The default of Greece, which is immanent, will
bring down the Euro Zone, and likely the entire European and American banking
system. This article appears in the June 5, 2015 issue of
Executive Intelligence
Review.
Mike Billington
Will Europe Survive
The Collapse of the Euro System?
by Helga
Zepp-LaRouche
June 2—While
the Greek crisis is coming to a head, maybe this week, but certainly in the
remaining weeks of June, the idea of a unified European Union (EU) has become as
full of holes as the proverbial swiss cheese. As this article is being
published, ultimatums are flying.
No matter
whether Greece suspends payment on the 300 million euros it owes the IMF this
Friday, June 5, because it cannot accept further austerity measures demanded by
the Troika, such as raising taxes in the range of 3.5 billion euros and further
cuts in social services; or whether the European Central Bank, German Chancellor
Angela Merkel and French President François Hollande at the last moment propose
a somewhat less brutal austerity program; either way, within the current EU
logic there is no way out, either for Greece, or for the EU.
Because after
June 5, further payments by Greece come due: on June 12, 350 million euros; on
June 16, 600 million; on June 19, 345 million; and then, altogether Greece has a
debt of 350 billion (!) to the European Central Bank (ECB). If the proverbial
miracle does not occur, such as the creditors agreeing to the European debt
conference demanded by Greece—the chances of which are currently totally
impossible—the policy of the EU will drive Greece into insolvency. At that
point, and not at the end of the 30-day grace period, which theoretically exists
before Greece technically enters definite insolvency, there is a threat of a
general collapse of the European banks, and, as a result of the derivatives
exposure and swap-arrangements between the ECB and the Fed, a collapse of the
American financial sector as well.
The faction
of those who swear that a "Grexit" would be bearable, even somewhat
"prediscounted," such as IMF head Christine Lagarde and occasionally German
Finance Minister Wolfgang Schäuble, insists at the same time on compliance with
the draconian austerity pact, because they fear that a concession by the Troika
would have a signal effect on the other countries which have been forced to
their knees by brutal austerity pacts, such as Spain, Portugal, Italy, and even
France. Behind this view lies the calculation that it would be better for
Greece, having returned to the drachma and having been reduced to beggary, to
serve as a horrifying example for the other potential candidates for leaving the
euro, rather than to accept a weakening of fiscal discipline, and with it, the
end of the euro.
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The Kremlin
Greek Prime Minister Alexis Tsipras meets Russian
President Putin in the Kremlin April 8, in the midst of Greece's showdown
with the European Union.
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Panicked
wefarnings have come especially from the United States, such as the one from
U.S. Treasury Secretary Jack Lew, that a Grexit would have dramatic consequences
for the world financial system. Paul Krugman warned in a June 1 article in the
New York Times with the headline "That 1914 Feeling," that the
inability of the Europeans to solve the Greek crisis is an eerie reminder of the
miscalculations leading to the First World War—Krugman quoted, as he said, the
latest book by Christopher Clark about the background of the First World War,
The Sleepwalkers. Krugman then compares the errors of judgment, even
the enthusiasm, with which the Europeans leapt over the cliff in 1914, with the
nonchalance today about Greece. Does Krugman, in using this ominous metaphor,
know more than he dares to write?
Eurozone
Fracturing
Italian
Finance Minister Pier Carlo Padoan reflected another variant on Fantasy-Island
thinking, when he went so far as to rave that after a Grexit, the Euro-Zone will
be a totally different entity (namely one from which countries can simply walk
out), but that such a Grexit would be a welcome development which would expedite
the further integration of Europe.
Apparently
Mr. Padoan doesn't often read newspapers. British Prime Minister David Cameron
lodged a complaint with Hollande and Merkel, that Great Britain's membership in
the EU could only survive Britain's upcoming referendum if the EU Treaty were
changed, and gave back more autonomy to the states. And Mrs. Merkel, in apparent
affinity with Cameron and realizing that the EU would not survive a "Brexit,"
even promised to be open to renegotiating the EU Treaty. The notion that, under
current circumstances, the twenty-eight EU member states could agree on a new EU
Treaty, suffers from a horribly far-reaching lack of reality.
Not only was
the Lisbon Treaty of 2007 only adopted through conspiratorial
maneuvers—everything was decided on the level of the European parliament behind
closed doors, and the members of the Euro parliament from the different nations
were given a modified text of the constitution that was rejected in 2005 in
France and Holland, which had been turned into a mere treaty that was not
subject to a referendum,—but in such an incomprehensible form that almost nobody
read it. Ever since, the EU has been hated for its lack of transparency, its
arrogance, and its policies favoring the bankers at the expense of the general
welfare,—by the greater part of the population, and this is not only in the
southern European states.
