Wolfgang Münchau: Relentless Austerity Will Only Deepen Greek Woes

Wolfgang Münchau has an interesting article in today’s FT (see here).   Not surprisingly, he highly critical of official policy towards Greece and pessimistic about the country’s prospects without a change of course.   Central to the argument is that the fiscal adjustment being demanded of Greece is self-defeating: attempts to lower the primary deficit through fiscal adjustments slow the economy so much that the primary deficit actually rises. 

While I agree with Wolfgang’s bottom line, I would put the problem somewhat differently.   Even allowing for two-way feedback between the deficit and GDP, standard analysis shows that, all else equal, changes to the structural primary balance do lower the actual primary balance.   Moreover, this result holds for any size of deficit multiplier.  (See, for example, Equation 4 from Annex B here.) 

But of course all else is not equal.   A big part of what is holding back a Greek recovery is fear of a catastrophe, in which Greece loses official backing and is forced to default and potentially exit the euro.   The tougher the conditions applied to Greece the greater is the fear that it will simply not be able to do what is required for continued support.   This fear acts as a huge drag on the economy, leading spending to contract and limiting any improvement in the deficit. 

Perhaps ironically, a similar phenomenon was nicely captured by Olivier Blanchard in his comment on the original expansionary fiscal contraction paper by Giavazzi and Pagano (see here pp. 111-116).  After considering a version of the basic mechanism discussed by Giavazzi and Pagano, Blanchard notes:

This formalization focuses on the effects of consolidation on the expected level of output; there is another, probably equally important implication of consolidation that this formalization does not capture-the effect of consolidation on uncertainty. Consolidation may be associated, at least after a while, with a substantial decrease in uncertainty, leading to a decrease in precautionary savings, to a decrease in the option value of waiting by consumers to buy durables and by firms to take investment decisions. 

While the mechanisms are similar, I think the situation is quite different for Greece today, with the actions of official creditors key to the restoration of confidence.   Rather than more decisive fiscal adjustment being the route to restore confidence, a better route would seem to be less demanding conditionality for access to official loans – conditions that stand a better chance of being politically acceptable.  This would reduce the pervasive fear that it will all go pear-shaped if the government fails to meet the conditions.   The positive effect of reducing this fear would be to help stop the contraction in Greek economy, and should actually allow a faster improvement in the deficit, ultimately reducing risk to official creditors.   Both sides could gain from a programme with better odds of success. 


It is useful to revisit the arguments above in light of the excellent analysis in the IMF reports linked to by Philip.   The findings in Box 1.1 of the WEO have received most attention this morning.   The key message is that fiscal multipliers appear to have been underestimated.   Given the robustness of the results to a variety of controls, this analysis is broadly convincing.   The arguments and findings in Box 1.3 are also very interesting, showing the adverse affects of uncertainty on growth.  This underlines the cost of the failure to develop crisis-resolution policies that remove the risk of a serious escalations of the crisis in the most vulnerable countries. 

36 replies on “Wolfgang Münchau: Relentless Austerity Will Only Deepen Greek Woes”

One-Pager No. 33 | September 2012
The Collapse of a Nation
Who’s Afraid of Greece?

As the Greek summer comes to an end, the predatory austerity policies of the second bailout plan are in full swing, while the fiscal consolidation program continues to run its wayward course. Overall, what was once a modern democratic polity is beginning to resemble a feudal state. As the government seeks a broad agreement on its latest spending cuts, the Greek labor movement is set to embark on a new round of paralyzing strikes and demonstrations. This year, the truly hot season in Greece is only just beginning.


I think an additional problem is a particular failure in Greece. Increasing government income depends on collecting existing taxes better and new taxes at all. It is not clear that this is happening in Greece. As this is central to the success of an austerity program, even a perception of failure is enough to damage confidence in the likely success of the program.

One of the successes of Ireland in the 1990s was the ability of the Revenue to catch scams, to increase tax compliance, and therefore to limit the duration of ’emergency’ tax rises.

re- D O’ D ‘Angela in Athens’

The Greek police have banned all public demonstrations in Athens tomorrow for her visit.

