Phil Mirzoev's blog

Friday, November 4, 2011

Greece will fail without euro? Just another cynical myth?

German fat cats cherished by the German Govt loaned to the Greek fat cats cherished by Greek Govt, now all the cats want the Greek people to COVER those sweet 'deals'.
I understand that the main headache of the so called 'euro leaders' now is to SAVE THEIR COMMERCIAL BANKS and the old financial capitalism model in broader terms, and do it preferably 1. at the expense of the taxpayers - that is PEOPLE 2. preferably at the expense of the Greek people - not the Germans of French. Therefore it stands to reason that the demagogic rhetoric of Sarkozy, Merkel etc offers for free a whole range of insipid and banal bogeyman stories and myths, like 'Greece will fail without euro', 'If euro fails Europe fails' (good that Europe managed to have lived thousands of years thanks to the fact that there were no euro)' or 'Germany was a great beneficiary of eurozone and euro' or 'the main problem is the lack of the leadership' and such like tales for the 5-year-olds for which they take the people of Europe. They - those euro leaders - don't have ANY legitimacy for the Greek people, they were not elected by the Greek people, and they in reality COULDN'T CARE LESS about the Greek people and their welfare. All that they are really now concerned about is the salvation of their 'too big to fail' BANKS and their own terms in office.
Why not to leave the eurozone reintroduce drahma and devalue? Quite possibly it should have been done a year or two before (without amassing extra debt in the form of the bail-out tranches). It seems that eurozone (in reality banks) now depends on Greece much more that Greece does on the eurozone. All those myths about Greek catastrophes in case of leaving eurozone just mask the catastrophe of the eurozone in case of Greece leaving. In practice NOTHING could be ever worse for the Greek economy then what we have already EXCEPT the proposed deal by those 'leaders'. In reality:
1. exports of Greece will be boosted by devaluing through drachma.
2. Tourism will be boosted for the same reason - price decrease through devaluing.
3. Restructuring of the debts in a much more comfortable way for Greece
4. No 'euro tax' burdens on small and medium businesses - there will be all the usual tools in the hands of the government to ease the life of the businesses which now they cannot do because of the 'euroburden' of saving German and French banks (which are too big to fail) (as a matter of fact what has been imposed on Greece so far by those 'euro-rescue crew' from an economic point of view looks like giving laxative for diarrhea; this once more demonstrated that euro-leaders and the very structure of this autocratic bureaucratic structure considers the people(les) not more than a piece of shit)
5. The cessation of this vicious endless dependence of further selling euro bonds to get money (cause Greece doesn't have its own money) and disappearance of the very temptation which had driven before the successive governments of Greece to borrow ever more and more (to finance their terms in office through injections) will lead to a much more responsible and flexible economic policy and attitude on the part of the following governments.
6. External PRIVATE investments into the REAL SECTOR (tourism, food industry, services things which really influence the welfare of 80% of the nation) in Greece will as likely as not RISE (in contrast to what is preached by the 'euro doctors') because of the drop of property prices, special conditions created by the new less 'euro-addictive' government and because the 'malignant investments' in the form of the unending stream of euro channeled by governmental institutions and their close affiliates (and overriding any really natural free-market competitive investments) would be stopped AT LAST. It is very important to remember that the conditions when the stream of 'crazy money' going from outside through the privileged state or state-protected financial institutions is much more significant that the much thinner trickle of consumer demand money going into the real sector, are less than auspicious for the major part of the population, especially in a real-sector underdeveloped economy like Greece (in essence it is a variant of the so called Dutch disease, but where the influx of 'non-working' capital is provided not by the resource exports but by a seemingly bottomless source of debt financing). In such conditions real sector economy becomes weak, unstable, uncompetitive and stops being the master of the situation - its share in the economy and the financial structure is OVERRIDDEN or superseded by parasites who take money from a bottomless pit, increase inflation, consume without giving anything in return, kill the investing power of the real-sector capital. All those problems will be eliminated in Greece just as it was in the case of Russia in 1998 or in case of Argentine in 2002).   
As to the practical examples, there is almost a general consensus among the economists that 'developing' European countries who hadn't done this mistake of entering the eurozone feel themselves economically incomparably better off now. Poland is a glaring example of this.
As for the eurozone in particular and the EU in general, the problem is the same and very old: it is not a democratic formation, hence doesn't have enough legitimacy in the eyes of the nations, and hence tempt the euro-institutions and the governments (using the instruments) to usurp ever more and more powers weakening the national sovereign democracies:

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