Scrabble For Europhiles
By Eric EllisJune 26, 2012
Being European isn't all Parisian zinc bars and bocce, boules and moules. In the besieged Eurozone, it's tough economic love. With just “one week to save the euro,” we negotiate the A-Z of continental concerns.
A is for Absent. Leadership is made during crises: think Churchill, Giuliani and 9/11, Mandela's inclusive grace, even Anna Bligh during the Brisbane floods. Overwhelmed by Europe's most calamitous crisis since World War II, the rudderless European Union threatens to dissolve; it is in dire need of leadership. So where's the EU President, Herman Van Rompuy, the cookie-cutter Belgian bureaucrat from central casting better known as "Who?!"?
When the largely invisible 'Rompie' did briefly surface in May, he was scorned for the post-prandial afterthought made to officials invited to dinner, as the euro was melting down: "At the very end of our dinner I propose we discuss recent developments in the Eurozone," he helpfully suggested.
But, one presumes, that vulgar matter would only have been raised after mints were elegantly proffered.
As Eurocrats like Van Rompuy readily remind, A is also for acquis communautaire, the EU's 'community agreements'. These are the 35 dictums that form the basis of all things functionally European, the equalising laws that member states are obliged to implement, such as keeping the national books in order. Except they didn't. Which is why the EU's half-pregnant 'economic and monetary union' has a currency that's anything but functional.
Which brings us to B for bonds, the IOUs governments issue to finance themselves, which conservative investors buy, deeming them safe. But in wobbly Spain, Madrid now has to pledge such generous interest rates to attract buyers the country is in danger of becoming unsustainable. Can bad countries, like bad companies, go broke? Yes, just ask Argentina (2001) and Indonesia (1998) and Mexico (1994). As so too the contagious Eurozone, where Spanish bond rates are its canary in the coalmine …
… because of Europe's disease and as yet unproven cure — bad banks and bailouts. Last week, Madrid was promised a lazy €100 billion rescate from fretful European neighbours. Banks across the continent, but particularly in Spain, are in various states of distress under the weight of billions of euro in dud property loans, mismanagement and over-exposure to risks like, well, Spain. And Ireland. And Greece. And Cyprus. And so it goes, infectiously on. Except in Madrid, the banks will probably be rescued by mates in the state; many of these bad banks were controlled by cronies of Spain's two main political parties …
… which briskly leads to C for the corruption, collusion and cronyism rife across the continent, afflicting Spain, and Silvio's Italy and, as Greeks see it, your average unelected bureaucrats with their nose in the Eurotrough. Or, as grumpy northern European taxpayers see it, the average indolent Mediterranean.
C is also for circuses. Most of the continent's 500 million-odd people are presently diverted from their currency catastrophe by the Euro 2012 football carnival expensively mounted by EU member Poland and aspirant Ukraine. For them, a European crisis is when Italy's Azzurri don't make it beyond the first round. On June 17, as Greeks voted for a future on the Germans' tab, not one of 40 TV channels beaming into this compiler's Berlin hotel had a live feed to the drama unfolding in Athens. But there were many tuned to the drama at Euro 2012. Might C be also for "Crisis? What crisis?"
D is for drachma, the old Greek currency that pre-dated the euro, and could now post-date it if Greece can't be rescued fast. Drachma derives from ancient Greek suggesting a fist grasping a bundle of sticks, from a time when Greece's economy existed hand-to-mouth. That's a time that might be coming again in a back-to-the-future moment for a proud but humiliated people.
D is also for democracy. Europe is supposed to specialise in it, and doesn't mind telling errant dictators elsewhere to find some. But someone forgot to tell the commissioners who run the European Union out of Brussels. They get their well-paid, well-perked jobs by appointment, a quirk of continental bureaucracy that the people subject to their diktats like rather less and less in these unsettled times.
E is for tiny Estonia, Brussels's wunderkind for its austerity mantra. In 2008-09, the first years of this crisis, this euro-denominated Baltic economy sank by a staggering 18 per cent — a depression. Estonians then tightened belts and restored order. As Nobel Prize-winning economist Paul Krugman recently pointed out, things haven't yet returned to the salad days of recent yore, but Tallinn's righted economy last year surged by almost eight per cent, near five times better than the becalmed Eurozone. Estonia has 1.3 million people.
F is for Francois, as in Hollande, the growth-is-good lobby's new poster boy. Elected only last month, France's almost accidental Président de la République is an affable "M. Normal " who, the French hope, will arm-wrestle Germany's butchy Chancellor Angela Merkel into accepting that austerity is an anathema to European joie de vivre. Bon chance there, Francois.
G is for guilt, the German post-war variety, and the increasingly prevalent opinion in German households that Berlin funds the mammoth Eurozone bailouts as part of its ever-enduring atonement for World War II and the Holocaust.