“I think the situation is quite different for Greece today, with the actions of official creditors key to the restoration of confidence. Rather than more decisive fiscal adjustment being the route to restore confidence, a better route would seem to be less demanding conditionality for access to official loans – conditions that stand a better chance of being politically acceptable.”

a) Extent of reforms is thought to have a bearing on debt sustainability – you can argue as to exactly how much.

b) Confidence that “less demanding conditionality” will result in a reduction in ‘a’ is high (let this height = H) among official lenders (and the ECB, ‘cos they, er, obviously won’t buy bonds to finance governments).

This is why OMT purchases are conditional on a ‘bailout’ or ‘PCL’ programme.

If a country wants to obtain “less demanding conditionality” it seems that it has to either:

reduce ‘H’ by bringing its practices more in line with those of core EZ states, or

have one of its political parties get it’s people signed up to the possibility of running a primary surplus and being therefore in a position to realistically threaten a unilateral default.

I am, and have been for years now, confident the second of these options is pie in the sky in the case of Ireland, whatever about Greece.

If H is reduced and the ‘programme doesn’t work, then the official funders’ have to question their own thinking. If H remains high, then it may take quite a while for that to happen.

One way to get more funding with less conditionality would be collateral. It’s not easy to think about how to do collateral for a sovereign but putting some assets into a holding company with some creative contractual design would be the principle: the assets revert to Greece only under good policy performance.

I was under the impression that the Giavazzi and Pagano paper on expansionary fiscal contraction was now considered one or more of politically motivated rubbish, poor research and just not applicable to any country in the modern Eurozone?

See John Quiggan’s post here, or Brad deLong here and so on. Krugman dealt with it fable by fable in 2010.

You even covered the debate (though it is no longer a debate really, is it?) here in 2010.

Apart from people who develop Baltic Republic Tourette’s syndrome when confronted with the failure of austerity in Europe who believes in expansionary fiscal contraction any more?

@John McHale re Update

Shuould not surprise on these ‘errors’ – this is as much political and psychological as ‘mathematical economic’ – power dynamics supercedes the mathematical all over the EZ …. and Irish GDP/GNP anomaly continues with a debt of 150% GNP the more relevant figure not the mention the ‘stupid’ self imposed constraints on action ….

Look at German Press on advice to Angela Merkel on her trip to Athens today – and the false narratives that are widespread in Germany not to mention the abysmal failure of Irish admin communicate reality of Irish position on Odious Financial System Debt to EZ public sphere ….

The World From Berlin
Merkel ‘Must Stay Tough in Athens’
Chancellor Angela Merkel is bracing for a hostile reception in Greece on Tuesday, her first visit since the euro crisis broke out. German media urge her to stay tough in the face of demonstrations and possible pleas for fresh money. Others say the visit offers a chance to shed her image as a cold fiscal dictator.


@ Frank,

the problem is, when Finland pledged collateral, people knew they mean it.

Greek politicians and unions have made it more than clear enough, that in their case it wouldnt mean anything. They are just habitual liars.

The last greek guy responsible for privatisations to the order of 5 billion this year, after breaking this promise for 3 years, did not sell a thing, but came up with plans to ask for some 50 more billions.

@John McHale

I find it difficult to reconcile some points you have made.

“While I agree with Wolfgang’s bottom line, I would put the problem somewhat differently. ”


“While the mechanisms are similar, I think the situation is quite different for Greece today, with the actions of official creditors key to the restoration of confidence. Rather than more decisive fiscal adjustment being the route to restore confidence, a better route would seem to be less demanding conditionality for access to official loans – conditions that stand a better chance of being politically acceptable.”

My understanding of the excellent Munchau article is that ‘austerity’ is not working and will not work.
Lessening conditionality of loans while continuing to pursue the same austerity policy seems at face value to propose that the policy works or will work. The evidence is now clearly to the contrary.

IMHO, the real policy of the creditor countries is not in fact austerity, it is a Dickensian Marshalsea debt collection technique, designed to cower and smash the debtor and to collect as much as possible. The idea (or lie) of prudent lenders and reckless and feckless borrowers has been infused into the creditor country populations. Infused to protect the very imprudent lenders and politicians in those countries.

