Straight from the Guardian's current article on the most recent shipwreck in the Med:

The deaths are likely to renew calls from campaigners for Europe to reinstate full-scale search-and-rescue operations in the Mediterranean. Last October, the EU opted not to replace the Italian-run Operation Mare Nostrum, which saved about 100,000 lives last year, amid fears that it was encouraging smugglers and migrants to organise more trips to Europe.

What they forgot to mention: Italy would have continued Mare Nostrum if the rest of this bloody EU had bothered to pitch in with a few bucks. The total bill was €114 million per year. Petty cash, by any measure.

The replacement, Frontex's Operation Triton, doesn't even have a mandate to save shipwrecked folks, just to keep them away from EU soil.

European values worthy of yet another Nobel Peace Price, I'd say...

You are absolutely right, the results of elections in Greece do not create an obligation for fiscal transfers from other European countries.

But that plays right into what Varoufakis has been saying for years, doesn't it? The program over the last seven years has reduced Greek output by a quarter, and thereby its ability to service and reduce its debt. The troika is offering more loans, loans that cannot be payed back, in return for a further reduction in Greece's ability to pay back those loans in the first place. Extend and pretend, all the way. Nevermind the humanitarian cost or the threat to democracy itself.

It is either counter-productive or aimed at a different goal entirely. Greece wants an end to those loans, and all the loss of sovereignty that comes with it, while the Eurogroup in particular wants to stick to a program that only increased Greece's dependency to a point where they can throw the entire country into unbearable misery at a moment's notice (e.g. cut ELA access).

Take the privatisation demands as an example. The program demands that Greece agrees to sell specific property at a specific price. Both parties are keenly aware that this price cannot be realised during a fire sale, yet they still demand a promise by the Greeks to do so. Any promise would be a lie and everyone knows it.

Same for the demanded specificity of Greece's plans. After decades of nepotism, a fresh government made up entirely of outsiders is supposed to draw up plans of more detail than any previous government came up with. And they cannot even rely on the bureaucracy, given that a great number of people in it are part of the nepotic system they are trying to undo in the first place.

Taxes, same thing. The first king of Greece (1832'ish) was a prince of Bavaria who was accompanied by his own staff of finance experts, and they failed miserably. Greece went through occupation, military junta and decades of nepotism, and the new government is supposed to fix that within months.

Those demands cannot be met. The Greeks know it, the troika knows it, the Eurogroup knows it.

Zizek called it the superego in his recent piece on Syriza/Greece:

"The ongoing EU pressure on Greece to implement austerity measures fits perfectly what psychoanalysis calls the superego. The superego is not an ethical agency proper, but a sadistic agent, which bombards the subject with impossible demands, obscenely enjoying the subject’s failure to comply with them. The paradox of the superego is that, as Freud saw clearly, the more we obey its demands, the more we feel guilty. Imagine a vicious teacher who assigns his pupils impossible tasks, and then sadistically jeers when he sees their anxiety and panic. This is what is so terribly wrong with the EU demands/commands: they do not even give Greece a chance – Greek failure is part of the game."

Aside from all that, the entire continent is in a recession. Not enough demand, not enough investment, unsustainable levels of unemployment. Greece was hit hardest, Greece was hit first. It's not the cause of the problem, it is the canary in the coal mine. And Italy is already looking very shaky...

I liked the way the Reuters article closed:

It was not clear what support the German position, which appeared to take no account of the political change in Greece, will have in the wider euro zone talks.

I went against your advice and had a look at a DW article on the subject, and I see what you mean, there is quite a big disparity between the accepted position in the article and anything else I've read from outside Germany. I am now also left wondering how on earth any compromise could be made acceptable to German politicians, and then sold to the public. Since Ireland and Portugal are starting to recover despite The Austerity, it's entirely possible that the usual suspects will say "Look! It works!". They do have much more debt now though...

I can understand a certain aversion to excessive inflation, after the chaos caused by hyperinflation in 1923, but you'd think that if they remember that then they'd also remember where that led (and particularly with the rise of Golden Dawn).

