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The hopelessly corrupt structure of the Eurozone & the Eurogroup

by Ramin Mazaheri

Part 6 - The first rule of Eurogroup is: ‘You don’t talk about Eurogroup!’

Such facts make it clear why the Eurogroup cannot be considered compatible with democracy, and thus cannot be supported. Full stop.

You might support creating a new Eurozone or changes to the Eurozone structure, but supporting the current Eurozone is simply morally indefensible, and you don’t have to be an open communist like me to see that.

What will you get if you keep supporting it, like by voting for mainstream politicians or fake “outsiders” like Macron? You will get exactly what has occurred ever since the Eurozone project began in earnest after the fall of the Bretton Woods monetary system/gold standard in 1971 – crisis and austerity across the Eurozone:

Each one of those heart-rending attempts at monetary union led to the same pattern: a promising beginning that soon degenerated into tears and recriminations as economic warfare erupted and recession impoverished the weakest Europeans.

Hmmm, efforts at capitalism turned out typically-capitalist results…shocking.

The secret is out about the Eurozone’s false prosperity of the late 1990s and 2000s – it was all built on the ruses of high finance. But – and this actually really important right now – nothing has been fixed since the 2012 sovereign debt crisis:

Since then it has been in a deep crisis reinforced largely by the European Union’s denial that there is anything the matter with its currency’s rules, as opposed to their enforcement.

Should we be surprised that the banker cabal that is the Eurogroup has concocted a “recovery” which has only targeted the needs of bankers?

The Quantitative Easing that is the alleged “fix” has only gone to the 1% and fueled property price bubbles and stock bubbles; the Eurozone’s average growth rate – the “real economy” – since 2011 has been 0.8% – total stagnation.

What’s amazing is the mass denial – the real propaganda effort – that back in June a pathetic projected 1.7% growth rate for the Eurozone qualified as a “surprise recovery”. Jobs don’t even begin to be created until 1.5%…and unemployment is essentially stuck at record highs in multiple countries. This makes the projected growth rates of 1.8% and 1.7% for the next two years just as pathetically inadequate.

I can best describe the media hypnosis like this: If a bully punched you 10 times yesterday, but only 8 times today, I suppose you could say that “things are getting better”…I would hope that no one paid you for that analysis, however.

What’s certain is that QE has to stop soon, simply because they are nearly out of bonds to purchase.

There’s no reason why they should even be buying bonds from economically healthy, trade surplus Germany, LOL, but the ECB will reach their 33 percent limit of debt in Germany this spring, at the current rate. Germany gets paid first, of course, not the countries which actually need it – Greece is excluded from QE.

And what happens when Germany’s 1% can’t get free money? Well, I can tell you it’s not: they finally start playing nice.

I have another theory: High finance/financial media around the world (and not just Germany) has decided they are not reaping enough from the years of no-questions-asked free money – years of gutting Greece has them sharpening up their Troika tools for the tastier meals of Spain and Italy. Therefore, they are trying to dupe/pressure everyone into stopping QE – thus the crazy nonsense that 1.7% annual growth is a “recovery”.

So, given all these real facts and plausible theories I have listed, the reality is that ECB chief Draghi is expected to announce in October that “tapering” will begin.

I have repeatedly written that when high finance is no longer being placated by the free money of Quantitative Easing, they will go back to what they were doing in 2012: squeezing the national bond markets in Europe and provoking a crisis across the Eurozone.

Here is another, different case of willful blindness: the Eurozone is the same as the US. Many believe that just because the US had no major bond problems after they started tapering their QE, then the Eurozone won’t have any issues as well. One size fits all, right?

But they ARE very, very different regions! Firstly, the US isn’t dumb enough to be run by a Eurogroup.

Secondly, the risks in the national bond markets for Eurozone nations are not anywhere as secure in comparison with the United States. They weren’t as secure in 2012, and the Eurogroup’s policies have not corrected these differences in risk whatsoever in 2017. Nor has the Eurogroup strengthened the resilience of the “real economies” in their member nations – indeed, austerity policies and labor code rollbacks have worsened the real engine of the “real economy”: the People (everyday consumers, for our capitalist readers).

So even if Draghi kicks the can down the road for a few months, a crisis is inevitable. For the reasons I’ve listed and because: this is capitalism.

And this is where Varoufakis’ lack of leftism – his failure to see capitalism as incorruptible pattern of guaranteed corruption – blinds him to the reality that the Eurozone should not be saved with his right-wing solutions, but scrapped completely in favor of central planning, safety nets, regulations on cabals: modern socialism.

The Eurozone is still as primed for collapse as ever, but that is the title of the next article in this series.

And as regards the Eurogroup…what else needs to be said?

These are our masters, and it is the IMF, ECB, and banker-loving, ex-banker finance ministers who pull the strings. All of us in the Eurozone must dance, even if these mobsters have already broken so many legs and backs.

***

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