I wanted to drop a few (dozen) lines on VW this weekend, when the first dust settled. But I saw this question posed and couldn't resist:

"Why did no one blow the whistle on VW emissions? Are US or German whistleblower protection or rewards insufficient?"

Easy. No one blew the whistle, because it was an open secret. Both Brussels and Berlin knew about it. In fact, they banned precisely this device a few months ago. And you can bet your ass that a) these are not the only tests VW cheated on, and b) they are not the only ones doing it.

Too big to jail, son. Same shit, different day.

Short version: Fuchs is a hardliner in many regards. Like you say, his perspective on this matter stands seperate from the rest of the world (except this one particular country in central Europe), which is why I used to not pay too much attention to folks like him. Bad idea. As it turns out, lots of people support his view, many more than I ever thought possible, depressing as that may be.

The entire thing is a break with 70 years of post-war diplomacy, trying to become a part of Europe again. Adenauer (Brandt) received better treatment in Moscow (Warsaw) than Tsipras did in Brussels/Berlin. From a European Germany straight back to a German Europe in no time at all...

Edit: Habermas offers his take on this matter.

Keynes and others made the same argument against the Treaty of Versailles. You mentioned how that turned out.

Folks did in fact learn from that mistake, but after everything is said and done, it was the Soviet expansion that made the case. Germany was the frontier and to turn it into some shithole or even a failed state would have made it worthless in the struggle against Soviet expansion. Germany was expected to a) keep them in check, and b) serve as a prime example of how much better life is within the realm of capitalism. If it hadn't been for T-34s in Berlin, I'm not entirely sure we would have been treated as favourably as we were.

In any case, even after much of the debt was written off, the remaining payments were stretched out over decades, so as to not be too much of a drain on the economic development of the country.

Still, it's not the same with Greece. We only torched half the continent, but they dodged their taxes. That's a million times worse, it seems.

While we're on the subject of tax evasion: Luxembourg alone accounts for about €20b-€30b a year of lost tax revenue in Germany. Yap, the tax system implemented by none other than troika member Jean-Claude Juncker is more of a drain on the public budget in Germany than Greece could ever be.

The leaked counterproposal is fucked up. Nevermind my ultra left wing preferences, opposing higher taxes on corporations while cutting benefits for the poorest of the poor is fucked up. That's fuel for the anti-European parties. They can paint themselves as the protectors of the plebs against those feudal overlords in Brussels and Berlin with this kind of shit.

Varoufakis is on stage at an IMK gig in Berlin right now. It was ~40 minutes of old news, really, at least if you've been following the developments over the last couple of months.

The interesting bit is that he's still making a clear commitment to a permanent primary surplus. For a country as devastated as Greece, that's austerity. Some argue that a 5% deficit over 5-10 years would be required to get Greece back on track, Bill Mitchell and Jamie Galbraith even make the case for running a 10% deficit to get some traction.

Since Varoufakis has to be aware that a primary surplus of any size is still contractionary, I wonder what funky accounting voodoo he has in mind to circumvent this contradiction. Just surplus recycling via the EIB? Who knows...

Edit: the ongoing panel discussion is interesting though.

Edit #2: the recording is now up again:
http://www.boeckler.de/veranstaltung_54282.htm (Varoufakis' talk begins at 12:30)

Edit #3: SPON has a piece on it this morning and one of the first comments correctly calls them out on it.

Crap....I just took your word that I was wrong. Just minor googling shows me that I was essentially right, and what you speak of happened near the end of total allied control of Germany. We've essentially had bases there since the end of the war.
WIKI-
In practice, each of the four occupying powers wielded government authority in their respective zones and carried out different policies toward the population and local and state governments there. A uniform administration of the western zones evolved, known first as the Bizone (the American and British zones merged as of 1 January 1947) and later the Trizone (after inclusion of the French zone). The complete breakdown of east-west allied cooperation and joint administration in Germany became clear with the Soviet imposition of the Berlin Blockade that was enforced from June 1948 to May 1949. The three western zones were merged to form the Federal Republic of Germany in May 1949, and the Soviets followed suit in October 1949 with the establishment of the German Democratic Republic (GDR).

In the west, the occupation continued until 5 May 1955, when the General Treaty (German: Deutschlandvertrag) entered into force. However, upon the creation of the Federal Republic in May 1949, the military governors were replaced by civilian high commissioners, whose powers lay somewhere between those of a governor and those of an ambassador. When the Deutschlandvertrag became law, the occupation ended, the western occupation zones ceased to exist, and the high commissioners were replaced by normal ambassadors. West Germany was also allowed to build a military, and the Bundeswehr, or Federal Defense Force, was established on 12 November 1955.