The
much-vaunted unity of Europe has the consistency of Swiss cheese. The EU
bureaucrats and technocrats want a United States of Europe as quickly as
possible. Great Britain wants more autonomy, because otherwise Scotland's
independence, and not only that, would turn it into Little Britain. Great
Britain, Scandinavia, and the Baltic states have degenerated into truly
hysterical warmongering against Russia, while the Czech Republic, Slovakia,
Hungary, and Greece openly demand an end to the sanctions against
Russia.
Two former
German Chancellors, Helmut Schmidt and Gerhard Schröder, are extremely critical
of Merkel, because she has, for the second time, disinvited Russian President
Putin from the Group of Seven Summit; so are Eckard Cordes, the chairman of the
Committee on Eastern European Economic Relations, as well as the German
Association of Machine-Builders (the VDMA), and the German Mittelstand. The fact
that German machinery exports to Russia collapsed in the first quarter by around
28%, while U.S. exports to Russia increased around 17%, strengthens the
suspicion many Germans have that the sanctions forced through by the United
States and Great Britain not only have the goal of regime change in Russia, but
that the old Anglo-American geopolitical impulse has also been directed against
Germany.
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The BRICS alternative to the EU is presented in this
election campaign poster of Tom Gillesburg, running for the Danish
Parliament. It reads: "Win-Win with BRICS, Not Collapse and
War"
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People in
America don't have the slightest inkling of how the NSA affair, in all its
aspects—from the tapping of Mrs. Merkel's cell phone, to industrial espionage
and the total spying on the population—has eroded the German-American
relationship. The fact that the NSA and BND (the German Federal Intelligence
Service) together have monitored and spied not only on private industry, but
also on politicians in France, Austria and Belgium, is a fission fungus in
Europe. Merkel's famous statement—"Spying among friends is not permitted"—has
become a synonym for the realization that this is obviously not a matter among
friends, but the pursuit of war against a specific population.
If you
soberly consider the real situation in the EU today, you can only conclude that
the euro was clearly, from the beginning, a failed experiment: Not only that the
Eurozone was never an ideal currency sphere,—it was totally obvious that no
currency union could exist between states as different as highly industrialized
Germany, versus agrarian states such as Greece or Portugal. But the evil
intention from the side of Margaret Thatcher, François Mitterrand, and George
Bush Sr. in 1989, to impose the euro on Germany for geopolitical reasons, as the
price for German reunification, would have to take its revenge. At least in the
case of Mitterrand, an adviser and eminence grise of the Socialist Party,
Jacques Attali, reported that Mitterrand threatened former German Chancellor
Kohl with war, if Kohl were not ready to give up the Deutschemark. All
three—Thatcher, Mitterrand, and Bush—were agreed that Germany must be checked,
and wedged into the straitjacket of the Maastricht Treaty, in order to weaken
its economy and thus to prevent it from building up an independent economic
relationship with Russia,—something which was always a thorn in the eye of the
Imperial powers, especially since the Rapallo Treaty of 1923,—and against which
they would even resort to political assassination.
It is
remarkable that Helmut Schmidt has recently identified the trigger for the
Ukraine crisis, which he sees now threatening to develop into a "hot war," as
the Maastricht Treaty, through which the foundation for the expansion of the EU
toward the East was laid, without regard for Russia and history. "EU membership
was offered to countries like Ukraine or remote Georgia, to turn them in the
direction of the West." Former French President Valerie Giscard D'Estaing, a
political contemporary of Schmidt, attested several days ago to many historical
facts showing that Crimea has never belonged to Ukraine.
Will There Be a
Break?
The
disillusionment, if not the frustration, of the citizens of various European
nations with the EU has reached seismic proportions. Far from strengthening and
uniting Europe, the discord among nations is greater than at any time since the
Second World War. The initial feeling of a "democracy deficit" has expanded into
the widely prevalent feeling that democracy in Europe is dead. (Indicative of
the mood in Germany is the [[latest satire]] of "The Institution" of May 26. [[
http://www.zdf.de/ZDFmediathek/hauptnavigation/
sendung-verpasst#/kanaluebersicht/2078314/ sendung/Die-Anstalt]]
Among an
ever-larger part of the European population, frustration over the mediocre
quality of the politicians has solidified. The Euro-skeptic parties are winning
in droves, as shown in the recent elections in Spain, Italy, Austria, and Great
Britain. Whether it's Merkel with her policy of little steps, or Hollande, with
his catastrophic poll ratings—these so-called leading personalities are seen at
best as crisis-managers, who gossip about events without developing the
slightest vision for the future, or presenting serious solutions to the
multiplying crises.
For this
reason, as well as the growing fear of a great war, which threatens to develop
out of the provocations by NATO and the U.S. against Russia and China—the policy
of the New Silk Road of China, and especially the offer of Chinese President Xi
Jinping for an inclusive "Win-Win Policy," is gaining ever greater attraction.
If Churchill's dictum were true, that in politics there are no friends—which is
obviously confirmed by the NSA—but only interests, then the interests of Europe
are better served by working together with the nations of the
BRICS
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