You are browsing the archive for Europe.

The Ukraine, US, Europe, Fascism and Imperialism

12:05 pm in Uncategorized by cmaukonen

Propaganda – flickr

While reading Yves Smith Naked Capitalism the Links section had a link to an entry by Dmitry Orlov – Reichstag Fire in Kiev. Where he gives president to the crisis being the work of neo-nazis egged on by and helped by the US and it’s western allies. Citing the Reichstag Fire in Germany in 1933 as a the incentive, since it very close to the anniversary on Feb. 23. 1933. As well as the current events that lead up to the situation we have today.

Obviously, this is far from a replay but more of a faint echo. It is a work-out of a long sequence of events. Leaving aside the dim past which gave rise to the Black Hundred and its Pogrom artists, the major problem is that Western Ukraine (Eastern Poland prior to World War II) was never properly de-Nazified (the technical German term for this process is Entnazifizierung). Then there was the fateful mistake of giving away Russian Crimea to Ukraine by Khrushchev (a Ukrainian), neatly paralleling the giving away of Abkhazia to Georgia by Stalin (a Georgian). Then came the years of neglect following the collapse of the USSR during which Ukraine, never quite capable of self-governance, achieved truly stunning levels of misery and corruption and became famous for its main export—young prostitutes. Then came the Orange Revolution, in which Yushchenko, who is the husband of a former Reagan-administration neocon, was thrust into office in a US-orchestrated campaign. He, along with his side-kick Yulia Tymoshenko, continued the orgy of corruption, until they were voted out of office and replaced by an equally venal, but additionally very thick-headed Yanukovych, who was the one chased out of office on the anniversary of the Reichstag fire.

Pointing to the current administrations’ relationship with the Ukrainian neo-nazis  and the the US with it’s history of …

thieving Presidents and Congressmen and gradually going broke as a result, are being systematically conditioned to hate Vladimir Putin. (As thieving presidents go, Bush is ahead so far with over a trillion dollars stolen via the bank bailouts and the so-called “Iraqi Reconstruction” while Obama is behind, having gobbled up just the “stimulus spending,” but may pull ahead of Bush soon thanks to the massive grift scheme known as “Obamacare” and other assorted swindles.)

Has little [if any] room to talk concerning Russia’s motives and Putin’s action on this manner. For the Russians are intimately experienced with Nazism and it’s effects. With US media towing the government line of anti-Russia, and anti-Putin for the benefit of our own oligarchs. Even thought Putin managed to pull Russia out of it’s economic and financial destruction, a situation which was at least partially helped by the west.

Finally, it bears pointing out that, Rechstag fires aside, the current state of affairs in Ukraine is the West’s direct fault: Ukraine was forced to choose between signing a worthless deal with the EU and entering a customs union with Moscow. Both Washington and Brussels, along with most of Western media, completely ignored Putin’s suggestion that all the sides negotiate a compromise solution to avoid Ukrainian bankruptcy, which is now all but assured. Because of Western intransigence, Ukraine’s government was forced to lurch between the EU and Moscow, losing face in the process and providing the fascists with a convenient opening.

The really interesting part is actually the links he gives to a tree part treatise by John Michael Greer on fascism. Where Greer gives a good historical perspective on fascism and how it has been used in the past as well as the present.  From Mussolini and Hitler to the present day as an derogatory epithet used by both the right and left to apply to anyone who whose ideas are contrary to those each side espouses. Greer’s premise is that any third way of thinking is at best dismissed and usually denigrated by the two major political entities, both of which are trying feverishly to maintain the status quo.

Greer also goes into detail  on what conservatism used to mean.

Since Republicans and Democrats are themselves simply very minor variations on a common theme, it worked well thereafter to apply those labels to anyone who strayed too far from the midpoint between the two.  This allowed the parties to squabble about peripheral issues while maintaining perfect unanimity on core values such as maintaining America’s empire, say, or supporting the systemic imbalances in financial and resource flows that keep that empire in business.

 One of the consequences of that strategy was the elimination of conservatism, in anything like the old meaning of that word, from the vocabulary of American politics. The Anglo-American tradition of conservatism—continental Europe has its own somewhat different form—has its roots in the writings of Edmund Burke, whose Reflections on the Revolution in France became a lightning rod for generations of thinkers who found the hubris of the radical Enlightenment too much to swallow. At the risk of oversimplifying a complex tradition, conservatism was based on the recognition that human beings aren’t as smart as they like to think. As a result, when intellectuals convince themselves that they know how to make a perfect human society, they’re wrong, and the consequences of trying to enact their fantasies in the real world normally range from the humiliating to the horrific.

