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IOM: Mediterranean migrant ships won’t stop until Europe finds ways to let them come legally

Invasion of Europe News….

Sheesh! The International Organization for Migration (IOM) yesterday said, don’t stop the boats and the boat people from Africa and the Middle East, find ways for them to migrate legally to Europe. (See former Australian Prime Minister Tony Abbott tell the Europeans to turn back the boats, here.)

iom-bags

The IOM was for years a quasi-non-profit organization (getting most of its money from governments) and a US refugee contracting agency whose job it was, and still is, to get refugees ready to fly to your towns and cities. You will see refugees in US airports with blue IOM bags.

Now the agency has been folded in to the United Nations and it is one more reason to sever our ties with the UN!

Here, yesterday, they reported on the number of illegal migrants who have arrived in Europe in 2016.

Switzerland – IOM on Friday (06/01) reported preliminary totals for all 2016 migrant and refugee arrivals to Europe via the Mediterranean Sea, as well as estimated fatalities. Arrival totals were 363,348 split almost evenly between Italy and Greece, with much smaller numbers arriving in Malta, Cyprus and Spain. Fatalities and missing migrants reached at least 5,079 although IOM emphasizes that some incidents reported in the month of December and earlier have not been fully accounted for.

According to IOM’s Missing Migrants Project, incidents off Spain, Morocco and Tunisia have been reported whose victim totals could add another 300 or more fatalities to the 2016 total. The year 2016 already is the deadliest for migrants ever recorded by IOM in the region.

The probable addition of several hundred more fatalities recorded in 2016 only deepens the tragedy, said IOM Director General William Lacy Swing, who added, Europe’s frustration with a seemingly endless cycle of migrant rescue followed by reports of shipwrecks and more drownings won’t end until governments throughout the region find a way to manage migration comprehensively.

“Migrants and refugees aren’t coming because they believe their lives will be rescued at sea once they leave Africa or Syria or wherever conflicts drives people to seek safety,” Ambassador Swing said. “They’re leaving because they believe their lives will be doomed if they stay. The answer lies in finding creative means to permit safe, legal and secure migration, be that through work visas, family reunification or temporary protected status. [UNHCR is searching for “alternative pathways” to move the third world to the first since most of these migrants are not legitimate refugees.—ed] Instead of doubling down on tactics that don’t work, let’s use this New Year to try something that’s actually new.”

mediteranean-arrivals

Map of Mediterranean arrivals of Muslim migrants. Italy and Greece suffer the most.

Read the whole article, these numbers are way down for Greece, but up for Italy.

See our complete ‘Invasion of Europe’ archive by clicking here.

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Paris: Muslim attacker with Syrian passport passed through Greece in October

It looks as if at least one of the migrants has wasted no time in getting down to the jihad. How much more of this will we see? Plenty.

“Holder of Syrian passport found in Paris passed through Greece,” Reuters, November 14, 2015:

ATHENS, Nov 14 (Reuters) – The holder of a Syrian passport found near the body of one of the gunmen who died in Friday night’s attacks in Paris passed though Greece in October, a Greek minister said.

“The holder of the passport passed through the island of Leros on Oct. 3, 2015, where he was identified according to EU rules,” said Greece’s deputy minister in charge of police, Nikos Toscas….

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Europe Must Confront Its Financial Problems, Not Subdue Them

Permanent instability appears to be the order of the day in Europe. The announcement by the Greek Prime Minister Alex Tsipras that he is stepping down and calling new elections comes as a surprise to no one. The Tsipras era has been no less volatile than that of his recent predecessors.

The immediate cause of his resignation is the loss of confidence in him by members of his own party, specifically over the agreement Tsipras made on the latest bailout with Greece’s European creditors. A new party has already been formed by the former energy minister, Panagiotis Lafazanis. When they stand before the electorate they are likely to be offering the Greek people almost exactly what Syriza offered the people before the party came across the realities that Greece is facing and that any party in government there must recognise.

But the truth is that the Greek people – and the people of the EU in general – deserve better than this. Specifically they deserve better leadership. It is not enough that the Greek government continues to revert to the people every few months in order to request that they suggest new ways to reorganise the deck chairs. The Greek governing class continues to behave as though there is a way of averting the inevitable – which is that the country face up to its creditors. Instead of that, a substantial portion of the Greek political class prefers to pretend that they will one day succeed in facing those creditors down.

In some ways the stasis exemplified in this Greek political groundhog day finds expression in other parts of the continent’s politics as well. In Sweden new polls show that the Sweden Democrats – a party with historical far-right leanings – is polling above any other party in the country. The cause is not complex: immigration. All the other Swedish political parties keep putting off the growing problems of their current asylum, immigration and integration strategies. Only the Sweden Democrats have been addressing them and as they have addressed them the other parties have stepped away from the issue rather than into it. And so a matter of the utmost concern to the Swedish people becomes addressed only by people who should have remained on the margins.

