Does the EU need to give Greeks welfare payments directly?

Hey Stavros, here comes my dole!

Even right wingers like me, who support the EU/IMF and recognise the need for harsh discipline in the country, are beginning to despair at what the Greek people are going through. The fact is, if we are not careful, we will see Greeks dying, or possibly suffer third world levels of poverty as their public infrastructure collapses.

But what is the solution? To keep giving a corrupt, incompetent Greek state money, which it will squander, or use to stave off vital long-term reforms? Or, is it time for the EU to consider direct welfare provision, to stave off the worst excesses and protect the most vulnerable? Should the EU offer to voluntarily register individual Greek citizens and pay them a weekly amount directly? Or what about creating EU public works programmes, such as hiring thousands of unemployed college graduates to collect taxes from businesses? Would it be patronising, even colonialist? Quite possibly, but bear in mind that it was the Greek government that created this insatiable public money devouring clientelist monster, not the EU. It would be voluntary, anyway, perhaps dispersed from EU embassies, effectively the biggest direct aid programme in Europe since Marshall Aid or the Berlin Airlift. How ever we do it, we cannot let Greeks starve. This is Europe, for Christ’s sake.    

Of course, when I suggest something like this there’ll be the usual Irish voices demanding that any such funds be spent in Ireland, but the reality is that Greece is in a far worse state than Ireland, and unlike Ireland, is in serious danger of a military coup. One thing is certain, and this applies to Ireland as well as Greece. Whilst you must get taxes and spending into alignment, you just cannot cut your way out of a recession.

Greece, the day after tomorrow: Athens burns as Ireland watches.

The Trojan Horse contained a Pandora’s Box.

All across Europe, a collection of left-wingers, eurosceptics, Occupy activists and anti-globalisation protesters took to the streets as the election results from Greece came in. The PASOK and the New Democracy parties, the old parties of corruption and clientelism that had led Greece to its knees, had been annihilated by a hard left alliance of small parties on a platform of resistance to austerity. Thousands of students danced in the streets of the Greek capital, and the people voiced their opinion. In Ireland, Richard Boyd Barrett of People Before Profit spoke excitedly of a Irish “Greek Revolution”, whilst Joe Higgins of the Socialist Party spoke ominously of a military coup.

Within days, the new Greek government had expelled the EU and IMF monitors, and announced plans to nationalise the major Greek businesses. Of course, the fact that nearly every commercially owned Greek vessel had left Greek ports in the days leading up to the election had not been missed by the media, nor had the streams of expensive Porsches and  Mercedes and haulage trucks that had choked up the border posts leading into Turkey or up into Europe. Some border guards had attempted to delay them, but bundles of euronotes had eased the bureaucracy in a way the old Greece would have been proud of. The new prime minister’s exchange controls on banks were merely symbolic, given the billions that had fled the country in the previous weeks. 

 Angela Merkel was quick to welcome the new government, stating very clearly that the EU would not force Greece to take any more of its bailout funding. The will of the Greek people must be respected, she said.

Within a month, the Greek government defaulted on all of Greece’s debt, and announced that it was leaving the eurozone. Greek banks began to collapse, the ECB providing assistance to other eurozone banks to assist them with their Greek losses. Greek banks began issuing euronotes with “New Drachma” stamped on them, at an exchange rate of one half of their euro value. As a result, food prices soared in shops, and Greeks continued to haggle using unstamped euronotes, until the government announced that hoarding unstamped euronotes was a criminal offence. Then the government announced that it could no longer pay pensions or public sector workers in notes, but would issue scrip until the New Drachma could be printed, which must be honoured in shops. Despite this law, many shop-owners refused to accept scrip, or gave preference to customers with euronotes.

There was a sense of excitement when the New Drachma finally reached the banks. Although the central bank attempted to restrict the amount printed, the new government, eager to restore public order, continued to print notes to pay public sector workers and restore cuts to wages and pensions. Prices in shops began to rise sharply, fuelled by internal inflation and the collapse in the New Drachma against other currencies. Tourists did begin to return, but were surprised to find themselves pestered by tour operators to be paid in euro. Given the almost daily price rises, tour operators going to Greece found themselves forced to admit that they could not guarantee prices, especially as imported fuel, food and consumer goods were soaring in price.

