The European Horrorshow

German Finance Minister Schaeuble chats with unidentified officials during a euro zone finance ministers' meeting on the situation in Greece, in Brussels
German Finance Minister Schäuble chats with unidentified officials during a euro zone finance ministers meeting on the situation in Greece, in Brussels / Reuters

The German news magazine Der Spiegel summarizes the absolute farce currently unfolding in Brussels rather succinctly: it describes the list of demands put towards Greece as a “catalogue of cruelties”. The picture accompanying the article is the one above, depicting the German finance minster Wolfgang Schäuble surrounded by a group of advisors at the meeting of the Eurogroup in Brussels. The title of the article in conjunction with the serious faces represented in the photograph is meant to suggest that the crisis has turned into a horror show. These are not the faces of experts willing to find ways to solve a crisis, but these are the faces of a vindictive team of technocrats out to get Greece. Importantly, the finance minister of Greece or any other key player in the crisis is not represented in the image. The photograph thus illustrates rather subtly that in this crisis the tables have turned: no longer is the focus on Greece, but it has actually shifted to Germany.

Since its introduction in 1999, Germany has massively benefited from the Euro. As one of the world’s biggest exporters, Germany has been reliant on a stable currency that would allow it to export goods easily and cheaply. The economic weaknesses of southern European countries meanwhile had the effect of consistently keeping the Euro at a low value which in turn lowered the cost of German exports and consequently made them more popular in key markets such as the US or China. A weak Euro allowed the German economy to boom into a European manufacturing powerhouse. Though as is increasingly becoming clear, German economic success rests on the economies in other European countries being weak. The irony therefore is that while the crisis in 2009 brought countries such as Portugal, Ireland, Greece and Spain to its knees, the German economy on the other hand prospered like rarely before.

The crisis in Greece is not new. In 2009 at the very latest it was already clear that the country is essentially insolvent. Even the IMF has recently come to recognize that the only viable solution for the crisis is to allow the debt to be written off. The fact that a debt write off would likely cause a banking crisis in Germany and France (where the majority of Greek’s debt is held) is perhaps one reason why the EU and the ECB insists on the debt to be repaid: in that way the problem of non-performing debt does not have to be addressed. So instead the Troika gives Greece billions of Euros in bailout funds to keep the charade going for a little longer. And for all this time the weaknesses of southern Europe continue to be exposed to the international bond and currency markets which in turn continues to keep the Euro at a low value. You may guess who benefits, again, the most from this arrangement.

The newly elected Greek government was the first to recognize how essentially flawed the entire system is. They said enough with the charades and lets find a lasting solution to the problem because kicking the can down the road for the past six years just didn’t work out very well. And this is the point we are at today: northern Europe profiting from the single currency, and southern Europe suffering under austerity and economic hardship. One thing has become very clear as the crisis is reaching fever point, the idea that the EU is a “union” based on solidarity and brotherhood has long been forgotten. Instead, what we are witnessing in Brussels in the last few days and weeks is financial and economic warfare.

Juncker tries to convince Tsipras to wear a tie – PHOTO

The hypocrisy of the EU leadership in the crisis has reached levels of Kafkaesque absurdity. A couple of weeks ago for instance the President of the European Commission Jean-Claude Juncker asks in a speech the following: “Why is the tax collection so poor? Greece needs a stable tax system to promote investment.” Juncker says this is as the former prime minister of Luxembourg which helps corporations such as Amazon to evade billions in taxes. Precisely this form of hypocrisy is equally discernable in the “catalogue of cruelties” put to the Greek government today: asking the Greek government to “reform”, “deregulate” or “privatize” as long as it is benefits the large industrial conglomerates of the north. No, in this neoliberal system Goliath tends to win rather overwhelmingly.

Back to Schäuble and his economic hitmen. One of the key conditions for another Greek bailout is that the Greek government needs to transfer 50 Billion Euros worth of valuable state assets into a Luxembourg “Institution for Growth” so that they can be sold on by the Troika. The Greece based organization Press Project did some research on this obscure and rarely heard of “institution” and it turns out that it is a wholly owned subsidiary of the German development bank KfW. On the KfW website it proudly states the following:

“The development of KfW Group has been closely connected to the economic development of the Federal Republic of Germany. Since its founding in 1948 and according to its statutory mission, KfW has been supporting change and encouraging forward-looking ideas – in Germany, Europe and throughout the world. For this purpose it has provided nearly one trillion euros in loans over 65 years.”

Amazingly, as if the levels of grotesqueness could not get any bigger, the chairman of the board of the KfW development bank is none other than Wolfgang Schäuble. #ThisIsACoup is currently lighting up on Twitter and a coup in broad daylight it is indeed. Therefore, it is not Greece that will bring down the EU, but actually it is the corruption and collusion of the system itself that will bring it down. Quite some horrorshow.

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