EU: Fiscal and Banking Integration – Cyprus Bailout

The Finance Chiefs of Germany, France, Italy and Spain have taken to the stage to discuss new plans for short-term and long-term management of fiscal and banking integration, coming after Cyprus becomes the fifth member of the common currency to request a bailout.

Cyprus Joins Spain, Italy, Ireland, Portugal and Greece under EU Umbrella

The finance ministers are meeting today to discuss closer union as laid out by a proposal from European Council President Herman Van Rompuy.  The document proposed greater fiscal union, which could lead to common debt being issued by the Eurozone countries.  There would also be banking union, with a single European banking regulator and a unified deposit guarantee scheme.  Among other proposals were limits on the amount of debt individual countries can take on, annual national budgets can be vetoed if they are likely to mean a county exceeding its debt limits, the possibility of the Eurozone borrowing money collectively could be looked into, a European treasury office to be set up to control a central budget and keep an eye on national ones, common policies on employment regulations and levels of taxation, joint decision-making with national parliaments to give it democratic legitimacy.  Though this seems to provide a groundwork for the progression of the Euro, many of the proposals are merely revisiting previous agreed upon regulations in the Stability and Growth Pact. These regulations failed in the past because of a coordinated supranational entity and a lack of enforcement.  The failure of the SGP came because Germany and France, the countries responsible for the EU and the creation of the pact, violated its restrictions on debt.  The Court of Justice (European Court of Justice) is an example of a supranational entity created to observe and ensure that EU laws, treaties and institutions are adhered to.  Through the infringement procedure, the ECJ is able to place a fixed or periodic financial penalty.  Nevertheless, this institution was not given the proper amount of authority into national areas of its members, thus making it unable to observe the political and fiscal matters of those countries that are now on the brink of default.  So saying, the current list of proposals are nothing entirely new but debates circulating about a joint finance ministry may provide the supranational entity needed to enforce and regulate the further integration needed for the progression of the EU.  In regards to steps towards effective integration, the European treasury would now be able to force Eurozone countries to make changes to their budgets to keep their deficit down, which previously was never enforced and merely left to the individual member states.

“Under these rules, the issuance of government debt beyond the level agreed upon in common would have to be justified and receive prior approval.  Subsequently, the Euro area level would be in a position to require changes to budgetary envelopes if they are in violation of fiscal rules, keeping in mind the need to ensure social fairness.” – Herman Van Rompuy, European Council President

One of the catching points for forward movement by the EU is the divide surrounding join borrowing, something that has kept Germany and France from being the dynamic partnership that so many previously assumed them to be.  It has generally been true that the EU’s movement has been driven forward when France and Germany are in step.  However, they are not in unison anymore.  There is a deep philosophical political divide between them, most evidently exemplified by the dissolution of ‘Mercozy” through the election of the socialist Hollande in France.  The divide of the EU on joint borrowing  is embodied by the concept of Eurobonds, which would be a way to allow countries that are currently unable to borrow money commercially to borrow at low-interest rates.  Some countries, largest of whom is Germany,have resisted this step unless there is much closer fiscal union.  The reason for that is that Eurobonds would have much the same effect as the original introduction of the Euro, which is that they would allow many government access to cheaper loans and therefore, without European supranational control over budgets, some countries would again take on unsustainable levels of debt.  So saying, the Eurozone’s third smallest economy, Cyprus, has become another member to apply for rescue loans.  The country is said to possibly need up to 10 billion Euros, more than half its 17.3 billion annual output.  This comes after Spain formally requested up to 100 billion Euros in rescue loans to recapitalize its banks weighed down by bad loans from a burst real estate bubble.  Both Spain and Cyprus are trying to avoid political humiliation and loss of sovereignty involved in a full state bailout program like those granted to Greece, Ireland and Portugal.  The approaching Brussels summit is expected to agree on a growth package pushed by France, worth around 130 billion Euros in infrastructure bonds, reallocated regional aid funds and European Investment Bank loans.  Spain, along with Italy, is likely to press at the summit for more urgent actions to lower borrowing costs and have proposed measures to reduce the difference in borrowing costs between Eurozone countries.

