Not for the reasons that far leftists suggest.
Because the reforms that the other European nations demand from Athens for the third (still not quite certain) bailout seem more strict than certain people expected, you may hear lots of people complaining about the German cruelty.
Let me begin with a vaguely related story that has excited many Germans yesterday:
Angela Merkel was in Rostock, NDR (which stands for East Germany in Czech LOL) and NDR (a TV station) showed the Chancellor's exchange with a cute, smiling Palestinian girl who said – in German that was better than I could ever dream of – that she has dreams such as studies in Germany and she is sad that she can't enjoy the life in the same way as other (German) people do. Apparently, this girl (with her family?) is awaiting deportation.
Merkel calmly answered that the laws unfortunately apply to everybody and Germany couldn't afford to host everyone. The girl predictably began to cry and Merkel tried to soothe and caress her, apparently not understanding why the girl was crying (she was crying because of the expected deportation and the inability of the Chancellor to save her dreams). "You did a good job, girl!" Merkel bizarrely told her.
Now, what can one say about this story?
There are many dimensions to it. First of all, I think that the number of Palestinian girls who seem to be German by their thinking and who are this excited about that country is low. If it were just the girl who would stay, I am almost sure that you could find people who adopt her or become responsible for her etc. Germany could accept all such people. The number of Arabs who are this excited about Western nations is not too high.
The girl's speech was touching.
Second, what Merkel has said was perfectly right. Even an impressive touching monologue on TV isn't a sufficient condition to circumvent the laws and Germany obviously can't afford to accept everyone in the world who wants to get in. Merkel may be a woman and she may be sensitive but her job is the job of a German Chancellor Рshe is a successor of politicians such as Gerhard Schr̦der, Helmut Kohl, Helmut Schmidt, Konrad Adenauer, and, indeed, Adolf Hitler Рand she can't become too ambiguous about what she really is. To be the most important politician in the most important country of Europe means that certain political attitudes probably must become more important than some ad hoc desires to circumvent the rules for emotional reasons.
Third, there is some implicit sexism here. People immediately assume that because she is a woman, she must be much better in caressing and soothing kids. Well, that's not necessarily the case. If a male politician behaved in a similar way, it would be viewed as a normal reaction of a politician. Merkel is being mocked because one is expecting something completely different from a woman. But this expectation isn't really justified. An average woman could react differently but Merkel is closer to a typical male politician than to an average woman.
So I don't really think that she has screwed something badly or showed herself as too inhuman or something like that. Even though her de facto PhD supervisor in Prague remembers her as a kind and sensitive girl, she reacted as a professional politician. You should have expected such a reaction.
Update: Later, the girl defended Merkel's handling of the situation – a kind of a proof of the girl's maturity.
But let me get to the attitudes of all Germans – throughout the history and during the ongoing Greek crisis in particular.
Germany has developed the most over-the-edge form of fascism that the human history has seen so far. But this has been just 12 years of its history. The German history is much longer than that. And the world's public realizes that Germany isn't equal to Nazism – when it repeatedly votes Germans as the most likable nation in the world. Germans are a nation of engineers, musicians, philosophers, and other occupations with a "soft edge". Well, I would probably agree that their music as well as philosophy has always been "tougher" than the music and philosophy of the French and other nations. But one can't deny that they have a heart, too.
Well, I still picked a Czecho-Slovak duet in a neutral language to represent the emotional German music. The Czechoslovak title is "Bells of Happiness"; the German translation is "The Absorption of Electromagnetic Quanta". ;-)
When it comes to the cruel national images – the kids who are being educated to be tough from their childhood – Germany may be close to the top but I think that the Nordic nations are even tougher. And it's natural that they are – this attitude may have been needed for the individual and collective survival in their cold climate.
Incidentally, the truly Nordic nations that exist today are those whose currency is known as a "crown" – which is Norway, Sweden, Denmark, Greenland, Iceland, and, of course, the Czech Republic. ;-) You may check the green island of Scandinavia in the heart of Europe.
To summarize, historically, Germans are tough, harsh, resilient, and relatively unemotional but in these respects, they don't differ much from the average of the Germanic i.e. Teutonic nations – and probably several other groups.
What about the Greek crisis? Among countries of the world, Germany has been the largest lender in Greece and its attitudes were obviously the most important ones in the negotiations – for that reason. But if you talk about an "intrinsic character" of a nation or its politicians, you must be aware that you are talking about an "intensive" quantity, not an extensive one.
Just because the overall financial claims of Germany in Greece are larger than the Austrian or Finnish or Dutch or Slovak ones, it doesn't mean that the Germans have bullied Europe and imposed a view that isn't common in Europe. In fact, the attitude that is being interpreted as the German one has been shared by the hardline part of the Eurozone – which also includes Holland, Finland, three Baltic States, Slovakia, and Slovenia. The attitudes were softer in the PIIGS countries but this group is smaller than the hardline group!
