Thursday, 15 November 2012

EUROBLOWN: Killing time is an oxymoron

Posted by the Slog

While Greece dangles on a piece of string, Spain is let off the leash.
Olli Rein in Spain normally involves acute pain, but not on this occasion. Last night, the EU’s economy prefect announced that Spain will need no further austerity measures until the end of next year. This despite the fact that the country will miss its deficit targets-  in much the same way that the Moon has so far managed to miss the Earth during its daily round-trips over the last 400 billion years.
This is, opined the London FT last night, ‘the clearest sign yet Brussels is backing away from an austerity-focused crisis response’. Rein’s approval is in truth based on nothing more than blind faith in the structural reforms proposed by Spain two months ago…none of which have as yet been enacted or even drafted.
Applying the same criteria to Greece, Athens could justifiably press for a total debt write-off, $600bn in Frankfurt gold, and the head of Herman van Rompuy. But times have changed in the eurozone. The eurozone plan now, in fact, is to kill time completely, by staying in an eternal present. The ideas of Eckhart Tolle have been adopted in toto: the future does not exist, there is only an Eternal Now.

Five days spent down among the unpleasant lowlife of British culture have not taken my eye off the eurozone ball, because the euroball never moves. It is involved in a game of Zen football in which the players are unreal: they dummy, they feint, and they swivel but – having no physical form – they do not affect the stationary nature of the ball. In Zen eurofootball, the ball lands where you want it to, in your head. On the ground, it moveth not.
This is increasingly referred to as Brussels, Berlin and Frankfurt ‘killing time’, and I have no doubt the eunatics love that thought, because it suggests they can, rather like Italian scientists after a little too much Campari, transcend the rules of e=mc2.
But you can’t kill time: Einstein knew that, and old Albrecht was never wrong. In the 3D world, killing time is an oxymoron.
Talking of morons, real-life footballers are often referred to as ‘playing for time’, or ‘wasting time’, when they’re 1-0 up with a minute to go. But the difference here is that, at the referee’s whistle, the game is over. In the eurozone, the idea is that the game should never be over, because the problem can never be solved.
In one sense, ever since late 2009 the eurozone has been wasting time. Forgiveness of debt at that stage, with a small bondholder haircut subsidised by the long-suffering taxpayer, would’ve come out at $450bn all up. Anyone who thinks we’re within three noughts of that today is disturbingly unclear about the direction in which Time travels.
The Greek economy contracted by 7.2% in the third quarter just gone, according to data published by ELSTAT two days ago. This might suggest that time is running out, as at this rate, Greece will have no economy at all beyond guns and petrol-bombs by August 2017. I have it on good authority that in that month, things will start to pick up, but that authority has a history of mental illness and is called Christine Lagarde, so don’t bank on it coming to pass.
Mario Draghi’s shtick with Time is to try and make it appear to stand still by reducing all progress on every issue to 0%. Being an intelligent man who obviously understands relativity theory, his is only a slightly sprained form of sanity. Thus last week he relaxed the collateral conditions for the Bank of Greece, but then on August 2, he’d already reduced the amount of repo-able T-Bills the BoG can get from the ECB by €3.5 billion – or roughly 50%. So now Athens has half the money but twice as well collateralised.
It’s what we bankers call ‘a trade off’. Or ‘killing time’. We’ve had Zirp, now comes Zip – Zero Infinite Progress. It’s an ultimate expression of limitless lack of potential from the same stable that brought you friendly fire and negative forward movement going forward.
Liberal Austrian newspaper Der Kurier wrote yesterday that ‘The help from the donor countries is half-hearted and ultimately will only postpone Greece’s bankruptcy rather than averting it’, a timeless observation that should’ve been put into action a long time ago. But the concept of anything from the eurozone being half-hearted is seen by some as a massive increase on cold-hearted.
Unfortunately, back here in real life again, half a heart doesn’t work. The thing with your heart is that you need all of it, or you die in very short order. Another favourite Einstein observation was that if you halve the distance between the mouse and the hole for infinity, the mouse never gets there. But mainly, the mouse never gets there because the cat isn’t working on this principle of movement, and thus eats him. There is a very good parallel for the EU in this one.
Another thing about time is you can’t fool all the people during all of it. David Cameron has his own personal Collider working flat out to try and disprove the famous Abe Lincoln remark, but it looks doomed to failure. After Olli Rehn’s complete capitulation last night, the eurozone’s mantra about treating Greece and Spain equally is finally consigned to the pit. Only the ever-lowering pendulum is left, dropping inexorably until it slices right through the eurozone’s bollocks.
I wonder what my many Greek friends, sources and readers will make of this. Most Spaniards (probably including Mariano Rajoy) will draw the lesson that standing firm coupled with going on strike is an excellent way to get bullies out of one’s face. It’s the standing and firm parts of the strategy that seem to be lacking in the Greek political class. That and, well, honesty, decency, consistency, calm, courage, and a calorie-controlled diet. 

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