Trades unions demanded price rises to keep place with inflation, which the government agreed to, funding with more printed notes, which fuelled higher inflation. The daily demonstrations, a regular feature during the IMF programme, returned to protest outside parliament, complaining of the soaring prices. The government attempted to instigate price controls, forcing business to sell products at prices below import cost. Not surprisingly, this plan did not resolve the issue. Far right protesters started marching, suggesting that the problem was caused by an alliance of Turkey and Jews, and demanded that Greece must make a military gesture to restore her national dignity. President Obama quickly dispatched secretary Clinton to Europe to London, Paris, Berlin and Ankara to make sure that Athens got the message that the rest of NATO would not tolerate such action.

By now, rioting was a daily occurence, with empty supermarkets being torched, and the government struggling to find a solution. The much hoped boost to tourism fuelled by the much devalued New Drachma didn’t arise, possibly due to the unattractive nature of rioting and tear gas dispersal on European television screens.

Then the army moved, seizing parliament and announcing a National Salvation Council to restore order. Martial law was imposed, and demonstrators were shot dead. Joe Higgins and Richard Boyd Barrett, who had been curiously quiet in recent months, immediately appeared, demanding that this “fascist putsch” be countered. When asked would they be going to Greece to lead an international brigade against the fascists, journalists were told “eh, we’ll get back to you on that”. The EU immediately imposed sanctions on Greece, freezing bank accounts and military imports. NATO suspended Greek membership within days.

Within two weeks of the coup, even the army were beginning to protest, with the shortage of food and fuel causing massive army desertions as soldiers returned to their families. A group of younger officers then staged a counter coup, overthrowing their superiors in a lightening operation, and returning power to the government, provided the prime minister agreed to one policy, which he assented to.

Two days after being restored to power, the Greek prime minister addressed the Greek people, and announced that his government would put the EU bailout package to a national referendum. 

Why the Irish Government really doesn’t want a referendum on the fiscal compact.

It can be a ballot box or a can of petrol. It’s our call.

There is a phrase used in Ireland, “codding ourselves”. I’m unsure as to whether it is used elsewhere, but it basically means that someone is knowingly deluding themselves, usually out of a dislike of the reality. It is a very common practice in Ireland, regarded, in fact, as a daily way of life, especially in Irish politics.

Now, consider the current bunfight going on over the possibility of a referendum on the EU fiscal compact. The government does not want to hold one, because it might lose, and governments don’t like uncertainty. The truth is, the government is afraid that the Irish people might make the wrong choice. But they won’t admit that they don’t want to hold one, instead making legal arguments about the constitution.

Now, when someone like me, on the pro-EU side of the aisle, makes a remark about the people being wrong, there’s normally uproar. The people can do no wrong, won’t be patronised, etc, etc. It is bollocks. Of course the people can do wrong, especially if, as always happens in Ireland, a substantial section of the electorate A) decide to vote not for what is on the ballot paper but what they think should be on the ballot paper, ie the local hospital, property taxes, bank bailouts, Uncle Tom Cobley and all, or B) refuse to believe that the rest of Europe will not save Ireland no matter how reckless we decide to be.

That’s why the government want to avoid a vote. Because we do have a choice. This is a referendum on the bailout too, and the government is afraid that the voters will pour petrol over our house, toss a match at it, and then look proudly at our neighbours as our house burns down.

The others can go on without us, and what happens then? Will the Irish people then turn to the government that agreed to the referendum and thank them for the opportunity to torch the gaff? No, they’ll start screaming at the government about the fact that our house has burnt down, and where are we going to live now? It actually makes more sense to just ignore the usual “undemocratic” jibes and carry on. After all, if Irish political history is anything to go by, they’ll be forgotten in six months. The house will still be there.

Having said that, if the Supreme Court or the Attorney General or even the Oireachtas (yeah, that band of brave heroes) decides that we have to vote, fair enough. The law’s the law. But let’s be honest about it at least, rather than denying that the government wants to avoid a vote. 

Eurosceptics will regret replacing Brussels commissioners with Beijing commissars.

They'll look back on the blue flag and golden stars with nostalgia.