Will YOU stand corrected? ...or was this a misunderstanding of what I meant by 'why the bases are in Germany', because I do understand those reasons have changed over time, as you indicated...I was talking about the original reason we stationed American military there.

So...it's an English speaking machine in German speaking Berlin.

I'm wondering if the people found this machine a bit fishy.

Your video, Berlin 1900, has made it into the Top 15 New Videos listing. Congratulations on your achievement. For your contribution you have been awarded 1 Power Point.

Berlin July 1945 after the war.

http://foreignpolicy.com/2015/03/06/is-the-euro-compatible-with-democracy/

"The Germans lean on eurozone authorities to get off the hook, and the European Commission bows to Berlin. But voters elsewhere want to change things, even just in their own countries? Nein, nein, nein: There is no alternative."

There comes a point where you just need to swallow your pride and accept defeat. Hamas is never going to win a war against Israel. Their continued efforts have achieved nothing but the destruction of their own country and the people within. Politics and religion are not worth the death toll.

Now, someone is inevitably going to rant about sovereignty and freedom and all that. Tell me... should Germany have continued fighting after the fall of Berlin? Should Japan have continued fighting after Hiroshima and Nagasaki? Should Native Americans be launching rockets and bombing government buildings? No. You accept defeat and start taking the road to recovery.

Wall of text incoming. Again.

Sorry. Again.

tl;dr:

Debt relief right away was proposed, was neccessary, and was skipped to protect the European financial system.



You are 100% correct, we both are as convinced as one can be that a disorderly collapse would have been much worse for Greece. Might have turned it into a failed state, if things went really bad.

But the situation in Greece at the time the Troika got involved suggested a textbook approach would work just fine. Greece was insolvent, no two ways about it. A debt restructuring, including a haircut, was required to stabilise the system. Yet it was decided against it, thereby creating an enormous debt bubble that keeps growing to this day, destabilising everything.

Why?

People in Brussels, Frankfurt and Berlin knew in May of 2010 that Greece cannot service its current debt, nevermind pay it back. I remember rather vividly how it was presented to us, as it stirred up a lot of dust in Germany. They pretended as if the problem was a shortage of liquidity, even though they knew it was in fact an insolvency. And to provide an insolvent nation with the largest credit in history (€110-130b) is... well, we can all pick our favorite in accordance to our own bias: madness, idiocy, incompetence, a mistake, intent. They threw Greece into permanent indebtedness(?), and also played one people against another. People in Germany were pissed, still are. Not at the decision makers, but the Greek people.

Again, why?

Every European government, pre-crisis, drank the Cool Aid of deregulation, particularly with regards to the financial sector. When the crisis hit, they had to bail out the banks, a very unpopular decision in Germany, given the scandalous way it was done (different story). Like I pointed out before, when Greece was done for, German banks were on the hook for €17b+, and the French for €20b+. So no haircut for Greek debt.

It gets even better. The entity most experienced in these matters is, of course, the IMF. But IMF couldn't get involved. Its own regulations demand debt to be sustainable for it to become involved in any debt restructuring. Strauss-Kahn had the rules changed in a very hush-hush manner (hidden in a 146 page document) to allow the IMF to lend vast sums to Greece, even though they knew it would not be payed back. Former EC members are on record saying the Strauss-Kahn decided to protect French banks this way as a part of his race for President in France. So they changed IMF rules and ignored European law to bail out German and French banks, using the insolvent Greek government as a proxy.

Several members of the IMF's board were in open opposition. The representatives of India, Russia, Brazil and Switzerland are on record, saying this would merely replace private with public financing, that it would be a rescue package for the private creditors rather than the Greek state. They spoke out in favor of negotiations of a debt relief.

And if that wasn't bad enough, there's an IMF email, dated March 25th, 2010, that was published by Roumeliotis, formerly IMF. They put it very bluntly:

"Greece is a relatively closed economy, and the fiscal contraction implied by this adjustment path, will cause a sharp contraction in domestic demand and an attendant deep recession, severely stretching the social fabric."

Even the IMF, who chose parameters according to their own ideology, thought the European program to be too severe. That's saying something.

