2011 May 08 Sunday
Der Spiegel Greek Euro Zone Exit Flap

A Der Spiegel article floats the ideina that the Greeks are contemplating an exit from the Euro.

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.

But at Monthly Review's MRZine Yanis Varoufakis, a professor at U Athens, says while the Greek government might have an Euro exit as a policy option the Der Spiegel story was a plant by a faction of the ruling elite of Germany to spur the rest of Germany's elite to do debt restructurings of the PIIGS to prevent countries from bailing out of the Euro.

The Spiegel article was meant as a salvo that would sound long-delayed alarm bells.  It was intended to raise a small storm of panic as a means of reminding Mrs. Merkel that the crisis so far is akin to a tea party when compared to what will follow if she continues to live in lies.

Who sent this message?  Der Spiegel would never act by itself, without coordinating with powerful German policy circles.  My sources tell me that these circles are mainly located within the Finance Ministry and, to a lesser extent, in one or two of the larger banks of Germany.  In association with Der Spiegel they had been sending tamer messages along similar lines for a while, namely that the Greek debt is not sustainable under the present policy mix (see FT Alphaville's account of that series of messages sent using Der Spiegel as their main conduit).

My take: Too many incompatible economies are in the Euro. The problem runs deeper and longer than the current debt of the PIIGS. In the long run it does not make sense to have so many countries which speak so many different languages (hence low labor market mobility) and which have such different economic systems to get tied up in the same currency zone. But like other dumb things our elites do (e.g. conduct wars that are not in the national interest, run up debts that threaten sovereign debt crises, and prefer lower skilled immigrants) we can't expect reason to appeal to them. The Western countries have destructive policies and due to destructive political and economic cultures.

Some German politicians would be happy to get the Greeks out of the Euro.

On Saturday, fellow FDP MP Frank Schaeffler said Germany should constructively support Athens should it choose to leave the euro zone.

Schaeffler was joined by Ifo Institute President Hans-Werner Sinn, who told Sunday weekly Frankfurter Allgemeine Sonntagszeitung (FASZ) that a Greek exit is preferable to permanent fiscal transfusions from German coffers.

How it looks to me: Germany's elites are fighting over whether to keep the Euro intact over all current members. Greece's fate will be decided in Berlin. The more southern European countries that remain in the Euro the more the Euro will be pressed to become like the currencies that those southern European countries used to have (Can you say "inflate to relieve excessively high wages caused by union power"? Sure). Also, Germany will basically be pressured to subsidize these spendthrift societies. So some portion of the German establishment wants Greece out of the Euro to ensure the Euro stays more like the Mark. Makes sense to me.

Share |      By Randall Parker at 2011 May 08 02:23 PM  Europe Monetary Union

James Bowery said at May 8, 2011 3:07 PM:

Humor me. Suspend judgement. Consider the hypothetical condition that there is no conspiracy here -- that the Greeks actually are seriously moving toward their own monetary authority:

What would motivate the Greeks to exit from the Euro to their own monetary authority?

erik said at May 8, 2011 4:06 PM:

I've heard that the Greeks are building Andrea Rossi's cold fusion reactor power plants in Greece. Rossi's reactor supposedly achieves tremendous energy gain. This could be why they're leaving the Euro to use their own money. Though it's hard to imagine them getting away with it if it works out.

bbartlog said at May 8, 2011 4:44 PM:

'inflate to relieve excessively high ways caused by union power'

Wages, I assume you mean. The public employee unions certainly are a problem, there as in California; but I think the main reason that the southern European governments end up needing/wanting inflation is that their powers of direct taxation are relatively weak. Italy and Greece both have enormous 'underground' economies and cultures that support participation in them; e.g., cheating on your taxes is regarded as an obvious choice if you can do it, not as something skeevy or transgressive. Thus, rather than try to levy taxes that might well just force more of the economy off of the official radar, they would like to be able to use inflation as an unavoidable tax on anyone using the currency.

Joe said at May 8, 2011 8:12 PM:

James Bowery's url leads to a scam site again. He did that before, and I pointed it out, and eventually, he changed back to a legit one. Now he's doing it again. Why don't you ban him?

Frank said at May 8, 2011 8:38 PM:


Why are you trying to get him banned?

Randall Parker said at May 8, 2011 10:54 PM:


I actually put in a filter to prevent it. Or maybe I only put the filter on FuturePundit.com. But the filter got lost some how. So I fixed it again.

For now on when he does that the posts will end up on the Pending folder.

Joe said at May 8, 2011 11:01 PM:

I only read this site, so it must have been here. Thanks for doing the filter, either way. Frank: because he's trying to lead people to a scam site. Was that a serious question. James is a pretty fucked up individual.

Frank said at May 8, 2011 11:10 PM:


I didn't know he was trying to do that. I assumed it was just a typo. Why do you say he's a "pretty fucked up individual"? That's a pretty harsh judgment.