Among the Eurozone countries, I follow the Slovak attitudes most closely – they are "our" representatives in the Eurozone, of course. Slovak PM has said that there is no room for any mercy for Greece and if Slovakia has managed to go through the deep reforms, Greece must be able to do the same thing. The finance minister said lots of tough things, too – search for KazimirPeter on Twitter.
And you find equally tough – or tougher – attitudes in the EU countries outside the Eurozone. The post-communist countries share some of the anger of the poorer ones who pay for apparently wealthier people's luxurious lives that they can no longer afford. But the opposition to the Greek parasitism goes well beyond this simple sentiment about the "reverse redistribution". Czechia and Britain protest against the funding of Greece through EFSM, a fund that should have been superseded by ESM since June 2013. The oligarch Czech finance minister says that Greece has gone bankrupt about 4 times in the recent 2 centuries and it should finally do it for the fifth time in order to clean the air. He doesn't hide is impatience in any way. He doesn't have to. No influential people or groups in Czechia expect people to pretend that we want to soothe Greeks whatever it costs. No political correctness of this type – and most other types – exists here.
Equally tough claims have come from the Finns and others. There is no reason to be surprised: What all these folks are saying is common sense. If something has been utterly dysfunctional for many years if not decades – if something has become a black hole that devours unlimited amounts of money – something dramatic has to change about this entity because others understandably don't want to fund it anymore, especially if they don't even get the gratitude in exchange for the help.
And if the deep yet organized reform seems impossible – e.g. politically intractable – the reform has to occur through less organized algorithms. The black hole has to be left to collapse. It's not really some "decision" that others are making. It happens spontaneously. If a company or a nation defaults and then completely collapses, one may partly blame it on bad luck or complicated events in the history. But if someone is responsible for that, it's the bankrupt entity itself – not others. Others don't really care much and even if they cared much, they couldn't do much because the Greeks are a sovereign nation – and have been insanely and incomprehensibly stubborn about their delusions as recently as 2 weeks ago. The other nations have enough problems with themselves. They can't really be saving someone else who doesn't – or didn't – allow to be saved, someone who didn't want it.
Germany continues to be rather strict about its budget. It mustn't run big deficits. But this attitude isn't some controversial "austerity" as unhinged extreme leftists are suggesting. It's common sense. And it's a law of the European Union, too. According to the EU laws, a Eurozone country is actually not allowed to run budget deficits exceeding 3 percent of the GDP! Needless to say, this law has been violated many times and no sanctions worth remembering have ever occurred. But it shouldn't have happened. It's a law and this law has very good reasons to exist.
In Czechia under the center-right governments, a possible law making the balanced budgets mandatory has been repeatedly discussed (but never adopted). Well, the freedom to borrow at some moment may be helpful for the nation so this restriction could be counterproductive for that reason. However, the protection that the law could offer against overspending (the main abuse of the aforementioned freedom) and really deep problems resulting from such overspending could be more valuable than the freedom to borrow at some appropriate moments. At the end, I don't know for sure whether the "mandatory balanced budget" is a good idea but I greatly appreciate the reasons why one could favor such a law.
The people who use the term "austerity" as if it were an expletive are flabbergasting sociopaths who constantly want to live beyond their means. But it's simply not possible. These people have been in charge of Greece, too. Socialism ends when you run out of other people's money. It has happened in Greece. The socialism has to end – at least Europe hopes that it will – so it has forced the Greek Parliament to adopt the policies that end, or at least seriously reduce, the over-the-edge socialism that has conquered Greece for 40 years (and especially the recent ones). It's highly questionable whether the Greeks will actually obey the laws – in the absence of foreign armies. But Europe is at least trying it once again... Err once, err twice...
Lenders are certainly "allowed" to have conditions if they're supposed to pay another huge amount of money. Those who suggest that others are "obliged" to pay the money with no strings attached are nuts. They're not only nutty, they are criminals, too. Monetary redistribution between individual nations is actually banned by the EU laws, too. The EU may have embraced some kind of solidarity but this solidarity surely doesn't and can't work in the way that the warriors against "austerity" are imagining. (Some EU laws are counterproductive if not crazy but the basic laws governing the financial relationships between the EU member states are sane – they're pretty much the same as they were before the EU.) Both at the local, national, or transnational level, legally imposed solidarity may only lead to acceptable outcomes if there are good mechanisms that prevent these policies from being abused. There have to be rules that restrict both sides. Otherwise, it's a recipe for a disaster. All such "solidarity policies" are being abused by almost all Greeks 24 hours a day which is why it's largely a failed state. But Europe isn't a failed continent yet.
