Dr. Oliver Hartwich: "Merkel´s irresponsible decision has created an existential challenge to her own country"

Angela Merkel´s open doors refugee policy has seriously weakened Germany and the entire EU:

Nothing is fine in Europe these days. Since Angela Merkel singlehandedly opened Germany’s borders to refugees, asylum seekers, migrants and any other nomads, the continent has been plunged into chaos. First and foremost, Merkel’s irresponsible decision has created an existential challenge to her own country. But it also threatens to wreck the European Union -- or at least turn it into an entirely different organisation. --

Before too long, we can expect Turkey to use the leverage presented to it by the refugee crisis to extort more concessions from Merkel. And how ironic would that be: to see liberal Britain depart from the EU while authoritarian Turkey joins – and both of them essentially because of the same reason.
Merkel’s political stupidity has exposed her to blackmail from Turkey – and from Greece. Again, it is completely ironic how the balance of power has shifted in Europe. Only half a year ago, it was the Greek government that was humiliated in Europe and had to give in to Germany’s demands. The refugee crisis has changed that too. --

What this shows is how much Merkel’s policies have reduced Germany’s standing. Not so long ago, Germany was seen as strong and Merkel as one of the most powerful politicians in the world. Today, the British are preparing their departure from the EU, Turkey cannot believe its luck to be dictating its demands to Berlin, and even Greece may feel encouraged to stand up to Germany.

We are witnessing a fundamental shift of power within the EU. This shift of power has weakened Merkel’s Germany and it will eventually lead to an EU that is very different from the EU that we knew.

It is indeed the end of the EU as we knew it. Britain out, Turkey in and Greece debt free: who would have thought what seismic shifts the refugee crisis could trigger in the EU’s power play?

Read the entire article here

Unemployment - the only sector in the eurozone and the EU with strong growth

These people are the ones who should be held accountable for the record unemployment and recession  in the EU.

"Our economic fundamentals remain strong"
EU Commission president J.M. Barroso (speech in New York, April 12 2013)

The only thing that is growing fast in the eurozone (and basically in the entire EU) is unemployment. Today official eurozone enemployment hit a new high: 12,1% - 19.2 million people - are on the dole. In the full 27-member EU, a total of 26.5 million (10.9%) people were out of work in March.

The Eurostat data show a dramatic year-on-year rise; a year before the eurozone unemployment was 11% and 10.3% for the entire EU. 

Greece (27.2%) and Spain (26.7 %) were the hardest hit. 

You could be forgiven for thinking that it could not possibly be much worse. But, as economist Andrew Watt (Germany's Macroeconomic Policy Institute), shows us, you would be wrong: 

"we can make a rough and ready calculation of the “real” rate of underemployment in Europe. According to the European Labour Force Survey, average hours of part-timers are a tick under twenty per week, whereas full-timers work 41.5 hours a week. We don’t know exactly how the working time preferences are distributed, but a reasonable starting point would seem to be to assume that those part-timers wanting longer hours have the same average hours as all part-timers and that they want to move to the average of full-timers. In  other words we add somewhat more than half of the 9.2 million involuntarily part-time workers to the unemployed total.** We then add the people in the two sub-groups of the economically inactive both to the numerator (unemployed) and denominator (unemployed plus employed).

If I haven’t made any stupid excel mistakes*** the underemployment rate in the EU27 could be considered to be up to 16.7% and in the euro area as high as 18.0%. In other words the unemployment rate captures only about two-thirds of the extent of European underemployment."

PS
It is of course possible that I have misunderstood what Barroso said. He may actually be right when he states that "our economic fundamentals remain strong" - if he meant to say that his own and the other commissioners' economic fundamentals remain strong. 

Another European "success story": Eight Italians bought an electric car in February

Europeans give thumbs down to these.

In spite of all the environmental hype and subsidies, European car buyers continue to give the thumbs down to electric cars and hybrids. These are the latest sales figures from February:

• 8 Italians (out of a population of 60 million) bought an electric car in February.
• 0 Not one electric car was sold in Greece 
• 505 electric cars were sold in Germany (population 82 million)
• 648 electric cars were bought in France (population 65,6 million)

The market share for electric cars and hybrids in western Europe is a whopping 0,25%!

