Britannia Radio

05 November 2011 8:54 AM

Euzozone pressure squeezes out some truth at last. Lots more to come.

As we sing on the country and western circuit, 'Pressure makes diamonds.'

This

week's pressure in the eurozone has produced some gems:

First, Silvio Berlusconi has finally said out loud what every rational observer has known for years: that Italy has got worse since the introduction of the single currency -- 'Italians have been impoverished since the introduction of the euro.'

Second, the leaders of both Germany and France have had to admit out loud more of the obvious, that is, that it is possible some countries may leave the euro.

Of course, the entire euro-elite hasn't quite got there yet. Mario Draghi, the new head of the ECB, was asked at a news conference on Thursday about the chances of a country leaving the euro. All he would say was: 'It is not in the treaties.'

Yes, well, it's not, but then neither are bailouts or the ECB interfering in the fiscal policy of eurozone member states, but that's been no barrier to either. So it is Jesuitical (satisfyingly Jesuitical, I must say, because I enjoy seeing the anti-nation-state types in the EU actually living up to national stereotypes) of Mr Draghi to reply by simply saying 'It is not in the treaties.' Its not, but that doesn't mean it can't happen.

Perhaps one other reason Mr Draghi won't give a straight answer is that he is Italian, and one of the eurozone member states that may be forced out of the euro is...Italy. Which would mean Mr Draghi would be out of his fat-cat job before his term is up in 2019.

Third, the pressure on the Greek government to cancel its democratic referendum is yet more proof -- if it were still needed -- that what Brussels most abhors is giving the people any chance to resist the plans the euro-elite have for centralising economic and fiscal (and soon, legal, but that is for another post) power in the EU institutions, and stripping them from the national parliaments, over which voters still have (occasional) control.

The EU: how it destroys morals as well as countries

We know that both Nicholas Sarkozy and Klaus Regling, head of the eurozone's Luxembourg-based bail-out fund, have been kowtowing to the Chinese, begging them to hand over billions to the latest eurozone bail-out attempt. For the moment, it won't happen. The Chinese say they will not give any money until this latest spasm in the eurozone debt crisis clears and some kind of stability is restored. (That'll be a wait, then.)

But the shame of the euro-grovelling to the one-party Chinese communist state remains -- and has intensified today, as news of the latest Tibetan suicide by self-immolation reaches the Western news agencies.

AFP reports that Qiu Xiang, a 35-year-old Tibetan Buddhist nun died today after setting herself on fire in southwest China. This was the 11th such incident involving Tibetan monks and nuns.

According to the International Campaign for Tibet, her death was a call for religious freedom and the return of the Dalai Lama, the spiritual leader of Tibet who has been exiled and vilified by the Chinese communist government since 1959.

In recent months eleven, eleven, Buddhist monks and nuns have found the courage to douse themselves in petrol and set themselves alight: self-destruction is the only weapon they have. Meanwhile, the EU elite ignore these deaths and go on grovelling to the Chinese who have driven the Tibetans to this.

Yet once attitudes to such courage were much different in Europe. In 1969, Jan Palach, a young Czech student, went to Wenceslas Square in Prague, poured petrol over himself and set himself alight. It was a protest at the Soviet communist invasion of his country that had suppressed the attempts by the Czech government to bring freedom to their country, and a cry to his fellow Czechs to resist.

Palach's death rocked the Western World. Below is a picture of a cross marking the spot where he carried out his self-immolation.

Through the years of communist suppression, Palach's name was never forgotten.

One could trace the 1989 Velvet Revolution which finally freed Czechoslovakia from communist rule back to that day when Palach found the sort of courage the rest of us will never find: because we, most of us, are not like Palach, we are not heroes.

But let us not be Quislings, either. What the eurozone is doing, when it seeks to collaborate with China in return for money, is showing how morals across the European continent have degenerated since 1969. When Tibetans plead for freedom from communist oppression, just as Palach once did, now the so-called leaders of Europe look the other way and pretend they don't see what is happening in China.

You probably know this line ascribed to the Emperor Vespasian: 'Pecunia non olet.' Money has no smell. It has come to mean that money itself is not tainted by its origins.

But I say it is. And I say the moment the Chinese touch the euro, it will smell of the burning flesh of heroes.

Should Greece pay its debts? 'Not every creditor deserves a break'

I've spent the last 48 hours thinking George Papandreou was the smartest Greek since that

Greek soldier called Sinon (and, yes, I'm willing to claim him as family) talked the Trojans into hauling the wooden horse inside the city walls.