All that is just about the initial decision. The implementation is another story entirely, with unelected and unaccountable bureaucrats telling a democratically elected government what to do. There are former Greek ministers on record, telling how Troika officials basically wrote legislation for them. Blackmail was common, bailout money held as leverage. The Memorandum of Understanding was to be followed to the letter, and the Troika program was as detailed as a government program, so they really had their hand in just about everything.

The specifics of the program are a discussion of their own, with all the corruption going on. The Lagarde list (2000+ Greek tax dodgers) was held in secret by order of an IMF official – that alone should trigger major investigations. The nationalisation and sell-off of the four largest Greek banks, or the no-bid sale of the Hellenikon area to a Greek oligarch – all enforced by Troika officials.

The haircut of 2012, ~€110b wiped out, came two years late. As a result, it didn't hit any German or French institutions in a serious way. Most of the debt was in the hands of these four largest Greek banks -- NBG, Piraeus, Euro, Alpha – who subsequently had to be recapitalised by Greece to the tune of €50b. Cut by 110, up by 50 right away. Banks were nationalised and shares later sold again, at 2/3 the price. Lost another €15b, because the Troika demanded the sale to appease the markets.

The legal aspects of all this are nightmare-inducing as well. They violated numerous European laws, side-tracked parliaments, used governmental decrees, etc.

Let me just say this: when they forced Cyprus to give away two banks' branches in Greece for a fraction of their worth, Cyprus lost €3.5b, at a GDP of €17b, and those two banks went belly-up. It was pure blackmail, do it or you're out. Piraeus Bank received those €3.5b, and its head honcho had €150m of personal bad credit wiped clean right then and there, all at the command of the Troika. Those €3.5b had to be taken from ordinary folks by "suspending" the deposit insurance, perhaps the most stupid decision they had made so far.

Why did they do it? Because Greece was more important than Cyprus, and Cypriot banks were involved in shady deals with Russian oligarchs. Still illegal, and massively so.

Edit: I cut my post in half and it's still too long.

Well, Syriza is an acronym for Coalition of the Radical Left (roughly), and everything left of the Berlin Consensus is considered to be radical left. So they are going to call Syriza a radical leftist party until the political landscape itelf has been pulled back towards more leftist positions. But you're right, if they were judged by their positions, they'd be centre-left in theory, if centre-left hadn't turned into corporatism by taking up the Third Way of Schröder/Blair/Clinton.

They are, without a doubt, radically democratic though. As your Grauniad article points out, they haven't turned on their election promises yet, which is quite unheard of for a major European party. Francois Hollande in particular was a major letdown in this regard. Few people expected him to bow down to German demands so quickly. Aside from his 75% special tax for the rich, he dropped just about every single part of his program that could be considered socialism.

Grexit... that's a tough one.

Syriza cannot enforce any troika demands that relate to the programmes of the Chicago School of Economics. Friedman ain't welcome anymore. No cuts to wages or pensions, to privatisation of infrastructure, no cuts to the healthcare system, nor any other form of financial oppression of the lower class. That is non-negotiable. In fact, even increases in welfare programs and the healthcare system are pretty much non-negotiable. Even if Syriza wanted to put any of this on the table, and they sure as hell don't, they couldn't make it part of any deal without further damages to an already devasted democratic system in Greece.

So with that in mind, what's the point of all the negotiations?

Varoufakis' suggestions are very reasonable. The growth-linked bonds, for instance, are used very successfully all over the world in debt negotiations, as just about any bankrupty expert would testify. Like Krugman wrote today, Syriza is merely asking to "recognize the reality everyone supposedly already understands". His caveat about the German electorate is on point as well, we haven't had it explained to us yet – and we chose to ignore what little was explained to us.

Yet the troika insists on something Syriza cannot and will not provide, as just outlined above. Some of the officials still expect Syriza to acknowledge reality, to come to their senses and to accept a deal provided to them. Good luck with that, but don't hold your breath. Similarly, Varoufakis is aware that Berlin is almost guaranteed to play hardball all the way.

Of course, nothing is certain and they might strike a deal during their meeting in Wednesday that offers Greece a way out of misery. Or maybe the ECB decides that to stabilize to Euro, as is their sole purpose, they need to keep Greece within the EZ and away from default. That would allow them to back Greece, to provide them with financial support, at least until they present their program in June/July. Everything is possible. However, I see very little evidence in support of it.

