Quotulatiousness

February 18, 2012

New medieval ruins, you say?

Filed under: Germany, History, Humour — Tags: , , , — Nicholas @ 13:19

In an article about Guild Wars 2 game play at the German website wartower.de, author 4thVariety briefly reminisces about fake medieval ruins:

This ruin will be smashed by Tequatl every time. I wonder, if players need to build it first, in some obtuse quest, sorry, event referencing Kevin Costner’s unforgettable, or rather unrepressable, classic Field of Dreams. Building a ruin makes no sense you say? I beg to differ. 135 years ago, the Bavarian king announced he was looking forward to visiting my home town the next year and take a tour of the medieval ruins. Problem was, there were no medieval ruins, but nobody wanted to tell that to the King and spoil the perfect visit he was looking forward to. Thus, in a fit of “because we can” and to further spite the neighboring cities, a medieval ruin was build in the middle of an English garden. The King had a happy visit and today’s fantasy nerds a spot to geek out once a year. This is the place where I learned that people in chainmail do not jump and dropping off a one meter ledge in armor with a broadsword in your hand is a scary dangerous thing. Thank god, neither cell-phone cameras nor Youtube were invented back then, else I would be an international near self-impalement meme today. On the bright side, nobody would then complain about not being able to jump in MMOs.

February 14, 2012

Colombia looks to upgrade their submarine fleet

Filed under: Americas, Germany, Military — Tags: , , , — Nicholas @ 09:23

With relations in a parlous state between Colombia and Venezuela, Colombia is considering upgrading their navy:

Colombia is negotiating with Germany to buy up to six recently retired Type 206A coastal submarines. The 206As are meant to be an inexpensive counter to new Russian Kilo subs being purchased by neighboring Venezuela. Colombia still has two older (1,200 ton) Type 209 subs and nine miniature subs. All are over three decades old, and so are the Type 206As. But the 206As have been better cared for and were updated in the 1990s. Colombia already has sailors with lots of experience on German submarines and the Type 206s can be obtained cheap. Exactly how cheap is currently under negotiation.

[. . .] If there were a war with Venezuela (which has been acting very belligerent over the last few years), the Type 206s would be used to shut down Venezuelan ports and destroy oil facilities. Venezuela also has two 1970s era Type 209 subs, said to be in worse shape than their Colombian counterparts.


Bundesmarine Type 206A submarine U22 in December 2006

Wikipedia says of these submarines:

The Type 206 is a class of diesel-electric submarines (U-boats) developed by Howaldtswerke-Deutsche Werft (HDW). Its design is based on the preceding Type 205 submarine class. These small and agile submarines were built during the Cold War to operate in the shallow Baltic Sea and attack Warsaw Pact shipping if the war turned hot. The pressure hulls were built out of non-magnetic steel to counter the threat of magnetic naval mines and make detection with MAD sensors more difficult. The low emission profile allowed the submarines in exercises to intrude even into well protected opposing forces such as carrier formations with their screen.

[. . .]

A major mid-life modernisation was conducted on twelve of these submarines, the boats concerned now being officially designated Type 206A. The work started in mid-1987 and completed in February 1992, being carried out by Nordseewerke, Emden; this upgrade includes:

The STN Atlas DBQS-21D sonar has been fitted, together with new periscopes, and a new weapon control system (LEWA). The ESM system has been replaced and GPS navigation installed. The rebuilt submarines are armed with new torpedoes (Seeaal), and the propulsion system has been comprehensively refurbished, and improvements have been made to the accommodation.

February 6, 2012

What would follow a European Union crack-up?

