Ode to Joy?

The European Union, its institutions like to tell us, was founded on the values of respect for human dignity, liberty, democracy, equality, the rule of law and respect for human rights. It is an area of freedom, security and justice without internal frontiers which combats social exclusion and discrimination. We are endlessly told it promotes the protection of the rights of the child. It champions economic, social and territorial cohesion and solidarity among Member States.

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It’s enough to make your heart bleed.

You wonder though how those soaring violins you hear square with reports from one of those liberally-endowed Member States, Greece, of children being abandoned. From cases of newborn babies wrapped in swaddling and dumped on the doorsteps of clinics to children being offloaded on charities and put in foster care, Greece’s struggle to pay off its debts is assuming dramatic proportions. Propelled by poverty, 500 families asked to place children in homes run by the charity SOS Children’s Villages, according to the Greek daily Kathimerini. One toddler was left at the nursery she attended with a note that read: I will not return to get Anna. I don’t have any money, I can’t bring her up. Sorry. Her mother. http://www.theguardian.com/world/2011/dec/28/greek-economic-crisis-children-victims

You may ask how all that solidarity and justice helped the sharp increase in those taking their own lives in despair.

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In June 2011, when a new round of austerity measures was met with protests and strikes, suicides among both men and women increased by 36 percent and remained high. A 77-year-old retired pharmacist shot himself in the head in the central square of Athens, leaving a note saying that he could not bear the idea of scavenging in dustbins for food and becoming a burden to my child… And anybody who knows Greece well can probably think of at least one acquaintance whose death was prompted, entirely or in part, by financial desperation. http://www.thetoc.gr/eng/economy/article/greeks-lost-almost-40-of-their-income-during-the-crisis

A new study estimates that the average Greek household lost almost four tenths of its income in the first five years of the crisis, reports The New Athenian website. Most of that loss – 23.1% – was in direct income. A further 8.8% was lost to increased taxation and another 7% to inflation not matched by increases in income over the period 2008-2012.

The EU’s desire for solidarity is such that a whole nation is being crushed under its weight. Just how much freedom, security and equality the Greeks can take is open to question. Of course, it’s their own fault and they shouldn’t have been so profligate and lied about their borrowing and their debts and it’s time to pay the price. After all, it’s not as if Britain is in debt, is it? http://www.nationaldebtclocks.org/debtclock/unitedkingdom

The UK would never a debtor be – certainly not long term in a way that implied it would never pay off its debts. Or would it…Here is BBC News last year:…some of the debt being refinanced by the Treasury dates back to the 18th Century. One of these bonds was issued by William Gladstone in 1853 to consolidate the capital stock of the South Sea Company which collapsed during the South Sea Bubble financial crisis of 1720. http://www.bbc.co.uk/news/business-29844961

Should the angelic host of human rights protectors in Brussels remember that proper scrutiny of the national accounts at the time of entry to the common currency would have revealed the stark truth that Greece was never ready for Euro membership…or should they admit that the momentum of the political project to unite us all in liberty overruled the basic need for due diligence? Were the people of Greece, the ones suffering today, responsible for the cover-up of their national debt? Did they even know? Or were they, like working class British citizens today, paying the price for the mistakes and greed of the elite – the political fixers, the institutional investors and the bankers…

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And if the Greek state, manipulated by the coalition since swept away by Syriza, was cooking the books, who helped them? Here’s a clue. Greece’s debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period – to be exchanged back into the original currencies at a later date. Such transactions are part of normal government refinancing…But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks. This credit disguised as a swap didn’t show up in the Greek debt statistics. http://foreignpolicy.com/2015/02/02/the-secret-berlins-bankers-dont-want-europe-to-know-euro-german-exports-greece/

And what about those Germans, fed up with feather-bedding the lazy Greeks. Why should they subsidise the inferior workshy types unable to run their own affairs? (Sound familiar?) This is Der Spiegel. It has become a rule of the euro crisis: While a number of euro-zone countries suffer, Germany profits…A projection by the Munich-based Ifo Institute for Economic Research found that the economies of France, Spain, Italy, Belgium, Greece, Portugal and Cyprus would likely shrink. The German economy, on the other hand, is still expected to grow…Germany is benefiting from an influx of new skilled professionals…Germany also profits from a simple symptom of the crisis – the weak euro…For German companies, the sinking euro acts as a kind of crisis buffer. While it reduces demand for German products within the euro zone, these make up only around 40 percent of the country’s exports. But for the rest of the world, a weak euro means cheaper German products, which means they’re more competitive. http://www.spiegel.de/international/europe/profiting-from-pain-europe-s-crisis-is-germany-s-blessing-a-808248.html

