weekly roundup

Been ill with a cold and now the flu :oops:, tiss the season I suppose! Anyway, a round up of a few of the week’s stories.

Its worth reflecting on the victory of Syriza in the recent Greek elections. Radio 4’s John Humphry‘s, who has a son in Greece, has done a number of pieces on the hardship of ordinary Greeks in recent years. If you’re wondering why so many Greeks voted for Syriza, its worth having a listen.

As I’ve been saying since the beginning of this crisis there has been a distinct lack of leadership within the EU. The EU’s one shot solution to all ills has been, until very recently, austerity with much tightening of belts and privatisation of public services. The end result is that listening to the ECB has tended to remind me of that scene in father Ted where they organise a disco and play the same record over and over again. Needless to say the Greeks have decided the time has come to change the record.

In part this has to be blamed on the German Chancellor Angel Merkel, who is a fairly risk adverse and unimaginative politician. To Merkel doing something radical would involve changing her brand of toothpaste, living dangerously would count as having cornflakes for breakfast rather than porridge! Also there has been a tendency to not consider the economic and political consequences of austerity, which has seen much hardship for ordinary Greeks and a rise in support for many radical parties.

Ultimately, the concept of solving Greek’s debit crisis using austerity alone was flawed from the beginning, as this assumed that Greece would one day be in a position to pay off its debts. As Syriza have been pointing out there seems to be no economist in the world who believes that was ever going to happen. This was an unspeakable truth that nobody in the EU, nor the Greek government would say , because they feared the consequences.

It is for example worth reflecting on the differences with the Greek bailout and, say the bailout in Ireland. In Ireland, it was never the Irish governments debt that was the issue. It was the huge amounts that Irish people had privately borrowed (approximately ten times Ireland’s GDP! as compared to an Irish government debt a tenth of that!) from banks and international lenders to fund the property bubble. Prior to the crisis the Irish government had been posting surplus budgets year on year, even when Germany and the UK were reporting deficits and doing so despite a string of tax cuts over the course of the boom.

In essence the Irish bailout was a case of a bridging loan to tide the Irish government over until it de-toxified the private debt mountain, and got people working and paying their taxes again. In theory, this should enable the Irish to pay off its debts, although the crash has left a lot of Irish in a precarious financial situation.

The situation in Greece however was very different. And given that the Greek debt has actually increased since the bailout its quite clear that austerity isn’t working and never was going to work. If this was an individual or a company, then this is the point where bankruptcy proceedings would start. Creditors need to realise that lending money involves an element of risk, after all why else do they get to charge interest? So in such a situation, Greece would settle its debts to the best of its ability, paying off what it realistically could, with the rest of the debt being written off.

However, this hasn’t happened in Greece, there’s been some debt write down, in the form of a “debt swap” back in 2012 , but that’s about it. Previous Greek governments feared heading down this road as it could lead to them being kicked out of the Euro. While the rest of the Eurozone feared that it would undermine the credibility of the currency, quite apart from the fact that the bulk of those euro’s are owned to other parts of the Eurozone.

So in short, anything Syriza does can’t be any worse that what the prior regimes have done. My concern however is that I’m worried if they understand the risks they are taking, or the consequences of engaging in what will effectively be the negotiated bankruptcy of a country. Particularly as Syriza has made various populist, but outlandish promises, ranging from creating hundreds of thousands of jobs to free electricity to cutting property taxes (the sort of thing left wing governments are usually imposing!).

How exactly the Greeks will be able to afford these measures isn’t explained. They could only do so by borrowing money, at least in the short term. But in the event of a debt write down, nobody, not even their eurozone allies, are going to be willing to lend them money. This again, is normal in any bankruptcy proceedings, nobody is going to lend you money (other than Wonga) if you’ve a pile of CCJ’s to your name. That’s why you should generally avoid going bankrupt at all costs! As Robert Peston at the BBC points out, the speed at which the Greek economy could collapse, if the ECB cut off the life support, is pretty swift.

The Greek’s could leave the eurozone and return to the Drachma, then simply print money, but that would wipe out the pensions and savings of most Greeks, as well as bring down their entire banking sector, quite apart from the normal problems caused by hyper inflation. I don’t want to have to be avoiding Ryanair flights to Greece because I can’t squeeze all the Drachma’s I’ll need for the taxi to my hotel into my hand luggage!