“The euro crisis is in some war mind-boggingly simple to solve…because it isn’t economics, it’s politics.  If Angela Merkel and her colleagues stood there together with the rest of the Euro area…and if they behaved as a true union, this crisis would be finished this weekend.” – Jim O’Neill, Chairman of Goldman Sachs Asset Management

Germany however, is remaining rigid on its stance that it should not finance  a country that indulged in excessive spending.  Because of her rigid stance, Merkel has been target of much criticism and some have suggest that Germany be the country that exists the Eurozone.  The support given is that Germany embodies the problem of the EU, the inability to balance polar opposites on the economic scale.  The periphery countries of the EU are the ones in debt and the ones facing default.  Not only is Germany’s economy inherently strong as a result of the high productivity of its workforce, its exports have added competitiveness because the Euro is undervalued as far as Germany is concerned.  As long as the rest of the Eurozone countries are locked in the Euro with Germany, the only way for them to become more competitive is through austerity measures that cut government spending, reduce welfare budgets, cut wages and raise unemployment.  These are the steps that have been taken for the past 2 years of the fiscal crisis and the aim has been to achieve export-led growth, like Germany.  As long as Germany remains in the Eurozone however, its hypercompetitive stance will make redundant the measures being taken , as the periphery countries will not be able to compete against the power house.  Nevertheless, the support for Germany’s exit may seem well based but its fails to address the fact that Germany is the only country keeping the Euro afloat, funding all bailout measures and without Germany and its seemingly endless pocketbook, the rest of the Eurozone would fall calamitously into a series of defaults and downgrades for years to come.  This would ruin the regional fiscal infrastructure, ruin the global markets, and dissolve international trade with many of the nations dependent on foreign investment.  In short, if Germany were to exit the Eurozone the other nations would be detrimentally affected, regardless the possibility to revert to Eurobonds.

EU: What the Future Holds for Europe – Greek Elections

Greek voters are returning to the polls on Sunday, leaving hanging in the balance the future of the country’s membership in the Euro and heightening general uncertainty about the future of the EU as a whole.

The EU Has Reached A Tipping Point

In 1952, German Chancellor Konrad Adenauer and French Prime Minister Robert Schuman introduced the beginnings of European integration, uniting the coal and steel industries of France, West Germany and the Benelux countries.  Over the next 50 years, the integration process would come to include a club of 27 states, becoming the European Union, which now stands at a possible breaking point.  Since its creation, the European Union has both expanded in number and deepened in purpose.  Initially a common market with subsidies to farmers, the EU has evolved into a community with coordinated foreign aid and trade policies, open borders among members, a common social policy and a powerful European Court.  Nevertheless, the problems of monetary union began in 1992 with the Maastricht Treaty which began the process of monetary union and was intended to begin economic convergence among member states.  The second part, economic convergence, was and is today the hurdle facing the members states of the EU.  The Stability and Growth Pact, introduced by France and Germany, was meant to harmonize interest rates, inflation and government deficits; yet, there were no enforcement measures and the sponsors of the pact, France and Germany, were the first among the states to breach the regulations on deficit as they both exceeded deficits of 3% of GDP.  So saying, how Europe handles the unbalanced economies of its members and its headlong expansion will decide whether the Eurozone recovers from its contagion or slowly disintegrates.

“Today we open the path towards a better tomorrow, with our people united, dignified and proud.  To a Greece where there’s social justice and progress – an equal member of a Europe that’s changing.  Today the people of Greece spake.  Tomorrow a new era begins for Greece.” – Alexis Tsipras, leader of the Syriza party

The first challenges to overcome is the Greek’s second attempt at a decisive electoral process, coming after an indecisive round in May resulting in the rise of polar opposites in the party system.   If a working majority emerges under the leadership of the New Democracy Party, Greece has a likely chance of following through its austerity measures, despite animosity and criticism therein involved.  These measures would perpetuate Greek membership in the EU, appease its troika (European Commission, International Monetary Fund and European Central Bank).  Even if this pro-bailout government is formed, the political paralysis of Greece has already put it behind on its obligations to privatize state industries and improve tax receipts.    If this weekend’s election extends the paralysis begun by May’s vote, the uncertainty whether Greece can remain in the Eurozone will intensify, resulting in another volatile yo-yo of international markets.  Moreover, the uncertainty in Greece would also intensify the pressure on Spain and Italy.  The combined economies of Ireland, Portugal and Greece – three countries that have been bailed out – are smaller than half of Spain, which the Eurozone could not afford to have fail, becoming a ‘too big to bail, too big to fail’ member.  The EU’s willingness to help bailout Spain’s massively indebted baking system has already surpassed the amount of 100 billion euros.  Spain’s financial future is highly questionable as Moody has cut Spanish sovereign debt to just a notch above junk status, on par with Azerbaijan.  Unemployment has also reach record highs, with youth under 25 years of age at 50% unemployment, and house prices are also collapsing.   Nevertheless, another possibility in the Greek elections is that the left-wing Syriza party emerges with a majority, and with its commitment to depart from current bailout agreements like the austerity measures, Greece could very well anticipate a ‘disorderly exit’ from the Eurozone.