And if Greece borrowed far more than it could afford, who lent it to them for profit? Bloomberg knows the answer: Germany’s banks were Greece’s enablers. Thanks partly to lax regulation, German banks built up precarious exposures to Europe’s peripheral countries in the years before the crisis. By December 2009, according to the Bank for International Settlements, German banks had amassed claims of $704 billion on Greece, Ireland, Italy, Portugal and Spain, much more than the German banks’ aggregate capital. In other words, they lent more than they could afford. http://www.bloombergview.com/articles/2012-05-23/merkel-should-know-her-country-has-been-bailed-out-too

And when Germany pulled its money out, it was money from the rest of the currency zone nations that filled the gap, allowing Germany to avoid taking the whole hit – look! solidarity in action…. http://www.bloombergview.com/articles/2012-05-23/merkel-should-know-her-country-has-been-bailed-out-too

There’s another irony here seldom mentioned. Historically, Germany has been described as the biggest debt transgressor of the 20th Century, with restructurings in 1924, 1929, 1932 and 1953. Total debt forgiveness for Germany between 1947 and 1953 amounted to somewhere in the region of 280% of GDP, according to economic historian Albrecht Ritschl of the London School of Economics. Today, Greece has an external debt-to-GDP ratio of roughly 175%.

Germany was shown the kind of solidarity and justice the Allies fought for during Hitler’s war and they made massive investments to rebuild the defeated country. Today’s Germany is reluctant to face up to that history. In December 1942 Greece was forced by Nazi authorities to loan German 476m Richsmarks to cover the cost of the German occupation, which it says it has never been paid back. €279bn is 125 per cent of Greece’s €223bn GDP – the money is around a tenth of Germany’s GDP. The modern-day euro figure is the Greek government’s own calculation of what the loan would be worth today.

Will anybody stand up for our Greek friends and fellow Europeans? It doesn’t look to me as the founding principles of the EU are being upheld and that instead Germany is being allowed to run the show for its own seemingly inevitable advantage. The EU is pursuing a pro-austerity, profit-first, beggar-my-neighbour approach which should scare every one of the smaller and economically fragile Member States. A Greek currency exit could bring even worse hardship for Greeks along with a rejection of the entire EU principles leading to withdrawal from all the institutions. The fall-out from that failure could wound the whole project.

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And yet, surely one of the biggest losers would be Germany itself. As Paul Mason writes: If Greece is forced into an accidental default, damage to the euro project and to the EU’s image would be massive. A central bank seen to be colluding in the bankruptcy of banks it is supposed to supervise, and willing the breakup of a currency union it is supposed to be running, would tarnish the ECB’s reputation for a decade.

With Germany as the leading economy in the EU system and viewed as having instigated the exit, its assumed primacy would be damaged – and Europe’s enemies heartened. A longer-term, lower-cost bail-out and carefully constructed people-based restructuring is a smaller cost.

It is time to return to the founding ideals of Churchill, Monnet and Schuman and come to the aid of a European partner in dire straights, one from which Europe learned the very basics of ancient democracy and one which paid a heavy price once before in the 1940s in the war that so horrified civilization that it drove the European movement we know today. Human dignity, liberty and respect!

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39 thoughts on “Ode to Joy?

  1. Very well said, I so wish I could have put the same structure around my thoughts on the Greece issue. I’m not sure that the YES/SNP movement support for EU continuity has really caught up with these events. If the small country of Greece gets sacrificed at the high altar of the euro with all the other non financial reasons for the European Union being given no priority then that will become a big part of the debate for the UK referendum. I think it raises the question of why it would be so definitely good for Scotland to insist on staying in a club dominated by austerity supporting German bean counters.

    I hope Greece stays but the neo liberal, self destructive, narrow minded greed of the governments of the wealthier European economies does seem to be terminally incapable of putting these narrow selfish finance issues into the broader context of European cooperation and solidarity.

    If our SNP are anti austerity they need to get to work now to start explaining and clarifying where they stand on this very important issue.

  2. The Eu needs to take action against those who deliberately set out to deceive. If they do not, then we will repeat history. It is as simple as that.

