Denial is not just a river in Egypt
Dale’s post, “Fantasy v. Reality” is spot on. And there are plenty of examples of his point to be found. One of the characteristics of those who live in the fantasy side of things is their continued denial of the real cause of Greece’s problems specifically and Europe’s problem generally.
They, like certain politicians on this side of the pond, want to lay it off on others – the implication being that if that situation is changed, the problems that Greece and other countries are encountering will resolve themselves.
And then what? And then the strategy would appear to be to cauterise the amputation; to circle the wagons; to issue the most ringing and convincing proclamation to the markets that no more depredations will be tolerated; and to get the Germans to stump up, big time, to protect Spain and Portugal. We are told that the only solution now is a Fiscal Union (or FU). We must have “more Europe”, say our leaders, not less Europe – even though more Europe means more suffering, and a refusal to recognise what has gone wrong in Greece.
The euro has turned out to be a doomsday machine, a destroyer of jobs, a killer of growth, because it entrenches and exacerbates the fundamental and historic inability of some countries to compete with Germany in making high-quality goods with low-unit labour costs. Unable to devalue their way back into the game, these countries are forced to watch industry wilt under German imports, as the euro serves as a giant trebuchet to fire swish German saloon cars and machine tools across the rest of Europe.
Germany is almost alone in recording economic growth in the first part of 2012; Germany is doing well from the euro; and so the theory is that Germany should pay to keep the whole racket going by bailing out the improvident and the uncompetitive, just as London and the South East subsidise the rest of the UK.
Alas, it is not a strategy that is likely to work. As Angela Merkel has made clear, there is little political support – let alone popular support – in Germany. EU leaders may want a fiscal union, but it is deeply anti-democratic. We accept large fiscal transfers in this country because Britain has a single language and a single political consciousness in a way that Europe never will. Rather than creating an “economic government of Europe”, the project will lead to endless bitterness between the resentful donors and the humiliated recipients, as these diminished satrapies will be instructed to accept cuts and “reforms” – designed in Berlin and announced in Brussels – as the price of their dosh.
Or, “it’s all Germany’s fault”.
Germany implemented Greece’s labor laws, work week, retirement age, public pensions and government subsidies. You didn’t know that? It’s Germany’s fault that it has all caught up with Greece in a down global market. If Germany wasn’t so damn good, Greece would be in such damn bad shape.
Really. That’s what this guy is pushing. I mean, my goodness, imagine – “high-quality goods with low-unit labor costs”. How dare they? How can one pump up a welfare state and keep it going with competition like that? It is Germany’s job to enable Greece’s work 38 hour week. Germany’s job to ensure their generous pension plans, early retirement, subsidies and welfare payments.
How dare they do otherwise. They owe Europe. They owe the rest of Europe the lifestyle they desire but can’t afford.
What is wrong with that country?