“This is the financial equivalent of the Cuban Missile crisis.  And the missile is really a bank run, which ultimately even the Germans can’t be completely immune to.  Not that there will ever be a run on Germany banks, but the effects of a bank run across Southern Europe are going to be felt by the economy.” – Niall Ferguson, Harvard historian

So saying, the future of Europe is at a crossroads, with only a few future scenarios on the horizon.  The first and worst scenario is a disorderly collapse of the Eurozone, starting in Greece but spreading to Spain and Italy.  This scenario would be likely with anything less than a clear victory, the Greek state could fail to meet its troika obligations and would not receive any further bailouts, essentially imploding upon itself.  According to the Greek economic minister, Greece only has enough money to run effectively until July 15.  If this case were to emerge, Germany has stated that it would put fiscal rectitude ahead of its pan-European principles.  Without Germany’s bankroll to help support many of the peripheral member states, the scenario could result in the Eurozone being reduced to a Franco-German core, with the Benelux states attached.  For the rest of Europe and its economy, the consequences would be calamitous; with governments defaulting on debt, a prolonged recession would be a certainty all across the European continent.  The second course is that Europe stumbles through whilst still attempting to achieve banking and fiscal integration.  Given that 80% of Greeks want to stay in the Eurozone, a Greece-troika compromise is not so unlikely and would also bring the country back from the edge of default.  A full recovery would be years away but the country would no longer be the spark to ignite the powder keg of defaults as seen in the first scenario.   The new European Stability Mechanism, due to come into effect next month as a permanent rescue fund, would help recapitalize banks and help cool yields on vulnerable sovereign debt.  With 500 billion euros at its disposal, the ESM would help the EU progress towards Chancellor Merkel’s growth agenda.  Germany aims to move towards a banking union that would insure deposits, progress toward common tax policies, the decline of government debt and the emergency of the Eurozone from its recession, all of which would help ease the pressure on governments struggling to find a common ground.  Though an imposing task, the struggled of the agenda are in Germany’s best interest because 60% of their exports stay inside Europe and without those trading partners, the German economy would be severely impacted.  The final future scenario for the EU is a move towards much closer integration, the fulfillment of the economic convergence promised in 1992.  The new French President Hollande has made this his montra, seeking to stimulate growth and imagination and creativity to deepen financial union, such as a joint fun to pay down debt.  Though it would seem to be a more secure and ideal scenario, the prospect will not gain support from a European public no longer convinced of the benefits of a deeper integration, nor of a German state unwilling to allow more countries to sign onto their bankroll.

“Germany’s strength is not unlimited.  The way out of the crisis can only be successful if all countries are capable of recognising the reality and realistically accessing their strengths.” – Angela Merkel, German Chancellor

In retrospect, the EU was intended to create a fiscal union of members that would be able to avoid repeating mistakes made in the 1930s, yet it seems that the cliff facing them now is illustrating that they have not been able to avoid those mistakes.  Unless the EU community is able to recognize the choices that have been and those that must be made now for the security of the union, and not of individual members,  the EU will most likely cease to exist or be severely reduced in membership and fiscal integrity.  They must enter a much larger form of integration, both political and economic, committing to a more federal system.

EU: Troubles with the Political Currency – Troubled from Creation

As Greece leaders meet to avert new elections, fears have been reinforced that the country is firmly on the path to bankruptcy and an exit from the Euro, a political currency that may see its own end soon.

The Euro Faces “Make it” or “Break it” Point.

The radical left-wing coalition leader, Alexis Tsipras, has declined an invitation by the Greek president to try to form an emergency government.  Italy faces greater debt and contraction under strict austerity constraints under Euro regulations.  Ireland faces a May 21 referendum asking the public to approve an EU treaty that aims to control nations’ annual deficits and longer-term debts, but the treaty ignores the competing need to stimulate growth and is now facing an increasingly euroskeptical populace.  Combined with Hollande’s far-left victory as France’s president and the ultra-left rise in Greece’s parliamentary elections, the events could force the European supranational entity to shift in favor of less austerity measures and greater investment in growth.  Even if the fiscal treaty is ratified by the minimum 12 nations required, it is likely to be an economic dead letter before it comes into force next year.  Its key goal is to bring deficit limits under the threat of ECB fines.  Once again, the main proponent is Chancellor Merkel and her CDU party.  Nevertheless, Merkel’s previously sound support structure seems to be cracking as the CDU party faced a heavy state election defeat in Germany’s most populous region.  With Britain disconnected from the EU and the major founders of the currency in turmoil, the future of the political currency seems rather bleak.  The EU powers that be, predominantly in Germany, remain in public denial about the real underlying reasons for the Eurozone crisis: the fault design of the Euro common currency, with no central coordination of debt funding.  The only solutions will require Chancellor Merkel and her uneasy electorate to accept the need for national debts to become European property, further imposition of supranational regulations into the independent banks and sovereign governments.