Incidentally, the Czech media amused us with another rather incredible story of Herr Christian Ude, a former mayor of Munich, Bavaria. He bought some real estate in Greece and wanted to pay the real estate taxes that exist. The bureaucrats told him he was a VIP so he shouldn't pay the taxes. He replied that the laws apply to everyone and started to work hard (he hired lawyers and so on and so on) to be allowed to pay the Greek real estate taxes. They treated him as a mentally ill person. Imagine, Greeks: He actually wants to pay taxes! Unbelievable. Finally, he won the battle and was allowed to pay his tax. What happened with that money on the following morning is a different question.
You know, this is the kind of stories we read every day and which shows the most serious, and most long-term, problem with Greece that will be around regardless of portraits on Greece's currencies or the country's membership in organizations: Their reasoning is just completely corrupt. Laws and treaties don't mean much for them. They allow each other to rob the state. But they always expect – and demand – lots of the good stuff from the government. And since the years of the junta, there was literally no one who was determined to act as a counterbalance. You know, this system just can't work well. If they want to be compatible with the internal and external laws and obligations, the Greeks simply badly need a Gestapo cop who doesn't have to be German but who will make sure that these insanely obvious events robbing the budget are not taking place.
A would-be economist named Paul Krugman has claimed that Germans are angry – because he has gotten lots of unfriendly mail from Germany. But the reason why German writers are overrepresented in this mail is obvious: He has singled out Germany as the main target of his completely deluded criticism. So the people whose nation is being attacked in this totally idiotic way are more likely to respond. But the reality is that every sane person in the world – regardless of his or her sex and nationality – who follows these things knows that Krugman is a staggering jerk and imbecile. I am not German – at most, we are Germans among Slavs ;-) – but I still realize that very clearly.
This knowledge has no specific relationship to Germany. And I feel offended when my nation – and other nations – are treated as if they were invisible. Germans are getting all the credit for something that they actually share with many others (and be sure that to be at war with Mr Krugman is a credit).
Incidentally, after he complains against dissatisfied German readers' mail, Krugman ends with this paragraph:
The Czech public debt actually dropped (infinitesimally) in recent two years; now it's $6,400 per capita. The oligarch finance minister BabiÅ¡ could have achieved these things by some accounting tricks – because the reduction of the debt surely sounds strange if we know that we still run (low but positive) budget deficits – but these tricks were probably not severe. It is possible to reduce the debt. You don't have to be German to know that and you don't have to be German to actually manage to reduce the debt. Many other nations are doing the same and they know it's a good thing – and, under certain conditions, an existentially important thing.
In recent months, I have collided with megatons of completely deluded parasitic far leftists who have claimed that the "real wealth" is only produced by budget deficits or something like that. Holy cow. First of all, the economy isn't a zero-sum game. Every transaction in the economy is good (or believed to be good) for both sides – that's why both sides agree to sign it. The economic life is composed of these transactions so their union is obviously a positive thing for the whole (for the nation and the mankind), too.
On the other hand, the budget deficit isn't needed for anything good. It (or at least a large one) is de facto illegal in the European Union. A government may stimulate the economy if it borrows. But the money will have to be repaid – so the effect will be reversed sometime in the future. In fact, because of the interests, you need to pay more than you borrowed so you will subtract more money than what you borrowed sometime in the future.
And in the future, when you're repaying the debt, you will have to collect it from your taxpayers. They will have less money left. And the taxpayers are better in meaningfully investing a part of their money than the government is. That's why the pair of events – borrowing plus repayment – will make an overall negative impact on the average growth rate of the economy.
The very redistribution of the taxpayer money (or the existence of the government) – at least too big redistribution (too big government) – is a bad thing. And if the redistribution is so intense that you meed to borrow – and rob the future generations of private citizens – it's even worse. You're inevitably placing the future generations – and sometimes the present generations because the debt situation may deteriorate really quickly – into a situation that may be analogous to the Greek one.
One might hypothetically defend (although I wouldn't defend) a plausible version of Keynesianism in which the government borrows when the economy is weak – but it has to repay the debt when the economy is strong and there must exist reasons to think that the system is calibrated and these two types of periods will be balanced. (By the balance, one may mean the budget deficits equal to the long-term average real GDP growth rate.)
But if someone wants to systematically overspend, i.e. persistently run significant budget deficits, he is a loon and a dangerous criminal. It is obvious that the Greece-like crisis is an unavoidable outcome of such policies. For many months, we could have observed the extreme manifestation of the persistent overspending in Greece. Is that something you want in your country?
