She’s Just Missing A Moustache!

At this point in the eurozone crisis, the only question to ask is, ‘What are the Germans playing at now?’ We Irish had better figure it out, because after the Germans get finished playing their game with the long suffering Greeks, they’ll inevitably turn their attention to the other poor men of Europe, namely Spain, Portugal and Ireland.

So far the clues point towards the Germans intimating that they may want to trigger a disorderly default in Greece so that Greece falls out of the eurozone – and out of the domestic political problems of Angela Merkel.

Apparently the Germans imagine that their banks are now strong enough to withstand a Greek default. Sounds pretentious enough to me, but then, Angela has always had a pretentious streak. When you have forced the rest of Europe to believe that your banks are strongest on the continent and that they had nothing to do with the gambling that took place pre-2008, you can afford to be pretentious.

So now the thinking goes that Merkel can stop the bail-out loans (which, let’s face it, are never going to be repaid) and thereby force the Greeks out of the single currency. Her taxpayers will then stop complaining that she is pouring their money into a country full of Mediterranean layabouts.

Meanwhile, the Spanish have accepted a bailout…..sorry…A LOAN, NOT a bailout….for their troubled banking sector. Spanish Prime Minister, Mariano Rajoy still refuses to use the word “bailout” – or any other word for that matter – and referred mysteriously simply as “what happened on Saturday”. He went as far as to say that Spain’s emergency had been “resolved” (“thanks to my pressure”, he said) and then jumped on a plane to Poland to watch the national football team play (“the players deserve my presence”).

The amount Spain received, €100bn, matches that of the bailout Ireland accepted two years ago for its entire banking recapitalisation. However, it is but a drop in the ocean for Spain, for what will inevitably be required to recapitalised their ailing banking sector. The €100bn only covers approx 30% of the banking marketshare….there will most likely be more rounds of bailout money to follow.

And what of Angela? Well, whilst shoving the Fiscal Stability Treaty down the throats of her European minions, it seems she is coming up against strong opposition at home. The German opposition parties are demanding;

– The strengthening of the European Investment Bank.
– Bonds for the indebted countries of the EU
– Better use of the EU structural funds to promote growth.
– A financial transaction tax.

Meanwhile, Angela is doing everything she can to halt or limit the amount of money that needs sending to Greece to try and placate her own voters at home, and to force Greece out of the euro, which is ultimately her end game. One wonders if Germany has a “Rewards Card” with Western Union, given the frequency of bailout upon bailout they’ve sent South.

Merkel has said on several occasions in the past two years that Germany and the eurozone will do ‘whatever it takes’ to keep Greece in the single currency. So you have to ask yourself if the last tranche of funds, €325m (that’s MILLION with an “M”), was so significant a sum to get into a tizzy over. Given that Greece already has €14.5bn (that’s BILLION with a “B” in debt repayments due, I would surmise that “No, it’s not”.

In terms of any Western country’s finances, €325m is petty cash. There are private individuals walking around the streets of most capital cities in the world who could write a personal cheque for €325m.

The €325m is not a reason. It’s an excuse.

It’s an excuse to put more pressure on the Greeks by way of more humiliation. In other words, the Germans want to find out how far they can push the Greeks before the Greeks snap and walk out of the euro – leaving Merkel saying ‘more in sorrow than in anger’ that ‘we did all we could to help, but they decided to leave.’ Politicking at its best!

However it is unlikely the Greeks will snap this week. Greek political parties actually humiliate themselves – and their electorate – by signing public promises to stick to the bail-out deal no matter how the vote swings in the upcoming elections.

That would be the real achievement for the Germans, because their aim is to drain democracy out of EU affairs. Why? Because too many electorates refuse to see things the Berlin way.

In short, what the Germans are demanding is the end of politics in Greece. There will be only one policy on offer, whatever combination of political parties forms the next so-called government in Athens: it will be the Berlin policy.

Ireland should not be surprised by this. The Irish electorate saw the end of politics when the Government capitulated to Brussels and forced the electorate to vote twice on the Lisbon Treaty and the more recent and shameful “YES” vote on the Fiscal Stability Treaty that was waved in front of Irish men and women as some sort of boogie man.

