Fox (n): carnivore of genus vulpes; crafty person; scavenger; (vb) to confuse; -ed (adj): to be drunk.
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Wednesday 16 May 2012

Poli-tics; Greek, meaning 'many leeches'.

FOR reasons only an idiot savant could fathom, everything depends upon Greece.

Your mortgage. Your chances of being made redundant. Your local school and hospital. The police on your streets and the nurses who will tend you when you're ill.

How is that even possible? Greece is miles away and the single currency has nothing to do with us. Well, here's an idiot to explain...

"The eurozone crisis is very serious and it is having a real impact on economic growth across the continent, including in Britain," said Chancellor Gideon this week.

"It is the uncertainty that is causing the damage. Of course countries have got to make difficult decisions about their public finances, we know that in Britain.

"But it's the open speculation from some members in the eurozone about the future of some countries in the eurozone which I think is doing real damage across the whole European economy."

Any the wiser? No, not really, and nor is Gideon I suspect. Sounds a lot like everyone's having a panic which in turn is causing a panic.

So this is what's really happened.

Back in the 1960s some bright spark came up with the idea that a united Europe wouldn't have another war. We didn't enjoy the last two, it was all very expensive, and let's not do it again.

Over the decades that followed various politicians became more and more certain that having a whole new parliament with more politicians would be a great idea, and Europe would be like the USA, but with better cheese.

In 1992 lots of European governments signed the Maastricht Treaty which set out how some of that union was going to take place, and in 1999 the single currency was set up. Greece joined in 2001 and a year later the first coins and notes were in circulation. It created a single trading market which made it easier - and cheaper - for business to operate.

Today the Euro is the currency of 332million people in 17 countries. It's the second-most traded currency on the planet, after the dollar, and there are 150m people in Africa who use currencies which are pegged to the Euro.

A lot, it must be said, depends upon it.

The problem is that despite having a 50-year run-up the whole idea is massively flawed. Europe is not the USA - it's got lots of governments, not one. It has lots of laws, languages and cultures. And it has many different economic mannerisms as a result.

The main mannerism, if you're Greek or pay any attention to history, is that you spend more money than you make.

The first recorded Greek debt default was in the 4th century BC. Thirteen Greek city states borrowed money from a temple and never paid it back. The temple took an 80 per cent loss, and no-one learned their lesson.

More recently Greek defaulted on its debts in 1826, 1843, 1860, 1894 and 1932. In fact for 50 per cent of the time it's been an independent nation, it's been broke.

At the moment Greece loses around €15bn every year in tax, and while trying to crack down on tax evasion it has shut 130 tax offices and made their staff redundant. It's got only five million people in its work force, and a 40 per cent rate of tax dodging.

So of course, it was a sound idea to bail it out twice in the past two years with a grand total of €320bn.

Again, not our problem right? Except Britain 'owns' about £14.6bn of that debt, thanks to private banks and government lending to the International Monetary Fund. France and Germany own far more, the Americans and Japanese a bit less, but we all have a chunk of it and as has often been remarked we don't have any money left.

That money we don't have has been loaned to Greece which is using it to repay us for the loans it took out earlier and already can't afford to pay.

If we lose the money we've promised to Greece, we have less to spend on nurses. And the chances of our losing that gamble are pretty close to 100 per cent, as every City trader knows. Those guys know how to make money and can make as much of it from a bust as they can from a boom. They're just waiting to pounce.

The best thing in Greece's favour at the moment is that it has no actual government.

The Euro was a politician's idea. Lending money to Greece despite it being a blatantly silly move was a politician's idea. And politicians, generally speaking, can afford to pay for their own nurses.

Which is why they cannot, will not, admit that the Euro is as doomed as a sickly baby gazelle in the middle of the Serengeti surrounded by particularly peckish lions.

The website of the European Union, in the face of all evidence to the contrary, still claims that the Euro "makes very good economic and political sense". It claims the single currency "encourages sound public finances", even though it's made cock-all difference to the Greeks.

This is my favourite bit: "The size and strength of the Euro area also better protect it from external economic shocks, such as unexpected oil price rises or turbulence in the currency markets."

Politicians, eh? Don't you just love 'em? Bless.

They finish by saying we should all be very proud of the Euro because it "gives the EU’s citizens a tangible symbol of their European identity, of which they can be increasingly proud".

It's been more than 10 years and Europe is no more like the USA than it was before.

There was a major war which killed tens of thousands of Europeans after the union was formed, so it's not helped much with that.

And our European identity, just at the moment, is that we're being run by a bunch of idiots who don't read, don't listen, and can't count.

Unfortunately, they still suck.

'A good decision is based on knowledge, not on numbers.'
- Plato