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The little PIIGS, the house of BRICS and the big bad wolf – Part II: the EU’s break-up is not inevitable, but…

The little PIIGS, the house of BRICS and the big bad wolf – Part II: the EU’s break-up is not inevitable, but…


Either we dissolve Europe or we press ahead

Romano Prodi, BBC Radio 5 live, 14 May 2015

Russia and the European Union agreed on forming a common economic space back in 2003. The plan provided for coordinating economic regulation without creating any supranational institutions. Vladimir Putin elaborated on the idea in his article published in the German Sueddeutsche Zeitung in November 2010, proposing a 5-point agenda for joint development. It included establishing a common free trade area, administering a joint industrial upgrade, setting up a common energy industry, unifying education standards and R&D frameworks, and introducing visa-free travel between Russia and the EU… Vladimir Putin proposed forging a common economic space and a pan-continental market stretching “from Lisbon to Vladivostok.” German Chancellor Angela Merkel spoke in favor of the Russian prime minister’s core initiative… A Eurasian Union essentially spells survival for the grand European project, and one on mutually beneficial terms.

Igor Panarin, Eurasian Union a survival option for Europe, RT, 30 January 2012

Either the Euro or Dollar goes. Greece was literally the Achilles Heel of the Euro and Washington and Wall Street hit it with a savagery not seen since they ran the Asia Crisis and Russian sovereign default crises in 1997-1998. When Greece imploded in late 2009 the dollar was the main currency under threat of abandonment… The response of the US Treasury Financial Warfare Division, the Federal Reserve and of Wall Street and the rating agencies was to launch a counter attack on the euro to “save” the dollar… The USA credit rating agencies, led by Standard & Poors and Moody’s, took the unprecedented step of downgrading Greek government debt three notches in one day in April 2010 just as EU Governments had agreed a Greek rescue plan… A cabal of New York hedge fund managers led by George Soros met to coordinate Geek speculative attacks, worsening the crisis and the costs to Greek taxpayers. What did Greece get for that new debt? A bloody austerity dictate from the EU, led by German Finance Minister Wolfgang Schäuble whose austerity demands made Heinrich Brüning in 1931 look like an angel of mercy…What no one in Berlin, Paris or Rome dare to address is the reality that the European Union countries are dying. Demographically, economically, socially they are in a death agony downward spiral. Either they make a definitive break with the bankrupt Washington and NATO Atlantic dollar world and throw their lot fully behind making the Eurasian Economic Union led by Russia into a viable new region of economic prosperity, along with China and the New Silk Road high-speed rail projects criss-crossing Eurasia, or in four or five years at best the EU will be choking in its own debt and economic depression as is Greece today.

F. William Engdahl, Will Greece join the Eurasian Union? New Eastern Outlook, 16 April 2015

A compromise will be achieved and there will be no Grexit.

The euro will survive because this continental currency was designed by Western Europeans to provide an alternative to the US dollar and to become a catalyst of transition towards a pan-Eurasian free trade area stretching from the Atlantic to the Pacific and, eventually, from Glasgow to Singapore.
Non-Western economies (BRICS-SCO) need the euro for a smooth transition towards a de-dollarized multi-currency system, with multiple centres of gravity.
A crumbling Eurozone would revive the dying US dollar and slow down, or even halt, the evolution of human civilization:

In 2013, Deutsche Bahn AG (German Rail) began preparing a third route between Hamburg and Zhengzhou that has now cut travel time to just 15 days, while Kazakh Rail opened a Chongqing-Duisburg link with similar times. In October 2014, China announced plans for the construction of the world’s longest high-speed rail line at a cost of $230 billion. According to plans, trains will traverse the 4,300 miles between Beijing and Moscow in just two days… The result will soon be an integrated inland energy infrastructure, including Russia’s own vast network of pipelines, extending across the whole of Eurasia, from the Atlantic to the South China Sea.

Alfred McCoy, Washington’s Great Game and Why It’s Failing, TomDispatch, 7 June 2015

Disaster capitalism comes to Europe

Titles like “Time bomb for the Euro” (Der Spiegel, 7 December 2009), “Shockwave from Athens” (Die Welt, 16 January 2010), “The next tsunami” (Manager magazine, 1 February 2010), “Prayers on the deathbed” (Der Spiegel, 15 March 2010), or “Looming default. Economists give up on Greece” (Spiegel Online, 28 April 2010) are just a few examples for the use of sensational language in press reports during the observation period. The wording used by the media clearly created a psychology of looming collapse. Even if investors did not believe in a Greek default at first, they were much more likely to do so after hearing or reading the news on Greece.