Filed under: Bureaucracy, Economics, Europe, France, Germany, Politics — Tags: , , — Nicholas @ 10:13

If you listen to Angela Merkel and other European leaders, what would follow a break-up of the EU would be something out of Mad Max, a post-apocalyptic wasteland where the living would envy the dead. With no Brussels bureaucrats to direct everyone’s affairs, war, pestilence, starvation, looting, violence and unregulated bananas would proliferate. Bruno Frey isn’t quite as sanguine:

The major problem is that people do not see any alternative to the presently enacted European unification. The Europe-minded politicians even insist that, if the euro and the EU collapse, complete chaos will break out. The European continent will go back to the situation before World War II. The various nations will isolate themselves economically, and they will even start to fight each other. A war within the core of Europe, in particular between France and Germany, is taken to be a real possibility lurking in the background.

This view disregards the fact that the European unification process was made possible only because Germany and France stopped considering each other as enemies. They then saw themselves as the ‘motor’ of the European integration process, which started with the establishment of an economic union and then expanded to the political sphere. It is certainly wrong to think that the only thing that was needed to bring peace to Europe was a formal international treaty.

The claim that the downfall of the euro and the EU would produce chaos and war may be interpreted to be just a strategy necessary to get support for helping the highly indebted nations such as Greece, Portugal, Spain, or Italy with ever more financial support. However, conversations I have had with persons from various European countries suggest that many people really believe that Europe will disintegrate and that wars are looming if the EU dissolves. I hold this view to be seriously mistaken.

[. . .]

The individual countries in Europe will quickly form new treaties among themselves. Collaboration will be maintained in all those areas where it has worked well. Some countries will remain in a newly formed and smaller Eurozone, for which the appropriate treaties will be designed. A similar reconstitution will take place with respect to Schengen, which will then encompass different members. Only those countries that find it advantageous will join a new convention on the free movement of persons. In contrast, those nations that do not find such new treaties attractive, or that are not admitted to them by the other members, will not join.

The result will be a net of overlapping contracts between countries, which the various nations will join at will. These contracts will not be based on a vague notion of what ‘Europe’ may mean, but rather on functional efficiency. Crucially, the individual treaties will be stable because they will be in the interest of each member.

January 31, 2012

Germany issues “secret” document to Greek government on debt repayment

Filed under: Economics, Europe, Germany, Government, Greece, Politics — Tags: , — Nicholas @ 09:41

Mick Hume recounts the machinations within the European Union:

One outraged Greek government minister described it as ‘the product of a sick imagination’. Another called it ‘absolutely laughable’. The formal title of the document in question is ‘Assurance of Compliance in the Second GRC Programme’. It is neither a joke, nor a sick fantasy. It reads more like the draft of a death warrant for democracy, first in Greece and then elsewhere in Europe.

This supposedly secret document was issued by Angela Merkel’s German government to its partners in the Eurozone — and then carefully leaked, to ensure maximum impact. It sets out two extraordinary measures that the Germans want to impose to ensure that the Greek authorities comply with the swingeing budget cuts which they promised but have apparently failed to deliver to the markets’ satisfaction.

First, it says Greece must ‘legally commit itself to giving absolute priority to future debt service’. All state revenues must go first to paying debts and interest due, before a cent can be spent on public services. And the Greek government will not be allowed to threaten to default on its debts in future; if it cannot pay, it must accept that ‘further cuts’ will be ‘the only possible consequence’.

Second, the Germans want the Eurozone to oversee the ‘transfer of national budgetary sovereignty’ from Greece to ‘the European level’ under a ‘strict steering and control system’. The plan is for the Eurozone group to appoint a budget commissioner to oversee Greek finances, with the power ‘to veto decisions not in line with the budgetary targets’ set by European and international officials. If that was not humiliating enough, the Greeks would also have to look happy to bend the knee by ensuring that this new system of outside control ‘is fully enshrined in national law, preferably through constitutional amendment’.

To get the Greeks to agree to these unprecedented conditions, the German document also offers incentives — or as we used to call it, threats. If Athens does not accept the compliance measures, then ‘the Eurozone will not be able to approve guarantees for GRC II’. That is the second huge bailout of €130 billion which Greece desperately needs if it is not to go officially bust in weeks. The ‘Assurance of Compliance’ document is a ‘secret’ blackmail note.