The irony is that the current policy of austerity will break both EZ and EU.
As Munchau says, it is a long way down the road in the case of Greece and Spain. He should certainly have added Ireland.

Personally I have made the journey from a pro European social democrat position to that of a slightly democratic anti European position. I imagine that I am not alone in that journey.

Re- D O’D ”not to mention the abysmal failure of Irish admin communicate reality of Irish position on Odious Financial System Debt to EZ public sphere ….”

The reality is well understood by those who have requested the Irish govt. to pretend matters are other than they are.
I don’t think we can expect our politicians to be representing the condition of the country truthfully – never mind serving it’s best inerests – on missions undertaken as part of the euro PR dept.

Perhaps the rest of us can take up a collection to buy an article in Time detailing the invented growth, continuing loss of earnings, ongoing falls in number of those working, imminent mortgage-debt ‘event’….

re- Joseph Ryan
‘Personally I have made the journey from a pro European social democrat position to that of a slightly democratic anti European position. I imagine that I am not alone in that journey.’

‘Europe’ died as soon as it chose to create an existence for itself seperate to that of it’s parts,
& when it chose to give transcendent primacy to it’s own legislative powers at the expense of national self-determining democracy.

John, you write:

Central to [Munchau’s] argument is that the fiscal adjustment being demanded of Greece is self-defeating: attempts to lower the primary deficit through fiscal adjustments slow the economy so much that the primary deficit actually rises”.

If that is what Munchau is in fact saying, he may have got his facts wrong. According to the sources I have consulted on line, Greece’s primary deficit appears to have dropped considerably over the past two years.

Please consider:
The state primary deficit totalled €4.31 billion in the 12 months to May [2012], down from €9.79 billion in the prior 12 months, according to revised data issued today [25 June 2012]. This represents a fall from 4.4% to 2.0% of GDP – see chart. The recent rate of decline is consistent with achievement of the target in the 2012 Supplementary Budget of reducing the deficit to €1.09 billion or 0.5% of GDP in calendar 2012.


And Patrick Bernau in today’s Frankfurter Allgemeine Zeitung
Wir zahlen nur noch für uns selbst

Ökonomen sagen: „Das Primärdefizit ist nahe null“. Auf Deutsch heißt das: Wenn Griechenland keine Zinsen zahlen müsste, wäre der Haushalt fast ausgeglichen. So gesehen steht der griechische Staatshaushalt nicht mehr schlechter da als Deutschland im Jahr 2009 und 2010.

In Griechenland steht für das laufende Jahr bisher vor Zinsen ein Defizit von nur 1,4 Milliarden Euro zu Buche, das meldet nicht nur die griechische Regierung so, unabhängige Experten kommen zu ähnlichen Schlüssen. Erst durch die Zinszahlungen verneunfacht sich Griechenlands laufendes Defizit auf 12,5 Milliarden Euro – und das wird dann mit den Hilfskrediten von EU-Staaten und Internationalem Währungsfonds gedeckt.

Quick translation:
Economists say: “the primary deficit is close to zero.” That means that if Greece did not have to pay any interest the budget would be almost balanced. From this perspective the Greek state budget is no worse than Germany’s in 2009 and 2010.

In Greece, for the current year to date and excluding interest payments the deficit is only 1.4 billion euros. It is not only the Greek government that says so: independent experts draw similar conclusions. Only thanks to interest payments does Greece’s current deficit multiply ninefold to 12.5 billion euros – and that is then covered with the aid loans from EU countries and the International Monetary Fund.


I wonder whether Munchau would change his views on the assumption that these sources are correct. I smell a rat because no mention is made of the impact of net DE-GR Target 2 credits or the 8 billion euro outstanding debt of the Greek government to its own private sector.

But even if the real decline in Greece’s primary deficit is less that stated above, Munchau has got it wrong. At any rate, the austerity policy certainly does not ‘correlate’ with a rise in the Greek primary deficit — so if it nevertheless ‘causes’ that rise, Munchau has some explaining to do.

