Friday, February 10, 2012

Greece Still Can Do the Right Thing

Greece has considerable power in the form of two possible routes to take – and I suspect they are the only routes available to a patriotic Greek leadership. The current path, if supported by Greek leadership is mendaciously anti-Greek if not for all Europeans.

The two paths Greece must take, and I think will take:

1. 1 1. Mutually Assured Financial Destruction of all Europe with self imposed default – this would serve only the Greeks interest and would be predatory to all other Europeans, but is the correct route to take if the following path is not taken;


2. .........2. Absorb and agree to the essence of the troika and German party demands, but retool the method so all of Europe, including Greeks, prosper and a federal EZ results.

The first route, the MAD route, would first require the refusal to acknowledge the authority of the troika or unique EZ representatives, but insist that the only voice Greece will now discuss the issue with are the actual bond holders themselves. The Greeks would then insist that all those on record as owners of Greek debt as of February 1st 2012 will be counterparties and all bearer bond forms and other non-registered bond holders will have no voice. Then the following terms provided, dictated by Greece, noting the failure in the EU to provide transfer relief or Schengen Plan mobility as sufficient justification:

  1. Greece will leave the Euro and convert to the drachma at the rate of 1:E0.01 .
  2. Conversion will be on all assets and liabilities of Greek entities and citizens as of February 1st 2012.
  3. The Greek CB is leaving the EACB system immediately with all assets and liabilities converted to drachma as per the above.
  4. Tariffs on all Germany sourced goods may or may not be imposed upon competitiveness review.
  5. All debt of Greece if held by Greek entities or citizens on the record date will be converted to new issue at par.
  6. All Greek sovereign debt held by all those not on record or non-Greek entities or citizens will be voided under the justification of a national emergency.
  7. Greece will immediately withdraw from NATO given costs and the emergency.
  8. Greece will seek to form a common market union with Turkey and North Africa in general.
  9. Greece will seek to form a security pact with the USA.

If it were clear that the above will occur unless the second route below is followed, it would be insanity for Germany not to step away from their current position and support the dismantling of the troika plan.

The second route would be the best for all of Europe, including Greece and in the great tradition of the EU as acknowledged by Jean Monnet, would use the energy from the crisis to move Europe to a construct that would be in the best interest of all.

  1. Greece will implement the decisions of a new Euro Commission, with that agreement pre-authorized by all parts of the Greek government if not a national plebiscite.
  2. The new EC forum will composed of a national of each EZ member for a total of 17.
  3. Each EZ member will appoint this member via national popular election.
  4. Each EZ member will agree to affirm and agree to the decisions of this EC forum.
  5. Any policy or decision or remedy the EC forum decides for Greece will be applied to all EZ members in all matters from employment to tax rates and collection to fiscal policy.
  6. The EC forum will become permanent to provide compliance and to report on the general status of the EZ , Greece being one of 17 members in those reports.

It is obvious this EC forum, started to manage the Greek crisis, becomes permanent and the “upper house” or senate of the EZ and provides direct representative democracy and governance which will not only remedy the current Greek crisis, but maintain minority rights going forward and prevent such crisis in the future.

Now the equal loss of sovereignty for all EZ countries might make such a forum impossible. Then sadly Greece must follow through with the first option. Of course this would be a disaster but is the second best course of action for not only the Greeks but all of Europe. Likely such an experience will move the remaining EZ members into the second path for I see no other way to prevent contagion and the ruin of all of the EZ otherwise. In that case Greece could be forgiven and brought back into the EZ, but this will only occur if Greece presents both options now, for the record.

The worst pathway for Europe and the world is what is happening now for it is clearly a strange usurpation of power without a democratic mandate provided by various factions and blocks, one being the corporatist plutocratic block of near stateless EU bureaucracy. In fact the current path seems to only benefit this plutocracy as Germany and all are about to find out if this is the remedy. In that regard I consider the current crisis the results of what is effectively a plutocratic putsch.

Greece is at an epic and important point, yet they have considerable power they can wield on both the behalf of all Europeans and more importantly for themselves.

The machine that brought Greece here is of course the debt.

Almost all the justification of those using positions of power to impose the troika and German position is based upon qualitative and moral stances considering the notorious tax avoidance in Greece, the out of control patronage for Greek civil service jobs and the myth of indolent Greeks.

And Greeks have made this rather easy for the troika and the rest with some good street drama and chicanery which seems to confirm the veracity of the stance. The justification of the incredible austerity planned and forcing of imbalances resolution through only drastically raised unemployment so a Greek competiveness can be established in relationship to intra-EZ trade.

However these imbalances are not caused by Greek actions or mischance, but these Greek patterns would only have made the levels of debt slightly less or perhaps more easily noted and monitored – but Greece would have been in this position nonetheless.

The cause of the current Greece debt crisis is the intense intra-Europe mercantalistic trade stance of Germany (and to a lesser degree the Netherlands and Finland) which is dedicated to forcing Greece into a debtor status so as to finance German industry. Of course other countries are doing the same, but Greece being the weakest and least competitive nation from the start of the EZ was the most vulnerable.

The ineffectiveness of the Schengen Plan thesis, the extreme avoidance or refusal of transfer payments, and the lack of a competitive export industry in Greece has made the current crisis a fate. Even if Greeks had paid all taxes and swept the streets and worked as hard as Germans – they would still be at this crisis point with only a slightly stronger point of negotiation. The truth is the Greeks save more and work harder than Germans, and the tax avoidance is caused from a long history going back to the days of the Ottoman of corrupt governance that works on patronage and bribes. This culture in Greece can certainly never be remedied under duress – duress just confirms that the actions taken by the average Greek were spot on and thank God they didn’t pay those taxes as they would now face starvation – and can only be remedied under prosperity.

The above absolves Greece of any blame or need to answer and atone.

It requires that any Greek leadership, if they do not wish the leadership to go to the street and barricades, to refuse to even listen to any justification of the German party nor the troika. They must now with use of every bit of Greek power available arrive at a status that is the most beneficial to the Greek people, and after that duty is met to be mindful of the European people at large.

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