EU ministers agreed this week to a new banking supervision treaty... that was boycotted till the last minute by, guess who? Merkel.
Uh? Weren't the Germans the champions of the banking union? It seems that they are fulfilling the old Spanish adagio that says, roughly translated: advise I have but not for me.
Why? Because it would imply supervision of many German savings banks which are probably in dire straits. So the resulting agreement leaves actually smaller banks out of EU supervision, what grants that, by the moment, the highly suspicious German banks are not supervised by anyone.
But of course the eyebrows are high already and the too good conditions that the German financial system enjoys in the so-called "markets" is now at risk.
That may be good... or disastrous. Whatever the case it seems clear that blaming Greece, blaming the PIIGS... was nothing else but a case of beggar thy neighbor and throwing shit to the proverbial fan.
In fact what all this evidences is that the whole management of the financial crisis in Europe (and possibly at global level) is nothing but neocolonialism: a reaffirmation of the role that each state is supposed to have in the Imperial Order.
Notice that this lack of confidence in German banks has been trailing since at least 2009 (The Daily Beast) and that a year ago Der Spiegel itself admitted that the German Banking system has serious problems. But you know: kick the can...
From a layman's perspective I understand that Germany is the most secure economy in Europe after Great Britain. But how long can they last if their other partners in the EU fall?
ReplyDeleteI think the basic issue is growth. As underlined in this article ... http://www.project-syndicate.org/commentary/brady-bonds-to-eliminate-europe-s-debt-overhang-by-andres-velasco
"After Great Britain"?
DeleteThat made me laugh, sincerely. Britain is already in deep crisis and, if it does have slightly more room fro maneuver in the financial zone, it is only because they mint their own money.
The more stable European economy right now is Finland, followed by Sweden probably. There are some Central-Eastern European states that are having some high growth rates but that follows deep slumps, so nothing gained in the long run (watch this video: is hilarious, yet informative).
Germany has been midling but the latest maneuvering at the European meetings, mentioned in the entry, suggests that it has a lot to hide. And you can only deceive the World for so long, right?
But the key that nobody seems to understand is that it's not about comparing these Europeans vs. those other Europeans: we are all in the same rusty boat and will sink or survive together.
"I think the basic issue is growth".
Well, that's the Keynesian or Socialdemocratic theory but it did fail already in the 70s and it was founded anyhow (as any non-sustainable growth) on plundering other less obvious areas of the economy (neocolonies, the environment and of course inflation). While the human aspects of this exploitation that sustains growth are, sadly, sustainable, the environmental ones are not and pose nearly absolute limits to growth.
These are limits of planetary dimension and therefore affect us all. And, in such context, if China and India, for example, grow madly, Europe, Japan and North America must degrow in absolute terms. The USA still controls many resorts (notably the dollar but also the costly marines) to make sure that they are not the first ones to lose if someone in the developed world must, so that leaves Japan and very especially Europe.
IDK re. China but for Europe growth is over, so now the hidden issue is not so much growth but sharing what we already have, which is a lot. But that would need a revolution.
Your understanding of the European economic scenario is much better than mine. Yes, I agree that the future lies in a more equal world. As you have noted - the financial, military, and political powers that rule the world won't allow that.
DeleteIt would certainly lead to conflicts around the world. An ugly scenario but can't be avoided. For example ... China and Japan have resumed hostilities over the Senkaku/Diaoyu islands. I guess it is China wanting to remove the US military presence from its sphere of influence + the desire for a bigger maritime territory. China has also been preventing Indo-Vietnamese attempts to explore oil in the South China Sea. US may increase its military presence in the Philippines.
On the other hand Pakistan seems to have had enough of the Pax Americana. The Pakistani Interior Minister, recently on a visit to India, made lots of conciliatory statements.
South Asia has a lot of potential to grow. In the end - the region which has a holistic approach to development, keeps religion on the back-burner, and invests in peace will emerge stronger out of this Chaos.
I'd really like you to take a situation @ South Asia and write a few blog posts about the future of this region if you have time.
"Your understanding of the European economic scenario is much better than mine".
DeleteMeh. Always just my opinion. I think it's correct within reasonable expectations but you never know.
"It would certainly lead to conflicts around the world".
