Vokiškas bėdavojimas: norėtųsi daugiau demokratijos - niekas nepaduoda

Jürgen Habermas SPIEGEL'yje sako, kad Eurozona ir Vokietija indoktrinuotos iliuzijomis, kurių palaikymas nelabai dera su demokratija. Esą derėtų diskutuoti nepopuliarius dalykus rinkimų kampanijos metu, o ne tada, kai jau šaukštai bus po pietų.

Merkel's European Failure: Germany Dozes on a Volcano

In the name of market imperatives to which there is allegedly no alternative, an increasingly isolated German government is enforcing harsh austerity policies in France and those euro-zone countries gripped by crisis. Contrary to reality, it assumes that all members of the European monetary union can make their own decisions regarding budgetary and economic policy. They are expected to "modernize" their administration and economy, and to enhance their competitiveness on their own -- if necessary with aid loans from the rescue fund.

This fiction of sovereignty is convenient for Germany, because it saves the stronger partner from having to take into account the negative effects that some policies can have on weaker partners. It is a situation that European Central Bank President Mario Draghi warned about a year ago, saying that "it is neither sustainable nor legitimate for countries to pursue national policies that can cause economic harm for others" (Die Zeit, Aug. 30, 2012).

It's worth repeating again and again: The suboptimal conditions under which the European Monetary Union operates today are the result of a design flaw, namely that the political union was never completed. That's why pushing the problems onto the shoulders of the crisis-ridden countries with credit financing isn't the answer. The imposition of austerity policies cannot correct the existing economic imbalances in the euro zone. An assimilation of the different levels in productivity in the mid-term could only be expected from a joint, or at least closely coordinated, fiscal, economic and social policy. And if we then, in the course of countervailing policies, don't wish to completely turn into a technocracy, we must ask the public what they think about a democratic core Europe. Wolfgang Schäuble knows this. He says as much in SPIEGEL interviews, which, however, have no consequences for his political behavior.

European policy is in a trap that the political sociologist Claus Offe has sharply illuminated: If we do not want to give up the monetary union, an institutional reform, which takes time, is both necessary and unpopular. This is why politicians who hope to be re-elected are kicking the can down the road [...]

On the other hand, what exactly does "unpopular" mean? If a political solution is sensible, it should be reasonable to ask a democratic electorate to accept it. And when should one do so, if not before a parliamentary election? Anything else is patronizing deception. It is always a mistake to underestimate and ask too little of voters. I consider it a historical failure of the political elites in Germany if they continue to shut their eyes and behave as if it were business as usual -- that is, if they persist in their shortsighted wrangling over the fine print behind closed doors, which is the current approach.

Instead, politicians should come clean with the increasingly restless citizenry, which has never been confronted with substantial European issues. They should take the lead in an inevitably polarizing dispute over alternatives, none of which is available for free. And they should no longer remain silent about the negative redistribution effects, which the "donor countries," in their own long-term interest, must accept in the short and medium term as the only constructive solution to the crisis.

Tekste trūksta problemų masto, atstovaujamų interesų įvardinimo. Tarsi būtų kalbama apie nedidelius reglamento pažeidimus, rutinines politios problemėles.

Kokia žurnalistika, tokia ir politika.
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[Papildau] Germans Believe Politicians Are Lying About Crisis, Says Study (blogs.wsj), The Missing Truth in the German Campaign (editors.bloomberg)

Open Europe apie bankų sąjungą

Pro-europinis britų Open Europe institutas (think tank) dar 2013.07.10 skelbė verdiktą kuriamai bankų sąjungai:

The banking union is likely to form an important part of any solution to the eurozone crisis (if one can be found) and the SRM is a vital pillar of this. However, the Commission’s proposal as it stands is likely too small, will not be implemented soon enough and suffers from significant political opposition. It does not therefore have a realistic chance of ending the financial fragmentation plaguing the eurozone. Furthermore, it also stretches the limits of the EU treaties, setting a worrying precedent for the UK and other non-eurozone countries as it poses the risk that single market treaty articles can be used for purely eurozone ends. Even Germany has insisted that such a far-reaching proposal which effectively alters the eurozone architecture requires treaty change, be it now or in the future. The eurozone is yet to face up to the fundamental problem of reconciling the economic realities within the existing legal and political limits – this proposal is another example of attempting to circumvent them in another ad-hoc way. As long as this approach continues uncertainty will plague the eurozone.