“We have to stay in the Euro.  I’ve lived the poverty of the Drachma and don’t want to go back.  Never! God help us.  They must cooperate or we’ll be destroyed, it will be chaos.  For once, they must care about us and not their chair.” – Maria Kampitsi, 70-year old Greek pensioner

In the 1990s, the continent’s political leaders believed that the division of a continent that so often torn by war were of the past, and that a single currency would bind the continent into a union.  Today, with Greek on the brink of bankruptcy – and Ireland, Italy and France deep in debt – Europe’s fiscal experiment faces extinction.  The problems of the past have come surging back, but even though talk about what’s wrong with the Euro focuses on complex matters such as national debt ratios, labor market reforms and pension protections, one fundamental problem is, comically, blaming Adolf Hitler.  After the fall of the Berlin Wall, a newly unified Germany was bent on leaving behind its recent division and the dark days of two World Wars.  Germany had to make sure the rest of Europe was aware of its peaceful intentions, thus it seemed agreeable to bind its own success with those of its neighbors.  Germany and France, the drivers of the Euro projects, pushed to be as inclusive as possible despite the evident risks.  Now, Germany recent leadership in strict fiscal measures and regulations has revived thoughts of Germany’s intentions of domination.  Nevertheless, the regulations initially installed by the supranational body were as strict, if not stricter, than what is being demanded now. The rules then, were strict and clear but were not adhered to.  The requirement was that no Nation must carry debt greater than 60% of their gross domestic product.  Now, Greece’s deb ratio is 165%, Italy’s is 120% and Ireland’s is 107%.  Even the powerhouses of France and Germany are above 80%.

“The first cut has released all the old demons.  We’re back to calling the Greeks lacy, the Italians shady, the British disconnected, and the German bent on domination.  It didn’t take long, did it?” – Richard Whitman, University of Kent in England

Coincidentally, the general entrance of Greece into the EU was based on falsified reports that spoke of its adherence to the fiscal requirements, meanwhile Greece’s economic situation then was already violating the GDP ratio.  It was also widely known that the Greek government had a reputation for not collecting taxes – $65 billion in back taxes are outstanding – and overall, Europeans regarded its economy as a mess.  Nonetheless, Greece was the birthplace of democracy, home to the Acropolis, the cradle of European civilization.  Greece’s entrance was sentimental and symbolic at best.  Greece is and was an extreme example of the problems facing the EU, but in general, the problem lies rooted in the fact that while sharing a single currency, individual nations would continue to handle their own tax and pension programs.  Thus, local issues superseded those of the Euro zone needs.  Like the decision concerning Greece’s entrance, many were largely political.  In 1998, Dutch officials warned Germany of the consequences of Italy’s entrance without further fiscal measures for regulation.  The officials were not willing to have Italy enter the union  To the Germans, no Rome equated to no Paris, which was not possible.  Another problem of the single currency is the polarity represented by the different economies.  The European Central Bank was established to regulate the common currency, to ensure that the currency could serve a booming Germany economy and a tanking Greek one.  It has to keep interest rates low to spur borrowing and growth in the south, while keeping rates high enough to avoid inflation in the north.

“The French even under Sarkozy had great reservations about Merkel’s focus on austerity, but they went along with it in hope they could extract  concessions in return.  With Sarkozy gone, Germany will be increasingly isolated.  Germany will eventually weaken its positions” – Simon Tilford, chief economist at the Centre for European Reform in London

In retrospect, the EU is facing a critical challenge to its solidity that is not only represented by the fiscal crisis, but also a growing Euroskeptic populace and a continent-wide political shift towards the ultra-left.  The flexible and ambiguous political decisions  of the past that transformed the European community into a fiscal union must be done away with, and the nations most congregate to form a more perfect union that is monitored on every aspect by some supranational entity.  A total solution would involve a single fiscal policy but that would only constitute one part.  A total solution would have to address the inequities between national economies.

Greece: Left-Wing Party Coalition and Departure from Euro

Following the Greece elections, Greece’s left-wing party Syriza has been given the opportunity to construct a coalition government after the conservative New Democracy party, given the same opportunity, gave up within a few hours.

