a curious Yankee in Europe's court

As she was in the beginning (Angela Merkel)

What is the nitty gritty of what precisely is happening with the European Union — the Europe project — in these days?  An answer to that puzzle is set out clearly, shortly and sweetly by Irishman Jason O’Mahony in a blog post today.

O’Mahony rests the matter of Europe’s future squarely on the shoulders of the remarkable Angela, the current Chancellor  of Germany.  Merkel faces a  very clear choice between saving Europe or destroying Europe, O’Mahony argues.  Check out what he has to say here.

My favorite part of the post, though, is this excerpt.

British eurosceptics constantly remark that the euro was a political project, as if that is a killer argument. It was. It was supposed to be, and whilst it is malfunctioning from bad design, the fact with European integration is that it has been the great success story of post-war Europe.

A few days ago in an email conversation with my daughter I mentioned that the political and economic turmoil in Europe had intensified this past two weeks. Writing back, she asked me to send her a few links to news stories that could give her some insight into the situation.

Harrumph, I mumbled to myself, I wish I could ask the same of some wise news guru.

And I suspect I’m not the only one. It’s much more difficult than it should be to find news reports that aren’t simplistic re-cyclings of various prejudicial stereotypes or political ideologies posing as expertise.

As an example, just last week economist Bill Black strongly criticized the mighty New York Times‘s coverage of the European crisis as “overwhelmingly written from the German perspective.”  You can read the post here on the Naked Capitalism website.

So when I found these two videos this morning featuring Harvard University economist Richard Parker talking about Greece, I decided to post them. Parker has a bit of an inside track on Greece especially. He served as an adviser to former Greek Prime Minister George Papandreou from 2009 to 2011 (see bio).

In the first video (click on screenshot above), Parker advises against falling for easy answers “about the character or moral values of other people to explain a crisis of the kind we’re seeing in Greece.” He then quickly refutes some of the worst stereotypes against the country that are found in daily news headlines.

I particularly liked Parker’s summing up comment because he calls for citizen activism as part of the resolution. Here it is:

Now in Europe as in the United States there have been attempts to rein in the power of an unregulated financial system. But it’s very difficult to do. So the way forward in the 21st century in the wake of this crisis that we’re still living through is going to require a kind of intelligence and vision that transcends national borders. And that will have to come in part from citizens demanding behavior of public leaders of all sorts that moves us to a new world.

This video is a concise three and a half minutes and was posted online earlier this week (May 14).

The second video I found, via Googling, is a six-minute excerpt of a lecture Parker gave last October to the World Affairs Council of Connecticut. In this video, the economist traces step by step how the Greek economic crisis began some years ago to its current deepening turmoil.

This morning while reading a couple of analyses about the great Greek referendum brouhaha, the shade of John Lennon floated past murmuring “Democracy is what happens while politicians are busy making other plans.”

Might that be the case if the Greeks are allowed to vote on the EU’s latest proposal to rescue/doom them into penury for years to come? Wouldn’t that be nice (shades of the Beach Boys just now floated by). Messy? Maybe yes, but maybe not.

The two informative commentaries mentioned above are “Time to resign Mr Papandreou” by Greek economics professor Yanis Varoufakis (here), and “Papandreou shows no regret as he faces a grilling from Sarkozy and Merkel” by the Guardian‘s Helena Smith (here). They offer differing perspectives on the Greek PM. Varoufakis scorns his government leader’s latest referendum maneuver as political ploy only. Smith, in contrast, casts Papandreou more admirably, as in this quote from an unidentified “adviser”:

He is not afraid to upset others if he firmly believes it is in the interests of his country. And as a committed socialist George really does believe in the value of participatory democracy.

Well, notwithstanding that Varoufakis makes powerful argument to the contrary, we can hope that Smith’s featured adviser may prove to be auspicious. That whether mere political operator or democracy’s champion, Papandreou will by hook or crook give the people a voice. That would be true democratic process, wouldn’t it?

Imagine.

When it comes to figuring out complex things in today’s world, Michael Lewis has proven himself better than most at doing so. Along with this, he has an uncanny sense for the perfect doorway into a narrative, and an eye (and ear) for the telling detail that raises the bar to new highs.

The reading public must agree — most of his ten or so books have made the New York Times bestseller list (see Vanity Fair bio and Wikipedia). And his 2006 book, “The Blind Side,” was made into a hit movie of the same name that earned an Academy Award nomination for Best Picture (2010).

But coming away from reading the more than 11,000 word feature about Greece by Lewis in next month’s Vanity Fair, I was struck by the series of questions he posed — and left unanswered — in the piece’s final paragraph (“Beware of Greeks Bearing Bonds” Oct 1, 2010).