Update: Ah, Monty captures the absurd state of the EU perfectly in a throw-away line in today’s Daily DOOM — “Like German porn, the politics of the Greek bailout just keep getting weirder and more complicated.”

December 22, 2011

Why Nazis?

Filed under: Books, Britain, Education, Europe, Germany, History, Media, WW2 — Tags: , — Nicholas @ 09:56

A British MP is being investigated for attending a “Nazi-themed” party. A member of the royal family is photographed wearing Nazi regalia to a costume party. World War 2 fiction about Nazi Germany vastly outsells similar fiction about Fascist Italy or Imperial Japan. What is it about the Nazis that Brits find so fascinating? In a Spectator article from 2002, Guy Walters tracks the onset of the Nazi fascination in young Brits:

In some Englishmen this interest has mutated into a not-so-guilty admiration for the Nazis and their uniforms, their pageantry, their military brilliance and — this is the really terrible part — their brutality. It is emphatically not a condoning of the Holocaust; rather, a fetish that exists despite it. In its advanced state the fetish will have evolved into a secret yearning to march up and down a bedroom in the togs of a Hauptsturmführer, riding-boots shining, the red swastika armband set smartly against the blackness of the tunic, the silver death’s-head badge glinting on the peaked cap. Of course, the Beevor reader is a far cry from a Nazi fetishist; but I wonder whether Beevor would enjoy such staggering sales figures if he had written only about the war in the Far East.

[. . .]

At the end of term, the flu now conveniently in remission, Mr Priestley unearths the projector and makes a selection from the school’s extensive range of films. The product of a broad mind, the library consists of just two works, The Guns of Navarone and Force 10 from Navarone. Our nascent fetishist will be particularly drawn by the stylish ease with which David Niven carries off the wearing of an SS officer’s uniform. He will be less than impressed, however, with Edward Fox’s absurdly pukka sergeant in the latter film.

His small head brimming with Nazis, our subject goes home for four solid weeks of constructing Airfix Messerschmitts, Stukas, Heinkels and Dorniers. He will know that the correct colour of the underside of most Luftwaffe aircraft corresponds to Humbrol’s ‘duck-egg blue’. If his condition is particularly advanced, the subject’s mother will be asked to purchase a Tamiya Jagdpanther tank, which he will place in a ‘diorama’, a word he will use in no other context. By now, he should be showing further classic early symptoms of a Nazi fetish: Allied aircraft and armour will hold little or no interest. Most of the young fetishist’s exercise books will be adorned with thousands of tiny swastikas.

[. . .]

By puberty, the fetishist will have repeatedly watched every war film available, including A Bridge Too Far, The Night of the Generals, The Dirty Dozen, The Eagle Has Landed, The Boys from Brazil, Cross of Iron and, for a younger generation, Saving Private Ryan and Band of Brothers. He will have read Pat Reid’s Escape from Colditz and Airey Neave’s They Have Their Exits.

When our subject starts in the sixth form, it is here that the fetish can be incorporated into, and disguised by, his academic studies. Naturally he chooses modern history for one of his A-levels, and his special topic will, of course, be Nazi Germany. He will now be introduced to the diaries of Nazi bigwigs such as Albert Speer, which will breathe life into sinister figures such as Himmler and Goering. In fact, the widespread predilection for Nazi Germany as an A-level subject has angered many university tutors, who have complained recently that it is the only period of history about which undergraduates have any real knowledge.

December 15, 2011

Mick Hume: Dispelling Euro-myths

Filed under: Britain, Europe, France, Germany, Politics — Tags: , , , — Nicholas @ 08:49

In this post at Spiked, Mick Hume pours cold water on five Euro-myths:

Euro-myth No 1: ‘It was a triumph for Cameron — or Sarkozy’

Depending on who you listen to, either UK prime minister David Cameron bravely stood alone for Britain by rejecting a new EU treaty, or else he was beaten by the wily French president Nicolas Sarkozy who got what he wanted by the UK’s omission from the new deal around the Eurozone.

