Euro Crisis: The Big One?

Brexit; Trump’s election; Greece; Syria; several times this blog has gone way off-topic, and each time we’ve discovered interesting points of convergence between us, (unexpectedly, given that we don’t know each other, and are scattered across the globe and the political spectrum.)

Mostly there’s been a link to climate, either directly via the scepticism of Trump and many prominent Brexiteers, or via the more general scepticism of Steve McIntyre in the case or Syria. Sometimes the link has been more tenuous. In this post I drew some parallels between the dysfunctional European Union and insane energy and climate policy:

There are a lot of similarities between the dream of a conflict-free Europe and a carbon-free economy, between an unworkable currency and an unworkable energy policy. Except that – so far – it hasn’t gone horribly wrong for energy policy. Gas prices are due to rise 6% or more per year for ever in France, and diesel even more, thanks to our ecology minister, the most popular politician in France. How long can that last? How long can Merkel square the circle between the pro-business FDP and the Greens and the SDP? When will the Poles’ carbonophilia cause the patience of the Commission to crack? […]

But the really interesting parallel is the account of what happens when the entire system is shown to be based on false premisses, when the European economy is faced with possible collapse due to its inherent absurdity. Does reason prevail? Do politicians and experts admit past errors? Of course not.

They double down. They lie, to themselves, to each other, and to us. And they exercise power – illegitimate power…

We may never get the answers to my questions above, since the EU, or at least the Eurozone, is once more on the verge of a crisis potentially far more serious than the Greek one.

You’ll have known since Friday that the Spanish government is almost certain to fall after a no confidence motion following a spectacular trial leading to 29 members of the ruling party getting a total of more than 300 years in prison for corruption. And you’ll have known since Thursday that the Italian president was going to veto the appointment of a mildly Eurosceptic Minister of the Economy, on orders from Brussels and Berlin, leading to new elections; almost certainly improved scores for the “populist”’ parties; and chaos in the money markets tomorrow.

Well, you’ll have known if you get your news from eccentric blogs like the libertarian share tipster which gets stuff out about three days faster than the BBC or the Guardian.

I watched the Italian crisis unfold this evening live on Berlusconi’s Mediaset channel. Salvini, leader of the right wing populist Lega said they weren’t going to take orders from Brussels or Paris or Berlin or the ratings agencies; that they were fed up with hearing about the markets, the debt and “lo spread,” and that they were going back to the Italian people. Di Maio of the Five Star Movement, usually so well-behaved and reasonable, threatened to impeach the president (possible under the constitution.) And il professore Conte, almost prime minister for three days, went back to his university job, and expressed the hope that he’d be reimbursed for his taxi fares.

On the rare occasions the British press has bothered to mention the Italian crisis, it’s been in disdainful terms of dangerous populism and fiery Latin temperament upsetting the Euro applecart. I read the Italian press in as much of its bewildering variety as I can find, and I occasionally watch debates on their tacky TV shows. Yes, even on Berlusconi’s channel there’s real debate, between real politicians with real (if malleable) convictions. OK, neither Salvini nor di Maio went to university, and their combined ages wouldn’t equal that of Boris Johnson. OK, the Lega just a few years ago was the neo-fascist Northern League, whose political message was a quasi-racist despising of the other two thirds of Italians. OK, so the Five Star Movement started as a blog by a washed up comedian with a homicide conviction morphing into a grassroots movement under the official slogan “Go F*ck Yourself.” But hey, it’s working.

It’s not a style of politics that would suit everyone. But they have a message for our government. Don’t go begging to Brussels for early release for good behaviour. Break out. It’s a message that, so far, Italians seem to like.

UPDATE Monday 8 AM

The above was written last night around midnight. It’s fascinating to see how, when you view an important event unfold live, (even on a hopelessly biassed media source like Berlusconi’s Mediaset) you can’t help but get a reasonably accurate vision of things. Viewing the same events this morning on the same channel, everything is changed. We see the angry faces of the elected politicians, but their passionate declarations have been replaced with the reasonable interpretation of the news presenter. Normality has been restored, and the fact that the choice of the parties which won the election has been replaced by an ex official of the IMF (the second official putsch in Italy organised by the EU in a decade) seems totally normal. It’s exactly like reading the Guardian in the immediate aftermath of Climategate.