Sonja Juko, Have the Media Made the Greek Crisis Worse? An Inquiry into the Credit Crisis of the State, Max Planck Society, September 2010

We must ask ourselves: who, in a sane mind, would ever advocate an austerity regime depressing the Greek economy and thus pushing for a  default, a total loss for non-Greek taxpayers and a humanitarian disaster? What would be the point? To protect banks making odious loans? To enslave a population by saddling it with a yoke of debt?

Currently, as a result of several years of financial warfare, one out of every three Greeks lives at or below the poverty line.

The basic idea guiding the EU and EZ decision-making process appears to be in line with the Washington Consensus: brutalizing a population with unemployment, increasing job insecurity and low wages make a society more resilient to shocks and more attractive to foreign investors (A Fate Worse than Debt: The World Financial Crisis and the Poor; Disaster capitalism: how to make money out of misery; Confessions of an Economic Hitman).

No sane or honest person would claim such a thing. It is obvious that people are more resilient when they are not hopeless, that is, when they live in dignity and can make a meaningful contribution to their communities.

This is the message that the Greek negotiators are trying to get across, along with several Nobel laureates in Economics, but it is falling on deaf ears. Martin Schultz, Jeroen Dijsselbloem, Wolfgang Schäuble, Jean-Claude Juncker (a veritable Shakespearean character), faced with resistance in their effort to collect their pound of flesh by financial waterboarding, express frustration, irritation, exasperation, anger, etc. at the idea that someone might object to austerity with no chance of recovery.

Their attitude proves that they are not interested in a cooperative, functioning monetary union in which Greece is helped to grow in order to repay its debts, nor are they ready to admit that “For every irresponsible borrower….there was an irresponsible lender” (Yanis Varoufakis).

The foolish and corrupt attempt to save banks that should have gone bankrupt for their recklessness (How two banksters led Europe to ruin, 12 June 2011) and the immense difficulties faced by any left-wing government aspiring to respect the electoral mandate are sounding the death-knell of the Eurozone in its present format.

A closer economic, monetary, and political union has never been so far removed from the realm of the possible, given that not a single European government has shown the slightest remorse and feeling of sympathy for the Greeks. In the minds of many Europeans, merciless neoliberal austerism and European institutions have become one and the same thing and one wonders how many are permanently disillusioned by the EU “experiment”.

Holding the Eurozone and the European Union together while destroying economies and peddling stereotypes and bigotry is no easy task.

A financial Thermopylae

If you cross that line you will destroy a great empire.

The Pythia

What could be the purpose of these unrelenting scare tactics? Constraining creative thoughts and deeds?
The Greek government does not appear to have been particularly affected by them and it is currently seeking new diplomatic affiliations and international sponsors precisely among the powers challenging U.S. hegemony.

There is a geopolitical side to a Grexit scenario that must not be overlooked (Schmidt: Putin should be at G7 summit, The Local, 1 June 2015):

A new Europe is still taking shape, and if that new Europe is to remain geopolitically a part of the “Euro-Atlantic” space, the expansion of NATO is essential…If a choice has to be made between a larger Euro-Atlantic system and a better relationship with Russia, the former has to rank incomparably higher to America…The consolidation of a sovereign Ukraine, which in the meantime redefines itself as a Central European state and engages in closer integration with Central Europe, is a critically important component of such a policy.

Zbigniew Brzezinski, The Grand Chessboard: American Primacy And Its Geostrategic Imperatives