In fact, what the rupture showed was that both the six-footer Cameron and the diminutive Sarkozy are, to coin a phrase, pygmies in political terms. And so are German chancellor Angela Merkel and the rest of Europe’s political elite. Far from a triumph for anybody, it marked an embarrassing failure of basic diplomacy among substandard statesmen and women. There are always tensions and ructions at international summits. But in other times they would have been kept under control by careful diplomatic preparation and consultation beforehand – not left to break out in a schoolboy spat on the day, with Cameron and Sarkozy reportedly almost coming to blows. Even far more strident Eurosceptics such as Margaret Thatcher knew how to play the great power game without tripping over their own laces. Europe’s destiny is now in the hands of self-regarding pygmies who think more of their next headline than the shared future of the continent.

As for the notion that Cameron struck a noble blow for the British people and ‘our’ national sovereignty — come off it. Indeed, one of his main motives appears to have been to avoid giving the British people any kind of say on the matter, by dodging both the referendum that would be demanded if he accepted an amended EU treaty, and the general election that would follow if he went too far the other way and broke up his coalition with the EU-loving Liberal Democrats. The government would rather fall out with the French than risk the wrath of British voters.

December 7, 2011

Time to end the “forced march” to Fiskalunion?

Filed under: Europe, France, Germany, Government — Tags: , — Nicholas @ 09:40

Patrick Hayes outlines the way European national leaders and unelected EU officials are steadily blocking any democratic influence over the future of Europe:

Missing from this deal-making has been the European public, which has been held in complete disregard; whether such a ‘forced march’ is acceptable to the European populace is deemed utterly irrelevant, a triviality, in the face of impending doom. After all, as Merkel reminded us recently, ‘nobody should take for granted another 50 years of peace and prosperity in Europe’. The need for such fundamental changes to Europe’s government and economic system are deemed to be beyond debate.

Even when raising the importance of the national sovereignty of their countries, European leaders do so by pointing out too much economic and fiscal integration would get in the way of solving the short-term crisis. There is little discussion of sovereignty as a matter of principle, as the basis upon which voters can hold politicians and technocrats to account. Actually asking the people directly what they want, through national referenda on any new treaty, is regarded as an unnecessary distraction from the urgent task of saving the Euro, to be avoided at all costs.

[. . .]

Once again demonstrating who is actually wearing the trousers in the partnership between the two wealthiest Eurozone countries, Merkel largely got her way. Only last week, Sarkozy was calling for a return to greater democracy in the European Monetary Union: ‘The reform of Europe is not a march towards supra-nationality’, he said. However, Merkel also had to water down her desire to haul naughty countries before a supra-national authority such as the European Court of Justice or a ‘super commissioner’ in Brussels. Instead, sanctions for breaches of the new Eurozone rules would be enforced internally within countries, who would adopt new laws promising they will obey EU rules.

Despite this, as is evident by a leaked document being circulated by EU Council president Herman Van Rompuy and to be discussed by senior EU officials today, the full arsenal of punitive measures for rule-breaking Eurozone members remains on the table. Van Rompuy suggests that bailed-out countries could be temporarily deprived of political voting rights in EU councils; pension reforms, social security systems, labour-market policy and financial regulations could be ‘harmonised’ across EU countries; and there could be ‘more intrusive control of national budgetary policies by the EU’. Development aid for poorer EU countries could be cut, too.

[. . .]

Whatever gets decided at this week’s summit, and whether the fiscal rules are accepted by all 27 EU nations or just by the 17 Eurozone members, it’s clear that greater intrusion into member countries’ national sovereignty by EU officials is the way the wind is blowing. Should countries overspend and breach EU rules, they may no longer be allowed to decide how they set their taxes, how much they can borrow, even the make-up of their budgets. Such decisions, fundamental to a country’s sovereignty, get ripped from the hands of the people living in the countries and their elected representatives, with decisions instead being forcibly guided by European technocrats in Brussels.

