Trumpeter 4 Europe

We seem to be living in an era of “neutron-bomb capitalism”. Small detonations in obscure credit instruments release huge amounts of very short wavelength speculations that irradiate and destroy economies, jobs, currencies and countries. However

banks and their bonuses remain intact – at least those given a government “money-shield”. Money-shields are made from millions of taxpayers affixed around and underneath banks. They carry government printed IOUs saying “I, the taxpayer promise to take on

responsibility for huge debts, to pay more taxes, and to have a lower standard of living in a contracted economy. I do this so that banks may continue to flourish and have the bonuses to which they are accustomed.” In technical economic language this type of

debtor protection arrangement is called “Quantitative Squeezing of Electorate” or QSE for short. QSE can be used for protecting national economies as well as banks, as you will have seen in the news. The Euro is getting a dose of speculative radiation from

“neutron-bomb capitalism”. The radiation is falling on little bit of it called Greece. Greek governments have cooked the books, cannot collect taxes properly, and have been let us say “fiscally challenged”. Shock horror and more speculation. Will the Greek

government be able to raise credit, will it be able to pay its bills or will it default? Would the Euro survive such default? Will the Greeks themselves take the pain of “Quantitative Squeezing of Electorate” or will they blackmail the Germans into doing it for them?

And so on and so forth with word speculations piled on top of number speculations. There has been much blather and nonsense about the significance of Greece and its government debt to the future of the Eurozone. Let us look at fundamentals. Greece has a

population of 11million, about 3% of Eurozone, and its economy is about 2% of Eurozone output. It is a tiny part of the EU and Eurozone economy. In effect it is a small economic electron whose orbit is attached to the heavy nucleus of economic power in northern

Europe. There, Germany, France, the Benelux countries, and Scandinavia are bound tightly together to make the industrial and
technological nucleus of the main productive power of the EU. (Incidentally, the UK with its long decline of industrial capability and its

present huge fiscal deficit looks more like a fringe economy than like one of the industrial nucleus countries.) Will the economic
nucleus of the Eurozone disintegrate because one of its smallest “fiscally challenged” economic electrons wobbles or is knocked

out of its orbit? The answer of course is no. On the contrary, the Greek crisis will result in a more tightly bound Eurozone atom, as
the recent statements and actions of political leaders in Greece, Portugal, Germany, France and elsewhere have indicated. Moreover,

the northern Eurozone economic nucleus will soon increase in mass. Within a few years Poland and the Czech republic will join it,
with a combined population about 5 times Greece and output much more than that. The Eurozone, like the EU, is a work in progress.

The main axis of EU expansion since the 1990s has been to accumulate economic mass to the north and east of its Franco-German-
Benelux nucleus. East Germany, Austria, Sweden, Finland in the 1990s and Poland, Czech republic, Baltic States in 2004 have added

about 100 million people to the EU and several advanced industrial economies. The Mediterranean additions were Malta, Cyprus and
Slovenia, about 3 million people mainly in agriculture and tourism. In short the EU has expanded most around its powerfully

productive industrial economic nucleus, and that expansion will be added into a Eurozone made more fiscally aware, and hopefully
more coherent, as a result of the Greek crisis. No doubt it would be traumatic and humiliating to politicians of EU countries if some

errant “fiscally challenged” Mediterranean or Atlantic economic electrons were temporarily knocked out of their Euro orbit. But the
Eurozone nucleus in the north European plain would remain intact and continue to expand, as is built into the 2004 accession treaties.

And after a severe bout of QSE any displaced fringe Euro-electrons, Greek or other, would have to return to their Eurozone orbit
because there is nowhere else for them to go. The interesting fringe economic electron of the EU is the UK, which like Greece is

rather “fiscally challenged”. The UK has a huge annual fiscal deficit about 12-13% of GDP; it is very slow coming out of recession; its
trade balance is not improving despite a very large currency devaluation; and it has an election coming that may or may not produce a

coalition government. After that election UK taxpayers (some of them at least, those not living in Belize) will have to endure a severe
bout of QSE. Will the QSE be soon enough and severe enough to overcome the fiscal challenge? Speculation abounds. Of course,

the UK is not in the Eurozone. So if “neutron-bomb capitalism” irradiates the UK currency with speculative waves we won’t have to
read or hear about any wild speculation about the survival of the Euro. And 26 out of 27 EU heads of government won’t have to stay up

late at night fretting about how to save the Sterling zone - because it won’t be their problem. Let’s hope Greek tragedy doesn’t turn
up in Shakespeare’s country.

Kevin Hannon of Midlands European Movement.
11.3.2010