As for Italy, it has somehow managed to muddle along on the edge of disaster for so long that I'm starting to think it can keep doing so forever.

Unfortunatly, it's not just Merkel and her cabinet. It's the press, it's the economics departments at universities, it's politicians at all levels. Call it an economic nationalism, hell-bent to defend what they know to be the moral way of doing business. Everything left of this special flavour of market fundamentalism has been systematically attacked and suppressed for at least 30 years.

For instance, our socialist party, still referred to as the fringe of what is acceptable, runs on what is basically a carbon-copy of social-democrat programmes from the '70s. Similar to the British Green Party and Labour. Krugman, Stiglitz, Baker, Wolff, DeLong -- they'd all be on the fringe in Germany. Even the likes of Simon Johnson (IMF) or Willem Buiters (City Group).

If you speak out in favour of higher inflation (wage growth) to ease the pressure on our brothers and sisters in southern Europe, you'll be charged with waging a war against German saver. "You want to devalue what little savings a nurse can accrue? Don't you support blue collar workers?"

The same blue collar workers have been stripped of their savings by 15 years of wage suppression, the same blue collar workers are looking at poverty when they retire, because the PAYGO pension system was turned into a capital-based system that only works to your benefit if you never lose your job, always pay your dues and reach at least age 95. The previous system survived two world wars without a problem, yet was deemed flawed when they realized how much money could be channeled into the financial system – only to disappear at the first sight of a crisis, eg every five to ten years.

Similarly, you could point out that a focus on trade surpluses might not be the greatest of ideas, given the dependence it creates on foreign demand, a weak currency and restricted wage growth domestically. But they'll call you a looney. "The trade surplus is a result of just how industrious our workers, how creative our scientists and how skilled our engineers are. It's all innovation, mate! Are you saying we force the others to buy our stuff? That's madness."

You simply cannot have an open discussion about macroeconomics in Germany. Do I have to mention how schizophrenic it makes me feel to read contradictory descriptions of reality every day? It's bonkers and everyone's better off NOT reading both German and international sources on these matters.


Any compromise would have to work with this in mind. They'd have to package in a way that doesn't smell like debt relief of any kind. People know that stretching the payment out over 100 years equals debt relief, but it might just be enough of a lie to get beyond the level of self-deception that is simply part of politics. If they manage to paint Varoufakis' idea of growth-based levels of payment as the best way to get German funds back, people might go for it. Not sure if our government would, but you could sell it to the public. And with enough pressure from Greece, Spain, Italy, and France most of all, maybe Merkel could be "persuaded" to agree to a deal.

As for Syriza's domestic problems: it's a one-way ticket to hell. Undoing decades of nepotism under external pressure, with insolvency knocking on your door? Best of luck.

Italy is hard on Greece's heels in terms of institutional corruption. Southern Italy, in particular, is an absolute mess. Given the size of the Italian economy, Syriza better succeed, so their work can be used as a blueprint. Otherwise we're going to need a whole lot of popcorn in the next decade...


Edit: Case in point, German position paper, as described by Reuters. As if the elections in Greece never took place.

@RedSky

Selling assets and, to a certain degree, the reduction of public employment is an unreasonable demand. There's too much controversy about the effects it has, with me being clearly biased to one side.

Privatisation of essential services (healthcare, public transport, electricity, water) is being opposed or even undone in significant parts of Europe, since it generally came with worse service at much higher costs and no accountability whatsoever. Therefore I see it as very reasonable for Syriza to stop the privatisation of their electricity grid and their railroad. There are, of course, unessentials that might be handed over to the private sector, but like Varoufakis said, not in the shape of a fire sale within a crisis. That'll only profit the usual scavengers, not the people.

Similarly, public employment. There's good public employment (essential services, administration) and "bad" public employment. Troika demands included the firing of cleaning personnel, who were replaced by a significantly more expensive private service. And a Greek court decision ruled the firing as flat out illegal. For Syriza to not hire them back would not only have been unreasonable financially as well as socially, it would have been a violation of a court order. Same for thousands of others who were fired illegally, according to a ruling by the Greek Supreme Court.

