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Is There A Euro Backdoor?
Like most families, occasionally someone leaves the back door open...and you know what happens when a door is left open?
Someone is likely to walk through it…especially if the house is too hot and too uncomfortable.
Such is the case with Germany as it concerns Greece and Italy.
While German Chancellor Angela Merkel waxes on about Europe as the grand idea, her own conservative Christian Democratic Union party passed a resolution to allow eurozone members to voluntarily leave the euro, but still remain in the European Community.
The resolution is akin to admitting that some family members are more responsible than others, and so why force the irresponsible ones to have to live by the strict rules of the house if they can’t or won’t?
Granted, the resolution is symbolic, but to Greece, it may look like a way out of the worst case scenario…
Worst Case Scenario?
But is that where Greece is headed—into a worst case scenario?
Maybe…But maybe not how you think.
Greeks will continue to endure severe austerity measures—and likely continued civil unrest and political instability…
As well as more contraction in their economy—GDP dropped by 6% in the first half of this year—
But the humiliation and loss of sovereignty imposed upon them from outside by their German—ahem—eurozone masters is perhaps the worst part of the situation.
Sure, in the eurozone or out, Greece will be going through hell for the next several years…
But if they leave the euro and return to the drachma, their economic difficulties will at least have the appearance of being on their terms…
And not by imposition by foreign diktat.
This should have great domestic appeal for Greeks, if they can admit that fiscal responsibility is…their responsibility…and they get the chance to vote on it.
Will this happen?
But the latest version of the back door from Angela Merkel’s party would allow Greece, and any other profligate eurozone member, the option of leaving the euro if they choose to do so.
The issue came up in a very pointed way when after the latest Greek bailout plan was offered, Greece announced plans to hold a vote on whether Greeks would accept it or not…
Not the kind of “thank you” that Germans had expected after pledging billions of German taxpayer euros…
In fact, the initial wording of the resolution by Merkel’s conservative party gave eurozone members the right to force derelict members out of the euro…
Which is really what fiscal conservative Germans—basically all Germans--would like to do to Greece and the other problem countries.
It should be no surprise that they should be talking with France about downsizing the eurozone to only those countries with actual, functioning economies…
And with more of the eurozone’s economies weakening rapidly, a smaller eurozone may not only be logical, it may be the only real possibility.
But don’t tell this to Angela Merkel…Or the European Central Bank (ECB).
Merkel has decided that it is up to Germany to “shoulder the burden of saving Europe’s most ambitious project and step up to the challenge of these uncertain times.”
Uncertain times indeed.
Kicking Democracy Out the Door
The end result is hard to predict; or, if you’re the ECB, maybe it isn’t.
Maybe the open back door is another way of letting Greece—and Italy, for that matter—have the appearance that they can “leave the euro anytime”…
But in the meantime, telling them how it’s really going to be.
Europe, it would seem, is doubling down on too-big-to-fail…
Telling both Greece and Italy to accept their new “technical” leaders…
And to do what they’re told.
“Non-political” leaders are what they are being called…
Which really means that no political process—no democratic process—was involved in choosing replacement governments for either country.
For Greece, a new prime minister is in office—without so much as one Greek casting a vote…
You see, Greek political leaders appointed Lucas Papademos as prime minister. Who is he?
Why a former European Central Bank Vice President, of course.
And in Italy, economist and former European Commissioner Mario Monti is the new Italian nominee for prime minister…chosen by Italian “political leaders,” but not by Italians voting.
Not the kind of democracy Europeans are used to, but one which they probably must learn to accept.
As I pointed out in The Gorrie Details last summer, the eurozone will not admit failure, but on the contrary, will expand the reach and power of the European Union into member countries by taking the last vestiges of sovereignty from Greece –and the rest of the European Community.
“This is the way forward” the European Community is saying; forget democracy, you will accept the leader we decide you must have, and how your country will spend its money…
You’ve got to admit it, the failure of the euro provides one hell of a pretense to take over countries without an army…
So, will the back door to exit the euro really be open to Greece? Or Italy?
Will either be able to voluntarily leave the euro…you know, if they vote on it and stuff?
Or is democracy being kicked out the back door?
Which does it look like to you?
And those are…The Gorrie Details.