New Open Europe flash analysis: Controversial second pillar of banking union looks insufficient to hold up eurozone roof in a crisis

Korektišku tonu ir labai dalykiškai paaiškinta, kad kuriama bankų sąjunga yra tik pirmas netvirtas žingsnis link didelės problemos sprendimo. Dar net neaišku, ar tą mažą, toli gražu problemų nesprendžiantį mechanizmą pavyks sukurti apskritai.

Apie garantinio fondo dydį:

A Single Bank Resolution Fund (SBRF) will be set up and will equal 1% of insured deposits in the banking union, around €55bn. This will be built up by bank contributions over the course of 10 years. How much and how each bank will contribute is yet to be defined and may be set out in Commission delegated acts. This is a worrying precedent since it provides a significant amount of power to set the scope and nature of a financial levy to the Commission without significant oversight.

As of May 2013, bank assets in the EU totalled €45 trillion, while in the eurozone they totalled €32.5 trillion – this is equal to 349% and 342% of GDP respectively.

Clearly, given the size of the banking sector this backstop seems short of being the necessary size. We have previously estimated that a fund would need to be around €500bn to €600bn to provide a viable backstop for a banking sector this size (in line with international comparisons and standards). Importantly, most resolution funds are backed by a credit line or implicit guarantee from a treasury or national central bank. Absent this, serious questions remain over the viability of the fund and the SRB to act swiftly during a crisis.

Under the EC plans “no explicit” role is given to the ESM, the eurozone bailout fund, which now has the ability to directly recapitalise banks using up to €60bn. This provides a further buffer, but given the significant hurdles to its use and the strict conditions, it seems unlikely to be tapped in anything but the worst crisis (as we have already noted).

Bail-in plans bear most of the burden under the banking union: A significant amount of emphasis is being put on the bail-in plans to bear the brunt of a resolution process. It is clear that a lower taxpayer burden is desirable. That said, the knock-on effects could be painful for the eurozone in terms of higher bank funding costs. Furthermore, the potential for contagion in a crisis is clear.

Meanwhile, given the size of these funds relative to national banks, it is unlikely to be sufficient to break the sovereign banking loop, not least because bail-ins on domestically focused banks will have a significant impact on the national economy (still the purview of national governments).

Kiti klausimai (analizės turinys):

1. Where does the power lie?
2. Will the resolution fund be large enough to backstop the €33 trillion eurozone banking sector?
3. Will the SRM be able to put the banking sector on “sounder footing, restore confidence and overcome fragmentation in financial markets”?
4. Will it require treaty change?
5. Germany has come out swinging
6. How could this impact the UK and non-eurozone countries?

Must-read.

Ellen Brown apie Europos bankų atsakomybės slinktį

July 5, 2013 by Ellen Brown
Think Your Money is Safe in an Insured Bank Account? Think Again.

When Dutch Finance Minister Jeroen Dijsselbloem told reporters on March 13, 2013, that the Cyprus deposit confiscation scheme would be the template for future European bank bailouts, the statement caused so much furor that he had to retract it. But the “bail in” of depositor funds is now being made official EU policy. On June 26, 2013, The New York Times reported that EU finance ministers have agreed on a plan that shifts the responsibility for bank losses from governments to bank investors, creditors and uninsured depositors.