Many of you may be wondering why I am here today and not in Brussels negotiating. However, I am here, exactly because I think that a country that wants to examine and explore possibilities for succeeding, must have a multidimensional policy and engage with countries that are currently playing a key role in global economic developments. […] While fully respecting our commitments as such, we will also actively seek to become a bridge of cooperation both in our region and beyond, with our traditional friends such as Russia, but also with new global and regional organizations. Of course, as you are all undoubtedly aware, we are currently in the middle of a storm. But we are a seafaring people, well-versed in weathering storms and unafraid of sailing in large seas, in new seas, in order to reach new and more secure ports…The economic circumstances that resulted from the global crisis’ eruption in 2008 have led to a very different world. In Europe, we had long been under the illusion that we were the center of the world, taking into consideration only those developments occurring just beyond the borders of our neighborhood to the other side of the Atlantic. The world’s economic center of gravity, however, has shifted. New emerging powers are playing an increasingly important role–economically and geopolitically. International relations are acquiring an increasingly multipolar nature. Moreover, the Eurasian Union–this relatively new project for regional economic integration–is potentially another source of new wealth production and economic power…For the old financial center, particularly for Europe and the Western world, the challenge will be whether it chooses to react positively to new challenges by building bridges of cooperation with the emerging world, or whether it will remain committed to old doctrines, raising new walls of geopolitical conflicts…The EU, of which Greece is a member, must rediscover its true course by returning to its founding statutory principles and declarations: Solidarity, democracy, social justice. This will be impossible, though, if the EU persists with austerity policies and the disruption of social cohesion, which only serve to further the recession. Let us not fool ourselves: the so-called Greek problem is not a Greek problem. It is a European problem. The problem is not Greece. The problem is the Eurozone, and its very structure. And the question remains, whether the EU will allow room for growth, social cohesion and prosperity. Whether it will allow room for political solidarity instead of policies imposing dead ends and failed projects. […] The emerging new multipolar world will truly be innovative and pioneering if it can free itself of the root problems fueling the global crisis. But this cannot occur–it has never occurred in history–without bold decisions. We cannot move forward in this new world while still carrying the burdens of our past mistakes. Otherwise, we will be doomed to repeat them and we will continue to fail–whereas the challenge for us is to change in order to succeed. To face new challenges and overcome them.

Alexis Tsipras’ statement at the Economic Forum in St. Petersburg, 18 June 2015

Judging from the speed with which Mario Draghi has stabbed Tsipras in the back, we can surmise that the plan is to weaken the Syriza government in order to replace it with a more submissive one (a “national consensus government”), ruling out all options for a debt restructuring. This strategy will backfire, because peoples under siege by a tyrant and threatened with slavery generally develop a furious resolve to resist and prevail, as they have nothing to lose anymore: stand and fight, or die on your knees.

Indeed, Syriza has never been more popular, as the coalition government is successfully confronting the concerted attacks by supposedly EU partners (Greek central govt surplus exceeds target after spending cuts, Reuters, 13 May 2015) and has drawn a line in the sand: welfare and commons (e.g. gas rights in the Aegean) will always come first.

The only remaining option for inhumanitarians (sic!) who are so keen on perverting history and subverting the future, with no concern whatsoever for honour, moral discernment, sensibility and truth, would be a Seven Days in May scenario to prevent a futureRusso-Chinese rescue package, the lifting of anti-Russian sanctions and the international realignment of Greece, Cyprus and possibly Turkey, leading to a free-trade, visa-free zone from Lisbon to Vladivostok.

The Greek government enjoys such a vast popularity because Greeks were hopeless and hope is what sustains families and communities in hard times (Yanis Varoufakis, A Speech of Hope for Greece, Project Syndicate, 4 June 2015).

Hope is what a tyrant needs to crush to retain his power. A hopeful people is unconquerable.

We are in the endgame and neoliberal analysts and commentators are busy persuading the public that a Greek capitulation is a matter of time. Greece, however, is not Cyprus and it is not internationally isolated.

The Greek government is already virtually cut off from the markets and the “bank run” has already occurred over an extended period of time.
A default within the Eurozone might not be necessary, and yet it would not have dramatic consequences if Greece could lean on China and Russia and issue Tax Credit Certificates (Bossone & Cattaneo, Greece Still Has a Fighting Chance, EconoMonitor, 18 May 2015).

But then again, who knows how bad the financial fallout of the next derivatives meltdown will be for North America and Western Europe, now that, for instance, the survival of 1 million Britons depends on food banks?

Across-the-board resets

Here I see you suitors plotting your reckless work,

carving away at the wealth, affronting the loyal wife

of a man who won’t be gone from kin and country long.

I say he’s right at hand—and may some power save you,

spirit you home before you meet him face-to-face

the moment he returns to native ground!

