Alphen, The Netherlands. 25 July.
Here we go again. Lucullus, in Shakespeare’s Timon of Athens (spot the irony) warns, “This
is no time to lend money, especially upon bare friendship without security”. As
a Dutch tax-payer that warning carries little irony as billions of my hard-earned tax Euros and those of my fellow
tax-payers have already vanished down the black hole of a failing currency –
either in direct transfers or by printing money that I will forever have to underwrite. No wonder the Dutch political elite have
decided to go AWOL and that this is a good time NOT to have a
government.
This week’s statement by rating
agency Moody’s, a Dark Lord of the Market Universe, that the AAA borrowing status
of Germany, Luxembourg and the Netherlands is now on notice thus comes as no
surprise. Indeed, in spite of German
protests it strikes me as plain common sense as the sums of my money needed to save
the benighted Euro become ever more astronomical.
“Even if such an event [a Greek exit from the Euro] is avoided, there is
an increasing likelihood that greater collective support for other Euro area
sovereigns, most notably Spain and Italy, will be required”. The statement goes on; “The burden will
likely fall most heavily on more highly-rated member-states [i.e. me] if the
Euro area is to be preserved in its current form”.
German Finance Minister Wolfgang
Schaüble thinks Greece now incapable of reform and yet this week the so-called troika;
the IMF, European Central Bank (ECB) and European Commission arrived in Athens
to assess Greek ‘eligibility’ for another €31.5 billion ($38.1bn) of my money. This is
the 'last' tranche of an €130bn ($157.4bn) bail out that apparently I agreed to last
March. Although the Greeks have managed
to trim €17bn ($20.5bn) from their national debt to bring it down from 160% of GDP
to 132% it is nothing like enough.
Now, Athens has stalled. Greece
has promised to reduce it budget deficit to below 3% of GDP by the end of
2014. In 2011 the Greek overspend was the
equivalent of 9% of GDP. Clearly, the 3%
target is pure Greek drama as Athens is now behind with its spending
cuts as the Greek economy shrinks faster than planned. More importantly, reports from within the all-mighty German Central Bank
(Bundesbank) indicate that Berlin now accepts Greece’s exit from the Eurozone
as inevitable which means all my money will be lost. And yet Athens may demand another €50bn ($60.5bn).
On to Spain. As the value of Spanish government debt
plunges Spanish banks are beginning to crack with some €250bn ($302.7bn) in
government bonds in their vaults, some 30% of Spain’s national debt. The ECB has already told me that I ‘promised’
€100bn ($121.1bn) of my money to pump into Spain’s banks, even as the Spanish take their money
out and put it all in German banks – so much for solidarity. Indeed, Spanish banks have lost 3% of their
deposits in recent weeks, leading them to take a further €106bn ($128.3bn) of my money via the ECB or some 9.5% of
their total borrowing.
My money is also being used for
similar purposes in Ireland and Portugal and it is fast reaching a point where
the indirect transfers of my money via the ECB must be replaced by direct
transfers of my money via the Dutch, German and other governments. And now I hear that Italy, the world’s third biggest
debtor, may also need enormous chunks of my money, I must be incredibly rich.
Sadly, I am not rich. Rather, I am being asked, no forced to bankrupt myself,
to risk all for which I have worked so hard for so many years and to end my
life a pauper simply to fund permanently failed southern European economies and
an absurd piece of political adventurism in the name of a European solidarity that exists only in the minds of the Euro-Aristocracy who have enriched themselves in the name of Europe.
The simple fact is that whatever
the economic and political shape of Europe the state institutions of southern
European countries are simply not strong enough to withstand the shock of
reform needed to ween them off my money.
There are thus three questions I want the politicians who put me in this
mess to answer. First, how much is
saving the Euro worth? Second, how much
would the break up of the Euro cost?
Third, (and most pressing) when is this going to end…and how?
How safe is my money? The one thing I will never get is an answer.
Julian Lindley-French