Regarded by many as a truth-that-dare-not-speak-its-name, this view is most controversially aired in a best-selling book by Thilo Sarrazin who, inconveniently for those who contend he's just another right-wing nutter, is a member of Germany's mainstream Social Democrats and a respected economist who served on the executive of the German central bank, the Bundesbank, the anchor of the European Central Bank (ECB), the euro's custodian.
G is also for gag. No, not the parlous state of the Med economies, but this joke doing the rounds of European inboxes:
Angela Merkel arrives at passport control in Athens.
"Nationality?" asks the immigration officer.
"German," she replies.
"Occupation?" the officer inquires.
"No," she says, "Not yet."
H is for Herman Van Rompuy, the EU's so-called President. Oh, we've mentioned him already? So we have (see A for Absent). So where is he again, as the Eurozone burns? Hastening to the excellent Bordeaux?
I is for Iceland, where this economic mess surfaced back in 2008. No-one had much noticed or cared that its banks had become bigger than this frozen country's economy, or that it was unusual. Remote Icelandics like to boast they have the world's purest gene pool, but such magnificent isolation clearly didn't nurture the sceptical chromosome in the European DNA.
J is for jargon. If there's one thing unelected Eurocrats are good at it's creating humbug. The EU is so beset by its own Esperanto — OMG-words like additionality and comitology, derogation and flexicurity — it even publishes a website which attempts to correct it. If only it took its own advice: "Best to use the terms people really use rather than the ones we think they should use."
K is for χάος, or khaos, the Greek word for chaos, which is what many believe inevitable in the event of a Grexit, if Athens foresakes the euro. Banks will be overrun and collapsed by anxious depositors clamouring for their savings. Businesses will fail and people will be reduced to bartering to survive. Things will get worse before they get better — when Germany steps in.
K is also for Kroes, Karel, Kallas and Kristilina, the names of some of the EU's Brussels-based 'cabinet ministers', the commissioners who execute policies for more than 500 million people. Never heard of them? You are not alone — neither have most Europeans, who are also denied the opportunity to elect them.
L is for London, the City of, the world's leading financial centre, to which British politicians are in thrall and, on its behalf, win pragmatic concessions from Brussels on key EU policies so as not to upset the money pot generated by the 'Square Mile' (see O for opt-out). Upsettingly for the ECB, it's also the world's biggest trader of euros, even though the UK is not part of the Eurozone. When commentators remark, and Europe's politicians grimace, at how 'the markets' are flaying the Eurozone again, they usually mean London screen jockeys who don't much care what happens across the Channel so long as there's a fat bonus in trading it.
L is for Luxembourg and Lichtenstein, two tiny and fabulously wealthy monarchies at the heart of Europe, into which great swathes of the continent's wealth disappears, inside impenetrable trusts and foundations out of reach of grasping taxmen elsewhere. Which may be just as well, given the way Europe has been throwing euros around of late.
M is for Merkel and the Marios. No, not another cheesy ensemble of Euro lip-syncers a la Milli Vanilli but the EU's pin-up troupe for austerity. Germany's Merkel signed up the two Italian Marios as fellow travellers on her take-no-prisoners austerity path, and so far she's prevailing. Draghi is now Europe's main central banker and technocrat Monti is the unelected, post-Berlusconi PM rescuing the Eurozone's third-biggest economy.
N is for non, no, nee andnein, which is how frazzled French, stressed Spaniards, insecure Italians, indigent Irish, perturbed Portuguese, doubting Dutch and divided Deutschlanders increasingly respond to Brussels's demand for austerity. They're also becoming inclined to vote no! to their politicians who advocate it. Unfortunately for our glib A-Z guide, no in Athens is όχι, which can sound a little like 'okay' off the tongue of Greeks, many of whom find Merkelesque austerity most certainly not okay (see S for Syriza).
O is for opt-out, an official departure from EU laws that recalcitrant members like Britain have finessed into a diplomatic art form. London most famously opted out of monetary union back in the 1990s, and today's euro plight suggests the Poms were prescient to do so. London also opted out of the borderless Schengen Agreement, which is why travellers at Heathrow can wait hours for the dubious privilege of entering the UK, all while being abused by its surly immigration officials.
P is for populism. As Europe smoulders, extremists like Geert Wilders of the Netherlands, France's Marine Le Pen, and the Golden Dawn — those Greeks who sound like they might be a breakfast cereal except they are neo-Nazis — have been quick to point fingers at foreigners and Brussels as being responsible for all that ails.
Nothing if not an opportunist, the pompadoured Wilders would like the Dutch — for many, the quintessential European traders — to return to the guilder and leave the EU. He recently schemed the collapse of Dutch PM Mark Rutte's centre-right government for signing up to Brussels's austerity. In Paris, Le Pen believes she's just one political cycle away from consuming France's right. Meanwhile in Athens, Golden Dawn thugs simply like to beat up immigrants, and their fellow Greeks, too.