It's difficult to imagine a WWIII with all those nukes around.
"China and Japan have resumed hostilities over the Senkaku/Diaoyu islands".
They're just posturing and China wins by default. IF China would take over the Diayou, the World would reluctantly accept it as fait accomplí. The US-Japan defense treaty does not include any islands that have not internationally agreed to be part of Japan. Japan could push the issue but for both Tokyo and Washington their economic relations with China are too important to actually risk them on some stupid atolls.
China is securing the islets in South China Sea because it "needs" (from a trader and military viewpoint) some control of those waters and comfortable, safe access to the Pacific and Indian Oceans. This process should culminate with the anschluss of Taiwan (soon) and Japan with their nationalist parading are only achieving exactly what China wants: a pretext to intervene in that area and get direct access to the Pacific.
The USA will grunt but eventually tolerate that. Why? Because China is almost as powerful as they are, a key economic partner and they know that China is defending their turf, while for the USA all that is only meant as pressure against China, pressure tools inherited from the Opium Wars and the Unequal Treaties that followed.
Of course the conflict can be protracted for long (Beijing is not warmonger at all but very cautious) but it will unavoidably end as I say: China wins without firing almost a single bullet.
Remember that China plays wéiqí (go): they first place their stones at the key positions, projecting subtle influence, and then, if everything goes as planned, the main enemy formation just falls, unable to do anything else. That's how an islet near Manila may be key to the eventual capture of Taiwan... and of course that's the case of the Diaoyou islands.
The USA invests madly in weaponry and pointless military campaigns. The Chinese come after them and buy their conquests. Who wins?
I know that China is not too popular in India but actually they are the rising star. And India has its own many problems in form of Maoist guerrilla and what-not.
"On the other hand Pakistan seems to have had enough of the Pax Americana. The Pakistani Interior Minister, recently on a visit to India, made lots of conciliatory statements".
Personally, I think that the best India can do with Pakistan is to get it split in many ethnic statelets. They will be a trouble for as long as they are big and, being Islam the only glue that keeps the state together, they are prone to feed Islamism, always under the clout of Saudi Arabia, Israel and the USA.
Pakistan is a product of British Imperialism, now inherited by the USA, it's not in the interest of India to keep it alive. But rather than directly fighting it, they should stimulate all kind of secessionist movements, as happened with Bangla Desh. However China is interested in Pakistan for as long as India is (mildly) hostile and pro-Western (as it is).
I have sometimes argued that it'd be in the interest of both China and India to make a comprehensive border and sphere of interest agreement to dominate Asia (and therefore the World) together. Overall their competition is quite futile because neither one will ever conquer the other.
Of course such cooperation would be bad for the many ethnic nations who sit in between: Kashmir, Tibet and probably also the ethnic minorities of SE Asia, who can only hope to benefit from a China-India rivalry. And I'm still sympathetic to their claims and struggles. What I said above is just rational (from the viewpoint of the national-imperialist interests of China and India).
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Delete"South Asia has a lot of potential to grow".
It is ecologically in very bad shape: too many people, only so much land, and then Monsanto's "remedies" that kill the soil. I see serious ecological problems in both China and South Asia (see for example this map of soil degradation) but India seems to be in even worse shape.
Growth has been so far predatory and there's no much more to pray on anymore. This is not mostly the fault of developing countries but in this like in many other things often the just pay for the sinners.
I agree about: "the region which has a holistic approach to development, keeps religion on the back-burner, and invests in peace will emerge stronger out of this Chaos".
I'd emphasize solar energy and sustainable farming. Solar energy is clearly the key to a future in which energy is not a problem anymore at the origin at least. Today solar energy is already competitive and can only get better.
Sustainable farming is also fundamental. For decades we have considered crops as a business but they are primarily food and without food no country can be safe and healthy. For decades food was not a problem but it is beginning to be such thing again. Food safety needs some central planning and promoting the most sustainable methods, not the more short-term profitable ones that kill the soil.
"I'd really like you to take a situation @ South Asia".
I am myself and my circumstances. I do not live in SA, so I can only rely on what I read from others. Still make a search or several because I have written (or partly copied from other sources) in the past quite a number of articles on India, Nepal, etc.