Tsipras’ Political Base Threatens the Global Financial System

The leader of Greece’s left-wing party Syriza, Alexis Tsipras, seeks to form a new government on the base of rejecting all EU and IMF-backed austerity measures.  Tsipras has 3 days to reach a coalition deal and has told the two major parties to end their support for the austerity measures if they want to take part in the government.  With the election of Hollande in France in favor of conservative Sarkozy, the shift in the  political atmosphere following the Eurozone crisis is becoming evident.   It also bodes ill for the future of the stability of the union as the socialist victories represent a drawback from EU credibility about its ability to manage the supranational federation. Tsipras plan includes cancellation of sever budget-cutting measures forced on the country by international lenders, plans that ensure its survival from budget failure.  This proposal would result in Greece exiting the Eurozone, a reality that has scared investors and markets worldwide and has dropped stocks dramatically.  Though rumors of Greece dropping out of the Euro have been discussed since the beginning of the perpetuating debt crisis, Greece will probably leave the Euro as soon as next month as the government runs out of cash and European institutions fail to lend it more. The critical attitudes of Tsipras have not helped the situation either; rather, Tsipras demanded an examination of Greece’s still massive debt and a moratorium on repayment of the part that is ‘onerous’, statements that drove Greek shares down another 3.6% from the 7% loss of Monday.  Although the public vehemently opposed the conservative party for its pro-austerity basis, it is unlikely Tsipras’ anti-austerity base will form a coalition either.

“The pro-bailout parties no longer have a majority in parliament to vote in a majority in parliament to vote in a destructive measures for the Greek people.  The popular mandate clearly renders the bailout agreement invalid.” – Alexis Tsipras, head of left-wing party Syriza

The Greek government hangs on a precipice, with Tsipras having 3 days to form a government.  Communist Party leader Aleka Papariga refused to meet with him in person, only talking to him on the phone about possible party agreements.  Fotis Kouvelis of the Democratic Left, which splintered from Syriza in 2010, told Tsipras that he needed the support of more than just the left.  Backing the hodgepodge of parties from the Stalinist left to the neo-Nazi right, the public is as divided as the political infrastructure.  Thus, it has become widely expected that in June the final decision will likely fall to a cross-party caretaker government that may be formed in the next few days to lead the country to fresh elections.  The financial chaos has sparked huge social unrest  in Greece and led to a deep mistrust of the parties considered to be the architects of austerity, but not unity is found on the issue of who should replace said parties.  I the country hopes to continue having a running government, it requires billions of Euros in further austerity cuts in June and the country would require a 30 billion Euro installment in EU-IMF funds, funds that would not be received under Tsipras’ plans.  So saying, there does exist a dilemma between the political proposals and practicality of the decisions being made.  In response to the volatility of the continent-wide elections, the European Commission has stated that the country leaders would be expected to abide by the terms of a bailout program mean to avoid a crippling financial meltdown.

“Mr. Tsipras is doing everything to prevent a government being formed.  Nothing can be done if we leave the Euro, because the country’s catastrophe would be certain and unprecedented.  He is asking me to place my signature on the destruction of Greece – and that I will not do.” – Antonis Samaras, head of the winning conservative New Democracy party

In retrospect, the deadline for the formation of a new government is May 17.  The chance to form a coalition will pass in turn to every party, in order of the current election results.  In the event that no party can form a coalition, new elections will be called.  Greece’s potential withdrawal from the Euro could have drastic consequences for the country which would have no chance of fiscal re-cooperation without the life line that has essentially been afforded to it by the EU.  Moreover, its withdrawal would hold consequences for the EU’s credibility and the stability of the Euro, a common currency for the 17 member-states.

France: Sarkozy’s Bid for Re-Election

As French voters vote to elect a new President, current President Nicolas Sarkozy seeks to beguile far-right voters to combat the surge of support for Socialist challenger Francois Hollande, else Sarkozy faces becoming the first French president to lose a bid for re-election in more than 30 years.

French President Sarkozy Faces Hollande in Second Round

Francois Hollande came out on top with 28.6% and Sarkozy with 27.1% of the vote, the first time a sitting President has lost in the first round.  Hollande’s performance mirrors advances across the European continent by anti-establishment Euroskeptical populists, gaining momentum as the Euro Zone’s grinding debt crisis deepens anger over government spending cuts and unemployment.  Sarkozy has been a target for much EU animosity because of his close ties to German Chancellor Merkel, many critics going so far as satirically entitling the duo as ‘Merkozy’.  France has played key roles in international hot spots such as Libya and Syria, as well as the perpetuating pan-European debt crisis.  Nevertheless, his efforts internationally have not won him much favor, as the domestic economy has been the prime focus of the elections and France is struggling in the face of  sluggish economic growth and a 10% unemployment rate, all of which sits upon their recent downgrade from their prized AAA rating.  The weak showing has forced Sarkozy to expand his constituent base, targeting the rightists under Le Pen, the leader of the National Front that won 19.3% of the votes, equating to 6.2 million people.  Returning to the campaign trail, Sarkozy propagated promises to toughen border controls, tighten security on the streets and keep industrial jobs in France, signature issues concerning the rightists.  The recent populist rise has already evicted 10 other Euro Zone leaders from office since the start of the crisis in late 2009, evidently lending credibility to the rumors that Sarkozy will soon be ousted.

