A continuing saga of folks with neither brains nor balls
With things getting sillier every day in the EU – and the increasingly obvious inability of leaders elected or otherwise to deal with it – a change of title for the dedicated page Euroblown Crisis seems in order. The euro is effectively hooked up to life support (it should perhaps be renamed the euthanasia) and requires just the minimum of plug-pulling now to send it on its way into the Ford Edsel Hall of Mistakes.
So as from today, I want to switch emphasis from the currency to the Union. As Angela Merkel herself has said on many occasions, the two are inextricably linked (thanks to the barmy Brussels army) so if the euro is on an intravenous drip of Draghiness, then the European Union as we know it won’t be far behind. Tough sh*t there Wolfgang: couldn’t happen to a nicer guy.
In fact, Beppo Grillo – you know, that joke candidate who almost won the last Italian election – explains to Handelsblatt with much logic today that “Italy is effectively already out of the euro”. Just for good measure, he describes failed Goldman implant Mario Monti as “a bankruptcy trustee on behalf of the banks”. The guy is a hero (watch his Youtube routines, they’re fantastic) but it’s only a matter of time before Bild Zeitung or some other paper cartoons him in a string vest scratching his groin unpleasantly.
It’s unclear as yet whether Spain wants to be seen in the same light, but Eunatic behaviour is nevertheless readily apparent there. One of the funnier aspects of EU card-sharping is the creation of ‘bad banks’, as if you could somehow isolate badness by shipping it to Cristan da Cunha. Spain’s ‘bad bank’ SAREB has done quite well at the task of selling tartan paint to investors, but it is now becoming clear even to those with heads inside the cumulonimbus that rather than plateauing after containment, Spanish bank debt and toxicity are rising unstoppably.
Bankia itself was based on the illogical idea that amalgamating dysfunctional cajas would somehow create a bright new behemoth. In fact, all that’s happened is the shrapnel has turned into an atom bomb. In Q4 2012, this fine institution this lost €12bn. Now given that the total annual l0ss was ‘only’ €19bn, we can see here that the losses are accelerating. What we can’t see here is that Bankia casually transferred €32bn of ‘loans’ aka unstable isotopes to SAREB, because SAREB is where Elephants in rooms go to die – allegedly.
Share dilution following the bailout will produce an eye-popping 99.7% drop in share value for those unfortunate enough to have been holding when reality hit. Thanks to devious schemes devised by the Madrid government, quite a few of these mugs are ordinary, innocent citizens who now find themselves, so to speak, ruined.
The Spanish quango charged with sifting through the sewer for signs of gold is called FROB. Last week it abandoned long-standing plans to try and flog Catalunya Bank, largely on the assumption that there simply aren’t any total jerks in the banking system any more: they’ve either been fired, or thrown into prison as a sop to citizen sensibilities in order to allow Jamie Dimon to remain at large. Looking at this failed attempt in even the most cursory manner, it does bear a striking resemblance to the UK Treasury’s 0% successful attempts to foist the Royal Bank of StephenHester onto unsuspecting Arabs. I have absolutely no doubt that the end games in both cases will be remarkably similar.
And so we return in perfect segue to the Bank of Greed, and its mercurial Chairman George Provopoulos. Mr Provopoulos came to his current position fresh from a huge success while running Emporiki Bank, 67% of which he sold to Crédit Agricole in 2006, cheerily pocketing €6m personally…and which he then bought back for just the 1 (one) euro in 2011.
Clearly a man who is keen on high margins, George yesterday opined that tax cuts in Greece will be vital to the economic recovery of the country. “Constantly increasing the tax burden on citizens and businesses has a negative effect on competitiveness and economic growth” he told Greek reporters, “and the tax base should be expanded in order to cover a larger number of people instead of burdening poorer taxpayers with higher taxes”. I think George Provopoulos is big into irony, and very sharp in all the worst senses of the word.
His career has always looked to me like that of a bloke who grasped very quickly – in relation to Brussels, France, Germany and the Athens Parties – that he was dealing with greedy but naive idiots. So he rounds off his State of the Nation thing by having a swipe at everyone as follows:
“The recession was deeper than expected in recent years, which is mainly due to the way of implementation of the recovery programme, the lack of readiness (of the government), and the errors – in particular the delay in implementing the structural reforms. Anyway, the recession cannot be used as an excuse for the failure to meet Greece’s obligations under the agreements with the international lenders”.
Or put another way, “Everyone’s a prick except me”…..and as if to prove his thesis, the Central Bank Governor announced triumphantly that €16bn had flowed back into the BoG since his arrival.
There was just the one fact missing from George’s analysis: the inflows since June 2012 represent under 17% of the €90bn that took flight from Greek bank accounts during the crisis negotiations with the Troika.
Meanwhile on the Eastern Front, as generally expected, the Hungarian parliament two days ago approved a package of constitutional reforms that radically expanded the powers of Prime Minster Viktor Orbán, leader of the conservative Fidesz party. The amendments weaken the country’s constitutional court, the last defender of Hungary’s constitutional state, and dramatically limit the independence of the judiciary.
German foreign minister Guido Westerwelle, who met with Hungary’s President Áder last Tuesday, said the German government “has left no doubt that Europe is a community of values, and that we expect these values to be lived out.” Coming from a bloke who has been incessantly critical of the Karlsruhe Constitutional Court of Germany (a grouping his leader ignores at will) this was more than a little rich. But even so, two wrongs don’t make a right: a spokeswoman for the European Commission also said the EU’s executive branch “will not hesitate to use all the instruments at our disposal to make sure that member states comply with their obligations”, which I guess is another way of saying they will ride roughshod over Hungary’s version of democracy in order to enforce the Brussels form of democracy.
Like I say, two wrongs don’t make a right.
The Slog 