I think Carolus makes an excellent point,

if you look at

, most Euro states have already done the majority of their homework,

and it is US, UK, Japan who look into an abyss, approaching their fiscal cliffs.

According to http://www.voxeu.org/article/europe-s-growth-model it also seems that integration in, especially in terms of narrowing living standards has worked better than elsewhere.

But of course in the lands of Baron Munchau(sen) and Krugmenistan everything could be solved immediately and painlessly, just printing ever more money, and the Germans, Finnish, Dutch paying for all of it.

Genauer : just wondering how collateral at the national level works? Do the 26th Airborne “Saarland” Special Forces come and fence off Rhodes? If greece doesn’t pay will we see a Finno-Teutonic seizure of thessalonika? Seriously, how does it work? I think the last time someone in that region decided to cash in collateral it was Turkey re Cyprus. That ended well.
So, how does collateral work at a national level.

Grumpy. What is going to be in escrow? If Greece ain’t
Paying then they won’t run an escrow account. If its outside Greece people won’t pay into it. Either way unless German tax police go in (…!!) it’s not going
To work. To me it seems like posturing from Finnish politicos. Can you direct us to an example of this working? Genauer is probably off in a huff.

Brian lucey, you certainly have a point.

Insisting that a finnish tax collector collects the entrance fees at El Escorial or the Akropolis, would not be very productive, I ll guess. How do you divvy up the advertising costs, the cleaning team costs, …. : – )

When you look at the “punishments” in the ESM, I think it is some ridiculously low 0.1% GDP, when somebody f—s up with 10 % GDP.

I think, in a way, when Philip posted this here, 5 hourse after me http://www.irisheconomy.ie/index.php/2012/10/03/tests-of-german-resilience/#comment-335866
, yak, yak, yak, LOL

He provided some internal space, before the usual outsider came in. I respect this.

And I said “I understand them [the Finnland people] to ask for”. That is not “ I support them”, or “I want the same”. It is me, who has English as a second language, but that looks pretty precise.

D-O-D asked, whether I /we are willing to draw our revolver, I answered we have bigger guns, but we don’t need them, for something like that.

I think, the links I provided here and there(http://www.irisheconomy.ie/index.php/2012/10/05/tall-ships-and-sovereign-default/#comment-337130), pretty much sum up my view:

a) Countries can get very fast very nasty on financial transactions / trade, if they feel like it is necessary, see Iran, or the Thai example there (A german liquidator relishs in the status of some prince, it makes it way more sure, that the debt is paid, without any gun used, or some auction needed to be organized : – )

b) nasty bankruptcies (like peronist Argentina in comparison to Uruguay) are followed by long term pissed off people, especially including their own, and the long term consequences to trade are in most cases the real punishment, for a nation, even without formal sanctions

c) And even “anewdawn” has a point today. Just trying to be everybodies darling (Germany is repeatedly the most popular nation in BBC / Pew questionnaires) some times gives some people the wrong idea, that we can only “nice”.

Merkel has exercised her “Richtlinienkompetenz” today, hic Rhodos hic salta, after careful considerations, that’s what she is elected Chancellor for, and democratic Germany will fall in line, keep our doubts to ourselves, and to give Greece a last, but very fair and realistic chance.

We want to built a community of equals, share a common destiny, with law and order, and increasing social integration. Today I am more confident, that we get this to work. The USA needed 3 attempts to built a lasting FED. The EU is an attempt to built something new, just like the USA were 240 years ago.


I got aware of that I assume that most folks here pretty much follow most of the postings, and I dont have to annoy with repeated posting of the same arguments / links.


“Greek politicians and unions have made it more than clear enough, that in their case it wouldnt mean anything. They are just habitual liars.”

Tagged under: Racism

‘We want to built a community of equals, share a common destiny, with law and order, and increasing social integration.’