“National Front voters must be respected.  They voiced their view.  It was a vote of suffering, a crisis vote.  Why insult them?  I have heard Mr. Hollande criticizing them.” – Nicolas Sarkozy, French President

There are now two more weeks before France elected its President on May 6th.  Sarkozy will not doubt continue his aggressive tactics, confronting his rival’s lack of experience at government level, and trying to corner hum during the traditional TV debate.  Sarkozy has already attempted to challenge Hollande to 3 debates, rather than the traditional 1.  Sarkozy seeks to impress upon the people his experience and intellect by focusing on the economy, social policies and international affairs, all the while accusing Hollande of avoiding the debates.  Nevertheless, the strong turnout of 802%, in which more than a third cast ballots for protest candidates, the future seems foreboding for Sarkozy’s typical tactics of showboating and scapegoating.  Hollande has vowed to change the direction of Europe by tempering austerity measures with higher taxes on the rich and more social spending.  Polls have already predicted he will win the run-off with between 53% and 56% of the votes.  A predominant contrast in the two remaining contenders’ economic approaches is that Hollande generally supports more government action to stimulate the economy whereas Sarkozy favors policies such as lowering some taxes and possibly repealing the mandated 35-hours work weeks.  With France’s domestic interests rallied around economic prosperity, a juxtaposition to years of hardship and downgrade under Sarkozy, Hollande seems sure-footed in the road towards the final elections.

“The choice is simple, either continue policies that have failed with a divisive incumbent candidate or raise France up again with a new, unifying President.” – Francois Hollande, Socialist Presidential Candidate

In retrospect, the results of the elections are a bad sign for Sarkozy, who will now be forced to perform a balancing act of campaigning to far-right wing voters and maintain a hold on his centrist supporters.   If Hollande wins, as is very likely, Hollande will be France’s first left-wing president since Francois Mitterand.  The rise of Hollande has come as a response to the economic crisis, providing ground for populism to develop.  Wages, pensions, taxation, and unemployment have been topping the list of French voter’s concerns, concerns founded on the mistakes and consequences of Sarkozy’s measures taken to counteract the debt crisis.

America: Economic Sadism and Mass Media

The disillusionment of society is fueled by an intensifying involvement of corporate corruption in the manipulation of the press corpse, perpetuating the crippling blindness of Americans to the evident truth that is the economic decay of their surroundings; thus illustrating an ever-growing divide, a disparity, in which the glorified land of opportunities is enjoyed by a select few.

The American Economy is Diseased, Leaving Millions Homeless and Unemployed

Once again, the masses of society are led astray by promises of a better tomorrow, a nonexistent paradise of equality and opportunism enjoyed by all Americans.  Resembling a constricting suffocation, the masses are enveloped by a gilded truth designed by corporate America, a false sense of security and complacency that disguises the ultimate truth that the American economy is diseased.  The bright lights of America shine brighter each day and the headlines read “Recession Over, June 2009”, ensuring the masses that America is ultimately too big to fail.  The headlines in Times Square, funded and built by the corporate investment in the misfortunes of others, has succeeded in conditioning society into unquestionable loyalty.   Repeatedly the scribblers of media strain to ensure that the facts fit the false charges, maintaining the structural plans of an America founded on lies and deceit.  The freedom of press has become an asset of corporate America, puling the wool over the eyes of the masses and using the people’s voice to sell the capitalist propaganda of materialism.  The manipulation of media has produced an endless stream of products and images that provide a societal image of gilded quality, an image of perfection that no one can be but that everyone strives to be.  The manipulation of media has fueled an economic sadism that tortures its bystanders with false promises, a blitzkrieg of images that leaves Americans with eyes wide open but not truly seeing.  As the masses sing their slogans and march to the stores of materialistic pleasures, millions go hungry and the economic situation continues to perpetuate a growing stagnation.  As the masses march to songs not of their own, the economic system of America sleuths forwards without a federal budget and a growing debt of $15.5 trillion that seems to only be felt by the American proletariat.