To the conservative mind, the existing order of society has one great advantage that the arbitrary inventions of would-be world-reformers can’t match: it has actually been shown to work in practice.

Through all the maturations and anti-communist propaganda and such, the left now views any sort of conservative thinking a fascist, neo-fascist or nazi like. Not even knowing what each actually means now or in historical context.

That these days the left equates fascism and conservatism with bigotry, racism and hate. Which the current self proclaimed “conservatives” proudly wear as a mantle of distinction.   He [Greer] also goes into the background of the “National Socialist Workers Party” – Nazi -  to which Hitler was a part of.  That it arose to fill the gap that emerged by the political infighting in Weimar republic, with its total dysfunction.

Then in the end proposes a though experiment of modern day where a third party emerges promising to “right the wrongs” and bring “order to chaos”  etc. based on progressive and ecological principals and end the end becomes worse than what proceeded it.  His thesis being that fascist and totalitarian states emerge when the middle ground is abandoned and this middle ground becomes a void.

Orlov sums it up at the end of his essay rather well.

In case you would prefer something much shorter, my thesis is that fascism can be handily equated with militarized bigotry, and that while most countries are at this point immune to it, seeing it as idiotic at best and criminal at worst, certain countries are not—weak, socially disrupted, destitute countries, with an unresolved fascist past, that are subject to unscrupulous external political manipulation—such as poor Ukraine.

The middle ground was embraced by both political parties here but was abandoned when they both began to pursue imperialism.  Leaving the US with a Weimar like situation.

Though I seriously doubt we will become a fascist totalitarian state, I can see US becoming more like the Ukraine. Lurching from one oligarchy to another with those trapped here having to bare the brunt of it.

The Ukraine Blues

8:46 pm in Uncategorized by cmaukonen


Here is a good interview with Dr. Stephen F. Cohen by George Kenney of Electric Politics. It’s about 48 minutes long but audio only. Well worth a listen. From the description:

One feels frighteningly disoriented, hearing an American president support deadly mob violence for what is, essentially, counter-revolutionary change (in the form of IMF austerity). The president’s message may be directed at unknown people far away but the effects are certain to be felt here, possibly for generations, as the bindings of what relative peace we have come undone. I was extremely fortunate to be able to talk with Dr. Stephen F. Cohen about the crisis in Ukraine. He’s in a tiny minority willing to discuss what’s really happening. This is an unscheduled podcast on breaking news. Total runtime forty eight minutes.

Dr. Cohen goes into good detail concerning the potential fall out of the crisis in the Ukraine and how Russia may respond to it. Also what this may mean for the Ukraine itself. A very good analysis of the situation. Especially the radicals that have stormed Kiev and the US EU response to the situation.

More from the Nation:

The crisis in Ukraine came to a head this weekend with President Viktor Yanukovych’s hasty flight from Kiev. The western response to his departure now threatens to fracture the Ukrainian government into two regimes: one led by a democratically-elected president and one chosen by the ‘street.’ Appearing on Electric Politics, Nation contributing editor Stephen Cohen situated the present conflict in Ukraine within the context of America’s foreign policy toward post–World War II Eastern Europe. He argues that western policymakers seem unaware of the possible consequences of their support for the Ukrainian dissidents. Pointing to a ‘new Cold War divide in Europe’ as one possible outcome, Cohen warns that ‘our children and grandchildren will pay the price of this winner-take-all policy.’

Here is the link to the podcast and download.

Attack of the Economic Crisis That Would Not Go Away

6:21 pm in Uncategorized by cmaukonen

Creature From The Back Lagoon - flickr Boogeyman13

So why is it that tiny little Cyprus and the their banks are causing such consternation and high blood pressure over in Europe and why should we care ? Richard Wolff gives a good explanation with this audio clip from an interview on KPFA that I grabbed and uploaded to my web site. You can hear the whole program here if you like.

Here is the long and the short of it. The Eurozone was the outgrowth of The Common Market or EEC – European Economic Community.

The European Economic Community (EEC) was an international organisation created by the Treaty of Rome of 1957.[1] aIts aim was to bring about economic integration, including a common market, among its six founding members: Belgium, France, Italy, Luxembourg, the Netherlands and West Germany. The EEC was also known as the Common Market in the English-speaking world and sometimes referred to as the European Community even before it was officially renamed as such in 1993.