Inevitably there’s going to be a need for compromise. The Troika need to realise that holding Greece over the fire is not going to result in them paying anything, when they clearly don’t have the means to do so. There is a need for a little bit of European solidarity here. But equally, a need for a bit of realism from the Greeks. They can hardly be expected to see money lavished on them at the same time their creditors are having to take a fairly hefty hit.

My concern is therefore, what happens if one or either side refuses to compromise. The consequences are likely to be Grexit. And while I tend to doubt the more extreme UKIP fantasies of what happens after that, it is likely to have a pretty disastrous effect on the Greek economy (out of the frying pan and into the fire) and a knock on effect on the European economy, including the UK.

Syriza also have this strange thing about Russia and Putin, which is not entirely explained.

Rise of the Populist parties?
The victory of Syriza has also had the media speculating that this might signal a radical change in European politics, whereby new parties populist parties begin to take over from the old guard of politics.

I think its important to remember however, that there is nothing new about Syriza. They are pretty much saying the same things they’ve been saying since before this crisis even began, its just the presentation is a little different and given the massive mess Greece is in, more are willing to listen.

Similarly, as I discussed recently, there is nothing new about UKIP. Their message isn’t that much different from that of the likes of the BNP or the EDL. The presentation might be different, they tend to prefer talking in code, rather than being more openly racist. But essentially dress Enoch Powell up in a cheap suit, put a pint in his hand, make him laugh occasionally and you’ve got Farage.

And Sinn Fein, who have gained a lot of support recently, as I discussed in a prior post, haven’t changed their message or core policies since 1920. The reason for this upsurge in support is driven by a lot of angry and confused people, taking it out their frustrations on a ballot box.

So yes its possible we’ll see populist parties figure in future governments. But its worth remembering that they are advocating polices that are actually quite old and not very new. So anyone expecting instant miracles is going to be sorely disappointed.

Election debate
Cameron and the Tories appear to be running scared from any debates in the run up to the next election. It started off quite amicably, once they learnt UKIP would be invited, they insisted the SNP would be included. Okay, makes sense, would be silly to exclude the ruling party of Scotland, particularly if the debate was held in Scotland, or the topic of Devo Max is likely to feature.

Then Cameron insisted that the Greens come along. Again, fair enough, they represent an obvious counter to Farage. While I won’t expect them to feature in every debate, but then again I’d be against the SNP, UKIP or the lib dems being invited to all of them either. But its reasonable to include them to some degree.

However now Cameron wants ALL the major parties to be invited, the Unionist, Sinn Fein, SDLP, the Welsh Nationalists, etc. I mean while we’re at it why not invite the Monster raving loony party, or how about George Galloway? By the time they all introduce themselves the debate will be over. I also have this vision of Galloway getting Farage in a headlock while Nicola Sturgeon tries to give him a Glasgow smile, as Miliband and Clegg take it in turns to give Cameron wedgie’s and the Unionists try to march their “traditional route” past the podium of Martin McGuinness, while the Welsh and the Greens sit in the corner discussing rugby and minted lamb :)).

The reality is that debates run counter to the Tory election plan. To those on the right they plan to point out that Farage is an insane racist and a fan of Enoch Powell. And to those who don’t read the Daily Mail, the Tory message is to point out that Cameron looks much better while eating bacon rolls….assuming they put some caviar in it first!

The danger with a TV debate is, that there’s likely be many “I agree with Miliband/Farage moments” and as a result they are very likely to lose support, no matter how the debate goes.

Education woes
One of the battle grounds in the election could be education. This doesn’t bode well for the Tories, as there is a growing view that their policy of favouring academies has not had the benefits that the Tories claim.

This is important, given that the Tories policy is to push any school that is “failing” into the category of an “academy” or “free school”. This robs the school from any local government control and hand that control over, more often than not, to various Tory party cronies and public school boy chums. It kind of makes Thatcher’s great milk snatch pale in comparison, given that they now seem to want the entire school.

