Home / Greece 

Will Europe’s past inform the present?

By Kyle Andrew Brown

Brussels, June 23 – Prime Minister Alexis Tsipras is scheduled to meet with European Commission President Jean-Claude Junker today before the Eurogroup Triad of creditors meets at 20:00 GMT.  Alexis Trsipas is invited.

IMF’s Christine Lagarde is said to threaten the negotiations, insists on tougher measures and could torpedo any deal. Should Wednesday’s Eurogroup reach a negotiation agreement with the Greek prime minister then it would be presented to Thursday’s summit.

Our reading of the Greek situation is that the current negotiation proposal bridges Greece’s immediate daily cash requirements without “fixing” the ability of Greece to retain from GNP sufficient funds for capital growth and liquidity.

There are sound macro economic indicators that a Greek return to the drachma would in the short term increase exports – theoretically increasing revenue.

But the social chaos this scenario would create in Greece – already at the bottom of despair – puts it out of the question from the Greek perspective.

IMF’s Christine Lagarde recognizes the proposed negotiations do little if anything to address Greece’s systemic economic distortions.

The European Commission’s two Presidents appear to have come to recognize that casting Greece adrift is contrary to the European Union as a quasi-national body. They accept that keeping Greece currently afloat via inclusion in the Euro is in the current best interest of the European Union. However ineffectual it is to Greece’s positive economic prospects.

However, their recent publicly stated hesitations to adopt this position of providing short term finance to Athens underscores their shared agreement with Chancellor Merkel and Christine Lagarde that Greece has systemic disorder in its financial, economic and social infrastructure. That it’s continued inclusion in the euro will alone not address.

Greece’s continued actual membership in the European Union – rather than some pro-forma one where the European Union is merely a blue and gold flag planted here and there on Greek soil – – requires inclusion in the Eurozone. Inclusion in the Eurozone requires then Euro financing – propping up – of the systemically bankrupt Greek financial and economic model.

The European Commission’s two Presidents, Chancellor Merkel, Christine Lagarde and Alexis Tsipras share one commonality: they offer neither a vision nor a roadmap to address Greece’s need to build a viable economic and social infrastructure.

For Alexis Tsipras it is simply a matter of protecting the level of central government expenditures and hitting up the European ATM without tilting it.

For Angela Merkel and Christine Lagarde it is simply a matter of turning off the ATM and thereby casting the common Greek people into even greater misery.

Angela Merkel and Christine Lagarde – one French, one German – have conveniently forgotten the very bottom of hell from which their own two nation’s emerged following World War II. This is why the Greek oblique references to Germany’s Nazi past and it’s subjugation of Greece fester behind the Greek headlines.

It is not so much nor realistic that Germany pay Greece reparations. But Germany did not rebuild itself without foreign capital and expertise. It was a rescue effort of encyclopedic proportions.

The Greek situation pales to the calamity of postwar Germany and France. You’d like think all those economists at the IMF and European Central Bank would take take a fourth grader look at Greece and build it into a roaring tourist mecca.

But no. Here we come full circle again. Brussels is merely the home of regulations and financial number crunchers..

Not visionaries.

The European Union displays no vision beyond printing currency devoid of names and places and historical events.

The European Union lacks the vision of a Roosevelt New Deal and Truman Marshall Plan.

That would require an actual leader emerge from within the European Union. Something systemically the Union is incapable of producing.

Which is why this financial pyramid scheme has persisted for a generation or two in the relationship between Brussels and Greece.