It gained a common set of institutions along with the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (EURATOM) as one of the European Communities under the 1965 Merger Treaty (Treaty of Brussels).

Upon the entry into force of the Maastricht Treaty in 1993, the EEC was renamed the European Community (EC) to reflect that it covered a wider range of policy. This was also when the three European Communities, including the EC, were collectively made to constitute the first of the three pillars of the European Union (EU), which the treaty also founded. The EC existed in this form until it was abolished by the 2009 Treaty of Lisbon, which merged the EU’s former pillars and provided that the EU would “replace and succeed the European Community.”

Whew. That’s is essentially how it began. To allow trade between the various countries that made it up to proceed with few hindrances and eventually to have a common currency. Sounds good in theory but it has a number of flaws. For one there is a central bank but no central government behind it. It has no real power except to print money. It cannot set policy of the member states.  Nor can it set the policies of theses states banks. The states themselves remain autonomous.  When the single currency was brought forth, it was – more or less – to replace each states currency on a one for one basis, even if the exchange rate at the times was wildly different.

All of this was in and of itself a prescription for disaster.  As we all know the exuberance and risk taking by the banks both here and in Europe built up mounds of debt. Debt that eventually came due and the debtors could not pay.

So why all this fuss over Cyprus banks ? They could not be THAT big…or could they.  Well as a matter of fact and as Richard Wolff explains in the interview they are. Far bigger that this tiny country with only tourism and some maritime shipping would ever generate on it’s own.

Read the rest of this entry →

Eurozone Update – Greece ? Italy ? Spain ? Portugal ? … Maybe – or ?

8:00 am in Uncategorized by cmaukonen

Euro - flickr creative commons

The on going and deepening economic crisis in Europe once again has come to the for front in at least a few media outlets.  Now before I go any further let me point out what has been going on in reality – at least according to Richard Wolff.  He has given a good synopsis of the situation in a number of his presentations on the economy.

The European Central bank – funded primarily by Germany, France and Belgium – has been “bailing out” various peripheral countries.  Mainly Greece, Spain, Portugal and Italy. But where is the money going ? Well back to the big banks in Germany, France, Belgium and Switzerland.   That’s where. In other words it has been and continues to be a stealth bailout of these big banks, mostly by Germany.

And Germany is keeping this part quiet since Merkel and all know damn well that the German people would not put up with this if they knew this was what was really going on.  I suspect they do however and this is why this item from Ives Smith over at Nakedcapitalism is not and should not come as a big surprise.  She gives a good rundown on the situation – as linked to by Faster – and what it may mean.  Beginning with this revelation.

Data point one. One of my colleagues studied in Germany, has extensive, high level political and economic contacts there, and reads the press daily. He also describes his sang froid as “somewhere between that of a Chinese sage and a dead animal.”

Needless to say, he not prone to overstatement or overreaction and also has a propensity to makes Delphic remarks.

He said the Eurozone is over. In pretty much those words, a simple sentence, no caveats or conditionals. I nearly fell out of my chair. This apparently reflects the German recognition as a result of the Italian elections that they will not be able to surmount domestic opposition in Italy and potentially other periphery countries and would rather pull the plug than continue funding their trade partners. He said there was a fair bit of discussion of Germany leaving the Eurozone after the election. I quizzed him on how they thought they could do that, since the new DM would presumably trade at a big premium to the Euro. We discussed that the likely outcome would be further labor “reforms”. Maybe I am naive, but I don’t see how this would not undercut an critical German strength, that of the good, if also sometimes combative, relationship between German workers and management. My source finally said widespread recognition of the existential impasse at most a couple of months away. He’s never this definitive.

Germany throwing in the towel ? If Merkel’s Christian Democrats do as badly in the upcoming elections as it has been doing in the local elections recently, this is a good bet.  Since they have been footing the bill for most of this themselves. Not something that has proven popular with the German people one bit.

And with Italy in a dead lock politically,  the ministers of Portugal fearing for their safety and the police and firefighters refusing to enforce evictions in Spain – the likelihood of the enforced austerity programs IE bank bailouts  continuing apace grows dimmer and dimmer.

Greece is on the verge of exploding and imploding all at once. And other countries are taking notice. As Ives says.

Thus Greece for the Germans served pour decourager les autres, to show what would happen if you let your debt levels and finances get as badly out of whack as Greece has. But that might have backfired. Citizens in periphery countries now suffering high unemployment might decide they’d rather take more pain now and gain control over their destiny rather than face being broken later on the Trokia’s rack.

