What’s Wrong with Europe? Ukraine, Greece and Libya: All Unfinished Businesses

Libya is sinking into a fundamentalist Islamic chaos, the cease-fire in Ukraine is breaking down and Greece’s debt problems are far from resolved.

Merkel, Putin and Hollande at the Kremlin (2015)

And this in spite of the the so-called agreement reached in Minsk between Putin and the Merkel-Hollande couple. And in spite of the news coming out late Friday evening (20 February) that the Eurogroup (the Euro-zone 19 finance ministers) had agreed to extend by four months Greece’s bailout, thus avoiding a financial shutdown of Greece.

Anyone following the news in Ukraine can see that the cease-fire hasn’t got a ghost of chance, with Russia still fully supporting the rebels’ advance in the East.  Yet, both Hollande and Merkel confidently talk about taking new sanctions and Kerry echoes them. One wonders how anyone can still believe in the power of sanctions. Surely Putin doesn’t care.

As to the Greek bailout extension, it’s a sham: this coming Monday (23 February), as reported in the New York Times:

“Greece must send its creditors a list of all the policy measures it plans to take over the next four months. If the measures are acceptable, European finance ministers could sign off on an extension of the bailout agreement on Tuesday.”

Varoufakis and Tsipras (Facebook)

Really, a “list of all the policy measures” by Tuesday? And to whom are the said measures supposed to be “acceptable”?

To Germany, of course. The fundamental idea is that a newly elected government in the Euro-zone cannot change the commitments taken by a previous government, i.e. the austerity measures forced upon Greece by Germany. Therefore the new government led by Tsipras and his dynamic finance minister Varoufakis must continue with the reforms and austerity policies called upon by the infamous “troika”, the European Union, the European Central Bank and the International Monetary Fund.

Back to square one.

Italian Military Mission (Olycon)

And the same can be said for Libya. The chaos threatening this country, just 350 km off the coasts of Europe, is a matter of grave concern to Italy: the radical fundamentalist Islamic militia over-running Libya are patterned on ISIS. Threats have already been sent via Twitter to Italy. The wonder is that the rest of Europe doesn’t seem to care. Italy declared its willingness to lead a multinational force to “restore peace and order” in Libya and sought a green light from the UN Security Council – as did Egypt, after it had attacked extremist positions inside Libya a few days ago.

But the Security Council did not respond – in practice, both Egypt and Italy were told to calm down and forget it.

I am worried. The world is fast sinking into anarchy, the West is doing nothing to stop it and not even using its prime instrument to prevent war: the United Nations. After Gaddafi was ousted, no serious effort has been undertaken to help Libya recover and rebuild – a tiny UN mission was sent to Libya, with no means to operate on the ground, and all the UN Representative can do, is warn that Libya is falling apart. Yes, it’s rapidly becoming a failed state like Somalia, and it’s sitting on Europe’s doorstep.

Of the three problems, Greece should be the easiest to fix: write off the debt and forget it. If one is to believe Paul B. Kazarian, one of the “vulture investors” of Hilary Rosenberg’s famous book, the €318 billion Greek debt is worth only one tenth of its value as a result of the series of adjustments to the Greek debt over the years that include restructuring, maturity extensions and interest rate reduction. He argues that if one applied international accounting rules and took into account the assets owned by Greece, the overall net debt figure would fall to €32 billion. “You are suffocating a country with a figure that has no relevance”, he argues, “Just take the fricking loss and move one.”

Not many people agree with him, such views are always scary to conservatives and particularly so in German circles. Yet, historically, sovereign state debts have always been treated this way: that is exactly what happened in the United States, for example when the Second Bank of the United States collapsed in 1836, sending thousands of UK investors scrambling for their money. This was not the end of the United States’ dollar, so why should a Greek (near) default be the end of the Euro?

When will our European leaders wake up and start facing the far more important challenges of Ukraine and Libya? Europe, quo vadis, where are your values, where are you going?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s