This is why the new German-directed intergovernmental treaty demands that the laws implementing austerity must be put ‘into national legal systems through binding and permanent provisions.’

The treaty is framed to force all countries ratifying it to invent laws which are beyond the touch of any national parliament ever to be elected. This ‘permanent’ law is to be law beyond the reach of voters. It is to be law the next parliament elected in Ireland, and the one after that, and the one after that, CAN’T EVER TOUCH!!

That’s what the Germans are playing at. Their intent is to govern all the countries of the EU now: German-designed law beyond the reach of any national ballot box.

And that is why they humiliated Greek political party leaders by forcing them to sign public pledges to ensure just that. And if they don’t – well, it is now easy enough to open the trap door and let the Greeks fall out of the eurozone and perhaps out of the EU altogether.

Still, some people persist in believing the German propaganda that all this – the austerity, the troika demands on Greece, the surrender of national sovereignty to EU institutions – is necessary to ‘save’ Greece, to keep it from declaring bankruptcy and leaving the euro. (I will leave aside for the moment the fact that leaving the euro is exactly what Greece should have done at the start of this series of disasters two and a half years ago.)

But that propaganda is not true. The policy being followed for Greece these last two years by the troika as active inertia. They are active, every three months, yet another set of discussions, more drama, but it’s inertia. They basically have not abandoned an approach that has proved to be totally ineffective. What is being pursued right now is more of the same, and it will not succeed.

Greece has no long-term option but to ask itself how do we restore growth? It leads you to the uncomfortable conclusion that Greece will have to take a sabbatical from the eurozone.

It will have to go through a major debt reduction. Then it must have a major devaluation to make it more competitive, which Greece can only do once it is out of the euro and back in the drachma. Only then can it regain the path to sustained growth.

Which is where we come back to the Germans and the game they are playing with Greece. No one wants to go down in history for being responsible for this, not Greek politicians, Mrs Merkel doesn’t want it, no one in the EU wants it, no one in the IMF wants it. So because no one wants to go down as responsible for this historic decision, it doesn’t get taken, Greece continues to be stuck in this active inertia, and things get worse.

In other words, the Germans and EU powers running Greece now know the answer is to get the country out of the eurozone. But for political reasons no one, least of all Mrs Merkel, will say so.

So this dishonest game is being played of putting so much pressure on Greece, of heaping so much humiliation on the politicians and the people, that at some point they will break and say ‘Enough, we are getting out.’

Unfortunately, this dishonest manoeuvre means that the German-led EU is piling tens of billions more in un-repayable debt on Greek shoulders as they wait for the country to reach breaking point.

Exactly the way the German-led EU has piled billions in un-repayable debt on Ireland’s shoulders. As I said at the beginning, this game won’t stop in Athens.

German Employment

Not only are German’s enjoying the highest level of employment levels not seen since the reunification back in 1990, but they have now begun an advertising campaign to help encourage those citizens who feel trapped in a job that they hate and would like to try something new.

This clever and original advertising campaign uses a kind of human driven steampunk style poster depicting people trapped inside the machines other people use on an everyday basis, for example, the laundry machine or a vending machine.

Below are some examples of the current advertising that can be found across Germany. My favourite is the guy working the X-ray machine at the airport 🙂


Could Audi See Sales Drop Next Year?

It’s been approximately six years since the average speed freak sales-rep swapped his company BMW car keys for those of an Audi. Now whenever you see someone in the mirror driving up your arse, the lights that are flashing you are invariably those of that menacing looking Audi and the greasy, slick back haired wanker driving it. It matters not a jot to them that you are already going as fast as the legal limit will allow, or that the driving conditions are not exactly conducive to driving around with your hair on fire.

But now the world is entering its fourth year of economic stagnation. In fact, if you’re living  in a eurozone country, chances are you might very well find yourself re-entering a recession soon. That’s certainly the projected forecast for here in the Netherlands. Whilst it’s largest next-door neighbour, Germany, recently announced low unemployment levels not seen since 1991, the Netherlands is experiencing unprecedented cuts to its welfare state and seeing overall government spending slashed. Given that 15% of the Dutch working population is employed by the Public Sector, a reduction in their spending patterns is enough to spin the economy back into a recession, having long lasting knock-on effects for the rest of the country. Which translates into Private Sector employers cutting back on perks and travel.

