Now
back to Greece and the Euro (how long can this go on?)!!
After
all that Sturm und Drang of the Greek election, Monday has dawned loud and
clear and the Greek people have spoken with one voice and voted for … a
third election? Or not. Papoulias calls on Samaras to form a government “within
hours”. Even with the 50 seat bonus from just pipping Mr. Tsipras at the first
past the post, ND does not command a parliamentary majority. It needs fat man
Venizelos (the Evangelos), plus some even leftier splinter group. Which means
that if successful at roping in PASOK, Vangy will have broken his word “within
hours” that he would not be part of a government without Syriza joining a Grand
Coalition. But the attraction of reverting to his former role as FinMin with a
fat salary and pension pot to rival his girth will have proved too much
(deposited in CHF in SBC Lugano please). Which just shows there are no
principles to be had among Greek politicians. ND is the party that lied,
cheated and stole to get into the Euro at a wholly unrealistic rate versus the
Drachma in the first place.
So
the most consequential change resulting from the vote is that Tsipras and
Syriza doubled their share from Round 1. And their pressure has pulled ND and
PASOK over to the “we’ll renegotiate the terms with our friend Angela” side of
the argument. (She’s still singing “Nein, nein, nein” down Mexico way and I
think she’s not referring to another margarita). Which in itself is a nullity;
since even after two big bailouts, and an ‘Affens ‘aircut of 75% for the
private sector, Greece is still running a big primary deficit on its domestic
budget and even bigger on external account. The government is not paying the
bills it has incurred and import credit insurances have been withdrawn. Why
would capital flight reverse or even diminish? So a third big bailout is a sine
qua non to even restart paying bills, including for vital imports, let alone
ever servicing the debt of bailouts 1 and 2. Or bringing down the Target2 or ELA
overhangs. Anyone advancing more funds to Greece characterized as a “loan” or
as A/R should know it’s really a gift (aka money down a rat hole). So it’s COD
only (ideally denominated in CHF).
Talking
of Sturm und Drang, with a measure of Angst und Schadenfreude thrown in, my
loving family has told me enough with the German already. I guess they’re
right, though T S Eliot seems to have gotten away with it. Oh, well, poetic
license and his German was sure better than mine.
Ambrose
E-P is back on his monetary high-horse, ranting about how the ECB has allowed
all meaningful monetary aggregates to collapse across the Zone. Which he claims
to be the cause of the problem. I wonder about the pushing-on-a-string theory
and whether the relationship between output and monetary aggregates (and
velocity of circulation) isn’t more consequential than causal (at least in the
case of the Euro). Especially when all Euro-money is heading, like a lemming to
a cliff, back to the BuBank, or in the case of the clever money right under the
mattress. It all does rather raise the existential question of what is a Euro.
Is a Euro deposited in HariKiri bank in Athens the same as one deposited in
Deutsche Bank in Frankfurt or even SBC in Lugano? Is a euro-note printed by the
BuBank with an X serial the same as one from the Greek central bank sporting a
Y? Are Euro-bank-notes safer than (electronic) bank deposits? (I suspect the
answer to the last depends on which bank and where its relevant branch and or
HO is located). Otherwise it’s a mystery to me.
It
doesn’t seem like much of a way to run a rail road.
The
Greek election has done nothing to persuade me that there is any change in
outlook. The Deuro (or Nord-Euro) remains the best option split off from the
Franco (or Sud-Euro). A better option than just collapsing in a heap with
mutual recriminations ad nauseam. Either way Greece is out since it couldn’t
even live within the Franco either. Maybe Greece’s only option is to emulate
Zimbabwe, Panama, Ecuador et al and just allow all paper currencies (except the
Euro since it will no longer exist) - US$’s, Deuro’s, Franco’s, CHF, even
Sterling et al - to circulate freely and banks to accept deposits so denominated.
Makes vending and POS machines almost impossible I guess. Otherwise, I’m with
Boris of London on Dithering into the Dark Ages. But he needs to lay off
another runway at Stansted. We’re not going to Bishop Stortford to get a flight
anywhere unless we live in Essex, Boris. It’s Heathrow or bust (right now it
looks like bust).
Of
much greater relevance to us all, today is the 200th anniversary of
the declaration of war by the Congress of the USA, signed by President James
Madison, against the UK. Fondly known as the War of 1812. Reasons given by the
USA were largely specious. The real intent was to grab British Canada while the
Empire was tied up dealing with Napoleon I, and put the Brits in a two front
war to take the pressure off Bonaparte. It didn’t work too well, as L’Empereur
met his Waterloo first in the retreat from Moscow the same year and later again
at Quatre Bras in 1815 (after a brief vacation on Elba). Meanwhile the Brits
burnt down the Capitol and the White House and occupied DC; wheeling to attack
Baltimore. They did not succeed, hence the Star Spangled Banner. Hostilities
were ended by the Treaty of Ghent in late 1814 but word took too long to reach
respective forces in Louisiana in time to obviate the need for Andrew Jackson
to prevent the Brits from taking New Orleans (and grabbing the whole Louisiana
Purchase). At least Canada was rescued from being absorbed into the USA. The
War of US Secession was finally over!
Und
so, mit vielen Entschuldigungen für alles das Deutsch.
Simon
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