….but the Troikanauts don’t care
Caligula rules apply in the last days of the Euroblown experiment
In a terrific piece of sleuthing by Reuters in recent weeks, the news agency has established beyond reasonable doubt that offshore companies owned by Piraeus Chairman Michael Sallas and his two children bankrolled shares he bought in the Bank…..by borrowing money from a rival bank. The purchase also represented insider trading, as Sallas knew the bank was about to be recapitalised. Unsurprisngly, the Athens stock exchange were not informed of the carefully disguised 6% stake he had taken.
Today, none of the IMF, the ECB or Brussels were prepared to comment. But the Slog’s Brussels mole commented, “The Troika has no interest at all in bringing Greek fraudsters to justice. It just isn’t even on their agenda. They want to keep the whirligig going for as long as possible, and anyway they’re dealing with Samaras and Venizelos, whom they know to be corrupt beyond belief. Before that they were dealing with Papandreou, whose family salted away millions from State funds. This isn’t about justice, it’s about stability.”
“This [the Greek financial system] is a closed circuit, operating as a system of power with no transparency and effective supervision,” said Louka Katseli, professor of economics at the University of Athens and former Greek minister of economy. “Through triangle deals between banks, businessmen and other banks, capitalisation requirements were fulfilled without new money being injected.”
And so the cynicism goes on, but these are looking increasingly like the last days of a eurozone with 17 members…and Merkel’s fabled Fiskal Union will most probably not happen in anything like its intended fashion – if at all. Although Mario Draghi was buying enough euros today to paper the entire Frankfurt head office, the IMF announced that Spain is going to fall short on its debt repayment targets for 2012, and its debt/GDP ratio is unlike to fall before 2016. Reflecting this reality, Spanish 10-year bond yields rose for a third day, rising 14 basis points to 6.8%. Not too much higher than that is the point at which pc software will start flashing to point up the fact that the markets are saying they have given up on Spain. At that point, Berlin-am-Brussels will have to stop pretending that Spain only needs a banking bailout…and Angela Merkel will have to face her own citizens.
With the extra yield investors demand to hold Spanish 10-year bonds instead of German bunds stretching a further 17 basis points to 557, Italy too was in trouble: the spread between Italian 10-year bonds and their German counterparts broadened to 495 basis points, almost a record and the highest since January. In both fiscal and economic terms, the obvious-from-day-one likelihood of a eurozone in which the North/South divide gets wider and wider is now an undeniable reality.
Future observers and historians will look back at this euromess, and probably have three main reactions: first, they will wonder why the populace allowed gravy-train bureaucrats and hubris-blinded politicians to continue the pointless pavane for so long; and second, they will gasp at the smug inaction of Camerlot in failing to spot when an imponderable outcome became an impossible nightmare for the British.
But most of all, I suspect, they will be repelled at the heartless cynicism of those who put the creation of a pointless, undemocratic, and illiberal superstate before the prosecution of rampant pocket-lining by the elites of its member countries. Or perhaps not: maybe by then, the whole concept of ethics will have disappeared – to be replaced by a perverted utilitarianism in which no holds are barred if increased geopolitical power is the result of a given set of actions.
I am more optimistic than that: not through some kind of fluffy sentimentalism, but because as a student of history, I know that it represents a constant back and forth ping-pong of action, reaction, forward thrust and backlash in which our more than slightly bonkers species veers crazily from one daft extreme to another. It would thus not surprise me if England (and it will be just us by then) is by 2040 a land ruled by aescetic Quaker farmers with a zero tolerance policy towards bankers, Islamists, taxation, the Scots, and an ageing pensioner nuisance-caller pervert by the name of Simon Cowell.
I will be long gone by then. But it would be nice to think that my grandchildren might have a firmer grasp on reality than our lot.