Aside from the basic salary and accompanying taxes an employer has to pay, the next biggest employee related items an employer typically spends money on is the pension scheme and employee perks (usually health insurance and company car). Pension contributions are largely driven in most Continental European countries by government policy, hence there is not much an employer can do to save money there. So the real area an employer can save money is by reducing salaries and reducing or eliminating the perks. Given that the clever companies will opt to retain top talent, leaving salaries untouched and taking a scalpel to the deadwood, that really only leaves one option. The company car.

Depending on which country you live in in Europe, this can be perceived as the slaughtering of the sacred cow. An unholy act that most unions and “works councils” will fight tooth and nail to leave unchanged and untouched. “How dare management think about taking away my car! But it’s my right, along with my six weeks of paid vacation.”

I’m not predicting a total drop in sales for Audi. Afterall, Russia, China and India’s economies are still buoyant (for the time being) with the nouveau riche chomping at the bit to own and drive a piece of German engineering. And there will still be enough greasy haired speed freak wankers left in Europe to buy the latest model to roll off the production line. But I am expecting that the leased ones already on the roads will probably see their leases being extended by an additional year or two, whilst the ones whose car policy has been impacted will probably revert to Golf GTi’s. Depending on the margins between brands, that could be good or bad news for Audi’s parent, Volkswagen.


Merkel’s Money Manipulation

So what IS behind Germany’s hesitant statements on Greek debt restructuring, Ireland’s move against subordinated bondholders and the ECB’s stance on interest rates

Europe is at it again, trying to pretend that it has stemmed the tides of insolvency through its program of lending huge amounts of money (at high interest rates) to… insolvent member-states. The official line, currently, is that the rot has stopped with Lisbon. Just like the EU-IMF €110 billion loan to Greece more than a year ago (in conjunction with a nominal €750 billion fund, the EFSF, standing by for other fiscally stricken countries) was meant to ring-fence the rest of the eurozone, inhibiting contagion from Athens, so now we are being asked to hope (against hope) that Spain has ‘decoupled’. It has done no such thing. As long as the banking crisis is left alone to fester, the crisis will continue its triumphant march.

For a year now many of us have been arguing that, to paraphrase good old Bill Clinton, It is the banks, stupid! Having started in their guts in 2008, the Crisis spread to the sovereign debt realm and then returned more viciously to where it had started: the banks. The result is that Europe’s zombiefied banks are now great black holes that absorb much of Europe’s economic energy (from the surpluses produced in countries like Germany to the loans taken out by struggling minnows, like Greece and Portugal). Quite remarkably, while the insolvent states are visited upon by stern IMF and EU officials, are constantly reviled by the ‘serious’ press for their ‘profligacy’ and ‘wayward’ fiscal stance, the banks go on receiving ECB liquidity and state funding (plus guarantees) with no strings attached. No memoranda, no conditions, nothing.

This is not to say, of course, that the powers-that-be do not discuss the banking catastrophe. I am sure that they are talking about little else. Only they do so in secret, behind closed doors, struggling to find a solution to the Great Banking Conundrum behind the European people’s backs and away from the spotlight of publicity. Their deliberations are now in a new phase, taking their cue from the Greek debt crisis. Lest I be misunderstood, the Greek crisis, however monstrous by Greek standards, is in itself no more than an annoyance for Europe’s surplus countries. A gross sum of €200 to €300 billion could be restructured quite easily or at least dealt with somehow. Its significance lies in the opportunity it offers Germany for revisiting the European banking disaster in its entirety. The Greek debt restructure, with its repercussions on Europe’s banks, is a useful case study; a dress rehearsal; an excuse to begin the process of taking the broaderGreat Banking Conundrum  more seriously.

So, what is the Great Banking Conundrum that Europe is now facing? Put bluntly, Germany’s banks have not been cleansed of much of the worthless toxic paper of the pre-2008 era and, on top of that, are replete with bonds issued by the now insolvent peripheral member-states. French banks  are in a similar state, with even more of an exposure to Spanish debt. Spanish banks are fibbing about the extent of their potential losses from falling real estate prices (which need to be added to their exposure to Portuguese and Spanish sovereign debt). Meanwhile, the ECB-system is massively exposed to the totality of this combination of stressed sovereign debt and unrelenting bank losses (actual and potential).