Individuals who are willing to fight against "austerity" even with all this new experience – the knowledge what the persistent overspending meant in Greece – leave me speechless. As far as I can say, they are not humans. They are just wild animals and I don't have to be (and you don't have to be) a German to see this fact. After all, Germans in the post-war period became one of the most "politically sensitive" if not PC nations. (It's been fun to share an apartment with Jochen B. who was obviously more left-wing than I was – but I tend to think that I've taught him something, too.) Are you serious if you suggest they're not PC enough? Maybe they're more rational than 10 years ago – because their generosity has been clearly abused and they have realized that they have to regulate it – but they're still very PC and generous to other nations.
These days, after all those Greek bummers, all the leftist animals who want to "overspend" and who criticize Germany for its realization that it's not wise to persistently overspend should be hiding in the sewerage systems and tread silently, ashamed of all the ideas and policies that they have defended for years. But they seem to be everywhere on the surface and they seem to be loud. It's just totally unbelievable.
Some of the activities they organize are amusing, however. On Twitter, they organized a #BoycottGermany campaign. That's cute. Greece should have done so in recent 40 years. Even though Germany is far from Greece, Germany represents about 10% of Greek imports – something like €5 billion a year. Greece exports about €1.5 billion to Germany per year. The overall Greek imports are twice as large as the Greek exports. It would indeed be very nice for everyone if they gradually started to boycott other countries' products! ;-)
Incidentally, when the banks began to be in trouble a month ago, the imports to Greece dropped substantially (because the cash is missing and almost no one trusts them that they will pay later). One could say that it's a hint that the capital controls have some silver lining.
Similarly, Germany exports $1.55 trillion of goods every year (57 times Greece) – 95% of the exports of the whole United States of America, and about 2/3 of all the Chinese exports – so indeed, one may think that the German exports seem too large relatively to everyone else. They could "consume" some of the production domestically. Perhaps, the German citizens could be paid some extra money from the government to be able to do so. It would surely be better for the living standards of the Germans. But it would be bad for the resilience of the German public finances.
Needless to say, similar campaigns haven't ever achieved anything. German products have completely different reasons than the "absence of boycotts" to be successful. It's their quality and value, stupid.
And Greece – and, to a large extent, Europe – depends on the health of finances of countries like Germany. But I don't mean just Germany – Germany is just the largest country of this kind, not the only one and not the most intense one. Germans haven't "invented" balanced budgets or budget surpluses or the desire to increase exports. Can you imagine what the Greek crisis would look like if all the remaining EU countries had finances similar to Italy's? I don't want to predict exactly what would be happening but it wouldn't be pretty.
It's extremely important for a country to try to keep their debt sustainable. And it's extremely important for the whole civilization – and for civilized continents – to actually possess some strong enough nations that are actually capable of keeping their finances healthy.
Greece owes hundreds of billions of euros to others. What do Germany and other nations owe to Greece? They owed them some strict attitude while demanding the debt to be repaid and the Greek economy to be repaired to be able to do such things – and do other things internally, too. Greece has been robbed of a stringent "parent" for many years and the result – a nation of spoiled brats – isn't pretty. It's never too late to start to educate them and spank them. Germany – and others – still feel some (but no longer unlimited) responsibility for the fate of the whole European continent. And it has become obvious to almost all Germans – but also many other nations – that strictness is a necessary condition for Greece to start to improve.
It's always problematic to try to export a societal arrangement – and one could indeed argue that in recent years, Greece had a qualitatively different system than the countries of Northern Europe. Such attempts to export systems often fail and this attempt may fail, too. But it's time for the intelligent and responsible Greeks to realize that they must really embrace these new rules. They don't have to invent the wheel.
They have already invented lots of things in ancient Greece and these things have spread to the rest of the world. Now, the rest of Europe is trying to repay the debt and show Greece how to run a modern country.
By the way, just a day after the Iran deal, Volkswagen was already developing plans to export Å kodas and Seats to Iran, an 80-million-people new market. Å koda has won tons of contests in dozens of countries, especially in the U.K. A circus elephant in Denmark in the video above shows that Å koda Fabia Combi is still a pretty light car; you can easily lift it with your tusk, and I don't mean Donald Tusk. And the car offers you seatbelts that no other company does, at least if you are a dog.
Seriously, I find it rather incredible that/if the people of Iran will be able to buy these successful products – Å kodas – that Americans can't!
Because the reforms that the other European nations demand from Athens for the third (still not quite certain) bailout seem more strict than certain people expected, you may hear lots of people complaining about the German cruelty.