Two, for example:

Will Greece default?…

Even if it is technically possible for these people [Greeks] to repay their debts, live within their means, and return to good standing inside the European Union, do they have the inner resources to do it?

To research the Vanity Fair article, Lewis spent some time in Greece,and interviewed some key figures and government workers in the national financial drama underway there. It makes for interesting reading — the full article is here.

Also interesting is the magazine’s companion Q&A with Lewis about the piece. Here you can read some opinions he has of the possible economic prospects of various other countries in Europe, in particular Germany.

My favorite segment  was a question asking Lewis to compare specific European countries to major baseball teams in the U.S. Of course, unless you’re a baseball fan, the metaphoric word play is illusive (and I can’t be of much help here — the sports world is certainly Greek to me).

One sample, though, was more explicit. His description of Italy — he compared the country to the baseball team The Marlins — is generous and apt, I think. He said:

Even though Italy is in financial trouble right now, like the Marlins are always in financial trouble one way or another, it still somehow feels like a successful place. Italy is this giant wild card; they can win the series at any point.

Italy certainly can do with a good word just about now. And maybe I’m biased, but I do favor such optimism. And I do so hope Lewis is as astute about this as he has been about so many other things. Vediamo.

The sentiment, “It’s the economy, stupid,” apparently also holds prime position in the hearts of Europeans when money troubles hit, according to the results of a European Union survey just released this week (“Spring 2010 Eurobarometer: EU citizens favour stronger European economic governance” Aug 26, 2010).

Survey results show that 75 percent of Europeans favor more coordination of economic and financial policies among countries belonging to the EU, the 2010 Spring Eurobarometer reports. The survey, conducted earlier this year at the height of the European debt crisis included more than 26,000 people in 27 EU member states.

“The clear majority for enhanced European economic governance shows that people see the EU as a decisive part of the solution to the crisis,” said Viviane Reding, Vice-President of the European Commission, who is also in charge of Communication. “Our spring survey – conducted at the height of the crisis – reflects the difficult times and challenges that Europeans faced during the past months…

See full report here.

Although I can only lay claim to the merest smidgen of knowledge about the European Union, I have become unmistakably aware since I moved here that many Europeans are as ideologically passionate about a united Europe as many Americans are about a United States. This is especially noticeable with Europe’s younger generations.

But to find any awareness of this in the major USA news and opinion media takes a long hunt. During the eurozone crisis, the headlines in much of the USA (and also UK) English language press I was reading online were dominated by financial and market perspectives. From outside Europe, in particular, the focus seemed to be exclusively on the financial scenario.

The implication was that a monetary union is the only important aspect of the European Union that anyone — European political leaders and citizenry — cares about. And if this monetary union falters or fails, these pundits and experts seem to imply, “Well, there goes the European Union itself and, by the way, the European Dream is dead.”

Yesterday, I was happy to see a passionate rebuttal of this strange, uninformed nihilism offered by Julien Frisch, a political scientist from Germany, on his “Watching Europe” blog (“The European Dream is not dead” May 18, 2010)

I am excerpting three paragraphs, the final one being Frisch’s summing up (I hope he won’t mind):

“The European Dream has been to create unity in diversity, it has been to prevent wars happening between European countries, it has been to allow freedom of movement, to create a common market, a common social model or even to create a common demos etc…”

“For me, the political fight we are seeing is the proof of a common Europe, not an indicator of its bad state. And even if this was a fight of nations, it is still a political fight and the European Union’s system is advanced enough for that this will remain just a political fight – quite an unlikely scenario 60 years ago!…”

“The European Dream is not dead, it is there, and many of us are living this dream – very well aware of the luck that we had having grown up in a European Union, one in which we look at each other as different but equal, and one in which we don’t mind having a good political fight with friends and partners today and a glass of wine tomorrow to talk about our common plans.”

UPDATE:

(Tuesday, 29 June 2010)
Dear readers,…
… this is the last real post of this blog, and the day after tomorrow at midnight, quite exactly two years after he came into existence, the blogger “Julien Frisch” will cease to exist… (read more here).

Europe’s reputation was damaged at the beginning of the recent eurozone crisis, but now everyone is backing the euro, former Italian Prime Minister Romano Prodi said in an interview today with Bloomberg Television.

He added that it would have been better if the European Union had not taken so long to make its decision, but now the clear decision is that there is no alternative.

The delay has had very, very high costs, you know, but to build Europe, you need time, as you know, Prodi said.

To see the full interview (7:33), click on thumbnail above.

A highly readable telling of the center-stage action in the Greece-Euro-EU-Germany squabbling of recent months was offered this week by Gavin Hewitt, BBC‘s Europe editor (“Greece and the story of George and Angela” May 3, 2010).