“The kids are sick and tired of the news today.  Sick and tired of all the lies.  We want the truth.  It isn’t going to be no paradise.  Forget the claims.  Oh no!  We need to take the world back now.  We need to take control right now.” – Anti-Flag, “No Paradise”

The American system propagates a Darwinian fiscal struggle, allowing the rich to maintain their lofty suites and private jets while the other 99% are struggling to support a family, their children’s education, the mortgage on their homes and ensure a leftover for food.  A theology of necessary sacrifice has corrupted society to believe in the necessity of their struggle to support an economic system that rewards only the minority with materialistic pleasures but robs the majority of their humanity and free will.  The vertical legitimacy of America is secured through fiscal suppression of the masses, producing repercussions that are felt by the complacent majority but producing riches for the dictatorial 1% of elitists.  The number of homeless and foreclosures grow every day, clearly illustrating the truth that our great depression exists still.  From 1948 until 2010, the American unemployment rate averaged 5.70% and yet today the unemployment rate is averaged at 8.50%, with millions of people homeless and therefore unaccounted for in employment statistics.  The majestic lady of liberty stands erect, open arms and open heart, calling for the world’s tired, poor and huddled masses yearning to breathe free.  The bold text, idealistic and riveting, capturing the gaze of the tinkerers of the world.  Just another slogan to be utilized by the monopolized corporations of America, a union of corrupt CEOs dedicated to the manipulation of the ignorance of society.  With millions homeless and unemployed, the gates of America stand rusted and permanently open to an endless stream of foreign workers, each group a source of cheaper labor than the one previous.  The American “joe”, lured into a sense of security and complacency stand by and watch as the slogan of “America: by and for the people” becomes replaced by “America: for and by the corporations”.

He huffs glue to escape their bitter homes.  He’s just one of desperate ranks, who can’t break free from the bright lights of America, life and death in sold out ‘Merica.  To live and die in the heart of America, where they sell souls.” – Anti-Flag, “The Bright Lights of America”

The American nation has become an add, a “sold on t.v.” propaganda that illuminates the grandeur of pebble beach, of Hollywood stars, and New York CEOs, highlighting a biased interpretation that masquerades all Americans in masks of gold and bejeweled beauty.  Nevertheless, the real Americans are worn and tired behind the wheels of a mechanical construction that propels the American corporation forward, a construct that symbolizes equality and freedom yet hides the truly huddled masses that are bent and stooped in exhaustion of carrying around such a false ideal.  The homeless, unemployed, “under-employed” and any class not of the 1% elites are battered and bruised into submission by a manipulative overseer that wields authority through the media, the state, the corporations, and the capitalist hierarchy of society.  The individualism of society has been broken by a homogenizing culture, creating a society of state cloned tools to serve the purpose of the corporations.  The state of America is supported and held erect by a steady investment of corporate wealth.  This wielded influence allows the corporations to dictate the processes of the American political and economic situation, becoming a big brother image that soon controls the masses as well.  The evidence surrounds the American people, but they have chosen to see what lies ahead, an image of blissful retirement that hangs on a string  permanently out of reach.  Like a pack mule lured by the carrot a head, the American people are guided by false promises of paradise that will never truly be reached.  The slogans of America, attesting to equality of all, is refuted by the unwillingness of the 1% to pay a tax rate higher than those that already struggle to survive on scraps and crumbs.  Rather, the 1% are carried along by the pack mules of America, resplendent in overzealous displays of wealth and greed.

“Close your eyes and shield your ears.  Shut your mouth and conceal all your fears.  What we want and what we need, they’ve engineered.  I can smell the bullshit right from here.” – Anti-Flag, “The Great Depression”

The American people are forced to squabble and feud over the positions of status, the hopes of aspiring power and wealth dividing a nation of brothers and sisters.  With a fire behind them, the American people trudge forward and wonder whether the next day there will be enough money left to provide a dinner for their family. Meanwhile, the elites of society are faced with one problem, whether they will have a wine from the 1980 harvest or the 1990 harvest.  The ranks of the masses are lied to by the media, forced into the lower levels of a capitalist hierarchy by the controlling CEOs of the system.  The political system is at the beck and call of the corporations and Americans refuse to acknowledge that the plague of their system is the system itself.  The revolution of thought, the revolution for change will only come when the people change themselves.  Yet, with an entire system pulling its united weights against such change, what pathways are open to the people?  A homogenized society will leave those brave enough to challenge it,  alone and isolated.  A sense of claustrophobia and suffocation will envelope those that strive to make a difference, their chains that were thought broken and left behind, will return and pull them down into an endless sea of obedient followers.  Nevertheless, the voices are needed and the people must come to the realization that this pyramid of society will be lost without its base.  What is this base?  The people, the submissive and complacent masses are the fundamental structure that permits the pyramid to function.  In order for the corrupt and malicious on the top to be removed, change must start at the bottom.  The hardest battle the American people will ever have to fight, is the battle to  just be individualistic and strive to remove the weights of conformity and blissful ignorance.  The CEOs are nothing without the people, the system is nothing without its people.  No longer can their gas and guns, clubs and thugs, and their lies on tv, hold the people down.  A system in which millions starve, millions walk homeless, and where millions are unemployed, is not a system dedicated to the equality of all.