P is also for petal, the poor little Portuguese one that seems to be the EC's president José Manuel Barroso. When non-European G-20 summiteers at a Mexican resort last week politely suggested Europe might hasten to fix itself because the euro crisis has now become the world's problem, Barroso undiplomatically told them to butt out. We're doing our best, he claimed. No way, José, say they.
Q is for the quadriga. If there's a stirring European symbol, it's the classical four-horsed chariot that proclaims Europe's triumphs, its civilisation and culture, even its Christian faith. Quadrigas are omnipresent: controversially bestriding Berlin's Brandenburg Gate, Napoleonically surveying Paris from the Arc de Triomphe and, naturally, there's one in Brussels's 'European Quarter'. The British provocateur Will Self recently mused that the Berlin quadriga epitomises Europe's current bewilderment. Is it "peaceful or warlike, facing east or west?" he writes. "Roman or Prussian? Coming or going? Inasmuch as Germany today sits in the very cockpit of the European Project, so the quadriga is a perfect symbol of how confused and contested that project has become."
R is for ratings agencies. These are the influential, mostly US-owned, 'experts' — Standard and Poor's, Moody's and Fitch — that rank the creditworthiness of institutions that sell investment products, such as nations and banks. Take Spanish bonds, which Moody's ranks as Baa3, meaning just one downgrade away from being derided as 'junk'. Cranky finance ministers grumble these agencies have too much sway and plead — usually in vain — for markets to ignore them. Some French claim it was the downgrade of their economy that helped seal Nicolas Sarkozy's election loss in May. It certainly didn't help. In Europe, only Germany, Britain (though on notice), The Netherlands, Luxembourg and the Scandinavians (minus Iceland) boast coveted Triple-A ratings.
S is for Syriza. After the June 17 election, Greece is the word, and so is the rapid rise and rise of Syriza, Alexis Tsipras's Coalition of the Radical Left. With his anti-austerity, anti-bailout insistence, Tsipras fell just a few seats short of power, which is probably his preferred position so he can snipe at new conservative PM Antonis Samaras doing Europe's hardest job — dancing to Merkel's austerity tune. Samaras's regard for Syriza? Beware of Greeks bearing rifts.
T is for Turkey, long a frustrated EU wannabe. When booming Turkey projects sophisticated Istanbul as its international face, Brussels sees the teeming hordes of Anatolia governed by Islamist Ankara. So it's constantly denied entry, because it is Muslim and — sacre bleu — would instantly replace France as the EU's biggest member after Germany. But no matter, with the Eurozone ablaze, Turks now look anew at brighter prospects to its Asian east — Europe's loss.
T is also for the Tobin tax, a levy Francois Hollande promised French voters he would impose on currency traders to discourage speculation in the euro, a proposal which has found favour among his fellow besieged Eurozone leaders (see R for ratings) but not, unsurprisingly, in the currency market where it most matters (see L for London) or, ipso facto, with the British government (see O for Opt-out).
U is for Union, and the debate that more of it — a politically tighter Europe — would help solve its problems. U is also for the United States of America, particularly its President, Barack Obama, who frets that his re-election bid this November will be upended by continued euro contagion Stateside, which thwarts America's own recovery from the 2008 sub-prime crisis that started all this. Americans ruefully remember Europe's last big domestic crisis, the Balkans war 20 years back, the one Washington had to fix because Europe couldn't.
V is for Van Rompuy, as in Herman, that evanescent Eurocrat. But wait, what's this? He's actually put out a statement this week assuring that "We will continue to stand by Greece." Is that before the petit fours, Herman?
W is for wasted, which is what many dubious, hard-working Europeans, usually from the north, increasingly believe happens to their contributions to the EU. For the years from 2007-2013, Brussels and its many bureaucratic derivatives, such as the European Parliament, decided themselves a budget of €864.3 billion. And that was before the combined near-trillionaire bailouts that are yet to be proved successful.
X is for xenophobia (see P for populism). There's a lot of it about this long European summer. The EU's glossary doesn't have anything listed under X — but give the Eurocrats time.
Y is for Europe's alienated youth, who'll be paying for the debts of their parents' generation for a lifetime, if they ever get a job to do so. In Spain, youth unemployment is 50 per cent. But it's not just first-time jobseekers who struggle to find work. In Greece, nearly one in four people are jobless. In Italy and France, it's one in 10 and fast getting worse. But no such problems in Germany, where unemployment is around six per cent, close to the level where unemployment is a lifestyle choice. That's a 20-year low in Germany as its robust domestic economy compensates for the loss of orders from strapped Euro neighbours.
Z is for ZZZZ, the sound emanating from a leaderless Europe, as it sleepwalks into oblivion.