Insured deposits (those under €100,000, or about $130,000) will allegedly be “fully protected.” But protected by whom? The national insurance funds designed to protect them are inadequate to cover another system-wide banking crisis, and the court of the European Free Trade Association ruled in the case of Iceland that the insurance funds were not intended to cover that sort of systemic collapse.

Shifting the burden of a major bank collapse from the blameless taxpayer to the blameless depositor is another case of robbing Peter to pay Paul, while the real perpetrators carry on with their risky, speculative banking schemes [...]

Although the bail-in template did not hit the news until it was imposed on Cyprus in March 2013, it is a global model that goes back to a directive from the Financial Stability Board (an arm of the Bank for International Settlements) dated October 2011, endorsed at the G20 summit in December 2011. In 2009, the G20 nations agreed to be regulated by the Financial Stability Board; and bail-in policies have now been established for the US, UK, New Zealand, Australia, and Canada, among other countries. (See earlier articles here and here.)

The EU bail-in plan, which still needs the approval of the European Parliament, would allow European leaders to dodge something they evidently regret having signed, the agreement known as the European Stability Mechanism (ESM). Jeroen Dijsselbloem, who played a leading role in imposing the deposit confiscation plan on Cyprus, said on March 13 that “the aim is for the ESM never to have to be used.”

Passed with little publicity in January 2012, the ESM imposes an open-ended debt on EU member governments, putting taxpayers on the hook for whatever the ESM’s overseers demand. Two days before its ratification on July 1, 2012, the agreement was modified to make the permanent bailout fund cover the bailout of private banks. It was a bankers’ dream – a permanent, mandated bailout of private banks by governments. But EU governments are now balking at that heavy commitment.

In Cyprus, the confiscation of depositor funds was not only approved but mandated by the EU, along with the European Central Bank (ECB) and the IMF. They told the Cypriots that deposits below €100,000 in two major bankrupt banks would be subject to a 6.75 percent levy or “haircut,” while those over €100,000 would be hit with a 9.99 percent “fine.” When the Cyprus national legislature overwhelming rejected the levy, the insured deposits under €100,000 were spared; but it was at the expense of the uninsured deposits, which took a much larger hit, estimated at about 60 percent of the deposited funds [...]

While the insured depositors escaped in Cyprus, they might not fare so well in a bank collapse of the sort seen in 2008-09 [...]

Vienintelis įmanomas bankų "stabilumo mechanizmas" Europoje yra ECB.

Bet ne kontrolės. Pradinis bankų sąjungos planas ir buvo tas dvi funkcijas - draudimą ir kontrolę sujungti po ECB stogu, taip sukuriant vieningą pajėgią europinę bankų sistemą. Tai būtų buvusi grandiozinė reforma su savo politiniais pavojais, kurie visiems pasirodė per dideli.

Todėl konstruojamas simuliakras - pusiau Kipro, pusiau Islandijos pusiau rogės, pusiau vežėčios. Raminančios propagandinės pasakos fone nebaigtą konstrukciją tempia pavargusios ekonomikos kuinas, nors girgžda, bet važiuoja. Iki nuokalnėlės.

Overpopulation. Airijos bulvių badas

1799 m. Airija prisijungė prie Didžiosios Britanijos ir pagaliau tapo pilnaverte Jungtinės Karalystės nare.

The passage of the Act in the Irish Parliament was ultimately achieved with substantial majorities, having failed on the first attempt in 1799. According to contemporary documents and historical analysis, this was achieved through a considerable degree of bribery, with funding provided by the British Secret Service Office, and the awarding of peerages, places and honours to secure votes.[51] Thus, Ireland became part of an extended United Kingdom, ruled directly by a united parliament at Westminster in London.

1826 airiai atsisakė nuosavos valiutos. Ekonomika nori nenori turėjo atsakingai susiorientuoti į eksportą. Anglams reikėjo mėsos.

