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Reichenbach: you aren't too smart, are you? I like that in a German

Here's a follow up to my post of November 17th, in which I wrote about the the crassness of the EU in sending a German to be the head of the occupation force -- or what the European Commission calls its 'task force' -- in Greece.

The German is a eurocrat called Horst Reichenbach, sent to run an EU team that has taken over control of the Greek economy and public administration. Today in the Financial Times Reichenbach admits he was 'surprised at the degree to which being German was a factor' in a situation that was 'already very difficult,' and had inflamed local sensitivities.

No kidding, Sherlock?

Reichenbach says his hostile reception in Greece was 'counterintuitive' -- which seems to be the fancy word he has chosen instead of saying 'I was too dense to see it coming' -- because he considered himself 'more European than German.' Before arriving to take over in Athens, he reckoned his 30 years working for the commission in Brussels washed a lot of the German out of him and that now he was just 'European.'

Hardly, Herr Reichenbach. As I've written in this blog before, although eurocrats are trained never even to mention the name of their home country once they sign up to serve 'the treaties,' and 'Europe,' and never, ever to think of serving their own country's interests while they are doing the work of Barroso and Van Rompuy, the fiction never really works outside the Berlaymont headquarters.

Anybody called Horst Reichenbach -- and that picture above is some of Reichenbach's fellow countrymen the last time a German led an occupation force into Greece -- who really thinks it is his right to take control of the fate of another European country isn't just being German, he is living up to his national stereotype.

Which is something I find satisfying.

Italy: where the world's first virus state replicates its DNA

I've just come from a press conference with José Manuel Barroso,

president of the European Commission, and Mario Monti (that's him in the picture), the new unelected prime minister of Italy dropped into office last week by the Brussels cartel.

The conference was sick-making.

Of course, it was no surprise to find Monti here in Brussels, meeting Barroso, and meeting Herman Van Rompuy, the unelected president of the European Council. Both Barroso and Van Rompuy are members of the cartel that pulled off the coup in Rome and put Monti in office.

Tomorrow Monti is off to Strasbourg to meet his other 'electors,' Nicholas Sarkozy and Angela Merkel. Then he will go back to Rome where he will have a meeting with Olli Rehn, the commissioner-for-bail-outs.

I hope Monti has a big notebook, because he's going to be taking a lot of orders.

And so, watching Monti on the press room podium bask in Barroso's delighted and patronising smiles, I was feeling humiliated for the whole Italian people: surely he should be back in Italy, talking to members of parliament and to the Italian people, who have not voted him into office.

Instead he was standing as an acolyte to Barroso, and Barroso was making no secret of his delight at having someone 'committed to the European Union' as prime minister of Italy.

Barroso then assured Monti 'he has my full confidence.'

Which is when I almost had to reach under my seat for the sick bag. Barroso was acting like he was a gracious head of state expressing confidence in a new prime minister he had chosen. He was not like an unelected EU bureaucrat -- which is all that he is -- who ought to have no power at all in the politics of member states.

Trouble is, we now know Barroso and his unelected, untouchable lot have plenty of power in the politics of member states, otherwise the former European Commissioner Monti would not have been standing next to him on the podium as an unelected prime minister.

What we had here today in Brussels was a perfect example of the EU as the world's first virus state. The Brussels cartel doesn't need to put its officials into all the most powerful positions in the member states. No, all the cartel has to do is get the officials of member states to do its work for it.

It used to be the EU only managed to divert the civil service of member states to do its work. Now it had achieved so much more: the EU and its cartel have put their own ex-eurocrats in as prime ministers of Greece and Italy.

In Britain, Nick Clegg, a former commission eurocrat, and former euro-funded think tank employee, and former member of the European Parliament, has control of David Cameron over EU policy.

A virus: first it finds a weak host cell, then it injects its DNA and takes control. The contagion is underway.

Not like the old days: who cares about the EU budget now?

At the risk of sounding like some sort of Brussels version of a Chelsea Pensioner, I can remember when the EU budget used to be a big story....