Troika demands are all too often against Greek or even European law, and while the previous governments were fine with being criminals, Syriza might actually be inclined to uphold the law.


On the issue of reforms, I would argue that the previous governments did bugger all to establish working institutions. Famously, the posts of department heads of the tax collection agency were auctioned for money, even under the last government. Everything is in shambles, with no intent of changing anything that would have undermined the nepotic rules of the five families. Syriza's program has been very clear about the changes they plan to institute, so if it really was the intent of the troika to see meaningful reform the way it is being advocated to their folks at home, they would be in support of Syriza.

Interventions by the troika have crashed the health care system, the educational system and the pension system. Public pension funds were practically wiped out during the first haircut in 2012, creating a hole of about 20 billion Euros in the next five years.

I would like to address the issue of taxation specifically. Luxembourg adopted as a business model to be an enabler of tax evasion, even worse than Switzerland. In charge at that time was none other than Jean-Claude Juncker, who was just elected President of the European Commission. He's directly involved in tax evasion on a scale of hundreds of billions of Euros every year. How is the troika to have any credibility in this matter with him in charge?

Similarly, German politicians are particularly vocal about corruption and bribery in Greece. Well, who are the biggest sources of bribery in Greece? German corporations. Just last week there was another report of a major German arms manufacturer who paid outrageous bribes to officials in Greece. As much as I support the fight against corruption and bribery, some humility would suit them well.


As for the GDP growth in Greece: I think it's a fluke. The deflation skewers the numbers to a point where I can't take them seriously until the complete dataset is available. Might be growth, might not be. Definatly not enough to fight off a humanitarian crisis.

Surpluses. If everyone was a zealous as Germany, the deficit would in fact be considerably narrower, which is a good thing. Unfortunatly, it would have been a race to the bottom. Germany could only suppress wage growth, and subsequently domestic demand, so radically, because the other members of the Eurozone were eager to expand. They ran higher-than-average growth, which allowed Germany to undercut them without going into deflation. Nowadays, Germany still has below-target wage growth, so the only way for Greece, Spain, Portugal and Italy to gain competetiveness against Germany is to go into deflation. That's where we are in Europe: half a continent in deflation. With all its side effects of mass unemployment (11%+ in Europe, after lots of trickery), falling demand, falling investment, etc. Not good. Keynes' idea of an International Clearing Union might work better, especially since we already use similar concepts within nations to balance regions.

Bond yields of Germany could not have spiked at the same time as those of the rest of the Eurozone. The legal requirements for pension funds, insurance funds, etc demand a high percentage of safe bonds, and when the peripheral countries were declared unsafe, they had nowhere to go but Germany. Also, a bet against France is quite a risk, but a bet against Germany is downright foolish. Still, supply of safe bonds is tight right now, given the cuts all over the place. French yields are at historic lows, German yield is negative. Even Italian and Spanish yields were in the green as soon as Draghi said the ECB would do whatever it takes.

The current spike in Greek yields strikes me as a bet that there will be a face-off between the troika and Greece, with very few positive outcomes for the Greek economy in the short run.

QE: 100% agreement. Fistful of cash to citizens would not have solved any of the core issues of the Eurozone (highly unequal ULCs, systemic tax evasion, tax competition/undercutting, no European institutions, etc), but it would have been infinitely better than anything they did. If they were to put it on the table right now as a means to combat deflation, I'd say go for it. Take the helicopters airborne, as long as it's bottom-up and not trickle-down. Though to reliably increase inflation there would have to be widescale increases in wages. Not going to happen. Maybe if Podemos wins in Spain later his year.

Same for the last paragraph. The ECB could have stuffed the EIB to the brim, which in return could have funded highly beneficial and much needed projects, like a proper European electricity grid. Won't happen though. Debt is bad, even monetised debt during a deflation used purely for investments.

In the current situation, "structural reforms" is used to subsume two entirely different sets of measures.