One of the things that I have always found interesting about euroscepticism, and not just in Ireland or the UK, is the assumptions it makes. Eurosceptics always seem to assume that the alternative to the EU is some sort of magical reset button, back to a golden age when national sovereignty actually meant that a country could decide its own direction by making decisions for the most part within its own borders.
I can see the romance behind the idea, and it’s a very powerful idea which has caused a lot of bloodshed, certainly from the American Civil War onwards. But it is flawed. Take Britain in 1940. It was a nation of far greater military and economic importance than it is now, a global power in fact. Yet in 1940, even with all the power Britain’s future was not decided by London, but by decisions made in Berlin, Moscow and Washington DC.
The problem for us is that life in the 21st century is almost impossible for a country that does not want to interact with others. The only country I can think of that genuinely attempts it is North Korea.
Now, it is true that a modern European country outside the EU will not be another North Korea. Britain, for example, is a modern and wealthy industrialised economy with global links. But it’s no USA. Or China. Or Russia. Or Japan. Or India. Or Brazil. With the exception of Germany (which only qualifies economically, as opposed to culturally or militarily) there is no European country that is, on its own, going to be a first tier player in the global economy of the 21st century. In effect, by turning our back on European integration, we are handing over the running of the world to the giants, to economic and military superpowers.
It is they who will set the rules, and the rest of us who will follow in their vast wake. That is the world that the Eurosceptics are moving us towards, and let us make sure that they know it, because in 2021 when a Chinese commissar decides what the technical standards will be for new products, he won’t be sending us draft directives for comment the way those nice men and women in Belgium used to. He’ll just tell us.

Ireland finally has to confront what it really wants.

We'd be down the back stealing quills and wig powder to sell down the mart later.

One of the more curious aspects of the debate about Europe and the euro in Ireland is how it doesn’t happen. The Sunday Business Post’s Pat Leahy once remarked as to how short term Irish politicians are in their thinking, and you find no better example of that than in our approach to foreign policy.

In recent weeks, options from rejoining Sterling to forming a federal Europe have been discussed in the media, and not just in Ireland. What’s surprising is that the Irish political system seems not as much incapable of discussing these issues seriously as completely unwilling. In short, there seems to be no Irish plan, no idea as to what it is Ireland actually wants. The government will say that it wants to defend the status quo and the euro, but the argument goes far beyond that, and we seem to have no opinion. Are we for or against a federal Europe? Irish politicans will claim that they are, but only in such a way as to ensure that if that is the least unsavoury option, we’ll sign up. Where is the Irish vision?

The scary thing is that our leaders are only reflecting our stance as a people. Are we committed to Europe? Probably not that much. It has worked well for us, but we’d almost certainly sell out, Bird O’Donnell like, for the next best offer. We’re more comfortable with the Brits than we let on, and if there was a few quid in it…even when we joke about joining the US (with that weird Irish assumption that they’d be delighted to have us, something I do not believe) we know that at the first sign of trouble (legalised abortion, the IRS actually enforcing the tax code on pensioners and conscription to fight in the US-Iranian War) we’d have the blade out and into Uncle Sam’s back quicker than you could say “Benedict Arnold”. Even if the Chinese offered us €5 billion to endorse an invasion of Taiwan, we’d consider it. We’re not big on beliefs or honour. If one of our politicians had been sent to negotiate the US Declaration of Independence, he’d probably never set foot in the hall, trying instead to steal a horse when ”all dem udder fellas is distracted with all dat writin’ an’ dat!” After all, we complain about the Paris-Berlin axis. Has anyone ever written the Dublin Plan?  

Alex Salmond is thinking like a European politician.

Salmond: A subtle European operator to Cameron's English blusterer.

The spat between Alex Salmond and David Cameron over a Scottish referendum on Independence is very telling about how British politics works, especially if compared against the Cameron government’s approach to Europe. Salmond is looking to propose three options to the Scottish people: independence, the status quo, or “devo max” , which is basically the Scottish Parliament taking over everything except for defence and foreign affairs. Cameron is trying to block this, because he (rightly, in my opinion) reckons that the Scots will vote for devo max, and devo max moves Scotland so radically close to the door that actual independence will be a relatively minor future step. Cameron wants the Scots to be forced to choose between the status quo and exit from the UK, which is far less likely to pass. Salmond, on the other hand, is being very continental about this, recognising the subtle options open to him, and that by giving the people the final say in a future exit he has a good chance of finally bringing the country with him, step by cautious measured step. But what’s really interesting about this is that David Cameron does not want to give the British people a similar choice on the European Union. In fact, if he is ever forced to do so, he will almost certainly offer more than just a simple in or out question. Who knows, he might even get some advice from Alex.

2012: Drama, drama, drama.

The odds are against him.

2012 promises to be, both in Ireland and elsewhere, another year of high drama, and that’s assuming that it’s not the end of the world.

