Rattus Hellenicus….making it easy for Troika torpedoes
I was just on ITalkfm discussing with bright-bint radio jock Pippa Jones about today’s gold slump and global market sell-off. Pippa quite rightly pointed out that there didn’t seem to be any sense in the manipulation being tried on by the élites of various shapes and sizes across the world, as it would pauperise the consumers who are already struggling. I ended my slot by advising that when a rat is cornered, the last thing one should expect is rational behaviour.
The application of that rule to Greece at the moment supports the parallel admirably. Andrew Watt in Social Europe Journal has just posted a brilliant analysis of German austerity policies in ClubMed. This extract is suitably representative:
‘Jörg Asmussen is either an utter fool or a complete knave. And as ECB Director and before that deputy minister to a series of German finance ministers he has climbed the meritocratic pole. (By the way, he is also a member of the SPD.) It is not just that he supports contractionary fiscal policy and the weakening of labour market institutions in the teeth of an economic downturn. It is not just that he does so in mid-June 2013, after the catastrophic failure of said austerity policies have been revealed to even the most obtuse observer. It is not just that he, an appointed official, opposes the European Commission and the Council, which have hardly covered themselves in economic policy glory, but, just about to their credit, have belatedly recognised that they have been flogging a dead horse and have granted several countries extra time to achieve balanced state budgets.
No, what really makes you weep, what really destroys every vestige of confidence in European economic policymakers is that Asmussen does not even offer a serious argument for his recommendations. [He says:]
“The pressure to delay austerity and structural reform measures are not particularly helpful because they extend the timeframe for budgetary consolidation in some member states for an unjustifiably long period, and so reduce the pressure for reform.”‘
As Mr Watt avers, it is indeed deranged reasoning: “If we delay our policy which isn’t working, all we do is put off the moment when we must apply it – even though it isn’t working”.
But is it just dummkopf syndrome we’re dealing with here?
‘More than three quarters of Greece’s rescue aid has gone to banks and wealthy investors according to a study by the activist group Attac’ Suddeutsche Zeitung correctly reported three days ago: out of €207 billion dispensed by the Troika, €160 billion has ended up with lenders and investors. Which sort of looks more like carpet-bagging than reconstruction: rats looting the sinking ship.
“Political elites have not been trying to rescue the Greek population, but the finance sector,” Lisa Mittendrein, from the Attac’s Austrian operation, was quoted by the German newspaper as saying. “The widespread belief supported by European politicians that the various rescue packages for Greece have helped ordinary people in the country is no longer tenable,” she added.
Let’s face it, you don’t have to be Einstein to want your money out…..andscrew the citizens, right?,
But meanwhile, the Greek citzenry’s own cornered rats seemed so distracted by Samaras’s mad ERT moment, Troika envoys said they were leaving Athens for a “pause,” noting that “important progress” had been made in talks. The Prime Minister’s ERT closure decree is now officially illegal, the country’s supreme administrative court having on Monday ruled so….and ordered the government to restore the signals of the national broadcaster pending its restructuring. But I suspect that spin suggesting the Troikanauts buggered off because of the ERT distraction is drivel. The real problem is yet another potential deal-breaker on the table.
A Troika statement alleged that, “to allow completion of technical work, policy discussions will pause, but are expected to resume by the end of the month.” That mendaciously sparing statement omits to mention that the Troikanauts have demanded Greek officials come up with proposals to plug a projected funding gap for 2013 and 2014 of €2.1 billion. Yes, Mind the Gap: you thought it had gone away, but it hasn’t.
The truth is that the €2.1 billion Grand Greek Canyon is too wide for even a financial Evil Knievel to leap. Now in my 35 years of corporate life, aka accountancy bollocks, when things were going backwards, you could always rely on the Chief Accountant to start bringing things forward. And it’s obvious that this Time-travel approach to fiscal management is still with us: Greek pols are thus hoping that the next Troika bailout tranche will total €8.1 billion, in the shape of a disbursement to Athens of both the third and the fourth quarter 2013 tranches immediately.
By doing that, a major part of the funding gap will be covered. One is left wondering, naturally, WhyTF the Troika would do that. And the answer is, because not doing so would leave the eurozone neck-deep in doo-doo. Maybe the Greek Establishment is wising up to this poker game at last. Either way, that still leaves a buck-naked Fourth Quarter with which we must deal. Can, road, cliff etc etc etc.
You have to wonder, do you not, what on Earth the Troika, the Greek élite, the central bankers, and the bigger swinging-dick Hedge Funds hope to salvage from this exercise in torpedoing the Titanic. However, I just invented a new adage which suggests, “Never corner a rat on a sinking ship: all he wants to do is get off, and you’re in the way”.
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