The first is meant to remove what you previously mentioned: corruption in all the shapes and forms it takes in Greece, from a (intentionally) broken tax system formed over decades of nepotism to a bankrupt national media in the hands of oligarchs. The institutions of the Greek state are precisely what you expect when a country has been run by four families (Papandreou, Samaras, Mitsotakis, Karamanlis) for basically five decades.

This kind of structural reform is part of Syriza's program. Like you said, it'll be hard work and they might very well fail. They'll have only weeks, maybe a few months to undo significant parts of what has grown over half a century. It's not fair, but that's what it is.

The second kind of "structural reform" is meant to increase competitiveness, generally speaking, and a reduction of the public sector. In case of Greece, this included the slashing of wages, pensions, benefits, public employment. The economic and social results are part of just about every article these days, so I won't mention them again. A Great Depression, as predicted.

That's the sort of "structural reforms" Syriza wants to undo. And it's the sort that is expected of Spain, Italy and France as well, which, if done, would probably throw the entire continent into a Great Depression.

I'd go so far as to call any demand to increase competitiveness to German levels madness. Germany gained its competitiveness by 15 years of beggar-thy-neighbour economics, undercutting the agreed upon target of ~2% inflation (read: 2% growth of unit labour costs) the entire time. France played by the rules, was on target the entire time, and is now expected to suffer for it. Only Greece was significantly above target, and are now slightly below target. That's only halfway, yet already more than any democratic country can take.

They could have spread the adjustment out over 20 years, with Germany running above average ULC growth, but decided to throw Greece (and to a lesser degree Spain) off a cliff instead.


So where are we now? Debt rose, GDP crashed, debt as percentage of GDP skyrocketed. That's a fail. Social situation is miserable, health care system basically collapsed, reducing Greece to North African standards. That's a fail.

Those are not reforms to allow Greece to function independently. Those are reforms to throw the Greek population into misery, with ever increasing likeliness of radical solutions (eg Golden Dawn, who are eagerly hoping for a failure of Syriza).

So yes, almost every nation in Europe needs reforms of one sort or another. But using austerity as a rod to beat discipline into supposedly sovereign nations is just about the shortest way imaginable to blow up the Eurozone. Inflicting this amount of pain on people against their will does not work in democratic countries, and the rise of Syriza, Podemos, Sinn Féin, the SNP and the Greens as well as the surge of popularity for Front National and Golden Dawn are clear indicators that the current form of politics cannot be sustained.

Force austerity on France and Le Pen wins the election.

Meaningful reforms that are to increase Europe's "prosperity" would have the support of the people. And reforms are definatly needed, given that the Eurozone is in its fifth year of stagnation, with many countries suffering from both a recession and deflation. A European Union without increasing prosperity for the masses will not last long, I'm sure of it. And a European Union that intentionally causes Great Depressions wouldn't be worth having anyway.

Yet after everything is said and done, I believe you are still absolutely correct in saying that the pro-austerity states won't blink.

Which is what makes it interesting, really. Greece might be able to take a default. They run a primary surplus and most (90%+) of the funds went to foreign banks, the ECB and the IMF anyway, or were used to stabilize the banking system. The people got bugger all. But the Greek banking system would collapse without access to the European system.

Which raises the question: would the pro-austerity states risk a collapse of the Greek banking system and everything it entails? Spanish banks would follow in a heartbeat.

As for the morality of it (they elected those governments, they deserved it): I don't believe in collective punishment, especially not the kind that cripples an entire generation, which is what years of 50+% youth unemployment and a failing educational system does.

My own country, Germany, in particular gets no sympathy from me in this case. Parts of our system were intentionally reformed to channel funds into the market, knowing full well that there was nowhere near enough demand for credit to soak up the surplus savings, nowhere near enough reliable debtors to generate a reasonable return of investment without generating bubbles, be it real estate or financial. They were looking for debtors, and if all it took was turning a blind eye to the painfully obvious longterm problems it would create in Southern Europe, they were more than eager to play along.

Nothing is good about this situation and there is no reason to think this will end in anything but Greek default.