Passing over the first, for the moment
‘a common destiny’ can mean a lot of very divergent things.
If you believe that for most people it extends beyond the country being a friendly partner with their neighbours, you’d be mistaken.
& ‘Social integration’ ?
In the sense of the ‘integration’ of people in some paramount european ‘citizenry’, you’d also be very mistaken.
You might get somewhat of a different impression from this site, but the Irish are almost as a body unsupportive of the european project.
There are certainly small, powerful coteries who proceed in it’s service against this tide, in the hope that once the framework is copperfastened then they can safely disregard public opposition. Without digging up old obsolete stereotypes, but they belong to social grouping that either (a) objected to the founding of the Irish state, or (b) are gombeens; colour their allegiance by circumstance, mercenaries, in a word.
There are also some well-meaning idealists, and those with legitimate dissatisfaction with the state of Irish politics. I doubt their trust in europe, though, will last the distance.

And, with the exception of the disreputable eurobaromter polls, I’m fairly sure this picture is repeated across europe. Common market, fine. Fedaralism not a chance.

Today twenty thousand farmers marched in Dublin to voice their demands to protect their EU subsidies. That is the uglier, self-serving aspect of support in Ireland for the EU. Take that away, and their is virtually nothing.
And certainly no ideological attachment to what is really, and increasingy recognised as, a remodelled form of imperialism.

You make some important points.

Getting me more and more aware and outspoken of what is important to me, and Germany.

A lot of countries, Sweden, Denmark, the Baltics, Poland, Czech, etc., are presently sitting at the sidelines, watching, look at how this Euro thing is evolving.

With whom we share close borders and a common culture (AAA, please look up your favourite financial scorecards, and to annoy you a little bit, a protestant work ethic, when I see the polish plumbers going to Paris and London, german folks serving in Switzerland and Austria as chamber maids, when the times got tough here.

And increasingly tight economic interactions. The trains and trucks are running every hour, from the ports in Rotterdam to Bratislava, through the factory networks in between, and back.

I think there is no other country in this world with as many neighbors as Germany.

And we are completely surrounded : – )

With NATO allies and AAA countries, or least A, I expect to upgrade to that, while I live : – )

What exactly are Dublin and London useful for? Why should I care more about Ireland, UK than Poland, Czech?

When I read a Sikorski from Poland and the Vaclavs from Prag, I feel a lot more common ground.

We will not fight secession wars here in Europe, what for? If people feel better about going their own way, they will.

I said it here before, there is strength in numbers, but only if there is synergy.

Are people really believing they can do a criminal bankruptcy on the People of Europe and can continue drawing benefits or trade priveleges? The Karl Whelan delusion?

Briefly, Ireland was closed to the markets when the govt. guaranteed bank liabilities due in the main to the chief european banks.
This guarantee was certainly mandated by the ECB, and probably with the knowledge of the ministers of finance within the eurozone, with whom there had been extensive consultation in the days leading up to the guarantee.
Our politicians see their mandate as coming from the european integration project, and not the Irish people. They were quite happy to cripple the country for the former cause.
The banks should have suffered their deserved losses.
The facts about the european federalisation agenda have been consistently denied by our politicians, and whenever they were pointed out they were denied as conspiracy theories and the like. How much validity does a union achieved through subterfuge have ? About as much as the annexing of czechoslovakia, the contemporary german commentary concerning which the commission pronouncements seem to echo (‘the nature state has no future in a globalised world’, etc)
Ireland will not be allowed to freely exit the euro, for the same reasons that there is reluctance to kick Greece out.
This is a private, elite coterie pushing this project – it has no popular support.
But they adhere to it with the same singleminded fanaticism that has accompanied every other european domination/integration project that preceded it.

There is no desire to bill the German-finno-dutch grouping; it is the mantra of commentators who are trying to delimit the peramters of the situation in those terms (”Germany must assume responsibility for the destiny of europe”, etc) – it is a contract severing us from our nationhood and self-determining democracy.
Don’t take this as exhibitive of any animosity – I am more worried about those who are trying to press the sceptre into German hands.
”Germany must assume responsibility for europe’s [Manifest] destiny” is really only a new version of an old and dangerous tune, & with similar words.

@Michael Hennigan

The guarantee of bank liabilities preceded the bailout by 2 years.