As I said, I don’t have an answer here. I’ve long thought the technocrats underestimated the risk of democratic revolt. Those tail risks are bigger than you think! The European elites beat back that threat in Greece, but Italy may (stress may) prove to be different.

Not to mention Spain and Portugal…among others.  It has been said in the past by other economists that the Euro was a bad idea poorly implemented and not really thought through . I tend to agree. I also think that Merkel’s loyally to the banks and her conservative ideology has been laid bare to the German people through all of this. Not good for her or her party and I see no way she can come out looking good.

So what does this mean for us ? Well according Ives sources in hedge funds circles, happy days are here again. But we have seen this kind of denial and naive exuberance before from Wall Street and even the FED and Treasury under Bush.  Even in the late 1920s just before the market crashed. And we actually had a manufacturing base back then.

I could be wrong but I suspect an unraveling of the Eurozone would lay bare a lot of uncomfortable realities concerning these masters of finance both in Europe and here.


Eurozone crisis Updates…

8:49 am in Uncategorized by cmaukonen

Just to keep Firedogs abreast of the latest developments in the on going saga of the Eurozone economic crises, here are some links to live blogs and updates as they happen….more or less.

From The Guardians blog..

4.23pm: But now comes the backtracking.

Seems partial denial over the Merkel comments… allegedly was off the cuff at ‘private meeting’

— Steve Collins (@TradeDesk_Steve) June 26, 2012

4.13pm: Well this is pretty definitive. According to Reuters, German chancellor Angela Merkely has said at a coalition party meeting that Europe will not have shared total liability for debt as long as she lives.

4.02pm: But don’t worry. The eurozone finance ministers are due to hold another teleconference tomorrow ahead of the summit on Thursday and Friday. So that’s all right then.

4.01pm: Some nasty rumours about Spain, notably that Moody’s may soon cut the country’s credit rating to junk after last week’s downgrade.

The Telegraph seems to be down playing it a bit on their blog. It’s live but in the business section and not front page.

16.29 Chris Beauchamp at IG Index comments on today’s market movers ahead of the close:

Despite several valiant tries, markets remain stuck in a downbeat mode for a second consecutive day. Weaker figures from the US, in the shape of consumer confidence and the Richmond Fed index, combined with a lingering sense of nervousness ahead of this week’s eurozone summit. This week’s summit is the nineteenth meeting of European leaders, but it seems to be doomed to the same inglorious failure as all its predecessors. Germany once again stuck to its familiar line on the pooling of debt, saying this would require greater oversight from Brussels. After more than two years of crisis we are left with the same problem, namely that Germany won’t take on everyone else’s liabilities, while the other countries remain opposed to a reduction in their sovereignty. One wonders how long the eurozone can carry on in this fashion.

So the more conservative Telegraph is concentrating on our problems instead of Europe’s. Even with Spain’s bonds being downgraded possible to junk status and France’s oldest bank in trouble.

Interesting comparison. Enjoy the show.

Editor’s Note: Please limit how much you quote from copyright sources to about 2 paragraphs per source for ‘fair use’ purposes. -MyFDL Editor.

Interweaving the thoughts in three different reads this morning.

11:31 am in Uncategorized by cmaukonen

White Picket Fence (photo: kaiyen/flickr)

I am a white male. I grew up in a rural part of NE Ohio that was nearly all white middle class. Both my parents had college degrees and both worked in professional fields. My knowledge of and experience with those who are blue collar was limited to my aunt and uncle on my father’s side of the family and a few friends.

After my father passed away,  my mother moved us down to South West Florida, which at that time was a mix of Northern transplants and Florida natives IE those born there.  Nearly all of which were white and most middle to upper middle class. We mostly shared the same world views and ideals.

There were Blacks and Seminoles in the area but I only recall meeting a few Seminole kids in school and I do not remember seeing many (if any) Blacks downtown. It was – as far as I could see – a white world.  At least that part of it. I had no negative experience with any other culture as I had little experience with any other culture. But this also meant that I could not easily relate what it would be like to be part of any other culture. I have no way of knowing what it is like to be of any other culture, to have their world view or attitudes.

My family went to the local Lutheran church – my father’s religion, though he himself did not practice it. This was largely symbolic as I never believed any of it and was later to learn that my parents did not either. It was completely white middle class.  Both of my parents were also in Europe during WWII and brought a lot of their experience there and attitudes with them. My mother also spent a good deal of her youth over seas as well, and conveyed this to us.