Greece's government, elected by its citizens ran up a large and unsustainable debt which was masked by easy credit before the GFC and fraudulent accounting.

There were many contributors. Corruption, hugely wasteful state owned enterprises, joining the euro zone before they were ready to lose the ability to devalue their currency and lower interest rates, and flagrant tax evasion.

But as a country they're collectively responsible for not demanding the necessary reforms of their politicians to ensure they were not vulnerable to a credit crisis when the GFC hit and lenders began to look more scrupulously at individual European countries rather than Europe as a whole. Equally, Italy is responsible for voting Berlusconi into power for every year their economy recorded negative growth under his government. Spain is responsible for not providing sufficient oversight to bad bank lending leading a huge indebting bailout package.

Some of Syriza's reforms are reasonable. Tackling corruption and trying to break up oligopolies are worthy ideas, but they are unlikely to be easy and yield any immediate benefit. Raising the minimum wage and planning to hire back state workers as they have already promised will almost guarantee they will cease to receive EU funding/ECB assistance and later IMF funding.

The simple truth from the point of view of Germany and other austerity backing Nordic countries is if they buy their loans (and in effect transfer money to Greece) without austerity stipulations, there will be no pressure or guarantee that structural reforms that allow Greece to function independently will ever be implemented. These lender government and by extension its people have no interest in transferring wealth to Greece if it stalls its reforms.

Yes fire sales of state owned enterprises suck but the likely alternative at this point if the Troika lending is stopped is that all other lending stops and Greece defaults. At that point there would be mass loss of state sector jobs and sky-rocketing unemployment relative to what is now being experienced. It would take years of reform for the Greek government to be lend-worthy again. There is simply no trust for any alternative to austerity on the part of north Europe.

Currently Greece has reported positive growth in the past quarter and excluding debt repayments is running a budget surplus. Realistically, yes they cannot pay back the 180% of GDP. The likely way forward is after several more years of real reform they (+ Spain & Portugal) would get better terms from the EU as politically, leaders in Germany and elsewhere will be able to make the case that their objective has been achieved.

The ECB's QE package is in some ways already part of this. What I guarantee won't happen is electing Syriza to oppose bailout terms helping to secure that. Germany et al will quite rightly see that if they acquiesce to Greece they will encourage other populist parties in Spain, Portugal, Italy and France and stall reforms.

Could Germany and others in theory provide a huge cash infusion to Greece, Spain and Portugal now? Sure. And those parties would be voted out in the next election and the terms reversed. Even with the relative stinginess of current loan terms, the likes of UKIP and the National Front with their anti-EU stance, have gained political standing in the EU parliament and will likely see huge boosts in upcoming domestic elections.

Not the entire rest, actually. Just the pro-austerity forces currently running the show (Germany, Finland, Netherlands, Austria, etc). Syriza have strong support in Spain (Podemos), France and Italy, the three major countries on the receiving end of austerity.

If Varoufakis' analysis of the situation in Europe is correct, almost everything the troika (ECB, IMF, European Commission) has done since the beginning of the crisis was counterproductive and the underlying economic theories were wrong, plain and simple.

It would be an open challenge to conservative ideology in European governments and to a sort of market fundamentalism that has been the overwhelming drive behind most major policies enacted over the last two decades, particularly in the last seven years.

Can't have that. The Emperor is not naked. Greece is not bankrupt, austerity leads to growth and deflation poses no risk.

25% unemployment, 50+% youth unemployment, GDP down by 25%, poverty through the roof, dumpster diving on the richest continent on the planet -- whatever led to this (hint: austerity) needs a special place on the wall of things never to be done again.

Yet they want to implement it in France and Italy as well, which is why the conflict with Greece is actually a high stakes game about the future of the entire Eurozone.

Like I said, my own views are heavily biased against austerity for a multitude of reasons. And to see my own government forcing it upon significant parts of the continent makes me sick.