    • If by that you mean Greece, the EU was well aware that Greece didn’t meet the convergence criteria when they were admitted. It was only creative accounting on the part of Goldmans which made it look so.

    • Not sure what you mean. Just a bit too cryptic.
      Are you saying that Germany with all its economic expertise was fooled by the Greek government into letting Greece join the euro?

      Are you saying the the German government deceived its own people by fooling them into believing Greece was ready for the euro even though they knew that not to be true?

      • I’ve always suspected that. Not the German government necessarily, but eurocrats somewhere in the system.

        Derek is right to beware the EU. Chomsky has no time for it, regards it as in hock to neo-liberalism.

      • The EU institutions were so fanatical about the euro they ignored their own rules. And one country which didn’t fit the criteria laid down was Germany – but no-one was going to say ‘no’ to Germany

  3. Thank you, Mr Bateman, for this excellent post setting out the clear facts about what has happened to Greece and Greek society. The callousness of the lenders, and in particular the strongest member of the EU, Germany, is terrifying to watch. I am an old-age pensioner who worked in education for many years in Crete, and I have continued to work to the best of my ability to support the free movement of labour within Europe. When I see what is happening to my students and young scientists with whom I work (no point in going into details but they are pretty horrible) I feel as if I have completely wasted the last 25 years of my life. There is no European solidarity, I’m afraid.
    Right now I am watching the Greek Vouli (Parliament) Channel, which is reporting live the rreports from the Truth Commission. Absolutely fascinating. The trampling of human rights by the EU is being shown over and over again. That is only one part of the report, of course, which will doubtless be ignored or denigrated by the European press. There is one small report online at the moment here
    http://greece.greekreporter.com/2015/06/18/the-2009-deficit-was-artificially-inflated-former-elstat-official-tells-greek-parliament/
    Sorrowfully.

    • Many thanks Margaret for confirming the human rights aspects of the Greek predicament. This is an excellent post by Derek and opens the discussion beyond the very limited fare we have been dished up so far.

      Christine Lagarde’s comment that the Greek Prime Minister and Finance Minister should act like “grown ups” was particularly ironic when they are being pressured into behaving like children and doing whatever the German finance minister tells them.

      I too wish there was something we could do in support and that the Scottish Government would take a supportive role towards our Greek friends.

  4. bjsalba – the European Union, banks and institutions are right at the top of the list for deception. Ably aided and abetted by MSM. Picking on the Greeks like they are the only perpetrators of deception is ridiculous. In any case you cannot punish a helpless nation that did not cause the problem Their bankers and governing institutions were as complicit as others in Europe but the people were oblivious. There is no such thing as the ‘simplicity’ you allude to.

    • I did not make myself clear. I consider Goldman Sachs and the poloticians in power who perpetrated the scheme in the first place to be the guilty parties. I personally think that they and any other financial institutuion which displays such a lack of basic ethics should not be allowed to operate anywhere in Europe.

  5. Dire “straits”, old boy.

  6. Sorry, it’s a really great article. Highly informative and education as well as being passionately humanitarian.

  7. Excellent article Derek, many thanks.

    I just wish there was something we in Scotland could do.

    I’m not an economy buff like you, but it seems to me like the issue was that the drachma came in at the wrong level, it was over-valued. That has allowed German goods to outcompete Greek goods and has shrunk their economy. Germany benefitted.

    What I can’t get over though is that there are rich Greek people, shipping owners for instance, who avoid paying tax, and the Greek state seems to be powerless to get them to pay their fair share.

    Like you I feel that culpability isn’t just with the Greeks, but with those eurocrats who didn’t do due diligence because they wanted enlargement of their political project and they should pay the price too, not the ordinary Greek people.

  8. It appears it is global greed that is running or ruining the world and the GOOD GUYS ARE NOT WINNING

  9. Excellent though thoroughly depressing article, Derek. Yet again the bully getting away unchecked. Surely something can be done to help the Greek nation.

  10. Europe has done a lot of good things for Scotland. I am a proud European. However their dismissive reaction to the ancient seat of civilisation Greece. Is undeniably wrong. Eu was supposed to better than this.

    Incidentally another union on a smaller scale, the UK has plans to vandalise Scotland. It started with trashing The vow, and will end with Scotland falling out with England for generations. It is Eire all over again. The Brits talk fair but can’t act fair. They are just a nasty bunch underneath the fluff.

  11. Richard Brennan

    Totally with you – makes me want to throw a plate!

