The Greek euro-exit strategy meeting DID take place in Luxembourg
Der Spiegel’s story about a crisis meeting between Greece and Brussels in Luxembourg was officially accepted by German Finance chief Steffen Seibert last night. Despite strenuous denials from both The German and Luxembourg governments yesterday, The Slog exclusively confirmed the truth of the story yesterday morning.
Herr Siebert told Der Spiegel, “Denying the existence of a meeting which is taking place makes little sense”. Rather well put on the whole, and in stark contrast to his spokesman, who yesterday dismissed the meeting as “a fantasy”. One feels he might be seeking alternative employment some time quite soon.
Martin Schulz, head of the Social Democrat block in the European Parliament, told Der Spiegel, following Siebert’s confession, “those who organised the meeting [on Friday evening] managed to create quite a disaster. The way it was handled is another indicator for the fact that the euro zone is primarily suffering from political mismanagement.” Also hiring half of the most expensive hotel in Luxembourg didn’t help; but then, eurocrats do not know any other way to behave.
Staying on the theme of mismanagement, it will be late June before the EU and the IMF next examine Athens’ progress. “Then we will evaluate those results,” Martin Kotthaus, a spokesperson for German Finance Minister Wolfgang Schäuble, told the Associated Press yesterday afternoon. This is a ludicrously dilatory approach to a problem that is near impossible to solve today: in six weeks time it will be all over. The Greek economy has shrunk further and more quickly than officials had forecast — by 4.5 percent in 2010. This year, it is expected to contract by more than the 3 percent originally predicted. The country’s debt burden now stands at 142 percent of GDP — and climbing.
Yesterday, The Slog also reported on the Dublin Government’s outspoken attitude to the rates on interest it is being charged on the bailout there. Ireland cut 2011 economic growth forecast to 0.75 percent from 1.75 percent on April 29, citing weaker-than- expected domestic demand. The country’s unemployment rate was 14.6 percent in April. Later yesterday, Michael Noonan told the media that his Finance Ministry plans to apply an annual 0.6 percent charge over four years on pension assets. As the UK’s former Scottish Gay helmsman found out to his horror, taxing pensions is political suicide. I was also told emphatically by insiders this morning that Moody’s will downgrade Ireland’s debt still further in its next survey of performance. “It’s a done deal, unchangeable,” said the source.
Despite desperate measures in Greece – and some remarkable cost-cutting success – the Athens Government has now given up. The Irish remain (quite rightly) truculent. The Portuguese cash-flow is on the point of a bankruptcy declaration there. And Spain has – in secret – hocked its welfare and health budgets for years to come in a desperate attempt to avoid becoming the next victim.
This political mendacity and hubris across the EU must stop, and stop now. The Euro has failed and the eurozone must be reconfigured. The Great Experiment has disproved the insane theory that sixteen completely different economies and cultures can share the same currency. The only currency they truly share is denial.