December 6, 2011

The Battle of Ortona

Filed under: Cancon, Germany, History, Italy, Military, WW2 — Tags: , , , — Nicholas @ 10:16

The Laurier Centre for Military Strategic and Disarmament Studies is marking the anniversary of the Battle of Ortona in 1943 by sending Twitter updates from @BattleOfOrtona to outline the historical events of the 1st Canadian Division and the 1st Canadian Armoured Brigade in this key battle of the Italian Campaign. Here is the situation just before the battle opened, from Terry Copp:

The Canadians were involved in a series of isolated battles in the mountains of Central Italy in November 1943 when General Bernard Law Montgomery issued orders for an advance up the Adriatic Coast to seize control of the east-west road Pescara to Rome. The American 5th Army was to launch a direct advance towards Rome at the same time.

The Canadians were still in the mountains when British, Indian, and New Zealand troops fought their way across the Sangro River, forcing a German withdrawal to the Moro River. The 78th British “Battleaxe” Division had shot its bolt at the Sangro and Montgomery ordered the fresh, full strength Canadian Division to take over the advance on the coastal flank. The move was to be completed by the night of 5 December.

The German 10th Army, responsible for the defence of Italy east of the Appenine Mountains, contained 12 divisions — 10 infantry and 2 armoured. The 76 Panzer Corps held the river lines south of Pescara with 1st Parachute, 90th Panzer Grenadier, 26th Panzer and 65th Infantry divisions. Normally an attacker needs to outnumber the defender by at least 3:1. This ratio could not be achieved in December 1944 and with the beginning of heavy winter rains air power could only play a small role. Everyone but the infantry was optimistic.

November 28, 2011

The real reason the German bond auction failed

Filed under: Economics, Europe, Germany, Italy — Tags: , , — Nicholas @ 08:58

Tyler Cowen explains:

If Germany and a few other, smaller AAA countries were to guarantee or monetize the debts of Italy, Spain, and possibly France and Belgium, never mind Greece and Portugal, Germany would not be AAA itself. The German median voter has very little interest in guaranteeing the above-mentioned debts. If German yields are flipping upwards, it is, in my view, because investors now see the whole euro deal as unraveling and don’t want to deal with the complexities and flak. A big chunk of the German auction didn’t sell at all. You don’t have to think that Germany is ripe to default to see that markets are warning Germany not to take on the whole burden.

The only remaining question, if Germany isn’t willing to take on the entire burden of European debt, is when will the whole edifice come crashing down and who’ll manage not to be crushed by falling debris.

November 24, 2011

Nigel Farage on “German-dominated Europe”

Filed under: Bureaucracy, Economics, Europe, Germany, Greece, Italy — Tags: , , — Nicholas @ 08:59

November 23, 2011

The political delusion: “We must re-establish the primacy of politics over the market”

Filed under: Economics, Europe, Germany — Tags: — Nicholas @ 10:06

That’s Angela Merkel, expressing the thought that many politicians have, but rarely speak out loud. There’s a lot of wishful thinking wrapped up in that statement:

“We must re-establish the primacy of politics over the market.” That sentence, spoken a little while ago by Germany’s Angela Merkel, sums up the startlingly unoriginal character of the approach adopted by most EU politicians as they seek to save the common currency from what even Paul Krugman seems to concede is its current trajectory towards immolation.

As every good European career politician (is there any other type?) knows, the euro project was never primarily about good economics, let alone a devious “neoliberal” conspiracy to let loose the dreaded market to wreck havoc upon unsuspecting Europeans. The euro was always essentially about the use of an economic tool to realize a political grand design: European unification. Major backers of the common currency back in the 1990s, such as Jacques Delors and Helmut Kohl, never hid the fact that this was their ultimate ambition. Nor did they trouble to hide their disdain of those who thought the whole enterprise would end in tears.