Public liability for private banking debts was then and remains now the policy of the ECB and their conflicted German co-conspirators and it is peculiar to suggest that Ireland would somehow have ended up with less of a financial burden from the banks had we been forced into doing it later rather than earlier.

Now extending the bank guarantee was wrong on multiple levels (political, moral and practical) but it was and is also the policy of all the EU institutions and in particular the ECB – an institution instrumental in forcing us into the bailout and currently engaged in trying to force Spain into one.

It takes a most unusual perspective to look at the mess resulting from the intersection of European component of the global financial crisis, EMU and Germany’s split mercanilist/neoliberal personality and blame it on the government of its twentieth most populous country.

re M. Hennigan

from the Wall St. Journal article that is the subject of today’s most recent thread:

”Ireland came close to national bankruptcy after pumping in about €64 billion ($83.1 billion) to six lenders to keep them from collapse when the country’s property market crashed almost five years ago. Accounting for about 40% of annual national output, the costs of rescuing the banks are among the highest any government had to bear during the global financial crisis.
The government pledged €32 billion in promissory notes to Anglo Irish Bank Corp. and Irish Nationwide Building Society that enabled the now-defunct banks to repay their debts, thereby preventing Ireland’s banking collapse from taking down other lenders in the euro zone.
…But paying the principal and interest on that debt will cost the government more than €3 billion each year for many years.
…Largely as a result of the cost of the bank bailout, Ireland lost access to the international bond markets in late 2010, and had to turn to the EU and IMF for a €67.5 billion bailout”.

As for credible evidence, the remarks of Lenihan, Ryan & Gormley to the effect that the guarantee has been agreed with euro-finance ministers and that the ECB had impressed the decision are on the record.

Shay and all

On 9/28/2008 The Republic of Ireland decided, to guarantee the 6 largest banks of Ireland.

At that time Irish ten year rates were around 4.7%, ISIN IE0034074488 (my 10 yr Irish proxy) was at par (98.08%), only Moody’s had downgraded Ireland to Baa1.

It was an Irish egocentric, unilateral, surprise move, which infuriated people on the Continent and the UK, because it forced their hands to make similar statements, they didn’t want to.

But only 4 years later, in an economic blog, people like Shay, D-O-D, etc, try to put the blame on some others, Europe, the ECB, the “co-conspirator” Germany. Let the German and other AAA tax payers pay for the consequences.

Sounds Greek to me.

When I look at http://www.money-go-round.eu/Country.aspx?id=IE&year=2011&method=gdp it is actually Ireland, with about 100 % GDP received from the EU, which might even beat out Greece in largesse gotten from Europe. I encourage you, to play a little bit around at this site.

The guy, who runs that statistic web site, Petr Mach, is a Czech, once (?) working for their Prime Minister Vaclav Klaus. Now it would be time for the Czech and Poland to collect similar subsidies, but he is determined to keep Czech out of the Euro, because there are sick of it and want to not be entangled. I can understand my close neighbors and have lots of respect for them. What they built in the last 20 years, was not subsidized by the EU. I went during this summer on day bike trips there, before starting desk work.

Their financial scorecard is a paragon of financial virtue, their 10-year rate as a small country is 2.3%, negative after inflation. They even managed a clean divorce from Slovakia, we can learn from them : – )

Yesterday I indulged in my cozy pan-European feelings, and it may be good that some folks here threw some cold water on it, promptly. It may be better to have a smaller, but more culturally coherent union. The people who got the most, Greece and Ireland, complain the most, and engage in conspiracy theories and endless slander. I don’t hear anything like that from our north/ central eastern Europe neighbors. The polish police is very helpful to catch car thieves (their favourite is the Czech/VW Octavia), before their cross the eastern Polish borders.

Herr Gennauer,
I think you might be disappointed with the reluctance of the people of CEE to join your vision of an alternative Europe as described by you. I also think your govt is also reluctant to embrace your “out there” views. The Chancellor seems to be increasingly flexible towards keeping the Greeks within the tent.


in case you missed it, the Chancellor went to Athens yesterday, a very profound statement, that we try very hard to get this working. And I said here above, I expect the democratic part of Germany to fall in line, and that includes of course me.

