picture

Being gay, O'Bama is detested by Putin, who is a macho guy.

The cokehead is no match for a trained KGB agent.

Tue, 06/19/2012 - 15:12 | 2540453 GCT
GCT's picture

President Obama got lectured by Putin.  The KGB is a tough outfit.  I wish I had been the fly on the wall for that one!

Tue, 06/19/2012 - 02:50 | 2538678 BorisTheBlade
BorisTheBlade's picture

From what I saw on tonight's news, Putin & Obama were NOT having a good time at this summit.

I wonder if it has anything to do with the appointment of this guy who really got himself into controversy in Moscow: http://en.wikipedia.org/wiki/Michael_McFaul

Some say Vlad's refusal to come to G8 meeting had everything to do with the fact that protests in Moscow were in large financed by a number of foreign NGOs. If that is true, then no surprise things are tense between the two.

Mon, 06/18/2012 - 22:21 | 2538204 azzhatter
azzhatter's picture

A gaggle of 20 of the most useless fucks in the world along side criminal bankster, Christine "tax exempt" LaGarde, and Barrosso and Von Rompoy playing Siegfreid and Roy. One could only wish the mexican cartels could pull off an astounding array of beheadings and in doing so give the world a gift

Tue, 06/19/2012 - 09:58 | 2539215 lakecity55
lakecity55's picture

Except that the cartels work for these same guys.

Tue, 06/19/2012 - 09:04 | 2539026 monoloco
monoloco's picture

I live an hour north of Los Cabos, for the last week there has been a constant stream of federal police, military, helicopters, F15's, and SUV's with blacked out windows, a large portion of the hotel zone is off limits to anyone without a special permit, the toll road to the airport is shut down to the public, they have an off shore exclusion zone, and police and military checkpoints everywhere. The effort to protect these useless fucks from their rightful fate is astounding. 

Tue, 06/19/2012 - 00:18 | 2538532 TNTARG
TNTARG's picture

My friend begs the mexican let the other Cristina go back home first, please.

Tue, 06/19/2012 - 00:23 | 2538539 TNTARG
TNTARG's picture

By the way, Lagarde wants to make us all feed the banks of Europe to "fight the crisis".

She deserves some mexican treatement.

Tue, 06/19/2012 - 01:04 | 2538597 Element
Element's picture

Feed the banks? ... lol ... what with ... nachos and guacamole dip?

Mon, 06/18/2012 - 23:28 | 2538431 engineertheeconomy
engineertheeconomy's picture

I vote for the Mexican Cartel for President!

Mon, 06/18/2012 - 20:40 | 2537946 world_debt_slave
world_debt_slave's picture

up is down, down is up, good is bad, and bad is good

Mon, 06/18/2012 - 20:27 | 2537916 Joebloinvestor
Joebloinvestor's picture

What a FARCE.

Just a photo op and a good dinner.

Tue, 06/19/2012 - 02:52 | 2538681 CompassionateFascist
CompassionateFascist's picture

Yak-Yak is better than Bang-Bang. But not for much longer. 

Mon, 06/18/2012 - 22:22 | 2538206 old naughty
old naughty's picture

...Let's fire them all.

And then re-structure to have one governing body ONLY...

Mon, 06/18/2012 - 23:24 | 2538412 Vidar
Vidar's picture

I think that's one too many.

Mon, 06/18/2012 - 22:09 | 2538163 Bollixed
Bollixed's picture

Dancing With the Czars

Mon, 06/18/2012 - 20:19 | 2537906 disabledvet
disabledvet's picture

this secret video was just released vis a vis "the ongoing negotiations." while i cannot reveal my sources at this time i will keep you informed should anything else of interest come up at the G-20.
http://www.youtube.com/watch?v=iYyMhPWjTwk&feature=player_detailpage
your trusted spy, disabledvet.

Tue, 06/19/2012 - 12:24 | 2539823 battle axe
battle axe's picture

G-20: Translation: Total waste of time, until the bond market hits these useless assholes in the face with a baseball bat....

Mon, 06/18/2012 - 20:48 | 2537960 Money 4 Nothing
Money 4 Nothing's picture

Thank you for that Intel Disabled Vet, I will forward it off to Porkey Pig and Cinderella to have them abreast of the situation.

Thanks!

Tue, 06/19/2012 - 11:28 | 2539591 CharlieSDT
CharlieSDT's picture

That summit in Cannes was such a great "fuck you" to the people that these assclowns are allegedly representing.  Sarcozy's hotel suite for that summit cost the taxpayers of his broke-ass country 37,000 Euros a night.

 

http://www.singledudetravel.com/2011/11/mangez-merde-sarcozy/ 

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