“I’m so bored. I hate my life.” - Britney Spears

Das Langweilige ist interessant geworden, weil das Interessante angefangen hat langweilig zu werden. – Thomas Mann

"Never for money/always for love" - The Talking Heads

Wednesday, July 01, 2015

burning Greece

One would need the heart of an economist not to find the ECB’s dealings with Greece cruel and irrational beyond measure. And one would need the eye of an anthropologist to see how this outburst of elite irrationality connects up with other such outbursts that run in a series through Europe’s history. The troika reminds me, in its infinite causuistry, its moral outrage, and the endless punishments that it metes out, of the various commissions to investigate witchcraft that darken the pages of the history of the sixteenth and seventeenth century. One of the most famous was lead by Pierre de Lancre, Montaigne’s relative – he married the granddaughter of Montaigne’s uncle and the president of the parliament of Bordeaux, who in 1608 ventured with other grave worthies into the land of Satan which, according to credible report, had been conquering the women of Labourd in Southern France. The expedition was accompanied, it was once thought, by a holocaust of thousands of burnings. Historians now think that these moderates, these 17th century centrists, did things the way centrists do: they only burned a few dozen women, and then wrote laborious screeds justifying their actions.  What distinguishes Lancre is that he was justly proud of his relation to Montaigne and was a pure product of the humanist culture of Southwest France. Montaigne’s own opinions on witchcraft are, like all his opinions, an involved and dialogical affair, but he certainly comes out against the persecution of witches on the ground that the witch itself is a figure invented by the theorists of witchcraft: “C’est mettre ces conjectures a bien haut pris que d’en faire cuire un homme tout vif.”
A phrase that should haunt Europe now, while we watch a whole country being put to the stake in support of economic conjectures that were first proposed before there was any grasp of the business cycle, and are now being forced down the throats of entire populations because their elites are either complicit or afraid to act.
Vox EU, which is usually a site devoted to the reactionary maunderings of economists in thrall to neoliberalism, published an unusually blistering analysis of the ECB’s usurpation of state power and its expulsion of Greece from the European Union – which is, beneath the rhetoric, what is happening here.Written by Charles Wyplosz,   the heart of the article is in this to my mind unanswerable graf:
Why did the ECB freeze its Emergency Liquidity Assistance (ELA) to Greece? The ECB will undoubtedly come up with all sorts of legal justifications. Whether true or not, this will not change the outcome.
If the ECB is truly legally bound to stop ELA, this means that the Eurozone architecture is deeply flawed.
·        If not, the ECB will have made a political decision of historical importance.
Either way, this is a disastrous step.
Whether it likes it or not, every central bank is a lender of last resort to commercial banks.
·        By not keeping the Greek banking system afloat, the ECB is failing on a core responsibility.


Surely the EU will never be the same. Either the strong European states – such as France - will reign in the ECB, or the EU will become a shell – and the quicker that happens, given the superstitions of the elites running Europe, the better. 

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