I say “we”, I do identify with my fatherland, I served it, I trust my elected politicians , as a system, (mostly : – ) and the nearly holy ( : – ) Bundesbank and Bundesverfassungsgericht (Supreme Court).

I am actually somewhat at a loss, where I provided some “vision” here?
What pictures did my praise of virtous neighbors induce in you ?

Chancellor Schmidt famously quipped, in the 1970ties, ‘folks with “visions” should go see a doctor ‘.

For your “reluctance” impression, maybe I should have added to my
“I can understand my close neighbors and have lots of respect for them” a “I would decide the same in their situation”.

I dont see any “alternative” here.

We collaborate with various neighbors in various ways. There is a french-german brigade, join cabinet meetings with various neighbors, chancellor Schröder once gave his voting rights to Chirac, because he had more urgent things to do, dealing with his unruly social democratic party : – )
Italian police is walking patrol on the Oktoberfest.

Why do I write all this? With so many words?

Because I realize more and more, that this whole cultural, communal, sub conscious feelings/experiences are significantly different in the center of europe and in countries like Ireland and Greece. The stuff we most the times do not talk about, but take for granted.

Greece does not even have a train connection anymore to the rest, and all major roads are built around them. But then having “visions” about becoming a logistics hub, aaargh.

I see you as in the mainstream of German nationalism. Thus far the record of this ideology ain’t great. As Fisker and Weber acknowledge it is on the way to destroying Europe for a third time in a century if unchecked. Thankfully the fightbacj begins with F
Draghi castrating the BuBA.


A General word of advice

If somebody thinks, playing the world war theme gets him anything but contempt, he is mistaken.

When people come with this, we immediately know they are criminal, trying to blackmail with things decided 3 generations ago, and steal from us.

This comes today nearly always from people in countries which did not even participate in WWII, like Ireland and Spain.

We don’t hear this from folks who would have a lot more reason to complain, Mother Russia, Poland, Czech.

With the recent blog here about “German resilience”, we do not so much associate a Greenspan’s “shop til you drop” with that word, but more walking the cemetery of Leningrad in 1991, with its endless rows of columns of mass graves, together half a million from that time, just one city. Times were tough for them at that time as well, but the hospitality of the Russian hosts was wonderful.

Russia would have had


(25 million dead, and not being part of http://en.wikipedia.org/wiki/Agreement_on_German_External_Debts )

And opportunity

(half a million military folks and 4000 tanks in Eastern Germany, http://en.wikipedia.org/wiki/Group_of_Soviet_Forces_in_Germany, this is 50 times more than all Irish forces on about the same size territory, to give you some impression) to ask a lot in exchange for reunification.

Everybody knew, we had bought out about a quarter million ethnic German brothers and sisters from Siebenbürgen (Transylvania, Romania) at around 10 000 a piece, priests up to 70 000 in 1964. Dissidents from eastern Germany came for around 30 000 per capita.

Moscow could have asked for ….. half a trillion? We would have paid.

But they didn’t ask.

Their “departure was carried out according to plan and punctually until August 1994”

There is one thing,

Individuals like Tullmcadoo, phantazising about “castrating” the Bundesbank, which is covered by the full faith and trust, and force of the German people, or Shay Begorrah,


Folks musing about murder to folks, who try to collect on legal claims against a nasty sovereign bankrupter, peronist Argentina, who recently took YPF from Spain.

It is a very different beast, when Luis_de_Guindos (lehman brothers, PwC, Opus Dei) …..

But it is a wonderful Saturday afternoon, the sun is shining, I smell the grass my neighbor is smoking, some things I attributed to tull and shay were said by others,

Spanish statements were in fact from some clown ministers there, and not the finance minister. The US have a vice president as the master of gaffe, and I like my parliamentary system, where we can hire and fire chancellors and ministers very quickly.

We will get this Euro thing working, 2 steps forward, one back, sometimes.

And now I have a big Schnitzel.

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