Question: What happens when a currency area (such as the dollar zone, the sterling area or, indeed, the eurozone) is lumbered with a mountain of debt plus banking losses at a time of sluggish growth both internally and externally?

Answer: It makes this mountain shrink through macroeconomic means. These means fall mainly under two categories. First, there are the blessings of mild inflation. By allowing average prices to rise, the mountain’s real value shrinks. Secondly, by effecting haircuts on debts and write-offs in the case of banking losses. Thirdly, when things get REALLY bad, they can always try devaluing their currency to make exports cheaper and help drive their economic growth. But when the entire worlds economy is in a comatose stasis, this would be the very last trick in the book they would use to try and kick-start their economy.

In the USA as in the UK, after re-capitalising the banks at the taxpayers’ great cost, the authorities opted for both strategies at once: Bank write-offs, large scale haircuts (e.g. a 90% cut into the debts of General Motors) plus quantitative easing for the purposes of pushing inflation to a modest level that will, in the long run, cut into the national debt. In sharp contrast, Europe has not moved in either direction. The lack of a common fiscal policy and the coordination failures that come with an ill-conceived monetary union played a central role in this dithering but are, I wish to argue, not the whole story.

So, what else is there, lurking in the shadows and prolonging Europe’s reluctance to act decisively? The answer, I submit, is: Germany’s twin angst regarding (a) its competitive edge in Asia and (b) the state of its banks. Germany’s relative success at weathering the crisis, after its own precipitous fall in 2008, has been due to the healthy demand for its capital goods from Asia; i.e. Japan and China. With Japan out of the picture (for reasons that were manifesting themselves even before the Tsunami), China is Germany’s source of optimism. But China’s own growth is based on the policies that Germany refused to countenance; i.e. massive infrastructural investments that have, interestingly, suppressed the country’s consumption share from 45% to 38% of GDP at a time of 10% GDP growth.

To sum up, with the USA entering a period of renewed contraction, following the budget cuts agreed between President Obama and the Republican Congress, China’s export growth (at least to the US) will dip. In conjunction with the incapacity of its domestic sector to replace the lost aggregate demand, and in the context of  an inflation rate inflation racing ahead at 5.4% (March 2011 datum) [while house prices are continuing to rise at a breathtaking rate of 24%], China is heading for a recession; one that will either be induced by the authorities or, more worryingly, one that will simply happen spontaneously and rather brutally. Against this backdrop, it would be unwise, and particularly un-German, of Mr Schauble (Germany’s finance minister) to imagine that Germany’s smooth 2010 run can continue during the next few years. The rise in the interest rates of Germany’s own bonds, from 2.8% to 3.45% surely weighs heavily on his mind.

So, back to the debt crisis and Europe’s Great Banking Conundrum. If Europe were to allow inflation to gently eat away at the sovereign debt (especially the debt held by periphery nations), it would make some sense to keep lending Greece et al until the problem fades sufficiently. Indeed, it would be, all things being equal, equivalent to a haircut: For there is, at least on paper, no difference between (a) imposing a 30% haircut in nominal values to Greece’s €300 billion debt when inflation is around 1.5% to 2% and (b) imposing no haircut but allowing inflation to edge up to 2,8% to 3% for seven to eight years. From a political viewpoint, and from the perspective of a banking sector whom abhor haircuts as much as Dracula hates a rising sun, option (b) would be vastly preferable to option (a). But then again, all things are not equal!

To see what is not equal, just look at the fresh downgrade of Irish bonds. What was the rationale? That the austerity imposed in order to compensate for the state’s support of Ireland’s banks weakens the state’s finances making it necessary to bring on more austerity. The implication is clear: The vicious circle is unbroken. The EFSF lending to the Irish state is making no inroads into the crisis. In effect, the debt mountain is rising and so are the banking losses not just of the Irish banks but of the whole eurozone.