This is my background.  Add to this that I have had in interest in radio and and electronics which lead me at an early age to listening to international Short Wave Broadcasts and Amateur Radio. Where in my favorite thing is to be able to talk with people in other countries.  As an aside most of them refer to you as “my friend” and express more passion in the conversation than I get from talking with most American Ham Radio operators.

So when I read posts from David Seaton, I can relate easily from where he is coming from. Like his latest post.

This combination of technical and commercial perfection combined with a lack of elementary common sense is what makes him the perfect metaphor for America today… with the rest of the world tagging along.

And the subject of Pam Spaulding’s front page post.

Chad Nance who is a freelance journalist in Winston-Salem and is covering the election here in NC, recorded the wife of NC Sen. Peter Brunstetter confirming that she believes that Amendment One’s destiny is not only to save marriage, it apparently also has something to do with white power preservation. (!)

Which runs along the same lines as what Alngela Merkel expressed a few years ago concerning Germany’s attempts at a multicultural society.

The German chancellor, Angela Merkel, has courted growing anti-immigrant opinion in Germany by claiming the country’s attempts to create a multicultural society have “utterly failed”.

Speaking to a meeting of young members of her Christian Democratic Union party, Merkel said the idea of people from different cultural backgrounds living happily “side by side” did not work.

She said the onus was on immigrants to do more to integrate into German society.

“This [multicultural] approach has failed, utterly failed,” Merkel told the meeting in Potsdam, west of Berlin, yesterday.

Her remarks will stir a debate about immigration in a country which is home to around 4 million Muslims.

Last week, Horst Seehofer, the premier of Bavaria and a member of the Christian Social Union – part of Merkel’s ruling coalition – called for a halt to Turkish and Arabic immigration.

All speaking to a single thread – a similar view, that of the white Anglo Saxon cultural world view which is especially prominent here. A view that Chris Hedges has expressed is bound to destroy those who hold on to it.  One not of American exceptionalism, but of white exceptionalism.

When the most basic elements that sustain life are reduced to a cash product, life has no intrinsic value. The extinguishing of “primitive” societies, those that were defined by animism and mysticism, those that celebrated ambiguity and mystery, those that respected the centrality of the human imagination, removed the only ideological counterweight to a self-devouring capitalist ideology. Those who held on to pre-modern beliefs, such as Native Americans, who structured themselves around a communal life and self-sacrifice rather than hoarding and wage exploitation, could not be accommodated within the ethic of capitalist exploitation, the cult of the self and the lust for imperial expansion. The prosaic was pitted against the allegorical. And as we race toward the collapse of the planet’s ecosystem we must restore this older vision of life if we are to survive.

The war on the Native Americans, like the wars waged by colonialists around the globe, was waged to eradicate not only a people but a competing ethic. The older form of human community was antithetical and hostile to capitalism, the primacy of the technological state and the demands of empire. This struggle between belief systems was not lost on Marx. “The Ethnological Notebooks of Karl Marx” is a series of observations derived from Marx’s reading of works by historians and anthropologists. He took notes about the traditions, practices, social structure, economic systems and beliefs of numerous indigenous cultures targeted for destruction. Marx noted arcane details about the formation of Native American society, but also that “lands [were] owned by the tribes in common, while tenement-houses [were] owned jointly by their occupants.” He wrote of the Aztecs, “Commune tenure of lands; Life in large households composed of a number of related families.” He went on, “… reasons for believing they practiced communism in living in the household.” Native Americans, especially the Iroquois, provided the governing model for the union of the American colonies, and also proved vital to Marx and Engel’s vision of communism.

Marx, though he placed a naive faith in the power of the state to create his workers’ utopia and discounted important social and cultural forces outside of economics, was acutely aware that something essential to human dignity and independence had been lost with the destruction of pre-modern societies. The Iroquois Council of the Gens, where Indians came together to be heard as ancient Athenians did, was, Marx noted, a “democratic assembly where every adult male and female member had a voice upon all questions brought before it.” Marx lauded the active participation of women in tribal affairs, writing, “The women [were] allowed to express their wishes and opinions through an orator of their own election. Decision given by the Council. Unanimity was a fundamental law of its action among the Iroquois.” European women on the Continent and in the colonies had no equivalent power.

This ethic that dates back to the Holy Wars and Crusades. That white Anglo Saxon protestant world views should trump all else is destroying the planet. A belief what we here and Europe to a lesser extent is keeping us culturally, socially and even scientifically back in the late 19th century at best. Getting past this arrogant, self righteous view is paramount to any chance at advancing and the trick is to do it with humility.