With this kind of sales, the German government's goal of having one million will of course never be reached. German car manufacturers are now crying for more subsidies:

“To support the development of alternative engines, we need positive conditions,” Zetsche, who is also the head of the European Automobile Manufacturers Association (ACEA), told business daily Handelsblatt. “At the same time it’s necessary to build the appropriate infrastructure.”Establishing new technology is unavoidably expensive, a cycle “we can only break if Europe supports the purchase of electric autos for a limited time,” he told the paper, adding that unified rules for the region would be ideal. 

Grillo's success a blessing in diguise: "Europe's Lost Generation Finds Its Voice"

As I tried to explain in an earlier post, the result of Italy's recent parliamentary election could actually be a blessing in disquise. Now German Der Spiegel seems to have come to a similar conclusion:

For years, Europe's young have grown increasingly furious as the euro crisis has robbed them of a future. The emergence of Beppe Grillo's party in Italy is one of the results -- and is just the latest indication that disgust towards European politics is widespread

Grillo is an Italian phenomenon, but his party's election results are an expression of the mounting rage and anxiety that is spreading throughout crisis-stricken Southern Europe. A new citizens' movement is taking shape, one that shares a mistrust of the established political system and a desire for more grassroots democracy. Only in Italy has it been democratically legitimized thus far.

These irate citizens are also united in anger against their own elite: politicians who have been tainted by party scandals and corruption, yet still remain in power or leaders who are seen as being the mere lackeys of Germany and Chancellor Angela Merkel.

Despite its name, Movimento 5 Stelle has long since ceased to be a movement. It has become a political party that is expected to take responsibility and make proposals for the formation of a government. During the campaign, it relied on a thin, 15-page platform.

The Grillini now have to prove that their country is not merely corrupt, indifferent and infiltrated by the Mafia. Ultimately, they could save Italy's image around the globe. They are the latest example of an uprising of the lost generation, that mass of people on Europe's periphery who are under the age of 40, desperate, unemployed and who have very little left to lose. The public outrage in Europe came to a boil in tent camps in Madrid's Puerta del Sol. It inspired the Occupy Wall Street activists. And it continued in Greece, where youth unemployment has reached 59.4 percent, and where there are no jobs and no economic recovery. =

Yet whereas the Greeks have not yet stirred up the old political system, the Grillini have found unexpected success. They were long underestimated in Italy, yet they long ago started having an effect. They have, for example, fundamentally shaken up the old party system, with its irreconcilable right-wing and left-wing factions. A new political class has emerged with them. Since the advent of the Grillini, Italians are debating Europe more than ever before, including their country's possible exit from the euro zone.

It must be terrifying for current bunch of European political leaders and Brussels eurocrats to watch the mounting anger, not only in southern Europe, but in other regions as well. In their hearts they must know that they have utterly failed, and that the day of reckoning cannot be far. 

Leading German economist on the euro: "We are destabilizing our political system with this excessive rescue policy ..."

Hans-Werner Sinn is one of the few European economists, who dare to speak out about the failure of the euro. Sinn was one of  the early supporters of the euro project, but in an interview for the German Der Spiegel he now admits his mistake:

Sinn: I was too quick to endorse the euro because I thought it would liberate the continent from endlessly fluctuating exchange rates. My mistake was that I believed that the nations of Europe would adhere to the Maastricht Treaty and not socialize the debts of Southern European countries. Older colleagues had already pointed to this danger at the time.