They certainly didn't think this through.
That prosecutor can be tried for not properly assessing the risk of criminal acts and communicating it to the public.
All politicians could be tried for not properly assessing the risk of any legislation and/or communicating it to the public.
In fact, everyone on earth could be tried for not properly assessing something dangerous or harmful and not communicating that assessment to the public.
I don't think I'll ever be going to Italy, their legal system is even more of an insane farce that ours in the US.

Italy's youth unemployment rate hit a record 44.2% in August

Welcome to Europe, where we fuck up the prospects of not one, but two generations of our precious brothers and sisters, all in the name of market fundamentalism and Puritan work ethic.

It is not a white problem, it is a human race problem. Every ethnicity has racism towards others. I refuse to allow people, whose only real knowledge of racism is what they've been taught by professors who make a living off 'white guilt', to label my race as inherently the only racist one based off of what happened almost 150 years ago.

Are there white racists? Hell yes! There are also Hispanic racists, Asian racists, and Black racists. Every culture fears and has stereotypes about other cultures that are not logical, but are ingrained into their sub-conscious from the moment they learn how to listen. If you have ever been to Japan, you learn very quick that there is a undercurrent of racism that is extremely strong. Same in the Middle East, same in many parts of Africa.

Is it fair to only label white people as racists when most of the people living today do not come from a family that owned slaves, or in some cases were close to slaves themselves? Half of my family came over to this country from Germany and immediately went to work in the coal mines, paying a huge chunk of their wages to the company store to subsist. The other half came from Italy and were also relegated to the poor jobs that no one wanted. I am 100% certain that they were scared and racist towards other races, because everyone is scared of the unknown. You grow out of it over time and the mixing of cultures.

Well if RT news has said it... I think its pretty clear WW3 is upon us...

Oh wait... guess RT news left out that this is an ANNUAL exercise...

http://rt.com/news/170380-sea-breeze-2014-bulgaria/

Nope... guess they didn't... this idiot just 'forgot' to mention it... and because of the conflict there, its "significantly reduced" in size. 30 second google search.

"Last year the number of participants was much greater. It included Azerbaijan, Bulgaria, Canada, Georgia, Germany, Italy, Romania, Turkey, Ukraine and the US, with France, Germany, Libya, Lithuania, Qatar, and UAE sending observers." RT News

Utter BS...

I agree, and here's the change that I've noticed. The phone traveling from the pocket, onto the dinner table. I think this is just rude, you're at dinner with people, spending time with them and giving them your focus, keep it in your pants.

In particular I've seen it in "The Trip to Italy" a distinct change from "The Trip" they have their phones on the table. They're at restaurants with friends or with eachother two funny comedians who are being filmed and are being entertaining. More specifically they're filming this for an audience and they constantly have their phones about, it's annoying.

I don't take calls when I'm in the room with others, I don't text in the middle of conversations especially not when at dinner. Put the phones down, the person who is right in front of you deserves the most attention.

Stare at the floor during the voir dire, remain silent with your eyes ever-so-slightly crossed.....y'know, like Jason Bourne did before he kicked that FBI dude's ass in Italy at that airport!

> "dividing large jurisdictions into many smaller jurisdictions would be a drain on commerce"

I don't think this is necessarily so. Both ancient Greece and Renaissance Italy prospered due to multiplicity of competing city-states. The more the competition between states, the more they will have to lower taxes and make the environment business-friendly. It creates a meritocracy as those states that fail to attract "clients," citizens and businesses will not survive. Small states make it very easy to do business with them, as in for example, Singapore, Lichtenstein, Monaco, Bahamas, etc. Small jurisdictions adapt their laws to make it easy to do business with them from abroad. Only big ones, like the US, make it a hassle to deal with from outside the country.

A free market society is as close to a meritocracy as you can get.

In a free market you can only really do well by providing goods and services that others want.

A common legal framework comes from commonality of culture, not from state control. And cultures adapt to each other for purposes of commerce.

Let commerce operate freely and people will find a way to adapt legal protections for successful and peaceful commerce. A small jurisdiction that "rips off" foreign business partners will find itself very quickly with no business partners and.being small, have a hard time surviving. Out of self preservation they will want to be trustworthy for others to want to do commerce with them.