  1. If you want to know how the EU and Berlin financial mafia operate, I recommend reading Yanis Varoufakis’ book: “And the Weak Suffer What They Must?”.

    Having watched the Greek crisis unfold largely through the prism of the pro-EU BBC, it was refreshing to read a rather different take on events. Of course, he has a peculiarly Greek take on things, and never really acknowledges the corruption and waste endemic in Greece, which at least contributed to the crisis. But he does make some fascinating points about the EU and its lack of democracy – despite himself being pro-EU and regretful of Brexit. Considering he is not writing in his first language, I found the book to be skilfully crafted and beautifully written.

    In my opinion, the political and monetary project that is the Euro represents one of the greatest problems with the EU, and links importantly to its lack of democracy. Like Yanis, I could support a reformed and democratic EU, but unfortunately that doesn’t seem likely to happen any time soon, so for now I remain a Brexiteer.

    Liked by 1 person

  2. Mark
    I agree absolutely about being able to support a reformed and democratic EU, if such a thing could exist, which I don’t think it ever could, for reasons far more profound than mere political differences. Democracy is impossible in Europe for the same reason it would have been impossible in, say, seventeenth century France. Not only did those in power not want it (just like Brussels) but more than half the country didn’t speak the official language, it would take three days to get news from one end of the country to another, a newspaper would cost a worker a month’s wages, and he couldn’t read it anyway. Modern Europeans are in much the same situation as a 17th century peasant, except that they can vent their frustration by voting UKIP or Front National.

    I read Varoufakis’s book “And the Weak Suffer What They Must?” but I preferred his “Adults in the Room” largely because of the evidence presented hot off his I-phone.

    I expressed clearly enough my admiration for Varoufakis at though I can’t support his idea of a party to reform Europe from within. That hollow slogan has been adopted by everyone from the savagely centrist Micron to the “extremists” of right and left who daren’t risk losing votes by suggesting doing something as daring and off the wall as our own dear wobbly Teresa May.


  3. Allah and Brahma help Europe if a guy like Varoufakis ever takes control of the EU, that guy is to the left of Tsipras, whose campaign was partially financed by Chavez.

    Regarding Spain, I believe the Socialist Sanchez will fail to get the votes to replace Rajoy. He would have to make a deal to govern with the Podemos Marxists and about six small separatist parties to create what’s called “The Frankenstein Alliance”. Podemos in turn is weakened by the purchase of a 630 thousand € mansion outside Madrid by party leader Iglesias and his pregnant party speaker in Parliament, Irene Montero.

    Iglesias and Monteros’ purchase was facilitated by a generous low interest loan made by a Barcelona bank controlled by separatists…which happens to be recipient of several million € in deposits collected by Podemos from its members as well as state party support funds.


  4. “. . . if a guy like Varoufakis ever takes control of the EU, that guy is to the left of Tsipras”

    If you have read either of the books other commentators are (rightly) recommending, you might want to read them again. Varoufakis is explicitly not a socialist; he campaigned for privatisation when he was finance ministar; he is a friend of, and was advised by, Thatcher’s former chancellor Norman Lamont and others of that ilk. And so on. Which helps to explain why his ministerial “colleagues” were hostile to him though it doesn’t justify the unprincipled way they expressed that hostility.

    Whatever, given that the Tsipras government has done everything asked of it by the Eurocrats and the ECB and imposed a polity so retrograde that even the IMF (and Norman Lamont) denounce it and the EU as putting the EU’s political goals before the good of its citizens or of basic economic literacy, it’s not hard even for a Europhile like Varoufakis to be to Tsipras’ left

    The value of V’s books is that, whatever one thinks of the author, they give a vivid insider’s view of how the top layers of the Eurocracy function. It as, in the parlance, worse than we thought. I agree with Geoff that “Adults in the Room” is the better of the two.

    In passing, V does not have ESL, he is IIRC bilingual and worked for many years in Anglophone academe. For that at least he deserves our sympathy.