In the interview Sinn says that he still hopes that the euro can be fixed, and that Greece and Portugal after a temporary exit could return to the common currency. However, when one reads his analysis, it is quite obvious that he is all but hopeful about the future of the euro (and rightly so):

Sinn: I hope that it can be fixed. The euro crisis proceeds in phases, and we are always told that there is no alternative to the next phase, because otherwise the euro would crumble. So there was supposedly no alternative when the European Central Bank (ECB) granted its TARGET loans, when it forced the German central bank, the Bundesbank, to purchase sovereign bonds from Southern European countries against its will, and when increasingly larger rescue funds were approved. Now, they are planning to create a banking union to socialize the debts of banks in Southern Europe. The next step will be the introduction of euro bonds …
SPIEGEL: … which the German government vehemently rejects.
Sinn: By the time France is hit by the crisis, as everyone fears will happen, the German government will no longer be able to refuse this demand. This development will ultimately lead to a system that has little in common with a market economy. The ECB and the European Stability Mechanism (ESM), the permanent successor to the current rescue fund, will then direct the flow of capital -- with the approval of euro-zone governments -- into countries where it no longer wants to go. This will result in growth losses throughout Europe, and money will continue to be thrown out the window in Southern Europe. Furthermore, it will create considerable discord because it makes closely allied countries into creditors and debtors.

Sinn does not agree with those who say that Greece's and Portugal's exit would cause enormous turmoil:

Sinn: I don't agree with the prognosis. If Greece exited the monetary union, the Greeks would purchase their own goods again, and wealthy Greeks would return to invest. And if Portugal leaves, it will have similar positive experiences. The Ifo Institute has studied some 70 currency devaluations and found that recovery begins after one to two years. We are, of course, also suggesting just a temporary exit. Greece and Portugal have to become 30 to 40 percent less expensive to be competitive again. This is being attempted through excessive austerity measures within the euro zone, but it won't work. It will drive these countries to the brink of civil war before it succeeds. Temporary exits would very quickly stabilize these countries, create new jobs and free the population from the yoke of the euro.

In Sinn's analysis, the most serious danger with the euro is this:

Euro-zone member states have made available €1,400 billion ($1,780 billion) in bailout loans, €700 billion of which has been contributed by the Bundesbank through its TARGET loans. On top of this, there is the ESM with €700 billion, which is to be leveraged to €2,000 billion with the help of private investors. This stabilizes the capital markets, but it also destabilizes the remaining stable European states and wipes out the savings of retirees and taxpayers. We are gradually sliding into a trap from which we will no longer be able to escape. This risk is, in my opinion, the greatest risk of all.

SPIEGEL: But other economists arrive at different conclusions when they analyze the situation. Honestly, if you were the chancellor, wouldn't you also take the safest apparent route forward, just as she is doing?

Sinn: I understand very well that politicians always have to bridge the gap until the next election, even if long-term dangers increase as a result. But as an economist, my time horizon is longer.

SPIEGEL: Isn't it perfectly reasonable to be extremely cautious in this situation?

Sinn: You can't convince me that it makes sense to stand by idly and watch as we take on increasingly greater risks. We are destabilizing our political system with this excessive rescue policy ...

SPIEGEL: ... but not if the rescue succeeds.

Sinn: I think that is rather unlikely because it would give us the wrong prices and thus result in a lack of competitiveness in the countries that are receiving public loans. I can't save drug addicts by meeting their demands for more drugs.

Read the entire interview here

Surprise, surprise - The "troika" gives a "positive" report on Greece

Luxembourg's Juncker - a leading supporter of the "joka"

The "troika" had delivered a "positive" report on Greece. Now it's once again time to start throwing taxpayers' money at the unfortunate Greeks. But the Greek tragedy continues, and everybody knows that the politicians in charge of the European Union are only buying time. The actors playing the part of the "troika" are more and more looking like clowns. Maybe it is time to rename them: How about calling the group the "joka"? 

The inspectors of the troika, made up of the European Commission, the European Central Bank and the International Monetary Fund, have finally presented their report on Greece. The head of the Euro Group of euro zone finance ministers, Jean-Claude Juncker, said it was "positive."

Arriving in Brussels for Euro Group talks later in the day, Juncker said the ministers received the report on Sunday night and that it "is positive in its fundamental tone because the Greeks really delivered. Now it is for us to deliver." He said the ministers would check the report in detail and that he couldn't give a final verdict on it because he was still reading it.

The euro is doomed

Greece is on its way out:

Greece has fallen behind with its budget cuts and is asking lenders for more time to meet the conditions of the 130 billion euro aid package. But that would require fresh help of up to 50 billion euros, SPIEGEL has learned. Neither Berlin nor the IMF are prepared to make that money available.

