Tsipras, Corbyn, Sanders – Can there be a Rise of a new Left?

The choice between left and right in politics amounts to the choice of different brands of laundry detergent. It’s made up from identical ingredients, more or less diluted and smells differently, according to your olfactory preferences. All brands of politics are, however, brought to you by the same people very much like all the different brands of „Tide“ are brought to you by P&G.

In the years following Thatcherism and Reaganomics, most leftist European parties moved to the right and assimilated to the mainstream consensus of neo-liberal economic policies. Witness the move from Labour to New Labour or the German Social Democratic Party’s Agenda 2010.

Austerity and entitlement reform have become well-accepted concepts and the squeeze on the Middle Class is well under way.

The pendulum has moved to the right and has taken what used to be leftist parties with it, thus reducing the influence of the working class and middle class and increasing the influence of the economic elites.

Are we now at a turning point and will the movement be reversed, at least to some degree? Continue reading

The Watering Hole: Tuesday May 15th – Europe

A Storm is brewing over Europe in more than one sense…

There is the unsolved, so called debt crisis, which entangles Spain and Italy now and has, by all accounts all but devoured Greece already. 

The second one is a political storm. In France it has swept Sarkozy out of office, in the UK the Tories got to feel quite a blustery breeze. In Germany last weekend and the one before voters were giving Merkel’s austerity politics quite strong headwinds. Again, Greece is at the center of the disturbance. The last election brought a stiff breeze from the left, but some serious gusts from the right as well. The Captains of the coffin ship contemplate to test the waters again and that should bring a solid gale from the left and swipe them off board.

Then there’s the weather. It’s really gusty and nasty outside, so much for spring. Ugh.

No matter how it eventually ends, there is some turbulence ahead for sure.

This is our Open Thread. Talk about the Weather?


Greek Protests turn Bloody

The BBC reports:

At least three people have been killed in the Greek capital as protesters set fire to a bank during a general strike over planned austerity measures.

The fire brigade said three bodies were found inside the bank in Athens. Two other buildings are also on fire.

Petrol bombs were thrown at police who responded with pepper spray, tear gas and stun grenades.

Protesters are angered by spending cuts and tax rises planned in return for a 110bn euro (£95bn) bail-out for Greece.

Parliament is to vote on the measures by the end of the week. (read more)

This is sad. People will blame the Greek people for what a few protesters did and still none of the corrupt and treacherous Greek “elites” will go to jail for having provoked this crisis. Let alone, those who aided them in ruining the country.

A Greek Tragedy, revisited.

Greece - Ruins

So taxpayers are asked to foot the bill again. European governments have decided on a bailout for Greece, so they can stay in the EMU (European Monetary Union), where they should not have been accepted in the first place.

It was Goldman Sachs, who else, who helped Greece to cook the books in order to make the 3% of GDP debt-threshold the EMU prerequisited for entering the EUROzone. Fully aware of their doings they, at the end of last year started to lay their bets on a default of Greek debts. This sent Greek bonds yields spiralling out of control, the latest was a 18% yield, a percentage Greece cannot afford to pay to borrow money to run their country. And all banks were busily selling Greek bonds to their customers, who in turn very much appreciated a (then) 5% yield to the almost nothing in interest you get on your money from your local bank.

Now what? Will the bonds default and leave the investors out in the cold? Will there be write-offs, so Greece can draw a little breath and get their debt situation sorted?

Fat chance. Deutsche Bank boss Ackermann has already issued one of his famous warnings of impending financial apocalypse if Greece wasn’t bailed out and should default on their debt. So, this knight in shining armour is saving the Eurozone’s economy from armageddon? Or is he helping the investors who bought the bonds from Deutsche Bank and by this saving the Banks reputation, their business and his bonus?

Not only Goldman sucks.

And: Portugal is next.

The Watering Hole: April 23, Britpolitics

Now this shall be unusual if it happens. The UK is heading for a general election on May 6th and this time it could result in a hung Parliament. Due to the first past the post voting system within a hitherto two-party system that has rarely ever  happened before.

The real surprise is the rise of Liberal Democrat leader Clegg, who is likened to, who else, Barack Obama. After the first televised debate of the candidates he was leading in the polls, after the second one he is neck on neck with David Cameron the Tory leader. There is nothing much that Gordon Brown can do, even if he was scored some points in the debate. The British want change, even at the price of a hung parliament.

This is our Open Thread. You can comment on this and that and everything.

Update on yesterday’s post: Greece has formally asked for aid now. € 30 billion from the EU and a further 15 billion from the IMF. Read this, too: The Economist sets Greece’s need for aid at €75 billion.

Across the Pond: The Euro’s Birth Defects cannot be healed.

Since January 1, 2002 most European countries share a single currency, the Euro. I remember paying 1 Million Lire for a week’s lodging in the Marches region of Italy and the next year € 500,–. The introduction made travel easier and prices immediately comparable. Convenient.

For European businesses a single currency made trade much easier, more plannable and got rid of the risk of undulating exchange rates.

A logical, well meant and politically desired move to a more economically powerful European Union. But well planned?

When the euro came into being, monetary policy became the responsibility of the independent European Central Bank (ECB), which was created for that purpose, and the national central banks of the Member States having adopted the euro. (read more)

The Stability and Growth Pact was meant to safeguard public finances and limited budget deficits to 3% of GDP.

The dissuasive part of the Pact governs the excessive deficit procedure (EDP). The EDP is triggered by the deficit breaching the 3% of GDP threshold of the Treaty. If it is decided that the deficit is excessive in the meaning of the Treaty, the Council issues recommendations to the Member States concerned to correct the excessive deficit and gives a time frame for doing so. Non compliance with the recommendations triggers further steps in the procedures, including for euro area Member States the possibility of sanctions. Continue reading

The Watering Hole: April 22, A Greek Tragedy..

..is it not. The problem was foreseeable, given the prevailing corruption of a set in concrete political class, be it from the right or from the left.

For years now the Greek Prime Minister’s name is always either Papandreou or Karamalis. It’s a Papandreou right now. And I am willing to bet that the next one will be Karamanlis again, or someone from his immediate family.

So Greece is pulling down the Euro, asking for huge bailouts by the European Central Bank and the only economical data showing an upward trend is the deficit that the Greek allow for. Nevermind the real deficit, which we all can only guess at.

On the upside, if you like a good risk: Greek bond yields skyrocket.

This is our Open Thread. Don’t pull any punches.