    Of course Varoufakis, a highly educated academic, may be considered “to the left” of the relatively inexperienced Tsipras, but as I insisted in my article, he enjoyed the support of such hardcore capitalists as Larry Summers and George Soros, who recognised that Varoufakis’s pragmatic socialism was infinitely preferable to the ignorant dogmatism of Schaüble and the Brussels bureaucrats. The Daily Telegraph’s Ambrose Evans-Pritchard – no lefty – pointed out that Germans don’t “get” Keynes. Why should they? As long as they’re in permanent credit with the rest of the world, why should they bother about the problems of the rest of the world which must – logically – be in deficit to them?

    In Spain, won’t a defeat in a motion f confidence force Rajoy’s resignation and new elections? Is €630,000 expensive for a house in Madrid?


  6. Thx, Geoff,

    I suggest ‘The Theatre and the Dance,’ or ‘ Ginger and Fred,’ some light relief
    from the deep state ‘n such.


  7. Geoff, and others. Thanks for your opinions regarding Varoufakis and his books.

    Adults in the Room is high on my list of books to read, and if it’s better than “And the Weak Suffer What They Must?” then so much the better.

    Two comments from Yanis on the Brexit section of his website demonstrate to me that he does at least understand what caused the Brexit vote, and why remainers are wrong to seek a referendum on whatever deal is finally worked out (assuming one is). Apologies for the lengthy quotes, but I think they’re worth it:

    “Those who try to understand the Brexit vote in terms of bean counting (or cost-benefit analysis) are missing the point. Yes, there was a strong underlying economic reason for the manner in which the majority adopted Brexit. But it had nothing to do with a calculation of what the result of the referendum would do to people’s hip pocket. Voters did not behave like homo economicus. (This is where the official Remain campaign, with its emphasis on ludicrous econometric scaremongering got it so badly wrong.) We saw how regions, like Cornwall, that have a great deal to lose from Brexit (as they are net beneficiaries of European structural funding), voted strongly in favour of Brexit.
    My estimation, the feeling I get, is that the people who voted for Brexit, the vast majority, were not xenophobes, and they didn’t bother to calculate their private expected net benefits from the result. They saw this binary choice as an opportunity to reclaim control over their lives, their communities from an Establishment that treated them like Britain’s last colony. They saw it as a splendid opportunity to give that very Establishment a bloody nose; to inconvenience them at the very least; to make them feel uncomfortable every time they visited their mates in the salons of Brussels, Paris, Milano or Berlin. However much Europeanists kick and scream about the (admittedly excellent) Erasmus program, and about the (very real) costs of interrupted supply chains, the ugliness of new restrictions on movement etc., unless we manage to address their (apt) sense of a democratic vacuum, their (justified) sense that British democracy has been depleted over the decades (especially in workplaces and communities), we Europeanists will remain dumbfounded losers.”


    “Besides the gross disrespect to those who voted in favour of Brexit (instructing them to go back to the polling stations to deliver what we think is the ‘right’ verdict), the call for a second referendum is fraught with logical incoherence.
    Any referendum, courtesy of being a binary Yes or No choice, must be clear on what the default is (which will obtain or hold in case the people vote No). Suppose now that, just before March 2019, the government comes back from Brussels with a draft Deal and puts it to a referendum. If voters vote Yes, end of story. But what if they vote No? What happens then? What is the default? One possibility is that a No vote translates into the UK government rescinding the Article 50 process in order to stay in the EU. A violently different possibility is that Britain exits the EU with no deal. Which of the two defaults obtains? By the logic of those supporting a second referendum, another referendum should precede the second referendum, in which voters are asked to choose between the two defaults – thus turning the second referendum into the… third referendum. One only needs to state this to realise the absurdity of the second referendum proposal.

    But, let’s take this a little further: Suppose that, somehow, it is decided that a hard Brexit is the default of any second referendum. In that case, it is clear that most Remainers would vote Yes to the Brexit Deal brought back from Brussels by the government for the simple reason that it could not be as bad as the hardest of Brexits. Now, if the default of a second referendum was to Remain, then Brussels would suddenly have a powerful incentive to offer London a ludicrously bad Deal – safe in the knowledge that the British voters would reject it at the second referendum. In short, whichever the default, a second referendum to annul – or to confirm – Brexit is pointless.”