Germany and other important international creditors are not prepared to extend further loans to Greece beyond what has already been agreed, German newspaper Süddeutsche Zeitung reported on Monday. In addition, SPIEGEL has learned that the International Monetary Fund (IMF) too has signalled it won't take part in any additional financing for Greece.

The Süddeutsche Zeitung cited an unnamed German government source as saying it was "inconceivable that Chancellor Angela Merkel would again ask German parliament for approval for a third Greece bailout package."

Merkel has had difficulty uniting her center-right coalition behind recent bailout decisions in parliamentary votes and would be unwilling to risk a rebellion in a another rescue for Greece, the newspaper reported.

Meanwhile, German Economy Minister Philipp Rösler said on Sunday he was "more than skeptical" that Greece's reform efforts will succeed. "If Greece no longer meets its requirements there can be no further payments," he said in an interview with German public broadcaster ARD. "For me, a Greek exit has long since lost its horrors."

Spain is also teetering on the brink, and Slovenia is fast becoming a bail-out candidate ...

The euro in its present form is doomed. It will remain in the history books as an example of monumental political and economic failure. 

Spain: Adiós to the euro?

The euro endgame is coming closer. The exit of Greece is nothing compared to what will happen if/when Spain is forced to leave the common currency: 

Spain is in the gravest danger since the end of the Franco dictatorship as it is frozen out of capital markets and slides towards a showdown with Europe.

"We're in a situation of total emergency, the worst crisis we have ever lived through" said ex-premier Felipe Gonzalez, the country's elder statesman.

The warning came as yields on Spanish 10-year bonds spiked to 6.7%, pushing the "risk premium" over German Bunds to a post-euro high of 540 basis points.

The IBEX index of stocks in Madrid fell 2.6%, the lowest level since the dotcom bust in 2003.

Chaos over the euros 23.5bn (£18.8bn) rescue of crippled lender Bankia led to the abrupt resignation of central bank governor Miguel Angel Fernandez Ordonez, who testified to the senate that he had been muzzled to avoid enflaming events as confidence in the country drains away.

--

Roberts said the collapse in Spanish tax revenues is replicating the pattern in Greece. Fiscal revenues have fallen 4.85 over the past year and VAT returns have slumped 14.6%. Debt service costs have risen by 18%.

The country is caught in a classic deflationary vice: a rising debt burden on a shrinking economic base.

"Once you get into such a negative feedback loop, you can move beyond the point of no return quickly," Roberts said.

Read the entire article here

Finally, good news from Greece: Greek beaches cleaner than French and German bathing sites!

Among the beaches on the French Riviera several are quite dirty

Finally some good news from the European Union - and Greece! 

92.1 % of bathing waters in the European Union now meet the minimum water quality standards set by the Bathing Water Directive. This includes the Serpentine Lake in London, which will host several Olympics events, including the Open Water Marathon Swim and the swimming section of the triathlon.

The results are from the latest annual Bathing Water Report of European Environment Agency (EEA) and the European Commission, which describes water quality in more than 22,000 bathing sites at beaches, rivers and lakes acrossEuropelast year

The report found that 77.1 % of sites had excellent quality, i.e. complying with the most stringent guide values, an improvement of 3.5 percentage points on last year's data. Some 93.1 % of coastal bathing waters were classified as ‘sufficient’, or complying with the less stringent mandatory values – a 1 % increase. Less than 2 % of bathing waters were non-compliant.

Cyprus, Croatia, Malta and Greece had excellent reports on their bathing water sites, all with more than 90 % of bathing water sites meeting the most stringent guide values (excellent quality), and the remainder complying with the mandatory values. At the opposite end of the scale, the Netherlands, Bulgaria, Latvia, Luxemburg and Belgium had relatively low proportions of sites meeting the strict guide values, especially as regards inland waters.

The report also noted that in France, home to 16 percent of bathing sites in the EU, only 2/3 were of excellent quality while 88 percent met the minimum mandatory water quality requirements.