Even for those in faraway lands who pay less attention to Europe than they do to passing clouds, Hewitt’s informative narrative of the high-stakes duel between Germany’s Angela Merkel and Greece’s George Papandreou is easy to follow.

Excerpt:

So round after round they eyed each other. As the cost of borrowing increased for Greece George played his club card. They were all in the European family together. He waved the flag of European solidarity, guessing correctly that others , particularly EU officials, would come to his side. He was after a big loan that would persuade the financial markers to back off. Angela didn’t buy into this. Greece had to do more…

Saw the link to Hewitt’s piece on Bloggingportal.eu.

The financial leaders of the European Union are almost ready with a rescue package for the being-pushed-downhill-fast Greece, according to an article last week in Spiegel Online International (“PIIGS to the Slaughter/Can the Euro Zone Cope with a National Bankruptcy?” Feb 22, 2010). Officials have been ordered to keep everything hush-hush for now, according to the article, but it offers a glimpse at some of the details.

The bones of the rescue package were put together by the combined efforts of German and French officials, the article states, who then brought the rest of the 16-country Euro zone financial members into the loop.  Excerpt:

The German Finance Ministry expects support for Greece to amount to between €20 billion and €25 billion. All the members of the euro group are expected to participate, including those, like Spain and Portugal, who also might find themselves needing help soon.

In coming together and drafting the rescue package for Greece, the Eurozone countries had no choice but to do so, according to the article. The speculators attacks on the euro and on Greece reportedly are showing no letup. Europe is under threat of member-country bankruptcies, the writers say in the article’s opening lines:

The consequences would be dramatic for the whole of the continent, especially German banks, which are highly exposed to risky debt. EU politicians are willing to pay almost any price to help the beleaguered countries.

I would say this article is a must read for those of us standing on the sidelines trying for a glimmer of understanding of what’s happening in Europe now. The Spiegel article lays out a detailed and comprehensible chronology of how this potential crisis has been created, and what may or may not happen in the future.

It’s also stomach-churning reading, if you don’t share the to-hell-with-everybody-but-me profiteering views of speculators and bankers gone bonkers.

A little further reading: (Why?)

“This Crisis Won’t Stop Moving” by Gretchen Morgenson, New York Times, Feb 6, 2010

“Just a few lessons” (editorial by Jean-Dominique Giuliani, Feb 10, 2010)

“Rescuing Greece. Economic union. Two different things” by Charlemagne, The Economist, Feb 12, 2010

“Greece turns on EU critics” Financial Times, Feb 12, 2010

“Eurozone overhaul” by Mark Schieritz, presseurop, Feb 12, 2010

“Greece Derails: Is Europe Far Behind?” by Simon Johnson, Huffington Post, Feb 12, 2010

“Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis” New York Times, Feb 13, 2010

“The Greek Tragedy That Changed Europe” Wall Street Journal, Feb 13, 2010

“Goldman Goes Rogue – Special European Audit To Follow” by Simon Johnson, The Baseline Scenario, Feb 14, 2010

Portugal – “Slow progress to avoid decline” by Guido Rampoldi, presseurop, Feb 15, 2010

“Senior Goldman Adviser Criticizes Greece – Without Disclosing His Goldman Affiliation” by Simon Johnson, The Baseline Scenario, Feb 15, 2010

“The evolution of Greece’s financial woes” by Stamatis Assimenios, Deutsche Welle, Feb 16, 2010

“Euro flounders amid Greek woes” by Siva Sithraputhran, FRANCE 24, Feb 16, 2010

“The Dutch Join the Germans in Rejecting Bailout of Greece” by Edward Harrison, Roubini Global Economics, Feb 16, 2010

“A reminder for the EU: America did not create federalism to back the dollar” by Charlemagne, The Economist, Feb 17, 2010

“Feldstein’s Euro Holiday” Paul Krugman blog, New York Times, Feb 17, 2010

“Wall Street’s Bailout Hustle” by Matt Taibbi, Rolling Stone Magazine, Feb 17, 2010

“Fear of Mediterranean Contagion Grows” by Julio Godoy, IPS, Feb 18, 2010

“Crash of the titans” Commentary, Kathimerini English edition, Feb 19, 2010

“Greece Asks for Details on EU Aid Plan” Spiegel Online International, Feb 19, 2010

“Greece not looking for EU handouts with debt crisis, says Papandreou” by Zoe Wood, Guardian, Feb 21, 2010

“Prospects For Financial Reform” by Simon Johnson, The Baseline Scenario, Feb 23, 2010