Therefore Grexit might actually be just a question of who to blame it on. Syriza is not going to exit the EZ willy nilly, they need clear pressure from outside, so the record will unequivocally show that it wasn't them who made the call. No country can be thrown out, they have to leave of their own. Additionally, Merkel will not be the person to initiate the unravelling of the EU, as might be the consequence of a Grexit. That's leverage for Greece, the only leverage they have. But it has to be played right or else the blame will be put squarely on Greece, even more so than it already is.

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Edit #1: What cannot be overstated is the ability of the EZ to muddle through one crises after another, always on the brink of collapse, yet never actually collapsing. They are determined to hold this thing together, whatever the cost.
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Speaking of blame, Yves Smith linked a fantastic article the other day: Syriza and the French Indemnity of 1871-73.

The author makes a convincing case why the suppression of wages in Germany led to disaster in Spain, why it was not a choice on the part of Spain to engage in irresponsible borrowing and how it is a conflict between workers and the financial elite rather than nations. He also offers historical precedent, with Germany being the recipient of a massive cash influx, ending in a catastrophe similar to Spain's nowadays.

It strikes me as a very objective dissection of what happend, what's going on, and what needs to happen to get things back in shape. Then again, it agrees with many points I made on that BBC videos last week, so it's right within my bubble.

Still alive after four days of too much info to process and too little sleep. So I'll just dump a list of talks here that might interest you:

- Richard Stallman: Freedom in your computer and in the net
- Jake Appelbaum/Laura Poitras: Assassination lists, planetary surveillance
- Tobias Engel/Karsten Nohl: SS7, the backbone of mobile networks, is fucked beyond repair (two talks, same topic: one, two)
- Laura Poitras and others: cryptography for high-profile journalists
- Bill Scannel: Inside Field Station Berlin Teufelsberg (NSA spy post - wierd talk)
- internet of toilets
- What Ever Happened to Nuclear Weapons?

It's not fringe when a good chunk of muslims around the world (not just the middle east) have extremist points of view:


Muslims in most countries surveyed say that a wife should always obey her husband." (including 93% in Indonesia and 65% in Turkey).

Only 32% of Muslims in Indonesia say a woman should have the right to divorce her husband (22% in Egypt, 26% in Pakistan and 60% in Russia)

1 in 3 Muslims in Austria say it is not possible to be a European and a Muslim. 22% oppose democracy

21% of Muslim-Americans say there is a fair to great amount of support for Islamic extremism in their community.

61% of British Muslims want homosexuality punished

Turkish Ministry of Education: 1 in 4 Turks Support Honor Killings

WZB Berlin Social Science Center: 65% of Muslims in Europe say Sharia is more important than the law of the country they live in.

Pew Research (2013): 81% of South Asian Muslims and 57% of Egyptians suport amputating limbs for theft.

Pew Research (2013): 72% of Indonesians want Sharia to be law of the land

Pew Research (2010): 82% of Egyptian Muslims favor stoning adulterers
70% of Jordanian Muslims favor stoning adulterers
42% of Indonesian Muslims favor stoning adulterers
82% of Pakistanis favor stoning adulterers
56% of Nigerian Muslims favor stoning adulterers

MacDonald Laurier Institute: 62% of Muslims want Sharia in Canada (15% say make it mandatory)

Pew Research (2013): 39% of Muslims in Malaysia say suicide bombings "justified" in defense of Islam (only 58% say 'never').

Pew Research (2013): 76% of South Asian Muslims and 56% of Egyptians advocate killing anyone who leaves the Islamic religion.

Pew Research (2010): 84% of Egyptian Muslims support the death penalty for leaving Islam
86% of Jordanian Muslims support the death penalty for leaving Islam
30% of Indonesian Muslims support the death penalty for leaving Islam
76% of Pakistanis support death the penalty for leaving Islam
51% of Nigerian Muslims support the death penalty for leaving Islam

Pew Global: 68% of Palestinian Muslims say suicide attacks against civilians in defense of Islam are justified.
43% of Nigerian Muslims say suicide attacks against civilians in defense of Islam are justified.
38% of Lebanese Muslims say suicide attacks against civilians in defense of Islam are justified.
15% of Egyptian Muslims say suicide attacks against civilians in defense of Islam are justified.
13% of Indonesian Muslims say suicide attacks against civilians in defense of Islam are justified.
12% of Jordanian Muslims say suicide attacks against civilians in defense of Islam are justified.
7% of Muslim Israelis say suicide attacks against civilians in defense of Islam are justified.


CLEARLY, what we need is more Islam in the world. Such a force for good...