Meanwhile, Ed Miliband has also been proposing a cut in tuition fees from £9,000 to £6,000. I would dismiss criticism of this policy from various overpaid “Jonty De Wolfe” types in academia, who are clearly more worried about the gravy train they’ve profited from coming off the tracks, than student welfare. Much as we can ignore the opinions of a tax dodging head of Boots.

However the BBC’s Sean Coughlan has a more intelligent criticism of this policy. He points out that its the issue of student loans to pay for maintenance, plus the fact that said loans seldom cover all a student’s living costs, that is the major cause of stress on household budgets. In other words, cutting fees may not deliver all the benefits that Labour, or their supporters in student unions, suggest.

Not an issue
Those on the right have been making hay out of the brutal beating of a university law lecturer by POLISH criminals 88|. However, if you’re wondering why the Daily Mail hasn’t been interviewing him, its because he doesn’t agree that this the attack on him should be seen in that context, that it has little to do with immigration. There is a need yes, to deal with criminals crossing borders. But the solution to this (as he sees it) is more co-operation with EU partners not less.

Last week saw the fiftieth anniversary of the funeral of Winston Churchill….and no I’m not talking about the dog from the insurance ads! ;D Inevitably, the Tories, who have a nasty habit of excessive hero worship, tried to make a big deal out of it.

Such behaviour is dangerous as it often leads to a warped tabloid style view of history. To say that Churchill had his flaws is to put it mildly. He was, as some critics have pointed out, a racist who considered non-white races (or Catholics) as inferior. The first gassing of the kurds may well have been launched by the British in the 1920’s, not Saddam, acting under orders from Churchill, who endorsed the use of gas to put down rebellions in Afghanistan and Kurdistan, as well as against Russian forces during the civil war.

It is perhaps ironic that he is known as a great war time leader. In the first world war, his actions led directly to the disaster at Coronel. This occurred because Churchill vetoed the sending of reinforcements to the British forces in the Falklands, against the advice of the admiralty. Churchill seemed to be more worried at the time in preventing a German born aristocrat friend from loosing his job at the Admiralty than fighting a war. Fortunately, after the battle, the RN was able to rush several ships south to save the Falklands before the Germans could attack the Islands directly. Churchill was also involved in planning of the mess otherwise known as Gallipoli.

And he only became PM in 1940 because of the British military mess in Norway ….that again had Churchill’s finger prints all over it! This would be a bit like G. W. Bush resigning in the middle of the financial crisis only to be replaced as President by Alan Geenspan!

And above all else, there was his role in Ireland. As I discussed in a prior post, he was involved in undermining the case for Home rule by loudly proclaiming that Westminster would renege on its pre-WWI commitments to implement it after the war was over (playing right into the hands of the IRA). The Black and Tans who terrorised Ireland were also his idea.

This behaviour had many long term implications, Irish independence became a matter of time rather than a possibility. Britain’s credibility was undermined in many corners of Empire, which probably played a role in the break up of the Empire later. Irish neutrality in WW2 was largely a consequence of the Irish seeing an alliance with the man responsible for the burning and looting of Cork as being little different from that of an alliance with Hitler.

Churchill has his high points but its also important to remember he had his flaws and certainly made many mistakes, as is the case for many historical figures. There are, for example, many Irish who hold up De Velera in the same light as Brits look on Churchill. However, to describe Dev as a “flawed” character is to put it mildly. One could argue the Irish civil war was largely a consequence of him putting his pride before country (he refused to sign the oath of allegiance…until it became politically convenient to do so!). He also often seemed to be more interested in scoring political points against his rivals (such as Churchill!).

If you want to promote a one sided propaganda version of history, then I recommend you watch the film “Churchill – the Hollywood years”….with Churchill played by…Christian Slater….well its got a good song!


3 thoughts on “weekly roundup

  1. Good points all. And yes, what is it about the British desire to hero-worship? Then (of course) we discover that the idol has feet of clay (ie human failings like the rest of us) and we can’t lambast him/her fast enough. RIP nuanced thinking.


  2. Good points all. And yes, what is it about the British desire to hero-worship? Then (of course) we discover that the idol has feet of clay (ie human failings like the rest of us) and we can’t lambast him/her fast enough. RIP nuanced thinking.


  3. We won the war – he wrote his own history – if we lost it would all be very different now. He was a very flawed character –probably not that different in essence form Stalin or Hitler…


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