Today, European Union leaders met in Brussels to talk about Greece and its terrible, great big money woes. With the EU’s biggest players, Germany and France, guiding the way, the member states agreed to bail out Greece, according to a Spiegel Online International article. But only in the case of a “complete emergency.”  (“Germany and France Take on the Euro Speculators” by Susanne Amann, Feb 11, 2010)

The article goes to say that in the eyes of Germany and France, a bankrupt Greece is not an option. One, Greece owes the banks in both these countries a lot of money, according to Spiegel, plus there’s an even bigger potential disaster looming:

“…A Greek bankruptcy could result in a collapse of the entire euro system,” says financial market expert Rudolf Hickel with Bremen University’s Institute of Labor and Economy. Currency market speculators are currently earning well by betting against Greece. “After Greece, Spain and Italy would then become the focus of the speculators,” says Hickel “and that is what France and Germany have to stop.”

Been reading a few articles reporting various interpretations of Obama’s announcement earlier this week that he himself wouldn’t be attending the European Union-U.S. Summit in May.  From both sides of the Atlantic, many of the voices offering comment seem quasi-hysterical about this.

Some label it a snub by a White House that they allege doesn’t value Europe. Others characterize Europe’s leadership as so shaky and panicky about the President’s absence that they may even cancel the summit (or already have?).

I have no idea what’s true or not true, not being privy to official discussions in Brussels. I do like today’s commentary on the situation by Stephen M. Walt, blogging for Foreign Policy (“Reports of a transatlantic rift have been greatly exaggerated” Feb 3, 2010).  It offers a different perspective that seems more informed. We’ll see.

Excerpt from Walt’s post:

I see the whole thing as a positive development all around. EU leaders will be making a big mistake if they postpone the summit, as Obama’s absence is an ideal opportunity to show they are beginning to stand on their own two (I mean, fifty-four) feet after a half-century of supine dependence on Washington (De Gaulle notwithstanding). Americans have always been ambivalent about European unity (we like Europe to act as one, provided it is doing exactly what we want), but Europe and America would all be better off if Europe were a) more capable of shaping world events on its own; b) better equipped to give the United States sound strategic advice, even if it sometimes differed from Washington’s current whims, and c) less reliant on residual U.S. protection

After I found the Der Spiegel article today, describing the migraine that Greece and its money woes are giving to the European Union leadership (previous post), I scanned more headlines at the newspaper’s website. I found this from earlier this week: “European Union Sees Threats to the Euro.”

The brief article paints an ominous future ahead this year for the Euro monetary system, predicting that the currency may continue its recent several-weeks slide downward against the dollar:

“…the euro stands at $1.41 and many analysts are now warning that it may be in for a long slide. Some are even concerned that the cohesiveness of the euro zone might be endangered altogether — with the European Union itself chief among the worry-warts.”

If I’d read this in a USA newspaper rather than an European one, I might take it with a grain or two of salt. Why? Because, having now inhabited both the two continents, and regularly followed the major news media of each, I’ve come to expect a predictable dose of media bias when one is reporting on the other. It’s been quite a slap to my rosy idealism of all fair and balanced, etc.

But this Euro gloom and doom is coming from a major German newspaper. Not to mention that the article is sourcing a recent report from the internal EU agency, Directorate General for Economic and Financial Affairs. So these baleful sounds have substance. Such as:

The report… went on to voice concern that differences among euro zone countries “jeopardize confidence in the euro and threatens the cohesiveness of the euro area.”

Financial turmoil in Greece is of particular concern, with the country running a public sector deficit of 12.7 percent in 2009, more than four times higher than the three percent target called for by European Union rules. But there are several other problem children within the 16-member euro zone, including Spain, Ireland and Portugal, with Italy also raising eyebrows.

Worrisome, definitely.

Greece is bankrupt, Nouriel Roubini said today, speaking during an interview at the World Economic Forum in Davos (“Roubini At Davos: Greece Is Obviously Bankrupt” Jan 27, 2010). He advised the country to ask China to rescue it, and added that the European Union may also be forced to help in order to hold off a threat to the Euro monetary system itself.

None of this is news to the leaders of the European Union who have been stewing over what to do about an economically wobbling Greece for some time, according to an analysis in Der Spiegel last month, “Should the EU Save Athens from Bankruptcy?” (by Wolfgang Reuter, Dec 14, 2009).

Reuter explores how the situation presents the EU and its leaders with an urgent new governance question.  He reports in detail on some of the high-level discussions. Central theme:

“…Everyone was asking the same question: What happens when a country, even a member of the European monetary Union, goes bankrupt? Can the EU allow this?…”

Another very interesting money pot to watch boil, as if there aren’t enough already.