Let me begin with a vaguely related story that has excited many Germans yesterday:
Angela Merkel was in Rostock, NDR (which stands for East Germany in Czech LOL) and NDR (a TV station) showed the Chancellor's exchange with a cute, smiling Palestinian girl who said – in German that was better than I could ever dream of – that she has dreams such as studies in Germany and she is sad that she can't enjoy the life in the same way as other (German) people do. Apparently, this girl (with her family?) is awaiting deportation.
Merkel calmly answered that the laws unfortunately apply to everybody and Germany couldn't afford to host everyone. The girl predictably began to cry and Merkel tried to soothe and caress her, apparently not understanding why the girl was crying (she was crying because of the expected deportation and the inability of the Chancellor to save her dreams). "You did a good job, girl!" Merkel bizarrely told her.
Now, what can one say about this story?
There are many dimensions to it. First of all, I think that the number of Palestinian girls who seem to be German by their thinking and who are this excited about that country is low. If it were just the girl who would stay, I am almost sure that you could find people who adopt her or become responsible for her etc. Germany could accept all such people. The number of Arabs who are this excited about Western nations is not too high.
The girl's speech was touching.
Second, what Merkel has said was perfectly right. Even an impressive touching monologue on TV isn't a sufficient condition to circumvent the laws and Germany obviously can't afford to accept everyone in the world who wants to get in. Merkel may be a woman and she may be sensitive but her job is the job of a German Chancellor Рshe is a successor of politicians such as Gerhard Schr̦der, Helmut Kohl, Helmut Schmidt, Konrad Adenauer, and, indeed, Adolf Hitler Рand she can't become too ambiguous about what she really is. To be the most important politician in the most important country of Europe means that certain political attitudes probably must become more important than some ad hoc desires to circumvent the rules for emotional reasons.
Third, there is some implicit sexism here. People immediately assume that because she is a woman, she must be much better in caressing and soothing kids. Well, that's not necessarily the case. If a male politician behaved in a similar way, it would be viewed as a normal reaction of a politician. Merkel is being mocked because one is expecting something completely different from a woman. But this expectation isn't really justified. An average woman could react differently but Merkel is closer to a typical male politician than to an average woman.
So I don't really think that she has screwed something badly or showed herself as too inhuman or something like that. Even though her de facto PhD supervisor in Prague remembers her as a kind and sensitive girl, she reacted as a professional politician. You should have expected such a reaction.
Update: Later, the girl defended Merkel's handling of the situation – a kind of a proof of the girl's maturity.
But let me get to the attitudes of all Germans – throughout the history and during the ongoing Greek crisis in particular.
Germany has developed the most over-the-edge form of fascism that the human history has seen so far. But this has been just 12 years of its history. The German history is much longer than that. And the world's public realizes that Germany isn't equal to Nazism – when it repeatedly votes Germans as the most likable nation in the world. Germans are a nation of engineers, musicians, philosophers, and other occupations with a "soft edge". Well, I would probably agree that their music as well as philosophy has always been "tougher" than the music and philosophy of the French and other nations. But one can't deny that they have a heart, too.
Well, I still picked a Czecho-Slovak duet in a neutral language to represent the emotional German music. The Czechoslovak title is "Bells of Happiness"; the German translation is "The Absorption of Electromagnetic Quanta". ;-)
When it comes to the cruel national images – the kids who are being educated to be tough from their childhood – Germany may be close to the top but I think that the Nordic nations are even tougher. And it's natural that they are – this attitude may have been needed for the individual and collective survival in their cold climate.
Incidentally, the truly Nordic nations that exist today are those whose currency is known as a "crown" – which is Norway, Sweden, Denmark, Greenland, Iceland, and, of course, the Czech Republic. ;-) You may check the green island of Scandinavia in the heart of Europe.
To summarize, historically, Germans are tough, harsh, resilient, and relatively unemotional but in these respects, they don't differ much from the average of the Germanic i.e. Teutonic nations – and probably several other groups.
What about the Greek crisis? Among countries of the world, Germany has been the largest lender in Greece and its attitudes were obviously the most important ones in the negotiations – for that reason. But if you talk about an "intrinsic character" of a nation or its politicians, you must be aware that you are talking about an "intensive" quantity, not an extensive one.
Just because the overall financial claims of Germany in Greece are larger than the Austrian or Finnish or Dutch or Slovak ones, it doesn't mean that the Germans have bullied Europe and imposed a view that isn't common in Europe. In fact, the attitude that is being interpreted as the German one has been shared by the hardline part of the Eurozone – which also includes Holland, Finland, three Baltic States, Slovakia, and Slovenia. The attitudes were softer in the PIIGS countries but this group is smaller than the hardline group!