1. The US Presidential Election. I still expect Pres. Obama to be defeated, which will be sad, but an indication of the way the US is heading. There will be people without two cents to rub together who will either not bother voting, or vote for a Republican to give a tax cut to billionaires and cut unemployment aid to people who can’t find work. I’m on the right, but even for me, that’s throw hands in the air and walk away time.

2. The EU referendum in Ireland will not be as dramatic as expected, because it doesn’t really matter whether it passes or not, as Irish ratification is not required to implement it. If the Irish choose to exclude themselves from the room, that’s our business, and no one else will really care, as we are obeying most of the Fiscal Compact rules through our IMF deal already.

3. Will the eurozone stay the same? Everything hinges on Greece, but even if Greece defaults on pretty much all her debts, which she would have to if she quit the euro, as they would multiply in cost against the new drachma, it still doesn’t make much sense. Tourism costs will drop, but will rise again as energy and imported food and consumer goods rise feed through. Devaluation is a short term gimmick that counts for nothing if a country does not deal with competitive issues, and the Greek government knows this.

4. Ireland potentially faces two referendums (referenda?) on Children’s Rights and abolition of the Senate. If the Children’s Rights one turns into a ban on smacking, it will go down. The Senate campaign will be more interesting, assuming Enda doesn’t give in to his backbenchers and kick it into the Constitutional Convention. Having said that, I can see the argument against leaving the Dail to its own devices gaining some traction. Could the Irish people vote to keep the Seanad? Potentially, yes.

5. The Constitutional Convention will begin work on rewriting Ireland’s 1937 constitution. I should be excited by this, but I remain deeply cynical, for the reasons stated here.

6. Finally, will Sarko survive April/May’s French presidential election? Run off polls currently put him losing to the Socialists’s Hollande by 20%. Interestingly, Hollande beats Le Pen by 76%, yet Sarko only beats her by 63%, which means that there’s a substantial number of people out there who just plain hate Sarko’s guts. Imagine that!

2012: The year of the demagogue?

It’s sad to say, but it doesn’t look like 2012 is going to be any easier that 2011, and potentially harder. Across the west, the challenge to our debt fuelled consumer lifestyle is growing, and as a society we’re kicking back. Initially, we’re voting people out (save for Canada and New Zealand), but how long will it be before populist charlatans start getting traction by targetting sections of society, like immigrants (Europe) or the poor (USA) as the source of many of our problems? Protectionism is already beginning to creep back onto the agenda (just listen to Sarko). On top of that, globalisation itself is under attack, ironically by people afraid of losing the consumer lifestyle that it has permitted. In  Europe, a gut nationalism is taking root, a feeling in individual countries that we would be better off if we had a lot less to do with our neighbours and their problems, and by extension, the European Union. It’s not true, of course, but it’s a genuine feeling.

The most uncomfortable part of all this is that the only real solution is sacrifice, and how we apportion it. The truth is, western society is now permeated by a feeling that we are all entitled to more than we create, and that has been proven to be no longer sustainable. It’s true, we must attempt to divide the burden in such a way as to ensure that ”the vulnerable” get some protection, but even that is a challenge. Who are the vulnerable? The bottom 5%? 10%? 49%? Because, if we are to shield (and, in effect, subsidise) them, then it means that a heavier burden must be carried by the remainder, and that concept has not been accepted yet.

Our political systems are still populated by politicians who claim that relatively pain free solutions are on the table. The tired old adage about “the rich” is not viable, not because they don’t want to pay a cent in taxes (which tax authorities across the west will testify is not true) but because there is a fairness threshold that is hardwired into rich and poor alike about wanting to keep most of the fruit of their work. But more importantly, the rich don’t have to stay. You would be stunned at the speed in which a wealthy person can transplant a life. It’s literally less than the time between a general election count and entry into office of the new government.

Therefore, sharing the burden of sacrifice will fall on the whole of society, and that’s where the problem starts. Many people could probably accept a fall in their standard of living if they felt that such a drop would ensure them of employment and a minimum standard of living. The problem is that politicians aren’t, rightly, trusted when they make a pledge like that. Take the new Irish Fine Gael/Labour government, pushing through salaries of €127,000 for special advisor positions, claiming that they can’t find people who can do the job for less than that. How can a government ask for sacrifice after such a brazen “F**k you!” to the voters who just elected them? They can’t. Instead, they provide easy ammunition to the populists, and that’s the problem.

