The Eurozone is the sick man of Europe because it has a congenital defect

Germany and France are to blame for the Euro disaster
By Gerald Warner


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• Germany and France are to blame for the Euro disaster
• Germany owes 1/3 of its economic growth to the euro, but won't admit it
• The European élite has lost contact with reality

Not since the closing scene of The Italian Job, with Michael Caine’s bus laden with stolen gold swaying like a seesaw on the edge of a cliff, have we witnessed brinkmanship on this scale. The negotiations between Greece and its creditors have become dizzying to watch. Day by day – or, increasingly, hour by hour – Greek finance minister Yanis Varoufakis and his colleagues erratically change their tune to lead their creditors a merry dance.

On Tuesday morning the mood was foot-stamping intransigence and plug-pulling on the negotiations; by the evening that stance was rumoured to have softened to “considering requesting a six-month extension of the loan agreement [but on the basis that] it is clearly distinguished from the programme set out in the memorandum of understanding. We are not going to ask for an extension of the programme or memorandum.” In other words: “Give us access to funding as if we had agreed to continue with austerity, but let us off the hook and call it a loan, not a bail-out.”

This olive branch might be tendered today, with a view to influencing the ECB’s deliberations on whether to continue to supply Emergency Liquidity Assistance (ELA) to Greece’s endangered banks. But already politicians in Greece are preparing to round on Syriza for reneging on its pledges of inflexible resistance to the austerity programme. Those on the other side of the poker table in Brussels, especially the Germans, are equally susceptible to electoral pressure.

Nobody knows what is going to happen. There is a danger, too, that all the players in this farce could be overtaken by events, e.g. a run by depositors on Greek banks, already haemorrhaging €2bn a week, so that the situation spins out of control. The Eurozone is the sick man of Europe – not because of recent infection but because it has a congenital defect.

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