M2RB: The GoGo's
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
"Germans are not prepared to pay for anyone's 'vacation from reality'."
- Der Spiegel
- Der Spiegel
By Gwynne Dyer
Published in the Japanese Times as "Greek election decided in Spain"
It's probably the first time that events in Spain have decided the outcome of a Greek election. Last weekend the European Union agreed to loan Spain's nearly insolvent banks €100 billion on relatively easy terms. Syriza, the hard-left protest party that came from nowhere to dominate last month's election in Greece, will therefore almost certainly emerge from next Sunday's rerun of that election as the biggest party in parliament.
The party that wins the largest number of votes in a Greek election gets an extra 50 seats, so Syriza will probably lead the next Greek government. It would then demand a renegotiation of the EU's much harsher terms for bailing out the Greek economy — and it might even get it.
That would prolong the agony of the
euro, but it wouldn't actually save it. The common currency is doomed,
at least in its current form, precisely because countries like Greece
and Spain were allowed to join the euro.
It's not that they were more reckless and
improvident than the Northern European countries who were really
guaranteeing the common currency's value (though the Greeks certainly
were). What dooms the euro is the fact that the Southern European
economies are far less efficient.
The fundamental mistake was made in 1999,
when the political attraction of a common European currency triumphed
over the economic rationality that said countries with radically
different economies should not be trapped in a single currency. The
current financial crisis, which threatens to destroy Europe's prosperity
and even its unity, is an inevitable consequence of that original
error.
The economic logic argues that less
productive economies should have their own currencies, which they can
devalue from time to time in order to stay competitive. But the
political imperative of European unity is still seen as linked to the
euro (though it doesn't have to be). Endless dithering over bail-outs is
the result.
What happened to Spain illustrates the
problem. Spanish governments were responsible in their euro borrowing:
they never ran a deficit of over 3 percent before the world financial
crisis hit in 2008. The euro did, however, let Spanish consumers and
companies borrow money at a very low rate of interest, since everybody
assumed that the powerhouse economies of northern Europe were the
ultimate guarantors of euro debt.
The result was one of history's biggest
housing bubbles, a mountain of corporate debt as Spanish companies went
in for headlong expansion — and huge exposure to bad risks by the
Spanish banks that lent the money.
In 2008 the inflated property values crashed
and the foolish investments came home to roost. The Spanish government's
borrowing ballooned as it poured money into saving the banks — and when
it could not raise any more funds either, the European Union stepped in
last week with €100 billion to stave off a default.
Well, it had to. A Spanish default would
bring the whole rickety structure crashing down, and nobody has yet
figured out how to dismantle the euro without a huge amount of
collateral damage. The EU is merely doing crisis management and has no
strategy for fixing the euro (other than a unified European state, which
is not going to happen). But what interests the Greeks is the terms of
the EU loan to Spain.
Or rather, the lack of any restrictive
conditions in the EU loan:
It imposed no obligation for the Spanish
government to raise taxes or cut spending further. That is exactly the
deal that Alexis Tsipras, the charismatic leader of the Syriza party,
says he can get for Greece, and in this last week before the Greek
election he will use the evidence from Spain to good effect. He will, of
course, make no mention of the fact that Spain's crisis and Greece's
are very different.
From the day the euro was launched in 2002,
Greek governments borrowed like there was no tomorrow, and lied to the
EU both about the scale of the country's indebtedness and the purposes
of the loans. (Much of the money went into the pockets of their own
cronies and supporters.) The entire country was living far beyond its
means, which is why the decline in Greek living standards since the
crisis struck has been so steep.
Greek voters don't want to hear about that.
They just want the pain to stop, and many of them believe Tsipras'
promise that a new government led by the Syriza party can renegotiate
the terms of the bail-out so it hurts less.
He may be right, at least in the short run.
Even if there were some super-secret team of financial experts in
Frankfurt working out how to wind the euro up without too much damage to
the German economy, they would need to time their move very carefully.
They would not want a Greek default to cause the euro to unravel
prematurely, and a flat "no" to Tsipras could bring that on very fast.
In fact, there almost certainly is no such
team. There is no "Plan B," and all the EU authorities are doing is
endless day-to-day crisis management. One day it will fail, but they're
not ready to admit that yet. So the Greeks may actually win some
short-term relief by giving Syriza a mandate.
Gwynne Dyer is an independent journalist whose articles are published worldwide.
Vacation - The GoGo's
Can't seem to get my mind off of you
Back here at home there's nothin' to do
Now that I'm away
I wish I'd stayed
Tomorrow's a day of mine
That you won't be in
When you looked at me
I should've run
But I thought it was just for fun
I see I was wrong
And I'm not so strong
I should've known all along
That time would tell
A week without you
Thought I'd forget
Two weeks without you and I
Still haven't gotten over you yet
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
[Instrumental Interlude]
A week without you
Thought I'd forget
Two weeks without you and I
Still haven't gotten over you yet
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
Back here at home there's nothin' to do
Now that I'm away
I wish I'd stayed
Tomorrow's a day of mine
That you won't be in
When you looked at me
I should've run
But I thought it was just for fun
I see I was wrong
And I'm not so strong
I should've known all along
That time would tell
A week without you
Thought I'd forget
Two weeks without you and I
Still haven't gotten over you yet
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
[Instrumental Interlude]
A week without you
Thought I'd forget
Two weeks without you and I
Still haven't gotten over you yet
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
Vacation
All I ever wanted
Vacation
Had to get away
Vacation
Meant to be spent alone
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