“Get up!  Get up!  Your voices are needed.  Become, become the pulse of the revolution.  In the ranks of the masses rising.” – Anti-Flag, “Ranks of the Masses Rising”

Challenging the status quo is imperative for the situation at hand to be changed, to be reverted to a system in which the people truly wield the authority that was promised to them.  America’s constitutions and rights have been bought and sold on the black market, leaving an alienated and forgotten people to scrounge for whatever morsels of food they can find.  The looming debt, approaching $16 trillions, has funded corporate and government programs that have never benefited the people.  The budget of the US has focused on investment in the neocolonialism of oil corporations around the world, on buying bullets and buying guns and all in the hands of killers and thugs, and a budget guided by the interests of a select few.  The truth is all too clear, but is not propagated or supported because of the lack of media assets; rather, the media assets available and trusted by the masses are run by corporations.  Nearly all mass media are owned and controlled by a handful of conservative capitalist.  There is no alternative method of distributing the people’s news, their information, their ideas.  The people must be united to take a stand and tell the truth.  The truth is seen as a conspiracy, a plot to undermine the security of the masses, but what is not understood is that there is no security, the masses have been lied to and manipulated into a false sense of complacency.  The economic system is plagued, infesting society and the political infrastructure of America, resulting in a flawed image that attests to the misplaced faith and belief in a country that was bought and sold by corporations.

EU: The Ashes of Athens – Athens is Burning

Greece enacted billions of Euros in spending cuts and austerity measures last night in a volatile parliamentary vote, an attempt to avoid another potential default on its national debt and keep the precariously perched Eurozone intact.

The Streets of Athens Burn as MPs Approve Yet Another Series of Austerity Measures

The members of Greece’s much hated and targeted parliament passed the austerity bill amid some of the worst rioting and political violence witnessed in the country in years.  The caretaker government has ordered for a further 3.3billion Euros of savings by slashing wages and pensions and laying off public sector workers, resulting in more than 40 buildings being set ablaze and stored looted and destroyed.  The story holds little new for observers, as the country is in its 5th year of recession and has little prospect of halting a steep decline in living standards.  The turmoil of the streets was mimicked by division inside the parliament, with strong dissent among the two main coalition members.  A total of 37 politicians from the majority of Socialists and conservative New Democracy party either voted against the party line or abstained.  A further 6 voted against sections of the legislation.  After the vote, the caretaker government announced that those 43 MPs had been expelled.

“I am calling on you to vote for the new loan agreement because I want to avoid falling onto the abyss, to restore stability, so that we can have the possibility tomorrow to negotiate and change the policy that is being imposed upon us today.  We have to exist first to be able to change it.” – Antonis Samaras, leader of conservative New Democracy party

The ballot, widely seen as the most important in modern Greek history, ignited division in party lines and ignited eruptions of violence that trailed in the parliamentary chambers.  The next step along the lines of the austerity measures necessary to receive Eurozone loans, include a 22% reduction in the minimum wage and 150,000 jobs from the public sector workforce by 2015.  In return, Greece is to receive a second Eurozone bailout in 2 years, worth 130billion Euros in addition to a 100billion Euro write-down of debt by the country’s private creditors, a cut of the real value of private-sector investor’s bond holdings by some 70%.  Greece needs the international funds before March 20th to meet debt repayment of 14.5billion Euros, or suffer a chaotic default that would send reverberating shock-waves throughout the Eurozone.  Nevertheless, street battles between police firing rounds of teargas and demonstrators hurling firebombs and marble slabs left Syntagma square, the plaza in front of the parliament building, already resembling a chaotic war zone.  The scenes of mayhem on the streets of Athens, coupled with political dissent, begs to questions whether Greece has the capacity to implement and carry through with the strict austerity measures.

“Yesterday’s vote in the parliament may have saved the country temporarily from default, but the Greek economy is going bankrupt and the country’s political system is failing.” – Vassilis Korkdis, head of the Greek Commerce Confederation

In retrospect, the scenes of violence and insecurity are a recent intensification of protests for the still-young caretaker government under Prime Minister Lukas Papademos.  Regardless of the social strife, without the bill for future loans, wages and pensions would go completely unpaid, hospitals and schools would be devoid of funding, banks would collapse and people’s savings would be lost.  George Papandreou, the former socialist Prime Minister, declared that Greece was embroiled in war that it had to win, for the sake of restoring faith and credibility to Greece in the long-run.