Here is the problem we face though.  It is very, very difficult for someone to come up with ideas and/or solutions to problems for situations of which they have no personal experience. It takes someone with immense empathy and insight to do so. It’s the main reason why AA and other 12step groups have been successful where the  medical and psychological fraternity has not.

It’s the reason why I can no more relate to what it is like being a poor Black or even a poor white is like in this country or anywhere else, as much as I would like to.  Why Bill W. said in founding AA, “I need another Alcoholic” someone who knows what it’s like that can relate.  And why economists have no more a clue as to help main street than the local barber does to fix a BMW.  It’s where too many on the left fall flat.

And it’s why any and all attempts of forcing other groups and cultures into adopting our ways of thinking and our world views and repressing and treating them as some how inferior to us and vice versa is not just morally wrong, but also destructive to them and to us.

We need to learn how to accept people as they are first. To work on understanding where they are coming from. Then helping people to help themselves but only when asked.  Sometimes the most difficult thing to do is to NOT stick our noses in where they are not wanted.  After all we might just learn something from them in the process.

Vive la Différence !

2:56 pm in Uncategorized by cmaukonen

Brussls Belgium

Brussels Belgium - Flickr

Most people in this country try are totally ignorant of how people outside of it live.  In fact according to this piece from a 2006 Denver Post, “Only about 23 percent of Americans own a passport, and only 10 percent of those actually leave the country.” That’s not very many and I am sure the figure now is much lower. It also does not even specify the destinations. This was not always the case. When the dollar was higher, there was significantly more travel and in the 1950s and 1960s when there was still a military draft, a lager number of service men and service women would be stationed in Germany or France of Greece or some other NATO country for their length in the military.

Also business travel was far greater then as well.
Here are a few thing I have gathered from those I know from overseas and off the internet that you might find interesting.

There are no Malls or Strip Malls or shopping centers in Europe.  Unlike here shops and stores are mostly in and around the larger metro areas. European cities are still the main centers of retail. There are some big box stores, but mostly near the biggest cities.

Single family houses are an exception in nearly all of Europe. Especially Holland (The Netherlands) and Denmark and Belgium where land is at a premium. Multi-family units they call Flats of Villas are pretty much the norm. What we call apartments or townhouses or condos or even duplexes.   Rent is also different and according to the sites I have seen more flexible as well.

European cities tend to be more spread out that here so public transportation is a necessity since retail and housing and work are spread out as well.  The automobile built a good part of America where as Europe was already pretty much built before the auto arrived.  Public transport made more sense.

Living near one city and working in another, as well as commuting from France to Germany or Italy for holidays is common. Inter city rail makes more economic sense than flying for most Europeans. It was also the only way before aviation. Read the rest of this entry →

Whats next for the Eurozone ? With Update

3:22 pm in Uncategorized by cmaukonen

With Greece still edging toward the financial abyss despite all the political maturations.  Now Italy – as has been predicted – is now hurling toward the inevitable default. Even though Italian prime minister Silvio Berlusconi’s promise to step down.  Now Barclays says Italy is finished as well. Courtesy of Zero Hedge.

Euphoria may have returned briefly courtesy of yet another promise for a resignation that will likely not be effectuated for weeks or months, if at all, and already someone has done the math on what the events in the past several days reveal for Italy. That someone is Barcalys, the math is not pretty, and the conclusion is that “Italy is now mathematically beyond point of no return.”

Summary from Barclays Capital inst sales:

1 ) At this point, it seems Italy is now mathematically beyond point of no return
2 ) While reforms are necessary, in and of itself not be enough to prevent crisis
3 ) Reason? Simple math–growth and austerity not enough to offset cost of debt
4 ) On our ests, yields above 5.5% is inflection point where game is over
5 ) The danger:high rates reinforce stability concerns, leading to higher rates
6 ) and deeper conviction of a self sustaining credit event and eventual default
7 ) We think decisions at eurozone summit is step forward but EFSF not adequate
8 ) Time has run out–policy reforms not sufficient to break neg mkt dynamics
9 ) Investors do not have the patience to wait for austerity, growth to work
10 ) And rate of change in negatives not enuff to offset slow drip of positives
11 ) Conclusion: We think ECB needs to step up to the plate, print and buy bonds
12 ) At the moment ECB remains unwilling to be lender last resort on scale needed
13 ) But frankly will have hand forced by market given massive systemic risk

The whole report [PDF] is available here. And now Reuters is reporting that both France an Germany are talking (how seriously I don’t know) about a break up of the Eurozone to contan only them and a few others who are still financially stable.

