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The road to hell is paved with euro intentions
by Thanos Kalamidas
2012-06-14 09:17:07
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Crying wolf is the most often used story with an educational end for centuries, but I’m afraid the last couple of years the domino effect is the contemporary European wolf with the very bad end. And just like with the little shepherd everybody was screaming wolf while the domino effect was unveiling and everybody was ignoring the fact that the wolf was here. They wasted all their effects on screaming domino effect.

The domino effect started just before EU and the IMF applied the second package of the austerity measures on Greece. Then everybody knew that something was seriously wrong and that the measures were doomed to fail. The same time the populists Robin Hoods were screaming, take/tax the rich, something that came even from the director of the IMF Christine Lagarde or the European leadership including Van Rompuy, Barroso, Merkel and Schäuble, proved that there is no plan and no wish to take a political decision that would might oppose their personal agendas and save the herd.

And by the way things like that are easy said and rarely happened, you see in the era of cynicism and stock market profits the Greek rich just like the Spanish, the Italians, the French and the Germans rich when they feel that their money are in danger they just move them to Switzerland, Lichtenstein or other “not ask – don’t tax” nations and don't worry  even EU has a few of them, call them Luxembourg.

However Spain is the first “big” country to join the bankrupt club – big country with strong industrial and banking structure - but if you noticed the first question after finding out that Spain had asked for help was not 'now what' but 'who’s next'. And it looks like Spain is just unveiling the red carpet for Italy. Cyprus and Belgium which are also in the cue; but when Italy joins then the hit will be big. And if the suspicions – differ a lot from the official reports - about the damage in Italy are true then EU is not able to help  and that's a fact. The European leadership has not just failed, has actually led Europe into a disaster. And the problem is that despite the fact that the wolf is here and starting eating the herd they still don’t believe it continuing just …screaming.

Threatening Greece that they will expel the country form the euro-zone sounds so pathetic not only because they never predicted a mechanism to do that but because as things turning out this will be the end of euro or it will end up being the euro of three say four countries. If Greece will be expelled from the euro-zone automatically Portugal, Spain, Ireland, Spain, Cyprus, Belgium and Italy will be next to follow in short distance. Soon the euro-zone will be Austria, Finland and Estonia and that only because Germany will finance and support their staying in an effect to save her trebling economy. Trebling economy because more than 50% of all the European states’ imports-exports depend on their European allies including the non euro-zone states like Britain and Sweden.

And yet we haven’t said anything about the rest of the world and be sure that is more scary. Why you think Obama is so interest? And why you think the Chinese watch so closely everything happens. The majority of the Chinese reserves are in Euros. Perhaps the reason behind this act was intolerance to the dollar and whatever American that represents, perhaps the Chinese invested into the united French-German-British economic strength, perhaps it was just gabling; whatever the reason the Chinese for at least a decade have turned most of their reserves into Euros and they are not the only ones. Most of the countries in Asia, Africa or South America with close ties in Europe  and the European economy (former colonies for example) invested in euro. For some euro even became their non-official official exchange currency. And their economy in a big part is depending on the euro. After all this was the big dream when they created the new currency, wasn’t it?

Can you imagine what will happen to the euro-zone if some of the states leave? Nightmare is here accompanied with deratings, inflation, less exports, immigration to mention only few. Will Germany survive that? Or do they expect to survive because Poland and Slovenia want to join the euro-zone? Was that the big dream?

The big dream, the big idea! How was that saying? The road to hell is paved with good intentions. And if the Greeks have seen the gates of hell I’m afraid the Spaniards despite all reinsurances just crossed the gates. But the funny thing is that there are more “domino effects” in play equally seriously, equally ignored and equally damaging. This Sunday the Greeks are heading for a very critical elections flagging anti-austerity, anti-IMF feelings while the Irish seeing that no austerity measures were – at least at the moment – applied on the Spaniards demand renegotiation of their situation. And of course there are the people, the mass; the ones who are actually hit by the austerity measures, the unemployment. The ones who feel that they were mistreated and demand reaction.

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