    I agree totally with the logic of his position criticising calls for a second referendum – but then I would, as it represents exactly what I’ve been saying in private to my long-suffering wife for ages.


    Varoufakis was much mocked for his expertise in game theory, but he’s only applying the same basic logic applied by anyone who’s ever haggled in a market or played Monopoly. The minister rejected by Italy’s president makes a similar point in an interview yesterday (in which, incidentally, he accused the President of doing him a grave injustice). This professor (and ex-minister for Europe in a previous government) has been publicly accused by the president of being an unsuitable person to be minister because he has stated that in certain circumstances Italy might be better off outside the Eurozone.

    We’re used to this kind of terrorist attack on the rules of logic and civilised discussion in the climate debate. Point out that, if the IPCC’s lower estimates of climate sensitivity are correct, there’s nothing to worry about, and you’re accused of being a denialist. There’s a certain kind of ideologue who pretends not to understand the sense of a sentence beginning with “if…”.


  9. The Italy fiasco was discussed on the Today programme on Radio 4 this morning.

    They had Varoufakis on, and he made the obvious (to everyone except President Mattarella, apparently) point that this was a gift to the populists.


  10. Predictably, Brendan O’Neill of Spiked has views on this:

    The Euro-establishment has declared war on democracy.

    There has been a putsch in Italy. A bloodless putsch, with no guns or jackboots, but a putsch nonetheless. The president’s vetoing of the finance minister put forward by the populist parties that won a huge number of votes in the General Election in March represents a grave assault on the democratic will. It is a technocratic coup, an EU-influenced, big-business-pleasing attempt to isolate and weaken the popular anti-Brussels sentiment that has swept Italy.

    Liked by 1 person

  11. The Spiked article linked by Paul above is very good. But things change fast. Was I too lighthearted in my commentary?

    Di Maio, leader of the Five Star Movement is no longer calling for impeachment, but, like almost every other party, for elections as soon as late July. There’s a video of di Maio announcing this to an excited crowd waving Italian (not party) flags and chanting “vote vote vote!” There’s talk of la Lega ditching its alliance with Berlusconi and the fascist party and forming an electoral alliance with Five Star, in which case, according to a poll today, they’d get 90% of the first-past-the-post seats and two thirds of those distributed proportionally. Meanwhile, a movement allied with the Lega is offering to march on Rome against the “royalist Jewish dictatorial Catholic communist state.”

    One thing I’ve learned today is that one person with internet, a spare afternoon and a mediocre knowledge of Italian can keep you better informed than most mainstream journals.


  12. There is, inevitably, an article about this at the Conversation. No surprises for guessing what line is promoted by Prof James Newell. Among other things, there’s an interesting attempt to redefine democracy.


  13. Thanks Paul. According to Professor Newell, Five Star’s “rhetoric” is “based on the dangerous premise that democracy is about the supremacy of the will of a majority.”

    More articles are linked under Professor Newell’s. One suggests that the “populist” parties won thanks to fake news and Russian interference; another, written just before the March election, writes approvingly of the new electoral law put in place by an ad hoc left/right Renzi/Berlusconi coalition “that seemed designed to offset M5S’s electoral popularity by limiting its seat gains.”

    It’s largely thanks to reading Steve McIntyre’s work on the hacking of the democratic party and the reporting from Syria that I’ve raised my eyes from the minutiae of climate change reporting and taken a look at some of the other things that are happening in the media and academia. There seems to be a pattern.


  14. My apologies, this post has nothing to do with the topic of this admirable post but there seems nowhere where a body can introduce potentially interesting snippets. Some time ago I did suggest to the meistersingers here that a separate continuing thread (something like the “unthreaded” at Bishop Hill) be installed but this laudable proposal was fobbed off with promises of a meistersinger concert (= meeting) “after Christmas” to consider. No outcome forthcame.
    Anyway my snippet arose when, zombie like, my finger inadvertently hit the climatenuremberg button and I found almost semi-rancid Brett, only weeks old. This was not really a snippet, but it was definitely news to me. I thought Brett went into hibernation.
    Is Len also somewhere out there? Adorning the activist firmament or perhaps up there upon the troll wall of fame. We minions need to be told. Soonish.


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