From the common currency project’s beginning, economic considerations were continually subordinated to the goal of using the euro to cement political bonds. That’s why most countries were allowed to enter the euro despite not having met some basic entry criteria. It also explains why no one really seemed to care too much when Greece admitted in 2004 that it had fudged, distorted, and lied its way into the euro club. Now, however, Europe is discovering what happens when political games diminish a currency’s ability to reflect economic facts on the ground.

H/T to “Monty” at Ace of Spades HQ, who commented:

This in a nutshell is everything that is wrong with the sovereign governments of both Europe and the United States (and China, and Russia, and…well, you get my point). The “market” is not a thing to be managed, or a process to be controlled. The market is just an aspect of the natural world, working on the creatures who move through it. Merkel’s comment reflects the combination of arrogance and ignorance that is at the root of so many of our economic problems.

November 22, 2011

Acronym watch: “In the euro zone farmyard, it’s time to forget about the PIGS and start counting the broken EEGs”

Filed under: Economics, Europe, Germany, Humour — Tags: , , — Nicholas @ 09:36

The journalists will appreciate this new acronym:

The euro zone needs a new acronym. For the past three years, PIGS has served as a catchall for the cash-strapped states on the single currency’s periphery. But now that the crisis has moved to the core, a change is overdue.

PIGS has proved surprisingly durable. When it was first coined, citizens of Portugal, Ireland, Greece and Spain were understandably upset at being lumped together in such a derogatory way. Yet as Ireland and Portugal followed Greece in seeking bailouts, their similarities outweighed historical differences.

Some felt the acronym was self-fulfilling, giving attention-deprived speculators a handy shortlist from which to select their next sovereign victim. However, its survival was also an accident. When Italy got into trouble earlier this year, it slotted smoothly into the slot previously reserved for bailed-out Ireland. Politically sensitive bodies avoided the zoomorphic insult by reshuffling the letters to create the GIPS.

[. . .]

A better idea might be to start with the one remaining euro zone member that isn’t under attack from the bond markets. Andrew Balls, head of European portfolio management at PIMCO, now describes the euro zone states being shunned by investors as EEGs: Everyone Except Germany.

November 17, 2011

Snapshots from Greece

Filed under: Economics, Europe, Germany, Greece, Media, Politics — Tags: , — Nicholas @ 07:54

Brendan O’Neill has a few snippets from Athens:

‘Prime ministers should be chosen by us, not Angela Merkel,’ says the taxi driver taking me to the Acropolis. Taxi drivers here love talking politics, and they love hating Merkel. She’s treated as the arch villain of this tragedy. Magazine covers show a massive Merkel playing with Greek politicians as if they were dolls. Graffiti invites her to do things that are probably anatomically impossible. My advice to her is to avoid visiting Greece for the duration of The 100 Days. Probably longer.

•••

The taxi driver also tells me he can’t relate to Papademos. ‘He’s not a man of the people’. But it’s precisely Papademos’s lack of experience in dealing with the grubby, demanding demos that endears him to the EU elite, which fought tooth-and-catapult to have him installed as PM. As one European economist put it: for Brussels the great thing about Papademos is that he ‘speaks the language and shares the philosophy of [the] EU and ECB’ and that he ‘comes in without officially representing a party’. That is, he’s apolitical, unchosen, boring and bureaucratic — just the kind of politician the EU likes. It’s already a cliché, but that doesn’t stop it being true: Athens is now both the birthplace and graveyard of European democracy.