Now I have to wonder if the Greek prime minister's genius idea actually came from an Indian-born, American-educated member of the House of Lords -- Prof Meghnad Desai, professor emeritus at LSE and chairman of the advisory board of the Official Monetary and Financial Institutions Forum (OMFIF).

The OMFIF has started re-circulating a paper Baron Desai wrote last July, 'What Greece could learn from Iceland -- concentrate creditors' minds: hold a referendum.'

Here is the gist of what Desai wrote earlier this year (that's him pictured below):

'As the euro drama slides into melodrama and then possibly into farce, Greece should learn from the example of Iceland, which went bankrupt two years ago. Like Ireland, Iceland ran into problems with its private banks which built up excessive liabilities by offering an above-market interest rate on deposits and then crashed when Lehman Brothers went down. The debt - which were the deposits taken by the banks operating abroad - was left with the Icelandic Treasury.'

'But in a referendum the Icelanders voted to renege on the debt and forced the creditor countries - mainly the UK and the Netherlands - to renegotiate.'

'Not being in the euro, Iceland could let its currency depreciate –a painful exercise, but one that lets individual citizens make their own adjustments to inflation. Now two years on, Iceland is on track for annual growth above 2% this year and next after a cumulative 10% fall in output in 2009 and 2010.'

'Iceland has returned to the international capital markets and can borrow at 5% - a rate the Greeks can only dream of.'

'There is a lesson for the euro area here. Not every creditor deserves a break. They should have known it was risky to lend to Greece. Let them bear the cost.'

'I believe Greece should hold a referendum on whether its citizens are willing to pay back the debt. That should concentrate minds - both in Greece and among the creditor countries – and might make a contribution to resolving the issue. A referendum would certainly be better than the other options that are feared – a revolution or even a military coup...'

That was clearly such a good idea from Desai that I'd be willing to claim him as family, too, except he's a Marx-ish left-winger, so clearly his DNA and mine have never crossed in the gene pool.

Greeks: the ECB and whose army are going to keep them in the euro?

You've all seen the headlines on the decision by the Greek prime minister to call a referendum on the EU/IMF bailout. And I suspect some of you might have already spotted the threat that will be made by Brussels: that if the Greeks vote No, take back control of their own budgets and spending and go for default, they will be forced to leave the euro.

'Threat?' Sounds to me more like an inducement to vote No, but plenty of EU-loving Greek commentators are already calling it a threat.

But here is one point the economic bullies from Brussels and their acolytes among the Brussels commentariat won't be in a hurry to point out to the Greek voters they are trying to frighten: according to official eurozone policy, it is a legal impossibility for a member of the single currency either to quit or to be forced out.

I have on my desk right now one of a series of legal working papers published by the European Central Bank, called 'Withdrawal and expulsion from the EU and EMU [economic and monetary union]' published in December 2009. It was written by -- how perfect -- Phoebus Athanassiou, a Greek billed as 'legal counsel, ECB.'

His conclusion is that it is impossible for a member to leave the currency. Here is just some of his legal argument -- dry stuff, but this is the official thinking:

'Unlike the Charter of the United Nations, Article 6 of which expressly provides for the possibility of a UN member being expelled for persistently infringing the principles of the Charter, there is no treaty provision at present for a Member State to be expelled from the EU or EMU. [at which point Athanassiou adds a footnote: 'This is hardly surprising, considering that the creation of the acquis' -- the body of EU law -- 'has been cumulative, with the institutional "ratchet effect" denying the possibility of reversals of course (and, implicitly, of withdrawals.)]'

'The closest that Community law comes to recognising a right of expulsion is Article 7(2) and (3) TEU [note from me: look, chaps, I read this stuff so you don't have to], allowing the Council to temporarily suspend some of a Member State's rights (including voting rights in the Council) for a "serious and persistent breach by a Member State of the principles mentioned in Article 6(1) of the Treaty...'

'If a right to expel Member States from the EU or EMU does not exist, could such a right be asserted or should it be introduced? Several considerations are relevant here, all of which militate against the assertion, by way of interpretation, or otherwise, of a collective right of expulsion from the EU or EMU.'

What this means is that the EU, in trying to construct treaties that would bind future parliaments and governments in member states from ever trying to escape from the euro, have in fact constructed treaties that do no allow the eurozone powers to expel an unwanted member.

Of course, the Greeks can leave the euro if they want to. All they have to do is say 'We're out of here,' sandbag their windows and just do it. Because the ECB and whose army, exactly, are going to stop them?