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The Corner

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An Ambassador Doing His Job



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Here, writing in the Huffington Post is Vassilis Kaskarelis, Greece’s Ambassador to the US, on the topic of his country’s financial predicament. The article skillfully blends truth, fiction and evasion. The ambassador is good at his job. Sometimes, however, he goes a little far, even by the undemanding standards of the diplomatic corps. Thus he is not “cynical” enough to conclude that predictions of the single currency’s demise reflect the machinations of those who have supposedly invested “hundreds of billions of dollars… in the euro’s downfall”. And as he is, of course, not one of those cynics who might suggest such a dreadful thing, he is freed from the responsibility of making any effort to prove it. How convenient.

 

The ambassador then goes on to write this: 

It is not the first time that the collapse of the EU is considered as “just around the corner” during its history. Such was the case with the Lisbon, or so-called “Constitutional” Treaty, which ultimately approved and implemented, despite predictions to the contrary. Who can forget the front-page headlines of the time, carried by the majority of prestigious media, heralding “Europe’s final days”, “EU system collapses” and “Europe is dead”?

The implication of that paragraph is that both sets of predictions reflect the activities of wicked folk opposed to an ever closer European Union. The pattern is, Kaskarelis clearly wants you to think, proof of the plot that he is not alleging exists.

What the ambassador doesn’t say is that the loudest voices predicting that the EU would collapse if the Lisbon Treaty failed to pass tended to come from those who supported the treaty. Most euroskeptics believed the EU could manage perfectly well without it.

Later on, Kaskarelis writes this:

[L]et’s also look at the bigger picture. Given that Greece’s economy barely represents 2.4% of the European economy, while the country itself is no larger than the state of Alabama, it behooves us to address the elephant in the room, none other than the lack of market regulation and its unprecedented greed.

It has been said repeatedly by respectable economists and published by major newspapers, more recently in the New York Times editorial titled “Greece and You,” that “it was derivatives that were behind “the near meltdown . . . in the global financial system”. It was indeed the relatively new financial instruments, derivatives, CDS, CDOs that created the 2008 U.S. economic crisis and its global implications. Yet, three years later, no one has dared take on those who seek quick and short term profit, betting on the destabilization of the European Union and ultimately on the global economy.

Perhaps the time has come for us to grab this beast by the horns and tame it, before we lose total control and the entire global economic system collapses.

Talk about changing the subject. We could debate forever the extent to which inadequate regulation of new financial instruments “created” the 2008 crisis. It’s a fascinating debate and it’s a worthwhile debate, but it doesn’t have much to do with Greece’s problems today.  To  understand those it’s better to look at the fact that its leadership fraudulently signed the country up to an irresponsibly designed piece of speculative paper known as the euro, a conjuring trick currency that allowed Greece, its investors and its lenders to pretend that times were far better than they were. And pretend they did, until they no longer could. 

And so, Mr. Ambassador, if you want to start talking about the problems caused by ”new financial instruments” why not start with the euro?



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