Another challenge for France´s brand new President! 

Maybe France - and perhaps also Germany - could use some Greek beach pros to clean up their polluted bathing sites! 

Greek hopes for economic recovery rest on an illusion

Solar energy will not save Greece

If there still are some people, who have the illusion that Greece could be able to return to real growth under the present regime, these words by PM Lucas Papademos must mean the end of that false hope: 

"The (solar) energy sector gives Greece an opportunity to become a hub for the European Union and third countries.”
--

PM Lucas Papademos, who recently spoke at a renewable energy and infrastructure development summit in Athens, said that investment in green energy was a “national priority” to boost economic growth. Project Helios is the Greek government’s massive initiative to ramp up solar power production from 206 MW to 2.2. GW by 2020 and up to 10 GW by 2050. The country is aiming to become the EU’s largest exporter of green energy.
The government hopes that this plan will attract the investment needed and Greece can then transform itself into an exporter of solar power and help other EU countries to meet their renewable targets. Greece’s Energy and Climate Change Minister, George Papakonstantinou, also launched a draft renewable energy plan which will ensure that the country meets EU targets to deliver 80 percent emissions cuts by 2050.

Günther Oettinger, EU Commissioner for Energy, thinks that the Greek solar project will succeed:

“Helios is a unique opportunity to demonstrate that renewable energy technologies like photovoltaics are becoming competitive in the near future through European cooperation. It could be the showcase project on the way to a truly integrated European market for electricity from renewable sources, while simultaneously helping the Greek economy to recover.”


Read the entire article here

Papademos and Oettinger - like most other EU leaders - live in a "renewable green energy" dream world of their own, far from the realities of the energy sector. Solar power is failing just about everywhere - why on the earth should it succeed in Greece, of all places?

German professor speaks out about the latest efforts to save the euro and Greece

Another German professor, who is prepared to speak out about the latest effort to "save" the euro and prevent Greece from bankruptcy:

Nearly 86 percent of private investors have agreed to join in the debt-swap deal that will help Greece avoid an uncontrolled default. But is that good news? Many experts have their doubts. In a SPIEGEL ONLINE interview, economics professor Harald Hau argues that not only will the plan put the burden on taxpayers, but it will mean an even bigger crisis to come.


SPIEGEL ONLINE: Is the debt haircut enough to free Greece from its worst burdens?

Hau: No. The agreed-upon debt haircut is insufficient. No matter what, there will be a second, proper bankruptcy. It will probably take another nine months to three years, but then there will be a really big crisis, both economically and politically. The problem has only been deferred. The next time it will only affect the taxpayers, though.

SPIEGEL ONLINE: Why?

Hau: The banks have been stalling for time over the last one and a half years. They wanted to take as many interest payments with them as possible. Now they realize that time is running out and have thus changed their strategy. They are just trying to pass on as many debts as possible to the public sector. From their perspective, this is a smart move. But it will be a catastrophe for taxpayers in the end.

Read the entire interview here

Merkel, Sarkozy and the rest know all this very well, but they all have their own reasons to behave as though they would be saving Greece and the euro.

EU´s überwarmist Hedegaard blames global warming for the eurozone crisis

In an interview the EU`s überwarmist, former Danish journalist Connie Hedegaard, has repeated the old leftist slogan about western "overconsumtion" and the need to change "the current damaging model of economic growth", "forever". (By the way, Hedegaard is - or is supposed to be - a conservative back home in Denmark!).

What makes the interview interesting, however, is the way Hedegaard, at least indirectly, blames global warming/climate change for the eurozone crisis. The media are full of "studies" and reports about global warming causing countless catastrophic events all over the world, but this is probably the first time a leading European politician/unelected eurocrat blames global warming for the Eurozone mess!

This is what Hedegaard had to say:

The world must use a landmark environmental summit this year to change forever the current damaging model of economic growth, Europe's climate chief has warned, or face future crises as severe as the one currently enveloping the eurozone.
--
"This has a lot of relevance to the euro crisis," said Hedegaard. "We're trying to make it clear that the climate change crisis is an economic crisis, a social and a job crisis – it should be seen as a whole. If we do not tackle these, we will be in crisis mode for many, many years."