Joe said at May 9, 2011 1:59 AM:

On numerous occasions he's linked to a scam site. He wants to steal people's money.

James Bowery said at May 9, 2011 7:27 AM:

My apologies for the bad URL. Chrome is fairly aggressive about caching form information and somehow ended up with two different values for the URL field that had the same typo-catcher spam site in them. The other one is now deleted as well.

James Bowery said at May 9, 2011 7:37 AM:

Erik, why do you say its hard to imagine the Greeks getting away with going to their own monetary authority if they become energy-rich?

PS: I discovered the source of my URL typo wasn't only the browser caching of form information but also this site's personal information cookie. I cleared it up by clicking on "forget personal information" and reentering the URL without the typo while checking the "remember info" box.

Joe said at May 9, 2011 10:23 AM:

Shit! Sorry James! My bad.

erik said at May 9, 2011 9:17 PM:

"Erik, why do you say its hard to imagine the Greeks getting away with going to their own monetary authority if they become energy-rich?"

With energy independence and monetary sovereignty, they'd be very close to achieving complete, genuine sovereignty. At that point they'd just need a decent nuclear arsenal to be fully sovereign. They'd be able to increasingly free themselves from the international financial and political order, and they'd be an example for other nations, groups and communities. Do you think international finance and political organizations and groups would stand idly by if they're in danger of potentially losing their control of nations heretofore dependent on them? Perhaps they won't have the will, foresight, or competence to stop it if Greece and others go down this path. But I'd think they'd try to control it somehow.

James Bowery said at May 10, 2011 8:35 AM:

Erik, the E-Cat is a serious problem for planners but by the end of the year things will be clearer. What is clear is that a device like the E-Cat would totally restructure civilization. In combination with the many emerging devolutionary trends like "Open Sourcing the Blueprints of Civilization", sovereignty could devolve down to the pre-civil level of the individual. Terminating civilization would be a tremendously liberating apocalypse although those who are most adapted to it from the 10,000 year explosion would fight it tooth and nail.

PS: The term "individual sovereignty" has been so encumbered with intellectual dishonesty by the likes of Davidson and Rees-Mogg that it is almost useless in honest discourse. What it should mean by construction is that an individual is the supreme law, subject to nature, of the territory over-which he holds power. This is really just the old concept of a homestead. The old "gentleman's war" (getting masses of men to kill each other off under certain rules the violation of which are "war crimes") is replaced by natural duel (law of the jungle governing two men in nature) between individual sovereigns. Constitutions are replaced by contracts. Gangs have a very hard time maintaining their power when individuals are independent and free to form defensive gangs, made temporary by clearly stated objectives (declaration of war) the achievement of which dissolves the temporary gang.

erik said at May 10, 2011 10:38 PM:


I was thinking more along the lines of nations and countries, but I think you're right. If this thing works out, not only would nations be more independent of the international financial, economic and political order, but lower levels down even to individuals would be able to achieve complete, genuine independence and sovereignty. An independent minded and technically skilled individual would be able to leave civilization and just go off into the mountains and be self-sufficient and productive on his own. It would be revolutionary. A "tremendously liberating apocalypse" is a good way of putting it, capturing both the new freedom and the destruction of the old order it would likely entail.

There's no question the people in power now will fight it "tooth and nail." The question is how they will go about it and whether they will be successful. They will have access to the technology as well and may have a first-mover advantage in scaling the tech. They might try something desperate and wild like permanently loitering surveillance predator drones all over the place. Then again, with this tech, the cost to individuals of defecting from civilization and the people in power drops precipitously and the benefits rise dramatically, so the people in power are in danger of losing their tax base and thus their source of power. Also their control of nuclear weapons becomes less of an advantage for them since the technology allows for population dispersal and low population density. Perhaps they'll resort to doing what they've been doing for the past 10 years, wasting trillions trying to hunt down and kill individuals like they did with Bin Laden and other Al Qaeda members.

What do "the likes of Davidson and Rees-Mogg" say about "individual sovereignty"?

erik said at May 11, 2011 11:29 AM:

Here's an article about how a Greek cold fusion tech company with worldwide patent rights (except the Americas) to Rossi's E-Cat might have influenced the Greek government decision to leave the Euro:


James Bowery said at May 12, 2011 9:45 AM:

The "individual sovereignty" popularized by Davidson and Rees-Mogg is basically about people who use money for jurisdictional arbitrage. Indeed, it is so popular that Wikipedia has removed the article on "individual sovereignty" and folded into "self-ownership". In a perverse way, this is appropriate because the definition given "individual sovereignty" by Davidson and Rees-Mogg leaves a monopoly on force with government so their notion of "sovereignty" is clearly incompatible with the definition of that word. Moreover, they don't describe is the way that money ties one to a particular type of human ecology in which other humans have to act as intermediaries to natural sources of sustenance.

So the damage they have done is to remove the very concept of "individual sovereignty" from discourse -- as evidenced by Wikipedia's "editors" treatment of the phrase.

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