Airijos žemvaldžiams tapo naudinga žemę skirti į eksportą orientuotai gyvulininkystei, todėl nuo geriausių žemių nuvarė nuomininkus, kuriems teko susispausti į pakraščius. Likę ant mažesnių žemės sklypų žmoneliai skurdo ir priverstinai koncentravosi į to, kas būtiniausia prasimaitinimui - bulvių auginimą. 1845-aisias prasidėjus potato blight epidemijai, maždaug trečdalis airių (apie trys milijonai žmonių) mito vien bulvėmis. Milijonas išmirė badu, milijonas emigravo. Airija prarado 20-25% gyventojų.

Ne tai, kad būtų stokoję žemės kitokio maisto užauginimui ir žmonių išmaitinimui. Institucinė struktūra neleido.

Nathan Tankus: Marx on Ireland, Then and Now

Ireland’s experience in the 19th century has implications not only for today, but specifically for modern Ireland. Ireland never really recovered from the great famine. It had net emigration for the rest of the 19th century and most of the 20th century. According to Martin Ruhs of University of Oxford: “In 1996, Ireland reached its migration ‘turning point,’ making it the last EU Member State to become a country of net immigration”. With the onset of the Euro crisis, unemployment in Ireland reached well above 10% and stayed there. As a result, net emigration has returned to Ireland according to the last migration estimates produced by the Central Statistics Office (click to enlarge).

Thus, in Marx’s language, Irish and Eurozone policy has produced a “relative surplus population” and reproduced the conditions which led to net emigration Ireland. The difference is largely in the fact that now Ireland has a social safety net. This may not be true for long, as Ireland implements budget cut after budget cut as the “powers that be” demand. Rather than being pushed by the British however, this austerity is being pushed by the Eurozone and the IMF. Just last week, according to the Irish Examiner,

The International Monetary Fund said Ireland should stick to the terms of the bailout agreement and cut €3.1bn from the Budget in October. The IMF said it was not its job to dictate the terms of the Budget, but said that Ireland needed to continue its track record of fiscal consolidation”.

In other words, the blood-letting continues.

Finally, for those watching the history of currency unions closely, it is interesting to note that the Irish pound was ended in 1826. One major (albeit dated) study of Irish economic history argues that “the suppression of paper money in 1826 the tragic effects of the Great Famine twenty years later were made inevitable”. If this latter point about the Irish pound is true, it implies that Ireland has fallen into another trap similar to the one that plagued it in the 19th century. The difference is that this time Ireland’s politicians gave up autonomy rather then having it yanked from them. Words such as tragedy and farce don’t begin to describe their crisis.

Optimistė

Grybauskaitė: Bankų sąjunga sustiprins ES vidaus rinką

Kuriama Europos Sąjungos (ES) Bankų sąjunga leis atkurti pasitikėjimą bankais, pagerins bankų priežiūrą bei užkirs kelią krizėms, kylančioms dėl bankų pažeidžiamumo, teigia prezidentė Dalia Grybauskaitė.

[...] „Tarp svarbiausių Lietuvos pirmininkavimo darbų - stiprinti finansų sektorių, toliau kuriant Bankų sąjungą. Viena iš sudėtinių jos dalių - bendras bankų pertvarkymo mechanizmas, kuris leistų lengviau valdyti bankų krizes ateityje. O bankams susidūrus su sunkumais, jo pertvarkymo kaštus prisiimtų patys bankai ir taip būtų apsaugomi mokesčių mokėtojų pinigai bei sumažinta grėsmė viešiesiems finansams“

Taip ir bus. Pasimelskime

[...] the fact that there is no plan B tells us that the real reason we are doing this lies elsewhere, which is to be found in the overleveraged European banking system, which is stuffed with bad assets and its too big to Bail. Given that no state, even Germany, is big enough to solve the problem of removing these bad assets from the banking system, they squeeze, add liquidity, and pray. 