  12. Thank you Derek. Dissociated snippets surrounding British debt, German debt, Greek debt, etc leak out from time to time. You have collated the main points all in one article.

    That leaves the Scottish entry into the EU and how we would A. protect the Scottish economy, and B. work to shape the EU into the organisation we all want, supported by “Human dignity, liberty and respect!”

  13. GavinC Barrie

    Banks,debts, GDP,currency, blah blah blah.

    Top Gear will resume, headed by Chris Evans, on a £5 million pa contract(?)!

    “I will not return to get Anna.I don’t have any money, I can’t bring her up. Sorry. Her mother”.

    The human race really needs help and guidance.

    • I think its the half full, half empty wallets of the middle classes that cause much of our difficulties. To scared to rock the boat because they think their own meagre savings and financial security would be under threat. Not clever enough to see that it is already under threat and the coming generations of their own kith and kin will almost certainly be relatively poorer than they will ever be.

      All due to the ongoing success of the very rich who, through their unelected power, are not just holding their own but are increasing the wealth gap with continuing success. I doubt we’ll see too many casualties among the richest Greeks whatever the eventual outcome of this crisis.

  14. Excellent and thought provoking article Derek. Definitely one of your best.

    Why is the truth of what is happening in Greece not being reported by our broadcasters? Why nothing from our broadcasters about the anti-austerity marches in Spain, Portugal, Italy and even Belgium?

    Who really runs our broadcasting in the UK?

  15. Great piece, Derek. I’m worried that EU membership is being used as a weapon by both sides in our ongoing War of Independence. The Tories don’t like the EU so it must be a good thing, right? is the extent of too much thinking on the matter.

    There are good leftist reasons for wanting out. Pleading that it can be reformed has got as much traction as arguing for continuance of the UK on the grounds that Westminster can be reformed. Short of an asteroid strike, no it can’t.

    When the EU referendum comes around, should I vote Yes in the hope of provoking the constitutional crisis that ends the British Union, or with my conscience that says No?

    • The former, obviously. If you want to run for a Scotexit referendum at some point after Independence I will fully support your right to do so and will listen to your arguments even. I hear lots of talk about these good leftist reasons for getting out but I have not read any. Care to cite some?

      BTW I don’t know your views on the issue but if you are a monarchist I would equally expect your support for my right to run for a republic referendum after Independence. We are pretty much that polity now, we have to work to be that sort of polity as though we are that better nation already. Scotland has a bad history of allowing our brothers and sisters to disagree in a tolerant, civil manner. Most of Yes is there, though I have seen some plot to leave out non Scots of any sort in the next referendum, not in my name.

      • “I hear lots of talk about these good leftist reasons for getting out but I have not read any. Care to cite some?”

        You haven’t seen them, so they don’t exist? Eppur si muove*.

        Use Google – I’m not your secretary. Try searches on EU coupled with Chomsky, or see if you can get any cached pieces from the (sadly) defunct Covert Action Quarterly, which published a lot in that direction. You can get archived articles here, but you’ll have to pay (sorry). Also try back copies of Scottish Left Review, which has occasionally dealt with this.

        I sort of know what you’re saying, but I’m a habitual activist (I knock doors and leaflet in the high street) if it’s an issue I care about – independence, whatever. So what happens to my street cred if I campaign sometime soon for a Yes to the EU, but want to hit the street in an indy Scotland and campaign for a No? If you’re a high-vis activist your local community know you, and won’t be shy about tearing you to bits if you seem to have defected to the enemy. Look what happened to the ‘Labour’ Party.

        You needn’t agree with leftist agruments, you sound as if you usually don’t. But please don’t claim they don’t exist. That’s just silly.

        *Google that too.

        • I didn’t claim they don’t exist. You made an unevidenced assertion and now you are getting all high and mighty about being called on it.

          As for my credentials, I’m in RIC, if anyone can be said to be in RIC since we voted not to have a membership.

          As for your fears of your credibility, that is the Far Left to a t: so scared of being seen as ideologically impure to have an open mind or to think for yourself. This is the New Scotland, grow up and grow a spine.