But those days are gone. Of course they are. Who cares about the EU taking a few billion extra when the EU is busy destroying entire economies, entire countries, an entire continent -- maybe two continents -- of banking and a generation of workers?

So it was yesterday, the might-as-well-be-last day of the deadline period (who wants to come back on Monday? No one) for representatives of the member states, the commission and the European parliament to seal themselves in a room at the European Council building and reach an agreement on the 2012 budget.

If you're interested, the headline figure is €129.1bn (£110bn), an increase of 2.02 percent, with disputes probably still going to continue on over an additional figure of between €200bn €550bn, and...oh, who cares?

Certainly not many members of the press. We all knew negotiations were going to go on late. That is the witless tradition about these things. But by ten o'clock last night at the council press centre, there were perhaps seven reporters hanging on to wait for the official result and (we hoped) press conference.

By midnight, there were just five of us left. When the word came down at 12.40 a.m. that it would be another hour at least before we'd have the white smoke, I showed my lack of moral fibre and went home.

So then, as in the Agatha Christie mystery story, there were four. Out of an EU press corps of maybe 900. Some of us can remember when the EU budget was a big story.....

17 November 2011 2:44 PM

Greece: the EU's Colonial Administrator gives his report

This morning the European Commission presented the first report of its Task Force for Greece. (Embarrassing, isn't it, how these over-protected low-testosterone eurocrats like to dress up their committees with military-sounding names?)

The 'task force' was set up by commission president Barroso in July. It claims to be offering 'technical assistance' to the Greeks to help them begin, as today's report puts it, 'a programme of profound structural reform and work towards a more efficient public administration.'

In other words, it is a cadre of eurocrats which the occupying powers have put in place in Athens to run Greece, and to over-ride the powers of the native bureaucrats -- not, of course, that the eurocrats see it that way. The official line of the commission is that the task force has not been forced on Greece. 'Absolutely not,' they insist, it was at the 'invitation' of the Greek government.

As proof of that, when the thing was launched in July, the commission insisted 'its [the task force's] creation and mandate were decided by the President of the Commission and the Greek Prime Minister.'

Ah, the Greek Prime Minister. That would have been Mr Papadreou. First he was 'invited' to ask for this Brussels colonial occupation as part of the bail-out, then he was toppled by Brussels when he announced he was going to offer the Greek people a vote on whether they really wanted this bail-out and its task force or not.

Here is what the task force is up to at the, ahem, invitation of the Greek government. Its members are now overseeing the administration of tax collection and public procurement. They also oversee judicial reform, national budget preparation, competition policy, privatisation, public health, and on it goes. In short, they are running the country.

But as the commission's euphemism has it, the task force's job is 'to identify, coordinate and provide technical advice to Greece.' Yes, technocrats running the government, technical advisors running the public administration. Greece used to be run by words beginning with demo, not techno.

In short, the coup is complete.

I could give you a few lines from the report that could interest you, but here is the one line I like best: 'In total, it is estimated that there are €60bn [£51.3bn] outstanding in upaid taxes. €30bn [£25.6] in uncollected tax revenues are the subject of court cases -- some of which have been running for over a decade.'

Most of the really enlightening stuff came after the presentation, and it was all off the record -- which is to say, it was the same two eurocrats standing on the podium in the press room facing the press but after the presentation of the report, the commission spokesmen, a Frenchman, hit a switch before questions started and a red light came on. That meant 'off the record.'

So I can't tell you what Horst Reichenbach, the head of the task force said in answer to

questions from journalists. But I did save that best bit until last, because, yes, the man that Brussels has sent to Greece to act as Chief Colonial Administrator is indeed a German named Horst Reichenbach. He is a former director-general of the European Commission and vice president of the European Bank for Resconstruction and Development.

But send a German named Horst Reichenbach?

It's bad enough Volker Kauder, parliamentary leader of Chancellor Merkel's CDU party, proclaimed yesterday that 'All of Europe is speaking German now.'

Add to that all those old wounds and furies that persist in Greece about the German invasion during the last war (or, if you listen to Angela Merkel and her talk of war as the alternative to her euro, merely the most recent war), and the man who is put in to run the new invasion of Greece is a German with a name that is half-bier keller and half-Sherlock- Holmes-meets-his-killer-in-Germany.