Among the Eurozone countries, I follow the Slovak attitudes most closely – they are "our" representatives in the Eurozone, of course. Slovak PM has said that there is no room for any mercy for Greece and if Slovakia has managed to go through the deep reforms, Greece must be able to do the same thing. The finance minister said lots of tough things, too – search for KazimirPeter on Twitter.
And you find equally tough – or tougher – attitudes in the EU countries outside the Eurozone. The post-communist countries share some of the anger of the poorer ones who pay for apparently wealthier people's luxurious lives that they can no longer afford. But the opposition to the Greek parasitism goes well beyond this simple sentiment about the "reverse redistribution". Czechia and Britain protest against the funding of Greece through EFSM, a fund that should have been superseded by ESM since June 2013. The oligarch Czech finance minister says that Greece has gone bankrupt about 4 times in the recent 2 centuries and it should finally do it for the fifth time in order to clean the air. He doesn't hide is impatience in any way. He doesn't have to. No influential people or groups in Czechia expect people to pretend that we want to soothe Greeks whatever it costs. No political correctness of this type – and most other types – exists here.
Equally tough claims have come from the Finns and others. There is no reason to be surprised: What all these folks are saying is common sense. If something has been utterly dysfunctional for many years if not decades – if something has become a black hole that devours unlimited amounts of money – something dramatic has to change about this entity because others understandably don't want to fund it anymore, especially if they don't even get the gratitude in exchange for the help.
And if the deep yet organized reform seems impossible – e.g. politically intractable – the reform has to occur through less organized algorithms. The black hole has to be left to collapse. It's not really some "decision" that others are making. It happens spontaneously. If a company or a nation defaults and then completely collapses, one may partly blame it on bad luck or complicated events in the history. But if someone is responsible for that, it's the bankrupt entity itself – not others. Others don't really care much and even if they cared much, they couldn't do much because the Greeks are a sovereign nation – and have been insanely and incomprehensibly stubborn about their delusions as recently as 2 weeks ago. The other nations have enough problems with themselves. They can't really be saving someone else who doesn't – or didn't – allow to be saved, someone who didn't want it.
Germany continues to be rather strict about its budget. It mustn't run big deficits. But this attitude isn't some controversial "austerity" as unhinged extreme leftists are suggesting. It's common sense. And it's a law of the European Union, too. According to the EU laws, a Eurozone country is actually not allowed to run budget deficits exceeding 3 percent of the GDP! Needless to say, this law has been violated many times and no sanctions worth remembering have ever occurred. But it shouldn't have happened. It's a law and this law has very good reasons to exist.
In Czechia under the center-right governments, a possible law making the balanced budgets mandatory has been repeatedly discussed (but never adopted). Well, the freedom to borrow at some moment may be helpful for the nation so this restriction could be counterproductive for that reason. However, the protection that the law could offer against overspending (the main abuse of the aforementioned freedom) and really deep problems resulting from such overspending could be more valuable than the freedom to borrow at some appropriate moments. At the end, I don't know for sure whether the "mandatory balanced budget" is a good idea but I greatly appreciate the reasons why one could favor such a law.
The people who use the term "austerity" as if it were an expletive are flabbergasting sociopaths who constantly want to live beyond their means. But it's simply not possible. These people have been in charge of Greece, too. Socialism ends when you run out of other people's money. It has happened in Greece. The socialism has to end – at least Europe hopes that it will – so it has forced the Greek Parliament to adopt the policies that end, or at least seriously reduce, the over-the-edge socialism that has conquered Greece for 40 years (and especially the recent ones). It's highly questionable whether the Greeks will actually obey the laws – in the absence of foreign armies. But Europe is at least trying it once again... Err once, err twice...
Lenders are certainly "allowed" to have conditions if they're supposed to pay another huge amount of money. Those who suggest that others are "obliged" to pay the money with no strings attached are nuts. They're not only nutty, they are criminals, too. Monetary redistribution between individual nations is actually banned by the EU laws, too. The EU may have embraced some kind of solidarity but this solidarity surely doesn't and can't work in the way that the warriors against "austerity" are imagining. (Some EU laws are counterproductive if not crazy but the basic laws governing the financial relationships between the EU member states are sane – they're pretty much the same as they were before the EU.) Both at the local, national, or transnational level, legally imposed solidarity may only lead to acceptable outcomes if there are good mechanisms that prevent these policies from being abused. There have to be rules that restrict both sides. Otherwise, it's a recipe for a disaster. All such "solidarity policies" are being abused by almost all Greeks 24 hours a day which is why it's largely a failed state. But Europe isn't a failed continent yet.