This realisation, though never acknowledged openly by the German Finance Ministry, is what lies behind the not so subtle change in Germany’s position vis-à-vis debt restructuring. That they only talked about Greece was merely a case of hinting at the general by focusing on the particular. The temptation to allow the mountain of debt to fade in the hands of mild inflation was purged by the belated realisation that the crisis’ dynamic is stronger than any mild inflationary process. And in view of developments in China and the USA, Germany is now eager to consider Plan B: Debt restructuring, beginning with Greece.

In the last few months, the first official mention of restructuring came from Ireland where the new government, with a fresh mandate to do all it can to shift the burdens off the weakened shoulders of the taxpayer, announced (through Michael Noonan, Ireland’s Finance Minister) a haircut of around €6 billion that would hit the banks’ subordinated bonds. Ideally, the government wanted to hit the banks’ senior creditors. In view, however, of staunch ECB resistance (in defence of these great sharks), Ireland is making a start with the medium sized fish that have, in the past, lent money to the private banks. As they say, the culling has to start somewhere. First, the weakest of all (the taxpayers), secondly the second weakest (the ‘subordinated’ bondholders).

Another sign that the combination of inflation and EFSF bail-outs is no longer seen as a viable ‘solution’ to the Crisis is the ECB’s decision to increase official eurozone interest rates to 2% at the end of the third quarter. Do they not know that this would push the insolvent peripheral states over the edge? Are they not aware that, for example, the interest rate reduction (over the bail out loans) that ex-Greek PM George Papandreou so boisterously celebrated on 25th March has withered away as a result of the ECB rate hikes? Of course they do. But that is the point: Whether the hapless Mr Trichet, the then-ECB Governor, knew it or not, Germany’s motivation to push for an ECB rate hike was crystal clear: To start the process of debt restructuring instead of relying on mild inflation to do the job that austerity in the peripheral countries could never do.

If I am right, why is Germany still not coming out with a clear statement that reflects its new mindset? The sad answer is: They have not worked out yet the form that the restructure will take, unsure of its costs to the German banks!

Before turning to the German banks as Germany’s main concern, what of the other prospective victims of a debt restructure? Is the German Finance Ministry not worried about Europe’s pension funds, about the hedge funds, about the ECB (which is holding about €100 billion of dud peripheral bonds, the result of its bond purchase program that started in May 2010, following the Greek IMF-EU loan)?  The answer is no, no and no. But let’s take these three no’s in turn:

Pension funds: It is true that in Greece and Ireland, as elsewhere, many people worry about the costs of a restructure on pension funds. Let’s speculate that Mr Schauble and Mrs Merkel do not share these worries. If need be, they concluded long ago, pensioners will have to do with less. What alterative do they have? Perhaps (from Berlin’s perspective) this is a good thing, as southerners will now have an incentive to retire later and to save more during their working lives.

Hedge funds: Similarly with hedge funds. German politicians have always taken a dim view of these outfits (except when their failure brought down German banks, like IKB – but that’s another story). In any case, Mr Schauble thinks that hedge funds are not likely to lose much from a debt restructure at this juncture because over the past year (after the Greek crisis erupted) they managed to de-leverage considerably.

ECB: It is clear that Europe’s Central Bank is vehemently opposing a debt restructure for a number of reasons. One is that since last May it has purchased close to €100 billion of peripheral sovereign bonds and, thus, worried about its own balance books in case of a haircut. Another is that bankers do not like haircuts; it is in their nature to resist it. A third reason, the most powerful of the three, is that the ECB is already cross with European politicians because it feels the strain of dripfeeding the banks with huge amounts of liquidity. A haircut, the ECB feels, will increase this reliance. Does Germany not share these fears? It does but, according to a general consensus in the German Finance Ministry, Germany’s economic strategists are beginning to fear the effects of the crisis more. In the final analysis (they seem to think), the ECB’s position can be bolstered fairly easily if push comes to shove.

So, the only thing that stops Germany from announcing here and now a wholesale debt restructure is the banks. Thus the term the Great Banking Conundrum. The reason why banks are such a large problem is that they have their tentacles everywhere. Their profit is theirs to enjoy but their bankruptcy is everyone’s loss. Unable to cash in their ‘assets’ at a time of crisis, i.e. to retrieve their loans from their creditors (homeowners, businesses, governments), if they are forced to come clean regarding the true value of these assets bank insolvency beckons. And so Europe is not forcing serious stress tests upon them.

