DEATH OF THE EURO: vindictive eurocrats, a happy Mario Draghi, a predictably exposed Christine Lagarde, and a wise but powerless DSK

draghisO Lucky Man


It hasn’t taken long today for the strutting “We can handle a Greek default” faux-confidence to evaporate among the engorged egos of the euroélite. On the whole it is becoming hourly more obvious what small, mean-minded and vindictive goblins the eurocrats all are. Juncker’s petty little address – laced with self-pity, riddled with fantasy but devoid of remorse – reveals this rubber-spined brothel-creeping bitch as a man with neither dignity nor style.

Dijesslbleom’s response was made of similarly flimsy dissembling: the classic over-promoted prefect blamestorming his way from topic to topic, condemning an elected Member State government for having spotted the game plan – humiliation piled on top of debt slavery – and proclaiming the Great Offer “removed from the table” in a pathetic tone of how very dare they.

But what we’ve seen today is precisely what would’ve happened had Varoufakis walked out of the ambush set for him, three weeks in on February 19th, after the Muscovici solution had been de-tabled by the Draghi/Schäuble/Drizzleloon axis of Wehrmacht diplomacy.

On February 19th, The Slog opined (  ) that a Greek walkout would’ve ‘vastly increased the cost of sovereign borrowing’. So far today, Portugal’s 5-year bond yields have leapt by 17%, default insurance rates in Europe have careered off the scale, Eurobank stocks fell 5%, and the euro has zoomed back down to 1.40 versus Sterling.

The usual suspects – notably Reuters and the WSJ – put a brave face on this, showing that German Bund yields fell and there was a flight to US Treasuries. No shit, Sherlock? What the Hell else did they expect to happen? No doubt egged on by Yannis Stournaras and his bumboy Hugo Nixon  Dixon, Reuters in particular talked of Greek stocks and bond yields in meltdown and liftoff respectively. No shit Sherlock? What the Hell else did they expect to happen? But none of that matters to the real Greeks, whose concerns now involve how to make the meagre amounts of cash available to them buy enough food for the week. If you’re skint already, markets and borrowing rates come very low down in the importance hierarchy.

However, one person tonight is, I suspect, a happy man….for he is not a politician, bureaucrat, nervous derivatives player, ordinary citizen or health practitioner, but a central banker.

As I’ve been saying for eight months now, Mario Draghi has all the bases covered. Greece may be proving truculent and using some silly plebeian ruse to give Brussels-am-Berlin the finger, but so what? He has a cheap currency, oodles of not yet dry QE euros to make it cheaper still and bail out exposed eurobanks, and more ability than any other European to do WTF he wants without fear of electorates, Brussels or Jens Weidmann. Mario has what every psychopath craves: absolute power and zero responsibility.

The flight back to US Treasury bonds ticks all the Wall Street boxes for the time being, and keeps him in good odour with Washington. So too does a euro still edging steadily towards $ parity…. and thus in line with the Dolleuro scenario. That working title for the buck-in-Europe strategy may have ghastly onomatopaeic echoes of Delorean, but this is of little concern to Supermario: even if that never comes off, as of tomorrow morning Greece becomes Europe’s Argentina, and he has lots of ways to wield further the baseball bat in order to make life even more unbearable in a nation for which he has little fondness anyway. True, he is ‘owed’ some €120bn by the Greek government, but what is that other than an entry in the ledger, to be transferred to the ‘negative assets’ column available to all those living in the Swiftian land of Oxymoronia, aka the Central Banking system?

In short, whether the euro implodes or succeeds against impossible odds, to Draghi’s mind he is the laughing sandboy: quids in, on the crest of a wave, on the up and in the pink.

In and to his mind, that is. But Mario had an unpleasant reminder last month of how radicals can penetrate security and then jump on his desk. He did look very scared indeed when that happened.

That said, he is way ahead of Lagarde the Lowgrade lawyer, another over-promoted chancer who now finds herself staring forlornly at the glaring blot on her IMF copy book. For the IMF is an instrument of American foreign policy, not a central bank; and the very first default write-off in its history is about to happen on Fifi’s watch.

Perhaps Dominique Strauss-Kahn can gain a certain contentment in the autumn of his largely destroyed career from Chrissie the airhead’s dénouement as the engineless aeroplane. We cannot be certain about that: but going back to another Slog obsession from 2011, as time passes it becomes clearer and clearer exactly why DSK was moved out of the game by the corporatocracy.

Think about it: DSK wasn’t only an IMF boss unimpressed by the idea of collaboration in US hegemony, he was also a shoe-in French Socialist Party candidate about to be handed the falling off a log job of defeating Nicolas Sarkozy. Without the invented New York hotel maid sex-assault smear, M. Strauss-Kahn would’ve gone from being a pain in the State Department arse at the IMF to being a cancer in the Eunatic/US imperialism, and a man who would without question have resisted the siren calls of the Draghischäuble on pretty much every issue.

Cynics may wish to shout me down on this one, but Google DSK News, and you will be rewarded with more sagesse in half an hour than has emanated from the Troika over the last five years. The latest of these can be found at where the silly sex pest but brilliant economist can be heard appealing for a temporary end to Greek debt repayments.

Régime change has for many decades been the MO of choice for the United States. Over and over again – in Europe, the Middle East, Russia and Asia – for more than half a century now, America has meddled in, muddled the realities of, and then left behind a trail of dysfunctional destruction for the citizens in, pretty much everywhere from Andalucia to Zaire.

At long last, new alternatives to this hegemoni horribilus are emerging. But the world desperately needs contrarian US politicians to start educating the American populace on the subject of how a once all-powerfully missionary Church needs to withdraw peacefully into more benign and less interventionist role. There is, after all, no percentage in gaining control of a world ruined by GM lunacy, energy blindness, unsustainable inequity, and nuclear exchange.