But here's the real killer. A Greek reporter had himself lined up to ask the first question. As he launched into his question, all one could here from Herr Reichenbach's podium was a scrabbling against his mic, as he tried to get hold of the ear-piece to listen to the simultaneous translation.

Because, yes, the man the commission has chosen as Colonial Administrator does not speak the language of the natives.

But then, why should he? It is the traditional job of any Colonial Administrator to ensure the natives are educated to speak his language. As Herr Kauder said: 'All of Europe is speaking German now.' And if not quite all, Herr Reichenbach is going to teach them.

Meanwhile, until the Greek natives do learn to speak German, why should he worry he can't understand a thing any of them says? It's not like they could vote him out of office or anything.

After an hour of Herr Reichenbach, I left the commission headquarters and ran into a Greek reporter-friend. I asked him why he missed the Greek briefing. 'Why should I go?' he replied. 'I don't care what they say. I just want to know if they are going to go on giving the money.'

Which was a reminder to me of why I am liking the Greek people more and more as this thing goes on: they don't want to know about commission task forces or ECB analysis.

Instead, they just riot, resist and take the money. Simple.

The Greeks have mastered philosophy as doggerel has it: 'As you go through life, let this be your goal: keep you eye upon the doughnut, and not upon the hole.'

That's about €130bn's worth of doughnut and counting...

The euro rampage won't stop at Rome: 'Spain is more at risk than Italy'

Italy and its debt disaster are pretty spectacular, so attention has been drawn away from the disaster that is Spain. Give it a few more days. The bond markets are going to take another look at the figures coming out of Madrid and widen their eurozone field of fire. (Yesterday Spanish spreads on ten year bonds were already at 4.2 percent.)

So far, the only reason Spain has not had to follow Greece, Portugal and Ireland into handing over control of its finance ministry to Brussels-appointed eurocrats is because its level of public sector net debt, relative to GDP, is still below that of Germany and the euro area average. (Meanwhile by the end of this year, Italy will have the second highest level of public sector net debt, relative to GDP, in the eurozone.)

However, according to a report out yesterday from the economist Jamie Dannhauser at Lombard Street Research, Spain, relative to Italy, faces a much bigger task in reducing its fiscal deficit and placing the debt stock on a declining path: 'Whereas the Italian budget should be in balance this year before interest payments are taking in account, the Spanish look like running a so-called "primary" deficit equal to around six percent of GDP. Official projections that it could get down to four and a half percent of GDP look wildly optimistic with Spain almost certainly back in recession.'

But here's what really sets Spain apart from Italy, and shows how dangerous Spanish investments now are: the vast scale of borrowing that took place within the privatesector before the crisis and the consequent asset price boom.

And that's not just the Spanish property market bubble.

According to Dannhauser's report, 'Spain's corporate borrowing binge makes Japan's in the early 1990s look fairly tame. Its ration of household debt to disposable income, although below Ireland's and the UK's, is similar to that in the US.'

'The ratio is only 50 percent in Italy, compared with 130 percent in Spain.'

'The loss of income from the financial crisis and the persistently lower rate of growth in the

future suggest the fundamental, or equilibrium, value of Spanish assets has been reduced significantly -- but the debt, largely provided by domestic banks, remains fixed in euro terms.'

But don't start thinking, 'this is private debt, not sovereign debt, it's not the same danger.' Wrong. The debt wonks among you may remember that it was Ireland's banks and the guarantee its (panicked, witless) government gave to bank debt in 2008 that drove Ireland into its disaster.

So remember this if you are looking for comfort in the fact that so much of Spain's debt is private, not sovereign: the Spanish government ultimately stands behind its banking system. So, 'potential losses on the latter's assets are therefore a massive contingent liability of the state.'

'It is the downward spiral between private debt, fiscal consolidation, low growth and banking solvency that really threatens countries in the periphery. Spain is more at risk than Italy.'

The euro: not so much a currency, more a plague.