Germany’s concern, therefore, and the reason its government remains undecided on the Greek debt, is that it is struggling to compute the losses to Germany’s banks from a restructure of Greek, Irish and Portuguese sovereign debt. There are two issues here: First, it is impossible simply to calculate the knock on effects. For instance, while we know almost to the last euro the exposure of European banks to peripheral debt (see here for a great interactive guide), it is virtually impossible to predict how, say, a 50% haircut of that debt will reverberate throughout a financial system whose opacity and inter-connectivity is notorious. A recent figure that was given by a well known German banker, is that a 50% haircut on EU peripheral debt would translate into an extra €850 billion of fresh capital that would need to be put into French and German banks alone to compensate them for the losses they will end up incurring.

Secondly, there is an international dimension that an export-oriented country like Germany cannot afford to ignore. E.g. many of these bonds are owned by non-European banks. If they lose a lot of money, these losses can trigger another round of government infusions (in places like Japan, China, Korea etc.) which may affect local investment in projects that would otherwise require German capital goods… What is the likely magnitude of this problem? The Bank for International Settlements tells us that the total exposure of non-EU banks to Greek, Portuguese and Irish debt is a mere $363 billion. This is peanuts, by the standards of the 2008-11 crisis. But then again it does not take into consideration (a) the amounts owed to UK banks and (b) the more than likely Spanish sovereign troubles.

In view of the serious problems that a horizontal debt restructure would cause to Germany’s banks and to its external trade relations, the German Ministry of Finance is therefore reluctant to come out, once and for all, in favour of a debt restructure. On the one hand, they have concluded that it is inevitable. On the other, they know it will bring huge costs to bear upon primarily Germany’s own banks but also, and this is equally daunting, to its export sector. The result is a new spate of….dithering.


Germany is experiencing a surge in self-confidence which, paradoxically, comes hand-in-hand with a realisation that its current good fortunes may be on borrowed time. For a year now, Berlin kept hoping that the euro crisis would, given sufficient time, go away of its own accord. Mild inflation played a major role in that dream of gradual recovery. However, the complete and utter failure to end the debt crisis by means of austerity-plus-loans in the European periphery has caused the German Finance Ministry to conclude that there is no way of avoiding Plan B: a debt re-structure. Alas, the Great Banking Conundrumis causing much consternation, the result being more procrastination and a series of conflicting statements from the German government that, understandably, push spreads up and intensify both the debt crisis and the banking conundrum.

This is the bad news. Is there a silver lining? Undoubtedly yes. A tranche transfer of part of the sovereign debt (which effectively restructures the Maastricht-compliant part of the debt without imposing a haircut), a selective haircut on zombie banks that rely of ECB for liquidity (and which does not affect the pension funds) plus (and this is important) the recapitalisation of banks by the EFSF in a manner that allows Europe, once and for all, to cleanse its banks of worthless titles and, soon, to return them to the private sector squeaky clean and ready to do business (as opposed to their current function as the EU’s black financial holes). Ignoring the proposals above or adding some such policy intervention, and continuing with the current, punitive bail-outs instead, will lead to the worst of all possible worlds: A deterioration of the debt crisis, a further escalation of the banking crisis and, in the end, a weakened Germany at a time when its good fortunes in Asia will be waning fast with possibly the total collapse of the euro as a global currency.

Taoiseach Sticking It To Europe

Taoiseach Enda Kenny visited his counterpart, Angela Merkel, in Germany yesterday and was in no way deterred in his compulsion to play hardball with his opposite number.

Seems like Enda has finally grown a pair and told Europe what they can do with their high jinxed plans of meddling with our affairs, especially when we’ve been subjected to a fiscal rubber glove treatment unlike anyone else in Europe….INCLUDING Greece!!

He even took the brave line of telling the press corps exactly how he felt about the EU and ECB’s efforts thus far to avoid contagion with the ever more likelihood of Italian economic collapse and the fact that the fractal efforts of the various eurozone governments have resulted in an inability to arrive at a cohesive consensus on ways to tackle the ever-growing financial crisis.