Incidentally, the Czech media amused us with another rather incredible story of Herr Christian Ude, a former mayor of Munich, Bavaria. He bought some real estate in Greece and wanted to pay the real estate taxes that exist. The bureaucrats told him he was a VIP so he shouldn't pay the taxes. He replied that the laws apply to everyone and started to work hard (he hired lawyers and so on and so on) to be allowed to pay the Greek real estate taxes. They treated him as a mentally ill person. Imagine, Greeks: He actually wants to pay taxes! Unbelievable. Finally, he won the battle and was allowed to pay his tax. What happened with that money on the following morning is a different question.
You know, this is the kind of stories we read every day and which shows the most serious, and most long-term, problem with Greece that will be around regardless of portraits on Greece's currencies or the country's membership in organizations: Their reasoning is just completely corrupt. Laws and treaties don't mean much for them. They allow each other to rob the state. But they always expect – and demand – lots of the good stuff from the government. And since the years of the junta, there was literally no one who was determined to act as a counterbalance. You know, this system just can't work well. If they want to be compatible with the internal and external laws and obligations, the Greeks simply badly need a Gestapo cop who doesn't have to be German but who will make sure that these insanely obvious events robbing the budget are not taking place.
A would-be economist named Paul Krugman has claimed that Germans are angry – because he has gotten lots of unfriendly mail from Germany. But the reason why German writers are overrepresented in this mail is obvious: He has singled out Germany as the main target of his completely deluded criticism. So the people whose nation is being attacked in this totally idiotic way are more likely to respond. But the reality is that every sane person in the world – regardless of his or her sex and nationality – who follows these things knows that Krugman is a staggering jerk and imbecile. I am not German – at most, we are Germans among Slavs ;-) – but I still realize that very clearly.
This knowledge has no specific relationship to Germany. And I feel offended when my nation – and other nations – are treated as if they were invisible. Germans are getting all the credit for something that they actually share with many others (and be sure that to be at war with Mr Krugman is a credit).
Incidentally, after he complains against dissatisfied German readers' mail, Krugman ends with this paragraph:
Again, these are letter-writers, and hardly representative. But Germany’s sense of victimization does seem real, and is a big problem for its neighbors.I happen to live in an adjacent country, 100 miles from borders of Germany, and I may assure everyone that not a single person in the media or politics – however extreme – or anyone among the people around me has suggested that Germans have a sense of victimization, or even that it would be a problem for us. This comment by Krugman is a pure lie, much like pretty much everything else that he claims. But this one is a lie whose negative truth value may be verified in a straightforward way.
The Czech public debt actually dropped (infinitesimally) in recent two years; now it's $6,400 per capita. The oligarch finance minister BabiÅ¡ could have achieved these things by some accounting tricks – because the reduction of the debt surely sounds strange if we know that we still run (low but positive) budget deficits – but these tricks were probably not severe. It is possible to reduce the debt. You don't have to be German to know that and you don't have to be German to actually manage to reduce the debt. Many other nations are doing the same and they know it's a good thing – and, under certain conditions, an existentially important thing.
In recent months, I have collided with megatons of completely deluded parasitic far leftists who have claimed that the "real wealth" is only produced by budget deficits or something like that. Holy cow. First of all, the economy isn't a zero-sum game. Every transaction in the economy is good (or believed to be good) for both sides – that's why both sides agree to sign it. The economic life is composed of these transactions so their union is obviously a positive thing for the whole (for the nation and the mankind), too.
On the other hand, the budget deficit isn't needed for anything good. It (or at least a large one) is de facto illegal in the European Union. A government may stimulate the economy if it borrows. But the money will have to be repaid – so the effect will be reversed sometime in the future. In fact, because of the interests, you need to pay more than you borrowed so you will subtract more money than what you borrowed sometime in the future.
And in the future, when you're repaying the debt, you will have to collect it from your taxpayers. They will have less money left. And the taxpayers are better in meaningfully investing a part of their money than the government is. That's why the pair of events – borrowing plus repayment – will make an overall negative impact on the average growth rate of the economy.
The very redistribution of the taxpayer money (or the existence of the government) – at least too big redistribution (too big government) – is a bad thing. And if the redistribution is so intense that you meed to borrow – and rob the future generations of private citizens – it's even worse. You're inevitably placing the future generations – and sometimes the present generations because the debt situation may deteriorate really quickly – into a situation that may be analogous to the Greek one.
One might hypothetically defend (although I wouldn't defend) a plausible version of Keynesianism in which the government borrows when the economy is weak – but it has to repay the debt when the economy is strong and there must exist reasons to think that the system is calibrated and these two types of periods will be balanced. (By the balance, one may mean the budget deficits equal to the long-term average real GDP growth rate.)
But if someone wants to systematically overspend, i.e. persistently run significant budget deficits, he is a loon and a dangerous criminal. It is obvious that the Greece-like crisis is an unavoidable outcome of such policies. For many months, we could have observed the extreme manifestation of the persistent overspending in Greece. Is that something you want in your country?