Read the entire article here

PS

With regard to Greece, the EU is in a strange way actually heeding Mrs. Hedegaard´s advice, by forcing the poor Greek people to cut their "overconsumtion". Impoverished and jobless Greeks are thus model citizens of Connie Hedegaard´s Brave New Europe. However, it is less than certain that the Greeks themselves are enjoying themselves in this role.

Merkel - "the great eurosceptic"?

Dr. Richard North, having read this column by Mary Ellen Synon, offers an interesting analysis of what actually could be happening in Germany:

Still burdened by national "war guilt", Merkel cannot break out overtly. She has to be seen as a "good European". She must be seen to be supporting the euro and, more generally, the European Union. But the EU has become a prison. To develop further, Germany must break out its destructive embrace. And this is what we are seeing. It being done by creating the conditions for the destruction the single currency, or a major re-alignment, without Merkel leaving her fingerprints at the scene.

Such a "game plan" presents a contrast with the perceived wisdom. In this scenario, other countries leave of their own volition, or are forced out by the "market" or other extraneous pressures. It eventually leaves an independent Germany (or a Greater Germany grouping) free to follow its preferred domestic policies, without having been seen to be responsible for the break-up of the European construct.

Merkel, therefore, is the great eurosceptic. It will not be Cameron's Britain that will bring down the European Union, but Germany, escaping its shackles and redefining the post-war settlement. That is the game being played. Germany wants "out", and the rest of Europe is trying to keep her in.

A message of hope from the EU Commission to the people of Greece

"the euro gives the EU’s citizens a tangible symbol of their European identity, of which they can be increasingly proud"

(Source: EU Commission)

Der Spiegel: "It's Time To End the Greek Rescue Farce"

Stefan Kaiser, writing in Der Spiegel, has published a realistic account of the efforts to "rescue" Greece:

For the past two years, Greece has wrangled with the euro-zone states and the International Monetary Fund (IMF) over its so-called "rescue." Austerity measures have been agreed to, aid has been paid and private creditors have been forced to accept "voluntary" debt haircuts. Despite all this, Greece is in even worse shape today than it was then. Its economy is shrinking, the debt ratio is rising and the country and its banks have been cut off from capital markets. There isn't even the slightest sign that the situation might improve. Something has gone very wrong with this rescue.

But none of the protagonists seem to have grasped this. They continue to negotiate as if things are business as usual, they let one "final ultimatum" after the other pass and they persistently fail to realize that their discussions have started to verge on the absurd. It would be a lot better to end this farce.

--
For months, Greek government politicians as well as the so-called rescuers in Berlin, Paris and Brussels have all been deceiving themselves. Each supposedly final rescue package is followed by yet another, and austerity pledges aren't being adhered to.
That has a lot to do with domestic political considerations. German Chancellor Angela Merkel and French President Nicolas Sarkozy must convey to their voters that they have the situation and, especially the Greeks, under control. Meanwhile, the government in Athens must, out of self-preservation, limit the burdens to its own people as much as possible.
That's why both sides repeatedly agree to promises that everyone knows they will not be able to keep. The current rescue package, for example, officially agreed at the euro summit at the end of October, already has to be improved because it has become too small.

Read the entire article here

Frau Merkel is still, according to fresh polls, very popular in Germany. However, that can change very fast, when people begin to realise what a weak leader she actually is. That realisation will come when the German economy slows down, at least partially as a consequence of her failed "green" energy policy and partially because of the China bubble beginning to burst.

EU leaders continue their dance around the holy euro totem pole

The European Union leaders continue their dance around the holy euro totem pole, despite the fact that this ritual has lost touch with reality already long ago.

Now the 25 out of 27 EU states have agreed to a more or less meaningless German-inspired fiscal compact for stricter budget discipline. At the same time European politicians are once again discussing a new bailout for Greece, even if everybody understands that the result will be no different than in the past:

Europe's politicians continue to battle reality. Everyone knows that Greece cannot repay its massive pile of debts, now at more than €350 billion ($459 billion). But instead of effectively reducing the financial burden, European politicians intend to approve new loans for the government in Athens and go on fighting debt with new debt. "If the country wants to remain in the euro zone, we should support it," says Austrian Chancellor Werner Faymann.