Visi viską kuo puikiausiai supranta.
FT Alphaville: A banking union “no go” summary
Bloomberg: How to Kill a Banking Union the German Way
FT: The dangers of Europe’s technocrats

Beveik euro optimistas Mark Blyth

Optimistai galvoja, kad jeigu žiaurosistema taptų netvari, elektoriatas ką nors nubalsuotų geriau. Miela iliuzija

Is it the notion of the “new normal” which retains the politicians and mainstream economist to realize that austerity has failed?

If the “new normal” is a permanent unemployment rate of 20 percent and the constant destruction of productive capacity, then the new normal will not be normal very long. At the end of the day you can’t run a gold standard type if monetary regime, which is what the Euro is in that no one can create the currency that they use and so deprived of inflation and devaluation as options the adjustment to shocks occurs entirely through wages and prices, in a democracy. Eventually someone will vote against it, and at that point the entire project can unravel. 

Nereikėtų turėti iliuzijų dėl tų demokratijų. Bet respect' Mark'ui už idealizmą.

Ambrose Evans-Pritchard apie Latviją

Lietuvos BVP atrodo kiek geriau, ir mes neturime tokių įtampų su tautinėm mažumom. Visa kita galime taikyti sau.

Ambrose Evans-Pritchard: Mad Latvia defies its own people to join the euro

EU finance ministers have just given the go-ahead for Latvia to join the euro in January 2014.
No matter that the latest SKDS poll shows that only 22pc of Latvians support this foolish step, and 53pc are opposed.
This is a very odd situation. The elites are pushing ahead with a decision of profound implications, knowing that the nation is not behind them. No country has ever done this before. 

Lietuva.

The concerns of the Latvian people are entirely understandable. Neighbouring Estonia found itself having to bail out Club Med states with a per capita income two and a half times as high after it joined EMU. Latvia may find itself embroiled in an even bigger debacle if the contractionary fiscal and monetary policies of the eurozone push Slovenia, Portugal, Spain, and Italy over a cliff, and push Greece and Cyprus into yet deeper crisis.

Apsimetame, kad krizė nesisteminė, nuostolių galimybę neigiame. Priešingu atveju tektų pripažinti savas klaidas.

It is worth reading the European Commission's report earlier this year on poverty and social exclusion.
Latvia stands out – with Bulgaria – as the country that has seen worst increase in "severe material deprivation", with the rate surging from 19pc to 31pc since 2008. (Bulgaria also has a fixed exchange rate, by the way). 

(Tekste grafikas visoms EU-27 valstybėms. Lietuvos skurdo rodikliai penkti nuo galo.)

While Latvia's unemployment rate has dropped to 11.7pc from a peak of 20.5pc, this is not the full story. Another 7pc have dropped off the rolls (one of the highest rates of discouraged workers in the EU). Roughly 10pc of the population has left the country.
The blue collar working classes have borne the brunt of the deflation strategy, while the affluent middle class with foreign currency mortgages have been protected. Policy has been shaped for the class interest of the elites (sorry to sound like a Marxist, but Marx was good at spotting this kind of abuse). Many who lost their jobs in the crisis – often Russian ethnics – have not found work, and may never do so again in Latvia if they are over 50.
This is how internal devaluations work. They break the back of labour resistance to pay cuts by driving the jobless rate to excruciating levels. The policy is a moral disgrace. Mussolini pulled it off in 1927 with his Blackshirts to secure the Lira Forte, but is that supposed to be a pedigree?

Analogiška situacija. Ironiška, bet pas mus fašizmu vadinamas tautiškumas. Dešimtadalio gyventojų emigracija daro įspūdį nebent kokiems nevykėliams. Išvažiavo ir išvažiavo, ar jau nėra apie ką daugiau kalbėti?

The country's recovery does not vindicate EMU austerity doctrine in any way at all. It merely shows that states with low debt and high exports can survive such a policy.
A low bar, surely?
As for joining the euro, you must be mad.