  16. Steve Asaneilean

    In 2014 the level of debt as a percentage of GDP fot Greece was 177%.
    But it was also 130% for Portugal, 98% for Spain, 93% for France, 90% for the UK, and 78% for Germany.
    Debt is debt. As you say Derek who allows the debt to accumulate in the first place if not the lenders? If Greece was spending borrowed money someone was lending money to them, presumably those who stood to make a profit.
    What is their moral obligation as lenders?
    And what about the debts of all the other countries? Stones and glass houses come to mind.
    In the end the already rich – both inside and outside of Greece – have benefited from what is happening to Greece and they will continue to do so.
    Meanwhile it’s those who started out with the least will suffer the most.
    It is morally repugnant.

  17. Antoine Bisset

    The inisistence of the SNP in remaining in the EU is sensible. A vote by the UK in the proposed referendum on EU membership that results in the UK leaving will allow the SNP to force another referendum.
    Once Scotland is independent it is highly likely that Scotland will leave the EU as that is clearly the best option. But if we really want independence then everyone in Scotland should vote to remain in the EU.
    Tactical voting, and with the danger that the overall UK result might be to remain.

  18. Derek – three times today I’ve returned to this article and tried to formulate a coherent reply. Late this afternoon I tried to read it out to my wife and found her hand suddenly on top of mine – stop she said – it’s upsetting you too much. Too much! Only because Bateman pressed all the right keys!

    If it is true that the the road to hell is paved with good intentions then this be the best current example. The warnings were clear back in the days of Blair and Brown that Greece wasn’t in a completely fit state to join the Euro. And now the whirlwind.

    As a grandfather of two little ones, the ones in hell are Anna and her parents and their ilk.

    The ones that should be there are the shortsighted, quick wins, greedy bastards that lead to this.

  19. Germany is the real problem. The Euro has benefitted them enormously, allowing them to run up huge surpluses, due to a joint currency that has, in effect, been a devaluation of the Deutschmark. This has enabled them to export to the poorer South (as well as worldwide) and has had the effect of moving money from the South to the North.

    As for exiting the EU, I feel that like Macbeth it would be as difficult to go back as to go on.

    • I’ve long had the feeling that the EU is evolving into a Fourth Reich – it is more and more dominated by Germany. Not how Angela Merkel’s every word is hung onto and treated ad gospel.

    • GhostofBanquo

      “I am in blood/ Stepped in so far that, should I wade no more, / Returning were as tedious as go o’er.”

  20. Fantastic piece; thanks. You might be interested in another angle that Greece are pursuing internally: the origin and destination of this debt. They have a Debt Truth Commission, and here’s a short but very interesting statement from its chair, Zoe Konstantopoulou:

    http://www.bbc.co.uk/news/world-europe-33179593

    .. bottom line is that 90% of the debt Greece “incurred” went straight back to creditors, so they’re coming around, on the basis of an existing international notion of “odious debt”, to declaring it illegal and repudiating it.

    Perhaps the rush to kick them out of the EU is an attempt to get them out before that commission’s findings are taken to the courts..

    The French have recently been suggesting that 60% of *their* national debt is illegal, which makes current activity impressively hypocritical.

    http://www.theguardian.com/commentisfree/2014/jun/09/french-public-debt-audit-illegitimate-working-class-internationalim

  21. Absolutely outstanding piece. No matter their failings, there can be no question that Greece deserves to be treated in this way. As usual, it is ordinary people who suffer. A European scandal.
    If all 53 SNP MPs spoke out in the House Of Commons, the govt would have to listen. Then again . . .

    • Outstanding piece indeed. I hope our new tranche of SNP MPs take note and raise this in ‘the mother of parliaments’.
      As an addition to Derek’s analysis it should also be pointed out that in 20010 Greece was spending 2.7% of GDP on expensive arms which it could not afford.
      And who encouraged and sold these vastly expensive weapons?
      Germany, France and the US!
      Not only could Greece not afford the expenditure on submarines, tanks etc, they could not pay for ammunition etc to arm them.
      Even in 2010, when the extent of the financial disaster was apparent, Greece bought 223 howitzers and a submarine from Germany at a cost of €403m.
      A European scandal indeed.

  22. So why should any country want to join an organization that believes in one economy, one law and one culture for the whole of Europe (“breaking down the barriers”)? Diversity and mutual respect are far better for everyone.

    I have not heard a single pro-EU argument that holds water except that it would be good to all be marching together in harmony (crushing our enemies underfoot). The reasoning is credible but the objective is lamentable.

    See EU Membership: Pros and Cons

    BTW, Ode to Joy was suggested as the EU anthem by Richard Coudenhove-Kalergi

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