But throwing money to a bankrupt economy is not going to help anyone:

The Greek economy is not productive enough to generate growth. Aside from olive oil, textiles and a few chemicals, there are hardly any Greek products suitable for export. On the contrary, Greece is dependent on food imports to feed its population.
"Greece has been living beyond its means for years," an unpublished study by the German Institute for Economic Research (DIW) concludes. "The consumption of goods has exceeded economic output by far."
Especially devastating is the assessment that the DIW experts make about the condition of an industry that is generally seen as a potential engine for growth: tourism. According to the DIW study, the Greek tourism industry concentrates on the summer months, with almost nothing happening throughout the rest of the year. There is almost no tourism in the cities, which translates into low overall capacity utilization and high costs for hotel operators. By contrast, capacity utilization in the hotel sector is much more uniform in other Mediterranean countries.
According to the study, a key cause of the problem is the relatively poor price/performance ratio. In Mediterranean tourism, Greece has to compete with non-euro countries like Croatia, Tunisia, Morocco, Bulgaria and Turkey, which can offer their services at significantly lower prices. The per-hour wage in the hospitality industry was recently measured at €11.39 in Greece, as compared with only €8.49 in Portugal, €4 in Turkey and as little as €1.55 in Bulgaria. The study arrives at grim conclusions, noting that the drastic austerity programs will not only remain ineffective, but will also stigmatize the country as "Europe's problem child" for a long time to come.

Read the entire Der Spiegel article here

As much as one would like to see the euro prosper, Dr Doom´s assessment is looking more and more likely:

"The euro zone is a slow-motion train wreck," said economist Nouriel Roubini, nicknamed Dr Doom after he predicted the U.S. subprime crisis.

Roubini sees Greece leaving the euro within a year, possibly followed by Portugal. He told delegates there is a 50 percent chance of the bloc breaking up completely in the next 3-5 years.

(image by wikipedia)

Danish economist: Greece and Portugal will leave the euro zone

Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world

(From the old Abba hit)

Yes, it is all about money. After all the previous rescue packages and bail-outs, Greece and Portugal again need more money. German Finance Minister Wolfgang Schäuble today said that he wanted a second bailout program for Greece, and in Lissabon investors, economists and politicians are convinced that Portugal also will need a second bailout, reports the WSJ.

However, the Chief Economist of the Danish Saxo Bank, Steen Jakobsen is probably more realistic in his forecast:

The euro currency does not work for Greece or Portugal and they will eventually leave the euro zone, an economist told CNBC.

They will leave the euro but stay within the European Union because it is very difficult to leave the EU in terms of security policy and foreign policy. You want to be part of it but only linked to it and that is increasingly what a number of countries want to do," Steen Jakobsen, Chief Economist at Saxo Bank said.

Jakobsen said that some countries within the euro zone would rather be one of the 10 that are currently outside of the zone but form part of the broader 27 countries of the EU.

Jakobsen does not think that a return to the drachma would be catastrophical for Greece:

"First of all there is a significant amount of local money from Greece now positioned in the U.S., Germany and elsewhere. If it was devalued this money would be flowing in and buying utilities, railways and telecom companies. If there was devaluation there could be huge advantages for companies," he added.

Read the entire article here

Greece announces huge solar energy project - paid for by EU taxpayers

Is this the future for Greece - and the European Union?

