Has the European Spring Started?
Via Lucas Jackson,
Has the European Spring Started?
“So it is the human condition that to wish for the greatness of one's fatherland is to wish evil to one's neighbors. The citizen of the universe would be the man who wishes his country never to be either greater or smaller, richer or poorer.”
With Angela Merkel and her vassal at the ECB Mario Draghi seemingly in control of markets on the European continent, there is a temptation to pull a George W. Bush and unfurl the “Mission Accomplished” banner. However, that was a PR blunder for Bush the Younger and it would a be blunder for Merghi as well.
There are a couple of items that have hit the tape recently that seem to indicate the ground upon which the Euro is based is shaking. The most recent was out of Germany where according to a Reuters article, “One in four Germans would be ready to vote in September's federal election for a party that wants to quit the euro, according to an opinion poll published on Monday that highlights German unease over the costs of the euro zone crisis.” Link here.
Germany’s population is around 80mm people and right now about 20mm of those would actively vote against the Euro. As the article highlights, this number is even more significant because there is a national taboo in Germany against nationalistic tendencies, a hangover from the nationalism of WWII. Despite this taboo, a major portion of the country is actively wishing for the return of the Deutsche Mark. One wonders how much higher the number would be absent the taboo on nationalism?
Grillo the Clown?
The Economist ran an article on the Italian elections recently entitled, “Send in the Clowns” where they attempt to paint Silvio Berlusconi and rising political star Beppe Grillo as nothing more than clowns, not to be taken seriously unless it is to discuss how they threaten the status quo. As it regards Berlusconi, Mr. Bunga Bunga deserves all the negative press he gets. At this point in his life, he is simply trying to keep getting elected to national office in order to maintain amnesty from prosecution and stay out of jail. As a billionaire in Italy, it seems to me that his chances of ever seeing the inside of a jail cell are quite low.
But what about Grillo? In his former life he was a clown, a real life entertaining clown. So I suppose I am meant to assume that means he knows nothing about the big picture of global or even European politics or economics? He is usually described as a quaint Italian anachronism with no real chance of accomplishing anything. If you read about him in the major non-Italian media at least, that is how he is portrayed.
Truthfully, I had never listened to a word Mr. Grillo said. But it’s hard to comment knowledgably about someone when all you’ve done is read what the major non-Italian news publications have said about them. So I took the time to watch the short clip (major props to Mike Krieger and his Liberty Blitzkrieg Blog for highlighting this) below to gain a better understanding of why 25% of the Italian electorate voted for him. For any of you who haven’t seen or heard Mr. Grillo speak, I recommend you watch the short five minute clip below:
What emerged in my mind after watching this clip was a few thoughts:
1. Grillo is hardly a clown. He is smart, well-read and has a thorough understanding of the how the current status quo works.
2. He is an extremely good public speaker. He is engaging, lively and does an amazing job of connecting with his audience. No wonder he crushed the technocrat Mario Monti in the polls! Watch how he works this sizeable audience like a rock star. Very few politicians of any country can do this – especially without a teleprompter!
3. He speaks truth to power and could very well be a force to be reckoned with in Italian politics for many years going forward. Dismiss him as a clown at your own risk...
The Wave is Building
Perhaps you believe Draghi’s open-ended commitment to do, “...whatever it takes,” to bail out Europe’s broken banking system will be enough to stabilize things for good. Could be.
On the other hand, the Merghi doctrine of open-ended support depends upon the sovereigns of Europe voting more or less along traditional lines. I feel pretty confident saying this will not happen. Over 25% of the people in two of Europe’s largest, best educated, richest, most populous countries are already saying they reject the status quo. More tellingly, the number of people sharing this view has been growing rapidly in recent years, not shrinking.
With Italy the number 4 holder of gold in the world with over 2.4 tonnes and Germany the number 2 with over 3.4 tonnes, the shifting of the political winds will have major effects on the world’s economic and banking systems.
Keep your eyes on the changing sentiment of European politics. What is certain today will be uncertain tomorrow. Massive youth unemployment ensures the next generation of voters do not see eye-to-eye with the previous. The old politicians just want to avoid change while the new politicians want nothing but. The wheels are in motion for major transition and upheaval on the old continent. Given the nature of the political structured in Europe, it’s unlikely the European Spring will take on the same dynamic as the Arab Spring, but massive change is afoot nonetheless.
And even though the man leading the charge in Italy is a former entertainer, one would be mistaken to dismiss the man as a simple clown. Very mistaken.