For years this paper — a lone voice in the wilderness — has warned that the imposition of a one-size-fits-all currency on Europe’s disparate nations would eventually lead to rioting in the streets. And so, tragically, it has proved.
A lone voice? Yeah, right! The EU is a profoundly anti-democratic institution, says Heffer. And this is in the paper that supports Britain's continued membership of the EU?
COMMENT THREAD
A lone voice? Yeah, right! The EU is a profoundly anti-democratic institution, says Heffer. And this is in the paper that supports Britain's continued membership of the EU?
COMMENT THREAD
It has always been my contention that the EU's days become numbered when Germany accepts its role as a nation state … Angela Merkel … may well be the right person to initiate the process of Germany accepting its nationhood and, consequently, the EU disintegrating.
Your Freedom and Ours
COMMENT: "MERKEL EUROSCEPTIC" THREAD
Your Freedom and Ours
COMMENT: "MERKEL EUROSCEPTIC" THREAD
The Guardian seems to be picking up something not immediately evident from Ollie Rehn's statement yesterday. In elliptical fashion, the commissioner for economic and monetary affairs notes only that the vote in the Greek Parliament "is a crucial step forward towards the adoption of the second programme".
He goes on to say that he was confident that "the other conditions including for instance the identification of the concrete measures of €325 million will be completed by the next meeting of the Eurogroup", which would "then decide on the adoption of the programme".
Eurozone finance ministers are expected to meet in Brussels on Wednesday and had been preparing to endorse the rescue programme for Greece, but The Guardian is suggesting that this will not be the final step. The best that Greece can now hope for is an agreement "in principle". A definitive decision would be left to an EU "summit" on 1 March.
On top of that, the German parliament still has to approve the deal, and is not planning to debate it until 27 February.
However, The Guardian is not alone in its analysis. Similar intelligence is coming from the Wall Street Journal, which reported an early surge for the euro on the currency markets, with the single currency then steadily losing steam in New York trading as it became clear that Greece had "more hurdles to jump before receiving its bailout".
All of this points to a continuing reluctance to go through with the second bailout, as discussed hereand here in our earlier pieces. The "colleagues" and/or Germany are going through the motions of supporting Greece, but the drive has gone out of the programme.
Not least influencing opinion must be the decision of Greece to hold a general election in April, only shortly after the 20 March deadline when €14.4 billion in bonds come payable. No one can be certain that even if Papademos gives the assurance that the bailout conditions will be met, the incoming government will hold to them.
Thus, more and more, it looks as if Greece is being pushed towards the exit. Some are even suggesting that this has always been the intention, arguing that the bailout was offered as a token gesture in the expectation that the Greek economy would collapse before it was taken up.
Nevertheless, with no one willing to admit responsibility, it is difficult to determine who precisely is wielding the assassin's knife. My guess is that this remains a German initiative, perhaps explaining why Soros has taken against the chancellor, complaining that she is "leading Europe in the wrong direction".
On the other hand, the commission needs to keep the eurozone together, but is also having to nod to the realities, and acknowledge German power. It is not yet appropriate to cast Ollie Rehn in the role of a reluctant Brutus, although stranger things have happened.
Mixing metaphors outrageously, once senses here an element of tightrope walking, but that has more than enough perils without also having too many people trying to balance on the slender thread, each attempting to take different directions and speed. A gust of wind could bring them all down, and there isn't any obvious safety net.
At risk is the entire European "project" and the next part of the script hasn't yet been written.
COMMENT: "MERKEL EUROSCEPTIC" THREAD
Ambrose makes the point about the brutality of the terms imposed on Greece, as a condition for financial assistance, noting that when Germany needed assistance in 1953, the settlement was altogether much more gentle. Thus does he see the current action, inspired by Germany, as a "blunder" which perhaps former chancellor Konrad Adenauer would not have made.
However, looking it the situation another way, this really does reinforce the argument put up byMary Ellen Synon, discussed in our previous piece, that Germany is deliberately trying to force Greece out of the euro. But a stronger part of the Synon thesis is the grounds on which the Greek deal was refused, last week, the Greek government being told to go away and find another €325 million in cuts.
You have to ask yourself, says Synon, if €325m is so significant a sum that these euro-bosses would risk Greece going into uncontrolled default next month and crashing out of the euro – Greece has €14.5bn in debt repayments due on 20 March - rather than just wave the latest bailout loan through? No, it's not, she adds rhetorically.
In terms of any Western country’s finances, €325m is petty cash, she says. There are private individuals walking around the streets of most capital cities in the world who could write a personal cheque for €325m. The €325m is not a reason. It's an excuse.