German and French officials have discussed plans for a radical overhaul of the European Union that would involve setting up a more integrated and potentially smaller euro zone, EU sources say.

“France and Germany have had intense consultations on this issue over the last months, at all levels,” a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions.

“We need to move very cautiously, but the truth is that we need to establish exactly the list of those who don’t want to be part of the club and those who simply cannot be part,” the official said.

French President Nicolas Sarkozy gave some flavor of his thinking during an address to students in the eastern French city of Strasbourg on Tuesday, when he said a two-speed Europe — the euro zone moving ahead more rapidly than all 27 countries in the EU — was the only model for the future.

Well mostly stable since France has not been looking too healthy lately. And now Merkel’s CDU is suggesting ways that countries could leave the Euro.

Merkel’s Christian Democratic Union party wants to make it possible for European Union members to exit the euro area, Handelsblatt reported in a preview of an article to be published tomorrow, citing unnamed participants in the discussion.

A commission within the party, that is crafting a framework to be presented at a party meeting, has proposed allowing a euro member who doesn’t want to or isn’t able to comply with the common currency rules to leave the euro region without losing membership in the EU, the newspaper said.

Which of course is sending the markets into a nose dive. Especially the financials. Oh well…easy come, easy go.  And how does one say “Turn the lights out before you leave.” in Portuguese ?

All of this will naturally throw a major monkey wrench into a lot of peoples economic policies.  For starters you can kiss goodby to any thoughts of making the Euro a reserve currency and attempting to solve our deficit problems by having the dollar devalued.   This wild ride has just begun and a lot of people will like get tossed off in the process.

Update from The Guardian:

Fears that Europe’s sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy will be too big to rescue.

Despite Silvio Berlusconi‘s announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in Europe’s third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

Italian bond yields surged through the critical 7% mark, at one point hitting 7.5%, amid concern that the deteriorating situation had moved the crisis into a dangerous new phase.

In Athens talks to appoint a new prime minister to succeed George Papandreou were in deadlock, and will resume on Thursday morning. The Italian president, Giorgio Napolitano, sought to reassure the markets by promising that Berlusconi would be leaving office soon.

Angela Merkel said the situation had become “unpleasant”, and called for euro-members to accelerate plans for closer political integration.

“It is time for a breakthrough to a new Europe,” she said. “Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe.”

Looks like it’s gaining speed.

Greek/Eurozone crisis. What’s next. – Update

12:43 pm in Uncategorized by cmaukonen

After pulling his punches on the referendum, Greek Prime Minister George Papandreou now faces a no-confidence vote in parliament.  This is to be held at midnight Greek time (5:00 PM Eastern).

From the Guardian..

The main opposition New Democracy party which withdrew from parliament at the start of the confidence debate has said it will return for the vote expected to take place at midnight.

The excitement should build up to 11pm Greece time (9pm GMT), when George Papandreou is expected to take the stand.

We reported earlier that Papandreou’s own Pasok MPs have told him that to win their votes tonight he must pledge to step aside.

Will he utter the words “resign and national unity government?” If he doesn’t you can expect the bloodletting to begin within Pasok….

And if he loses then snap elections would be held in as little as 30 days.   However this would not guarantee a  majority government – one that would hold a mandate. If he wins he would try to form a coalition government with opposition conservatives.

From CNBC.

The most likely scenario is that of Papandreou’s party — angered by his shortlived plan to put the bailout to a referendum — backing him in the confidence vote on the understanding he makes a face-saving exit later.

Government sources have said Papandreou had struck a deal at a cabinet meeting on Thursday under which he would stand down after he had negotiated a coalition agreement with the conservative opposition, provided he survives Friday’s vote.

Some of his own supporters have hinted at this, saying they will back him at Friday’s vote as long as he begins talks with the opposition on a cross-party coalition government that can ratify the euro zone rescue plan and then resigns.

Several lawmakers in the ruling Pasok party have already said they are in favor of such a “national unity” government and Papandreou himself has said he is willing to begin talks with the New Democracy opposition party on the issue.

Former European Central Bank Vice President Lucas Papedemos has been cited as a potential candidate to lead such an interim government of technocrats.

One potential sticking point between the two sides is on how long a coalition government will be in charge.

New Democracy leader Antonis Samaras wants a transitional government that ratifies the bailout and proceeds immediately to elections — in as little as six weeks — while a Pasok party official has suggested holding elections in March.