Once under his own roof, he and your friends,

believe you me, won’t part till blood has flowed…

Amphinomus made his way back through the hall,

heart sick with anguish, shaking his head,

fraught with grave forebodings …

Homer, the Odyssey

The “War on Terror” and the “wars for democracy” have been used to defend the status of the U.S. dollar as a reserve currency (The Looting of Asia. Review of Gold Warriors: America’s Secret Recovery of Yamashita’s Gold, London Review of Books, 20 November 2003; Troops Find 2,000 Gold Bars, ABC News, 23 May 2006; Libya holding huge gold reserves IMF data shows, BBC, 22 March 2011; The War on Mali. What you Should Know: An Eldorado of Uranium, Gold, Petroleum, Strategic Minerals …, Global Research, 15 January 2013; The Latest Heist: US Quietly Snatches the Ukraine’s Gold Reserves, 21st Century Wire, 21 march 2014).

A different defence strategy has involved the “imposition” of trade agreements favouring US based multinational corporations (The Trans-Pacific Partnership clause everyone should oppose, Washington Post, 25 February 2015).

The easiest way to stop U.S. military adventurism is to restore gold and free the world from having to use a militarized U.S. Treasury-bill standard as their monetary base…Russia, China and other countries should develop an alternative monetary and payments system to the U.S. dollar, a financial system to replace U.S. banks, and ultimately their own bank clearing through an alternative to SWIFT. If they succeed in this, U.S. neoconservatives will have overplayed their hand – and ironically will have become a force for world peace, by uniting the rest of the world’s economies, trade, financial and even defensive military systems to protect themselves from the U.S. threat. If they succeed, this threat will recede – but the U.S. withdrawal probably will not be a pretty sight, nor will the collapse of its financial system. The rest of the world will have to protect itself from the backwash, blaming foreigners.

Michael Hudson, The Saker interviews Michael Hudson 10 June 2015

Now the dollar system is unravelling (Germany, Netherlands, Austria: who will repatriate their gold next?; Russia Gets Very Serious on De-dollarizing, New Eastern Outlook, 6 June 2015), the US economy will be taken down by the shale oil junk bond market and/or the burst of the Chinese housing bubble and, eventually, the United States will have to follow the lead of the rest of the world, which will drop U.S. treasury bonds (The little PIIGS, the house of BRICS and the big bad wolf – Part I: war is not inevitable, but…FuturAbles, 27 May 2015), causing a tremendous loss of wealth in the United States and the end of their bribing, bullying and bombing policies.

Several Western countries will recur to selective defaults and a large share of the world sovereign debt will be repudiated as “odious”, inasmuch as it was incurred under coercion or by betraying the citizens’ and taxpayers’ trust (Creditocracy or democracy? Al Jazeera, 10 May 2014).

Those nations that will jump ships at the right time will be saved, the others will sink:

Of course, we have discussed the prospects of realization of the large infrastructure project which we call Turkish Stream — a key project for transporting Russian gas to the Balkans, maybe to Italy, the countries of Central Europe. The new route will provide for the Europeans’ needs in fuel, and would allow Greece to become one of the main power distribution centers on the continent; it could help attract significant investments into the Greek economy.

Vladimir Putin about his meeting with Alexis Tsipras on April 8, 2015

This is, for all intent and purposes, the resurrection of De Gaulle’s plan for a European Confederation extending from Lisbon to the Urals and beyond (Merkel and Gabriel offer Russia free-trade agreement, Deutsche Welle, 23 January 2015; ‘From Lisbon to Vladivostok’: Putin Envisions a Russia-EU Free Trade Zone, Spiegel, 25 November 2010; L’Europe de l’Atlantique à l’Oural, Espoir n°18, 1977), which could hopefully clarify the status of Transnistria, Abkhazia, South Ossetia, Nagorny Karabakh and Novorossiya.

We need to engage in dialogue (I spoke about this many times and heard agreement from many of our western partners, at least in Europe) on the need to create a common space for economic and humanitarian cooperation stretching all the way from the Atlantic to the Pacific Ocean.

Vladimir Putin, The World Order: New Rules or a Game without Rules, Sochi, 24 October 2014


About stefano fait

Social forecaster/horizon scanner, entrepreneur, Arts and Culture reporter for "Trentino" & "Alto Adige", social media & community manager, professional translator, editor-in-chief of futurables.com, peer reviewer and contributor for Routledge, Palgrave Macmillan, University of British Columbia Press, IGI Global, Infobase Publishing, M.E. Sharpe, Congressional Quarterly Press, Greenwood Press. Laurea in Political Science – University of Bologna (2000). Ph.D. in Social Anthropology – University of St. Andrews (2004). Co-author of “Contro i miti etnici. Alla ricerca di un Alto Adige diverso” (2010)

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