That sum now comes into high profile as a number of commentators recall a piece in the Greek Sunday newspaper To Paron published in June last year. It was headlined "SCANDAL IN THE HOUSE: €500 million not collected from the Germans" (pictured above).
In fact, that money, going back to 2001, was unpaid. And in June it publicly emerged – as a result of questions from the 13-strong New Democracy – that the total of unpaid VAT has now grown to €500 million.
The liability for VAT was confirmed in 2009, on the basis of an opinion by the State Legal Council and, on 30 April 2010, the General Directorate of Taxation reiterated that there was " … no reason for issuing a new opinion", reaffirming that there was no exemption from paying VAT.
Having never paid VAT, Hochtief again tried to postpone the payment of VAT but the Administrative Court of Appeal ruled against them. The company finally paid after ten years a quarter of the VAT due for the years 2001, 2002 and 2003.
For that period, the total VAT due was assessed at around €150 million euros, on which basis, the debt is currently estimated at €500 million. This does not seem to include the €270 million for the VAT on construction costs and, on top of that, there will be fines for late payment.
MPs from the New Democracy party were, back in June, demanding that the criminal law be invoked, and measures taken to recover the €500-plus million. But, so far – even to this date – there has been no response from the Greek government.
However, the strong focus in the To Paron article was that the Germans owed this money, with the inference in some blogs that the issue could be thus resolved by Mrs Merkel. And that applies to an even greater extent to this week when, instead of dunning the Greek government for an extra €325 million, she could have gone knocking on the door of Hochtief.
And so we would like to leave the story but, as always, it is a little more complicated. As we now know, the airport was built and is run not by Hochtief but by AIA S.A. (Athens International Airport). Hochtief AG is only a 45 percent shareholder of AIA, in a consortium with ABB Calor Emag Schaltanlagen AG and Flughafen Athen-Spata Projektgesellschaft (FASP). The Greek state owns the other 55 percent.
Thus, it might appear that the Greek state owes itself at least €275 million from VAT collected from Athens airport revenues.
However, the irony does not stop there. Although To Paron made a big deal on 12 June of Hochtief being German-owned, on 18 June, Deutsche Welle reported that the Spanish construction group ACS had secured the majority stake in Hochtief, completing a nine-month-long takeover bid. It then held 50.16 percent of voting rights in the company.
Hochtief, incidentally, had posted losses of €169.5 million in the first quarter of 2011 and later, when it tried to sell of all its airport interests, these were valued at a mere €1.6 billion, only slightly more than three times the debt said to be owed by To Paron.
The point relevant to this post though is that, whatever the amount that is owed by Hochtief, it is a Spanish company now, with Spain itself being one of the PIIGS, alongside Greece. Merkel is not in the frame, not that she ever was.
Nevertheless, the Synon point does stand. To threaten to pull the plug on Greece for a "mere" €325 million – less than a single VAT debt from its international airport – is bizarre. And that says there is a lot more going on than meets the eye. There are other agendas at work.
COMMENT: "MERKEL EUROSCEPTIC" THREAD
Mary Ellen Synon thinks that Merkel is deliberately trying to force Greece out of the eurozone – with Portugal and Ireland to follow.
This actually makes sense. Furthermore, it reflects not strength, but the weakness of an electorally-challenged chancellor, desperately trying to cling on to power at home. But it goes far deeper than that. In my mind, she is trying to reconcile the now-traditional Euro-centric stance of her nation with the phenomenal domestic stresses created by Germany's membership of the European Union, and all that goes with it.
These now have her people objecting to their wealth being squandered on basket-case economies yet, within the post-war paradigm, Germany is only allowed to exercise its power within the context of the European communities. Her military and economic might are constrained (mainly) by France and the other member states, within the matrix of the European Union. That is the primary purpose of the EU.
Still burdened by national "war guilt", Merkel cannot break out overtly. She has to be seen as a "good European". She must be seen to be supporting the euro and, more generally, the European Union. But the EU has become a prison. To develop further, Germany must break out its destructive embrace. And this is what we are seeing. It being done by creating the conditions for the destruction the single currency, or a major re-alignment, without Merkel leaving her fingerprints at the scene.
Such a "game plan" presents a contrast with the perceived wisdom. In this scenario, other countries leave of their own volition, or are forced out by the "market" or other extraneous pressures. It eventually leaves an independent Germany (or a Greater Germany grouping) free to follow its preferred domestic policies, without having been seen to be responsible for the break-up of the European construct.
Merkel, therefore, is the great eurosceptic. It will not be Cameron's Britain that will bring down the European Union, but Germany, escaping its shackles and redefining the post-war settlement. That is the game being played. Germany wants "out", and the rest of Europe is trying to keep her in.
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