Anyway, thanks for reading my rants during the year. It was my best year ever in terms of reader numbers, which far exceeded anything I ever expected when I first started blogging four years ago. Happy New Year! 

The EU in 2021.

Colonel Zhai Zhigang, the first Chinese man on the moon.

“Good evening. Paris entered its third consecutive week of martial law today as President Le Pen attempted to restore order across France in response to the ongoing economic crisis and trade disputes with her neighbours. A summit with English prime minister Boris Johnson broke up without progress, as neither country was willing to unilaterally lower the large tariffs on imported products which now dominate the former European single market. Former German chancellor Angela Merkel, laying a wreath at the tomb of assassinated President Sarkozy, who was murdered in the panic of 2012, expressed regret at the European unemployment rate of 30%, and blamed the decision of European governments to dismantle the eurozone in 2012 as being the catalyst for the collapse of free trade across Europe. She said there was some truth to the Beijing People’s Daily’s description of Europe as “an economic backwater”.

In Dublin, the Taoiseach has resigned following her decision to deploy British troops to assist the overwhelmed Irish security forces, following weeks of rioting across urban areas in the country. In her resignation speech, the Sinn Fein leader called the thousands of businesspeople who have fled the highest income tax rates in Europe “Traitors who should be delighted to pay taxes to their country”. Last week , twelve people died in a pitched battle with police and soldiers which resulted in the Irish Parliament being burnt down.

In the United States, President Perry announced that the US Border Patrol would soon have powers to detain pregnant women from seeking abortions in Canada, following the sharp increase in cross-border abortions after the Supreme Court overturned Roe Vs. Wade. The president also received a gift of the US flag that Neil Armstrong and Edwin Aldrin placed on the Moon in 1969 from Chinese President Hu. The flag had been recovered by China’s astronauts when they had placed a large Chinese flag on the lunar surface in December 2020. President Hu also announced that China intends to land a man on Mars by 2025.

Finnish Police today arrested over one hundred protestors demonstrating against the presence of Russian troops in Finland, Estonia, Latvia and Lithuania. The president of Lithuania has stressed that with the collapse of both NATO and the EU, it was important for small countries to be respectful towards the dominant power in the region, and that Russian troops were present as a sign of good faith. The president refused to comment on Russia’s ongoing military occupation of Ukraine, other than to say that it was “an internal Russian affair”.

Prime Minister Johnson has suggested that Chinese requests for ministerial representation at the British cabinet, given the size of Chinese investment in the UK and Chinese loans to the UK government, were being “looked at” by the attorney general. He expressed satisfaction that British ministers were no longer being asked to consider amending or rejecting draft regulations drawn up in Brussels. That’s the news tonight. Good night.” 

The EU faces its Dunkirk.

Churchill, one of Europe's founding fathers.

Reading the British eurosceptic media, it only dawned on me recently that they are against the EU primarily because they’ve never understood it. Just consider Britain’s unique position: a former global power that due to its geographic location has managed a certain form of detachment. They say they want a common market and no more, never quite understanding that a common market alone was never what was on the menu. Whose fault is that? Possibly their own leaders, certainly, but they honestly cannot blame the rest of Europe for wanting to integrate closer, because that closer integration is in Europe’s interest.
Of course, they now point to the euro crisis as evidence that the entire project is a mistake. It is true that a crucial flaw in the euro, the lack of a functioning fiscal union, is now threatening the very existence of the single currency, and it is true that eurosceptics pointed this flaw out from the very beginning. But it is also true that for ten years the euro did provide stability, prosperity, low inflation and price transparency, sometime the British eurosceptic media has airbrushed out of the story.
So, to put it in terms that the Daily Mail will understand: this is our Dunkirk. This is our darkest day, and like Britain in June 1940, things are looking grim. Our previous strategy hasn’t worked the way that we hoped, but neither did Churchill’s. There were those who told Churchill that the British army was finished, its equipment abandoned on beaches in Northern France, and that he should abandon his plan to defeat fascism and compromise with the new conventional wisdom, and make peace with Hitler’s new Europe. But he didn’t. He adapted and stuck to his principles, and won. Like Churchill, we’re not going to give up because this is too important and because we too actually believe in our cause. It’s that which British eurosceptics have never understood, because they have never believed that we could feel as patriotic and as passionate about our cause as they are about theirs. We do, and we’re not going to walk away. It’s just too important.