Economic Blitzkrieg

Maybe we're all too polite: Mr Fawlty's 'Don't mention the war' seems to have taken an unshakable hold on the rest of the world and, it seems to me, this time Germany may just succeed in taking over continental Europe, not because we haven't melted down the iron railings outside the UK's public buildings to make into bullets, but because we're too polite to say or do anything about it.

Indeed, it's beginning to look as though, by the time we've got to the British: 'now look here old chap, this is simply not on,' reaction, it may be way too late. It may already be too late.

I've set off on this blog a few times and ended up going round in circles and becoming stymied in an anti EU piece, looked at purely from the point of view of why the UK shouldn't join-up. Indeed one would have to ask the question as to whether this has been a deliberate part of the plan: to keep the Brits preoccupied about their own antagonism towards the European Project, so that they don't notice the steadily - and rapidly - creeping influence of the EU: or, to give it it's proper name: Germany, over the rest of continental Europe.

A quick look at the reality facing the rest of Europe might give credence to this conclusion: Most, if not all of the countries that have now signed up to be members of the EU (and remember that acronym stands for European Union, not European free trade or friendly countries, but Union) are in some considerable financial difficulty and find themselves in hock (sorry) to Germany/Brussels. These countries were allowed to join the party without meeting the strict economic and financial requirements established at Maastricht - indeed even France and Germany have breached those criteria several times - in such a way that they would inevitably be taking on major amounts of debt in order to balance their books in line with the requirements of the EU.

Effectively Germany has played out enough line - given these countries enough rope - to get them used to the trappings of economic strength, without actually needing to achieve it themselves. In effect, these countries have started the meal with a desert of white truffles and are now working their way backwards towards the more savoury - and indeed unsavoury - courses that they skipped earlier.

Indeed they have now become so dependent upon bail-outs from Germany - and in this group I certainly include France (this is not just an issue for the periphery of Europe), that without German financial support they will not be able to pay their armies, civil servants, police, teachers, doctors etc., for very long.

Some people suggest that this crisis is the fault of countries like Greece, Spain and Italy who have not been able to tighten their belts to meet the EU austerity requirements, even though they said they would do. But it doesn't take Paul Krugman (Nobel Economics laureate) to recognise that the EU knew all about the Greeks' laughably early retirement age, low levels of tax collection rates and general financial fecklessness well in advance of their creation of this situation.

They knew, when they were lending the first tranche of money to help Greece to fix the roof while the sun shone, that Greece would effectively piss it up the wall (which they did). The subsequent lending of more aid, before any resolution about the first lot had been made, is just about helping Greece to sink even further into its dependence upon the EU/Germany. In effect the crisis that is now hitting (and hitting very hard indeed) in Greece, Spain, Italy, Ireland and some others albeit more quietly so far, has been planned and delivered by Germany.

We have not got here by accident


What is now starting to happen is that everyone's hiding behind each other - the banks behind national governments, who in turn are blaming the banks, or the IMF (International Monetary Fund) or the ECB (European Central Bank) or even the US Fed (who will not be sending a plugged nickel in an election year by the way).  It has got to the point in the last week or so, that the fund being used to bail out Spain, is being paid for by Spain, and Italy, and Ireland, and Greece, who all need the bail-out because they don't have any money. Go figure.

And, most of the most recent money allocated (even though it doesn't exist) to Spain, has actually been identified for use in strengthening the German and French banking sector who were massively exposed to the EU debt mount..actually, 'mountain' doesn't come close as a description.

Without going through all of these ramifications, the bottom line is that a new mechanism called the ESM (European Stability Mechanism) is now the holy grail: It will ride over the hill with the cavalry and save the day. Trouble is it hasn't yet been ratified and so it doesn't exist. But that's a good thing. If it did, continental Europe would be, and stand-by here for a highly technical economic term...fucked.

ESM - see video here would effectively give the EU complete control over all of the money in continental Europe. It can, as it is now configured pre-ratification, call on all and any governments to transfer virtually unlimited amounts of money, on the basis of 7 days' notice, without needing to justify what it is being spent on, and without anyone - sovereign government or national electorate - able to take any challenging action in any court in the world. Truly a blank cheque.

What is also now happening is that these countries that have effectively been turned into economic basket cases by Germany - and you'll notice that the German economy is booming on the back of the massive exchange-rate advantage that they get by being shackled to weaker economies in the EU than would ever be the case if they were on their own (which is massively damaging to the UK's competitiveness in the world) - are so deep in the merde that they will do anything to stay afloat for a few days or weeks in the hope - the forlorn hope - that 'something will turn up'.

The other thing, briefly to point out, is that the leaders of these countries, and their representatives at the trough of Brussels and Strasbourg will lose their own jobs if this whole thing goes breasts upwards (another highly technical economic term - bet you're glad I'm here). So they will also do anything - whether it's in the interests of the country they represent or not - in order to keep their jobs and their embarrassingly cushy lifestyles at our expense.

And now, as the moment when the money runs out completely draws near, and the only option they have is to beg Germany effectively to take control of their economies (setting employment and pension/retirement laws, tax rates, collection regimes, working hours etc), otherwise the entire edifice of their societies will come crashing down, is where the end-game starts to emerge.

Greece may still be called Greece in the future and the same may be true of the other German 'dependents', but if the ESM is ratified and if this EU take-over is allowed to happen, they might as well  get used to eating Brotwurst and sauerkraut and drinking (small amounts) of German beer, rather than wine. Small amounts, not just because of the price, but because they won't have much time to spare between working and sleeping, between birth and death, to drink much at all.

So what Mr Hitler failed to achieve through a slightly more agressive approach during the last unpleasantness, may actually be coming to pass anyway, but this time with banks and not tanks.

Some might think this is a good thing. I'm not sure the populations of the countries involved will necessarily agree when they wake up to the reality in a few years' time and as a country which has led - fought for and spilled blood - in the cause of freedom in Europe, to promote the autonomy of smaller countries so that they wouldn't be dominated by bigger ones, I'm not sure that we Brits should be happy about it either. Of course, we'd have to be talking about it first though and there doesn't seem to be much chance of that right now.

Thanks for reading. Sleep well (if you aren't already!)