•••

Yet the graffiti expresses exasperation as well as anger — a deep disappointment with Greek workers. Commonly scrawled phrases are ‘Wake up!’ and ‘Stop being slaves!’ You get the impression that the Greek left, which is rowdier and noisier than its western European counterpart, is as annoyed with the masses as it is with Merkel. In Syntagma Square, nothing much remains of the radical protest camp that so excited outside observers earlier this year and which provided the template for the global ‘Occupy’ movement. There is just a memorial tree, with political paraphernalia attached to it in remembrance of the camp. It’s like one of those shrines that pops up on roadsides where someone has been killed by a speeding car, only it is adorned, not with wreaths, but with balaclavas, goggles and batteries (which were thrown at the police). It has the unwitting whiff of being a gravestone not only for the Greek left, but for Greek politics itself.

November 13, 2011

The report from Greece

Filed under: Economics, Europe, Germany, Greece — Tags: , — Nicholas @ 12:16

Michael Petrou and Stavroula Logothettis survey the Greek debt crisis in a report that Maclean’s cheekily headlines “Acropolis Now”:

“We are finished as a nation,” says Marko Gjini, a 39-year-old unemployed construction worker in Athens. “The country has been sold off. We have no say in anything anymore. Greece is owned by the Germans.”

Like many Greeks these days, Gjini is bitter and despondent because of his country’s financial mess, and the austerity measures that have been imposed in an effort to contain it. His wife, Aleka, a public hospital nurse, has seen her income drop from 1,200 euros a month to 800 euros. Now, facing more taxes and cuts to public expenditures, the family expects to have a net monthly income of less than 500 euros. Marko and Aleka are investing whatever money they can toward English lessons for their twin eight-year-old boys in the hope that they might have a better future somewhere else. “Let the government fall,” says Gjini, “[German Chancellor Angela] Merkel is the boss now anyway.”

[. . .]

For Vaso Gildizi, a Greek freelance writer, events in Cannes were “a national humiliation for the country.” The Greek prime minister was scolded like a schoolboy and sent home. The incident didn’t sit well with many Greeks who were already sour on the bailout deal and the euro itself.

“We’re bankrupt,” says 44-year-old Vasilia Paneli, owner of Bliss, a trendy café a short walk from Syntagma Square and the parliament in Athens. “We know it. The EU knows it. And yet we continue this Greek tragedy. A referendum would at least give us a voice, a chance to speak up for our future.” Paneli was unmoved by French and German threats that a referendum on the bailout deal would have meant a vote on whether to remain in the eurozone. She’d rather Greece leave it. “It’s self-serving,” she says. “I say let’s go back to the drachma.”

[. . .]

William Antholis, a senior fellow at the Brookings Institution think tank, likens flirting with a return to the drachma to “threatening suicide to avoid a lynching.” Greece is in for a painful few years whatever happens, he said in an interview with Maclean’s. The austerity measures are going to bite. But leaving the euro, he says, would be disastrous. The costs could include a run on Greek banks, as people sought to withdraw euros before they were changed to drachmas. Some banks would probably collapse. Greece would likely default on its debts, and would be unable to pay pensions and salaries. Some sectors of the economy built on export might benefit from a new, devalued currency, but at the expense of much heavier blows elsewhere.

November 9, 2011

Under attack by overwhelming economic forces, French and Germans consider retreat to citadel

Filed under: Economics, Europe, France, Germany — Tags: , — Nicholas @ 14:42

If they’re floating ideas like this, the Euro is done:

German and French officials have discussed plans for a radical overhaul of the European Union that would involve establishing a more integrated and potentially smaller euro zone, EU sources say.

French President Nicolas Sarkozy gave some flavor of his thinking during an address to students in the eastern French city of Strasbourg on Tuesday, when he said a two-speed Europe — the euro zone moving ahead more rapidly than all 27 countries in the EU — was the only model for the future.

The discussions among senior policymakers in Paris, Berlin and Brussels go further, raising the possibility of one or more countries leaving the euro zone, while the remaining core pushes on toward deeper economic integration, including on tax and fiscal policy.

As in any retreat, some outlying forces (countries) will have to be sacrificed to save the main body (France and Germany). A small retreat may not be enough — but Greece, Italy, Spain, and Portugal are likely to be left outside the walls.

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