[where there's a Finn, there's a shark.]according to economist Varoufakis, the Finns have a habit of playing the decisive
card at times when they can.
1 during the Russian revolution,
and now,
2 during the Euro cascading clusterf^&k
So, I say to the Finns:
"give them the coup de grace."
checkitout:
To the Finland Station: The undoing of the Menshevik Approach to the Euro Crisis
When Lenin alighted on 3rd April 1917 at Petrograd’s Finland Station, a train was set in motion that upstaged, and eventually overturned, the Mensheviks’ plan for an ‘evolutionary’ path from absolute Tsarism to some form of social democracy. Ironically, it took a Finnish social democrat (newly elected finance minister Jutta Urpilainen) to derail once and for all the eurozone’s ‘Menshevik Plan’ for a gradual adaptation to the new realities that the Crisis is spewing out. In what follows I shall lay bare what I term, cheekily, the ‘Menshevik Approach to the Euro Crisis’, its reliance on the Principle of Perfectly Separable Debts (of PSDs), and explain how this Principle turns into an impossibility the dream of turning the EFSF into a European Debt Agency (issuing jointly and mutually guaranteed eurobonds). Lastly, I shall address why the shoddy and unworkable Finnish-Greek side-deal has put paid to this dangerous illusion.
... The Finnish spanner in the Euro-Menshevik works
Opposition to the EFSF, to the bailouts it funds, to the very notion of fiscal consolidation and, above all, a staunch defence of the PSDs Principle, have all been hallmarks of conservative forces within the EU. Not so the Finnish demand that Greece auto-insures its fresh loan to Finland (by purchasing AAA-rated securities before it can get a penny from Helsinki). This demand came from the social democratic end of the political spectrum, the party that put Mr Jutta Urpilainen into the Finance Ministry.
Though I have no doubt that the rest of the EU, reflecting Mr Schauble’s strong views on the matter, will prevail upon Finland to rescind its collateral deal with Greece, the damage to the Euro-Menshevik best laid plans has been done. Permanently. The reason is three-fold:
* First, because the Finns have a point: Given the structure of the EFSF, who will rescue Greece’s, Spain’s, Italy’s etc. rescuers? It is one thing to ask from a small affluent country like Finland to show solidarity toward its fiscally stricken eurozone partners. But it is quite another to ask of it to fall off a cliff; an act that will, in any case, will not help the already fallen.
* Secondly, Europe cannot have it both ways. We cannot on the one hand stick valiantly to the PSDs Principle while hoping to evolve out of it via an evolutionary path (see my diagram) that will destroy the euro before it converges onto a new federalist principle.
* Thirdly, Greece’s second bailout is shoddy. No one believes that (a) the Greek state’s bankers will sign up to the dotted line (providing up to 90% of rolled over funds), (b) the Greek state will be able to avoid a default over the next thirty years, and (c) the eurozone’s banks will (given a parlous state that no one is talking about in Brussels) avoid a major new credit crunch that will, inevitably, lead to the derailment of not only the second Greek rescue plan but, indeed, of the whole EFSF bandwagon....
[HOW IS IT THAT WHILE THE MNIMONIO GIVES THEM THE RIGHT TO TAKE THE PARTHENON, THEY ARE UPSET WITH FINLAND FOR ASKING FOR OTHER FORMS OF SOLID COLLATERAL. THE MNIMONIO IS MEDIEVAL & IRON-MAIDENISH IN ITS EVIL AND SERFITUDE, BUT I’VE ALREADY FIGURED OUT THAT IT’S A VILE SMOKE SCREEN OF UNKNOWN BENEFIT IN THE CONTEXT OF A CRUMBLING BANKING SYSTEM WHICH IS BEING PUBLICALLY DENIED, BUT PRIVATELY, PANIC HAS SET IN, NECESSITATING REGULAR CONTRADICTORY ANNOUNCEMENTS FROM THE VARIOUS MAJOR ACTORS SUCH THAT THE PUBLIC WILL NOT KNOW WHAT’S GOING ON, BUT THE BANKERS DO BECAUSE THE BANKERS PUT THEM INTO THAT CONDITION.-Costick67]