If those talks fail, the ensuing chaos would mean the country heads to snap elections sooner or later.

Whether Papandreou wins or loses the no confidence vote, he is likely out as Prime Minister and party leader.

And either way Greece will likely leave the Euro, which would not upset the vast majority of Germans who wish that it would. Even Germany’s Merkel now thinks that is a likely outcome.

From the Guardian.

Before things get too heated in Greece, let’s post this jolly tale from David Gow:

The “live ticker” on has made a wonderful contribution to German-Hellenic understanding by quoting at length Uli Hoeness – remember him England? – now the president of Bayern Munich, on the debt crisis.

“Wir Europäer sind nicht schuld an der Krise der Griechen. Und wenn sie unsere Hilfe nicht wollen, sollen sie es bleiben lassen”, sagte er. Zumindest aber sei ein “Dankeschön fällig. Ich bin eigentlich gewohnt, dass man sich bedankt, wenn man Hilfe angeboten kriegt”, sagte Hoeneß: “Wenn sie die Hilfe nicht annehmen, wird es zappenduster.”

Roughly: We Europeans are not to blame for the crisis of the Greeks. And if they don’t want our help, they should drop it. But at the very least a thank you is long overdue. Actually, I’m used to people being grateful when they get offers of help. If they don’t accept the help, then they’re in real shtuck.”

That comes on top of German polls showing 90%-plus want Greece out of the euro and tabloid headlines. Perhaps the Germans have yet to forgive one of their own (Otto Rehhagel) for managing Greece to victory in the European Championships in 2004.

Along with all of this, there are still massive protests in Athens as being reported by the BBC and others.

From BBC Live coverage.

1916: In the debate, Environment Minister George Papaconstantinou has told MPs that “the widest possible agreement in the political system is needed” to ratify the EU bailout, AFP news agency reports. “The bailout deal requires this… that is why the government asks for a vote of confidence,” he says.

1912: @Inflammatory in Athens, Greece tweets: Protesters in #Syntagma reportedly plan to stay until parliament talks come to an end tonight.

1905:One protester at the communist rally in Athens says: “Only one thing should concern the Greek people – how they can intervene drastically into [these] developments with organised political action, and overturn Papandreou and the policy that he expresses.”

1900:There are now thousands of people massing in Syntagma Square near parliament in Athens, many of them waving communist party flags.

All of this could take weeks or even months to sort out no matter how it goes.  Then there is also the matter of Italy and Spain and Portugal to deal with. Assuming the Euro lasts that long. Personally I’m not holding my breath. Especially since the latest G20 conference accomplished absolutely nothing.   This roller coaster ride ain’t over yet.

Update: From the Guardian:

10.53pm: Papandreou has won. By 153 votes to 144.

The Greek referendum and what it may mean for the global economy.

10:32 pm in Uncategorized by cmaukonen

Greek Protesters Setting Stage for Referendum (Photo: Scott D. Meyer, flickr)

Greek Protesters Setting Stage for Referendum (Photo: Scott D. Meyer, flickr)

From the Christian Science Monitor. One of the better sources available.

The chaos generated by George Papandreou‘s mere proposal to put Greece’s participation in the deal to a referendum exposed the fragility of the European plan and the lack of confidence it enjoys in markets.

A top European official warned that Athens could be left to go bankrupt if it went through with the vote and experts said the broader eurozone deal — which hopes to protect larger countries like Italy — could collapse.

Ultimately, Greece could leave the euro union, causing massive financial havoc and pushing the global economy back into recession.

That prospect could be enough to keep the referendum from happening — Papandreou’s government could collapse before the proposal goes through, having lost huge amounts of support from its own party.

After a grueling seven-hour Cabinet meeting, Papandreou’s ministers expressed “total support” for his referendum proposal and said the vote would be held “as soon as possible,” government spokesman Ilias Mossialos said early Wednesday.

But Papandreou’s government still faces a vote of confidence scheduled for Friday. The prime minister was summoned to attend emergency talks Wednesday on implementation of the bailout convened by French President Nicolas Sarkozy and German Chancellor Angela Merkel in Cannes, France, a day ahead of the Group of 20 Summit in the French Riviera.

The referendum proposal piled more pressure on an already creaking deal that was facing scrutiny from markets that found details wanting.

But Papandreou’s government still faces a confidence vote and if the government falls, all bets are off. And Greece may not even get it’s bail out loans it it goes ahead with the vote. Read the rest of this entry →