He expressed his opinion that the proposed increase of the EFSF doesn’t go far enough, nor do the proposals regarding the guaranteeing of sovereign bonds. His words went much further than any other EU leader has expressed to date, and it seems Angela was non too impressed by his candour and willingness to tell it how it is.

We will need to wait and see if this approach to standing up to Germany will backfire on us, or if it will result in the impetus for the EU to refrain from viewing Ireland as a backwater partner of the EU, a trumped-up nation who should know its place in the grander scheme of things. I however am quite pleased that our Taoiseach has grown a pair and decided that he’s not going to let Europe bully us.

Solution To Greece’s Debt Problem

I’ve long held the view that the extortionate taxes I’ve been paying here in the Netherlands are not being used towards the greater good of the Dutch economy, but that of my fellow countrymen back home in Ireland.

I say this, because as a “DINKY” who earns a pretty decent salary, herself and I are net contributors to the Dutch economy rather than net beneficiaries. We do not benefit from the multitude of tax breaks families with children get, we do not benefit from the Dutch schooling system (mind you, given the majority of Dutch children I have come into contact with, I doubt the Dutch benefit from their schooling system either) and I am never ill enough to benefit from the “extra dental and health” insurance I have to pay each year, let alone get to break-even from the benefit I get from the Dutch quack doctors.

So, I can only assume that my taxes are being used to benefit my fellow Irishmen and women, especially when the Dutch are so keen of late about reminding me about “all that bailout money” they sent over the Ireland not so long ago. Amazingly, they always seem to wash over the fact though that the bailout of Irish banks was actually a protectionist move to prevent their own banks from collapsing after those banks put money down like an uncontrollable gambler, betting the house on new housing estates across the Emerald Isle.

But now we have Greece, whose economic growth seemed to defy all the odds with year over year increases in its GDP since the 1970’s. But the bit that I never understood is why since the early 1990’s the Greek government thought it was a good idea to spend more than they could generate. As any business or government will attest, generating cash is easier said than done, especially if your customers are based in Spain, France, Italy, Greece or Portugal, all of whom are complete fuckers when it comes to getting paid on time….or even at all. So when it comes to the average Greek taxpayer, those problems become compounded, because we all know how nicely padded with drachmas (and now euros) those Greek mattresses are when stuffed full of undeclared income.

We also all too aware that Greece should never have been allowed join the eurozone in the first place. But it’s been done, and to boot them out, some would say, will fuck it up for everyone else….in particular ze Germans and French who have so much to lose. So they see fit that everyone else should stump up the cash and bail them out. Here’s the next bit that I don’t understand.

Why should countries, such as Slovakia, Slovenia, Czech Republic, all of whom have smaller economies and lower standards of living comparatively to Greece, be forced to help out its wealthier neighbour? More to the point, why do we still feel the need to throw good money after bad, to a government who has not exactly been the most proactive in implementing good fiscal policies, unlike those of say Ireland or Spain, and who is no nearer to seeing the light at the end of the tunnel……maybe it’s good that they haven’t because that light may end up being the lights of the oncoming train, ready to finish derailing it’s economy and government.

So the solution, in my mind is simple. I am a taxpayer, and my taxes are going to help out my fellow European citizens. But I am not exactly seeing the benefit from my end. So why don’t we do it like this.

Give everyone across Europe a free holiday to Greece! Instead of sending the money directly to the Greek government (who’ll only go and spend it on the wrong thing anyway) the governments of Europe (Germany, Netherlands, Britain, France and anyone else who wants to join in) pays for you and me to fly down to Greece on holiday. They can pay for their own national airlines to fly us down (that way ensuring full employment at home) and contribute towards our hotel bills and some spending money when we get down to Greece. Then the Greek economy would be buoyed up from all the cold hard cash we’d spend in the bars, restaurants, tours, boat rides, ferries, taxis and everything else one spends ones money on when abroad.

Greece still gets the cash infusion she so desperately needs, but the citizens from across Europe who have up until now not actually seen their taxes at work, get to reap the benefits of their taxes and get to experience true harmonious European economics at work, first hand! Everybody wins 🙂

Honey…..where did I put my passport?