Greece is de facto bankrupt, in spite of  the huge sums of money provided by the EU countries and others. Still, there seems to be no end to the enormous waste of  EU taxpayers´ money:

The Greek word for sun is the name of a proposal for a large scale solar project George Papaconstantinou, the Minister of Environment, Energy and Climate Change of the Hellenic Republic introduced on the first day of the EU PVSEC 2011 in Hamburg.
Against the background of the massive public depth and the suffering economy in Greece, the initiative is seen as an opportunity to generate economic growth in the economically battered EU-country which enjoys about 300 days of sunshine per year. Supported by EU-funds to stabilize the Greek economy the country, the plan includes the installation of 3-10 GW of solar power in the country, covering an investment volume of roughly 20 billion Euros and the interconnection of mainland electricity grids with the multiple islands.
---
While Papaconstantinou admitted that the project will not be feasible without EU-support, he also pointed out that HELIOS offers the possibility for other EU-member states to fulfill their national renewable energy goals set by the European Commission in the so-called 20-20-20 plan. The regulations allow allows statistical transfers of energy (?), joint projects and joint support schemes, which all could be realized within HELIOS.

Read the entire article here

The Greeks have apparently not learned anything from the Spain´s solar and wind power policy failure:

Government support of renewable energy production does not provide long-term employment and in fact destroys jobs.
In the Spanish example, we found that each renewable job cost the Spanish taxpayer between $752,000 and $800,000. Even more troubling is the fact that diverting these critical resources cost the Spanish economy 2.2 jobs for every job created. Further, the jobs created in Spain were temporary — two-thirds of them were in installation.
All signs point to a fatally flawed idea. Developing these jobs on a reliable and consistent basis requires ever-more subsidies. It’s a never-ending cycle to keep a bubble inflated, which as Spain discovered costs billions in public funds. Even before Spain’s investment bubble began bursting, the massive investments in renewable energy companies were producing disappointing results.
What’s more, the subsidization of these inefficient sources of energy has led to significant economic hardship on the macro and micro levels. As of 2008, when our study was conducted, the Spanish government had committed approximately $36 billion to renewable energy subsidies; since then the resources committed have grown exponentially and are now well over $100 billion, an amount equivalent to more than 10% of Spanish GDP.

Read the entire article here

Or, more probably, the Greek government is well aware of these facts, but it does not care, because it is not their money, but the money provided by EU taxpayers, that is wasted. The time, when the German and other EU taxpayers will put a stop to the insane "renewable" energy/climate change policy both in Greece and elsewhere, cannot be too far away. Otherwise the entire European Union will go broke - and be transformed into a Green Hell.

The über euro-Commissioner has spoken: "we would not accept a Greek withdrawal"

 The arrogance of the unelected, overpaid eurocrats is mindboggling. Here is the über euro-Commissioner, the Finn Olli Rehn speaking:

SPIEGEL: Mr. Rehn, your Greek colleague on the European Commission, Maria Damanaki, said last week that either Athens and its lenders agree to tough sacrifices, "or we return to the drachma." Did she merely say what everyone is thinking?

Rehn: The public misunderstood my colleague's statement. She was trying to encourage her countrymen to implement the austerity program so that Greece can remain a member of the euro zone.

SPIEGEL: So you are no longer ruling out a return to the drachma?
Rehn: I do not see a withdrawal from the monetary union as a serious option. It would harm the Greek economy and be a setback for European integration. The euro is more than a currency; it's the central political project of our community. For this reason, too, we would not accept a Greek withdrawal.
SPIEGEL: But the Greeks themselves have played out the scenario of reintroducing the drachma.
Rehn: All I can say is this: I am not aware of it. We in the Commission and in the euro group are not working with such a scenario.

Read the entire interview here

Greece is fighting for its economic and political survival, and the euro-Commissioner Rehn has the nerve to tell the Greeks, that "we would not accept a Greek withdrawal" (from the euro co-operation)!

The government and the people of  Greece (and also Ireland and Portugal) are not anymore free decide about their own future. Mr. Rehn and his cronies in the Commission will not accept that, because the euro is "the central political project of our community" (leading to a federal European state).

Greece leaves the eurozone?

This is interesting:

Der Spiegel:

The debt crisis in Greece has taken on a dramatic new twist. Sources with information about the government's actions have informed SPIEGEL ONLINE that Athens is considering withdrawing from the euro zone. The common currency area's finance ministers and representatives of the European Commission are holding a secret crisis meeting in Luxembourg on Friday night.

AP-US Today:
 Greece is denying a report by a German magazine website that it is considering leaving the euro currency.

Is this the beginning of the end of the eurozone in its present form?