Individuals who are willing to fight against "austerity" even with all this new experience – the knowledge what the persistent overspending meant in Greece – leave me speechless. As far as I can say, they are not humans. They are just wild animals and I don't have to be (and you don't have to be) a German to see this fact. After all, Germans in the post-war period became one of the most "politically sensitive" if not PC nations. (It's been fun to share an apartment with Jochen B. who was obviously more left-wing than I was – but I tend to think that I've taught him something, too.) Are you serious if you suggest they're not PC enough? Maybe they're more rational than 10 years ago – because their generosity has been clearly abused and they have realized that they have to regulate it – but they're still very PC and generous to other nations.
These days, after all those Greek bummers, all the leftist animals who want to "overspend" and who criticize Germany for its realization that it's not wise to persistently overspend should be hiding in the sewerage systems and tread silently, ashamed of all the ideas and policies that they have defended for years. But they seem to be everywhere on the surface and they seem to be loud. It's just totally unbelievable.
Some of the activities they organize are amusing, however. On Twitter, they organized a #BoycottGermany campaign. That's cute. Greece should have done so in recent 40 years. Even though Germany is far from Greece, Germany represents about 10% of Greek imports – something like €5 billion a year. Greece exports about €1.5 billion to Germany per year. The overall Greek imports are twice as large as the Greek exports. It would indeed be very nice for everyone if they gradually started to boycott other countries' products! ;-)
Incidentally, when the banks began to be in trouble a month ago, the imports to Greece dropped substantially (because the cash is missing and almost no one trusts them that they will pay later). One could say that it's a hint that the capital controls have some silver lining.
Similarly, Germany exports $1.55 trillion of goods every year (57 times Greece) – 95% of the exports of the whole United States of America, and about 2/3 of all the Chinese exports – so indeed, one may think that the German exports seem too large relatively to everyone else. They could "consume" some of the production domestically. Perhaps, the German citizens could be paid some extra money from the government to be able to do so. It would surely be better for the living standards of the Germans. But it would be bad for the resilience of the German public finances.
Needless to say, similar campaigns haven't ever achieved anything. German products have completely different reasons than the "absence of boycotts" to be successful. It's their quality and value, stupid.
And Greece – and, to a large extent, Europe – depends on the health of finances of countries like Germany. But I don't mean just Germany – Germany is just the largest country of this kind, not the only one and not the most intense one. Germans haven't "invented" balanced budgets or budget surpluses or the desire to increase exports. Can you imagine what the Greek crisis would look like if all the remaining EU countries had finances similar to Italy's? I don't want to predict exactly what would be happening but it wouldn't be pretty.
It's extremely important for a country to try to keep their debt sustainable. And it's extremely important for the whole civilization – and for civilized continents – to actually possess some strong enough nations that are actually capable of keeping their finances healthy.
Greece owes hundreds of billions of euros to others. What do Germany and other nations owe to Greece? They owed them some strict attitude while demanding the debt to be repaid and the Greek economy to be repaired to be able to do such things – and do other things internally, too. Greece has been robbed of a stringent "parent" for many years and the result – a nation of spoiled brats – isn't pretty. It's never too late to start to educate them and spank them. Germany – and others – still feel some (but no longer unlimited) responsibility for the fate of the whole European continent. And it has become obvious to almost all Germans – but also many other nations – that strictness is a necessary condition for Greece to start to improve.
It's always problematic to try to export a societal arrangement – and one could indeed argue that in recent years, Greece had a qualitatively different system than the countries of Northern Europe. Such attempts to export systems often fail and this attempt may fail, too. But it's time for the intelligent and responsible Greeks to realize that they must really embrace these new rules. They don't have to invent the wheel.
They have already invented lots of things in ancient Greece and these things have spread to the rest of the world. Now, the rest of Europe is trying to repay the debt and show Greece how to run a modern country.
By the way, just a day after the Iran deal, Volkswagen was already developing plans to export Å kodas and Seats to Iran, an 80-million-people new market. Å koda has won tons of contests in dozens of countries, especially in the U.K. A circus elephant in Denmark in the video above shows that Å koda Fabia Combi is still a pretty light car; you can easily lift it with your tusk, and I don't mean Donald Tusk. And the car offers you seatbelts that no other company does, at least if you are a dog.
Seriously, I find it rather incredible that/if the people of Iran will be able to buy these successful products – Å kodas – that Americans can't!
Are Germans cruel?
Reviewed by DAL
on
July 17, 2015
Rating:
Reviewed by DAL
on
July 17, 2015
Rating:
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