These are testing times across the continent, from north to south. There are no simple solutions to any of the problems the continent faces, but unless the mainstream political class in each of our countries is honest with the people and addresses their concerns rather than trying to subdue them, permanent instability will be the least of our worries.


mendozahjsFROM THE DIRECTOR’S DESK 

This week’s revelation that over $1 billion in US military equipment has now flowed to the Lebanese Army in one sense counts as no surprise.

Lebanon has been seriously affected by the conflict in Syria and has been rocked by instability caused by massive refugee flows that have swollen the country’s population by 25% of its pre-war total. Sectarian tensions have simmered and occasionally flared into violence. With ISIS claiming sovereignty over the country and Iran’s Lebanese catspaw Hezbollah having been drafted in to defend President Assad’s faltering rule, Lebanon runs the constant risk of once again being torn apart by conflict within its region. It stands to reason that its army therefore needs bolstering.

Except that in Lebanon, nothing is ever straightforward. The careful internal balance within the country has meant that the army cannot enforce the state evenhandedly. Hezbollah has long acted with impunity for example, acting as an armed militia which cannot be controlled. Worse, the army’s links with Hezbollah have been scrutinised in the past, with the US Congress stopping military aid several times on account of fears that Hezbollah would get hold of US equipment and use it against US strategic interests.

Given this, what explains the US move? The answer, as with part of the rationale for the Iran nuclear deal, seems clear: President Obama has decided to gamble on Iran and its allies becoming a fully fledged part of the coalition against ISIS, and that this bet is worth the potential consequences of a strengthened Iran in the region

This is a strange decision to make. Hezbollah is no friend of the US. Commencing with its murder of US marines in Beirut in 1983, it has consistently targeted US interests in the country. It poses a direct threat to the US’s Israeli ally, and has engaged in terrorism overseas in other US allied countries. Its military support for the Assad regime keeps the murderous dictator in power, helping ISIS radicalise foreign Muslims to come and wage jihad against him.

This US decision once again therefore marks the triumph of blind optimism over experience as the guiding principle of US foreign policy today. We must hope it is not one that will return to haunt the US in years to come.

Dr Alan Mendoza is Executive Director of The Henry Jackson Society
Follow Alan on Twitter: @AlanMendoza

Greece in Chaos: 50,000 Muslim Refugees Arrived in July Alone

Invasion of Europe news…..

From Malta Today:

The Greek islands of Kos, Chios and Lesbos are in “total chaos” due to a heavy influx of refugees, the UN’s refugee agency UNHCR have warned.

The organisation said that around 50,000 migrants arrived in Greece in July alone, more arrivals than in the whole of 2014. The majority of them are refugees fleeing the wars in Syria, Iraq and Afghanistan.

UNHCR European Director, Vincent Cochetel said that refugee facilities on the Greek islands are “totally inadequate” and called on the EU to do more to ease Greece off its burden.

“On most of the islands there is no reception capacity, people are not sleeping under any form of roof, so it’s total chaos on the islands,” he said. “After a couple of days they are transferred to Athens, there is nothing waiting for them in Athens.”

Greek Prime Minister Alexis Tsipras admitted that his country was unable to cope and that Greece’s economic problems meant it was facing a humanitarian “crisis within a crisis”.

Meanwhile in the US, the border flood is apparently underway again as July numbers reveal, here.

Go here for our ‘Invasion of Europe’ archive.

What do you think? Could there be some planning in this invasion?

Paul Krugman Is Even Wrong about What Paul Krugman Thought by Steve H. Hanke

Paul Krugman, “Killing the European Project”, NY Times, July 12, 2015:

The European project — a project I have always praised and supported — has just been dealt a terrible, perhaps fatal blow. And whatever you think of Syriza, or Greece, it wasn’t the Greeks who did it.

Paul Krugman has always praised and supported the European project? Really? Here’s Prof. Krugman in his own words on the centerpiece of the European project, the euro:

  • Paul Krugman, “The Euro: Beware Of What You Wish For”, Fortune, December 1998: “But EMU wasn’t designed to make everyone happy. It was designed to keep Germany happy — to provide the kind of stern anti-inflationary discipline that everyone knew Germany had always wanted and would always want in future.So what if the Germans have changed their mind, and realized that they — along with all the other major governments — are more worried about deflation than inflation, that they would very much like the central bankers to print some more money? Sorry, too late: the system is already on autopilot, and no course changes are permitted.”
  • Paul Krugman, “Can Europe Be Saved?”, NY Times, January 12, 2011: “The tragedy of the Euromess is that the creation of the euro was supposed to be the finest moment in a grand and noble undertaking: the generations-long effort to bring peace, democracy and shared prosperity to a once and frequently war-torn continent.But the architects of the euro, caught up in their project’s sweep and romance, chose to ignore the mundane difficulties a shared currency would predictably encounter — to ignore warnings, which were issued right from the beginning, that Europe lacked the institutions needed to make a common currency workable. Instead, they engaged in magical thinking, acting as if the nobility of their mission transcended such concerns.”
  •  Paul Krugman, “Greece Over The Brink”, NY Times, June 29, 2015: “It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency…”
  • Paul Krugman, “Europe’s Many Economic Disasters”, NY Times, July 3, 2015: “What all of these economies have in common, however, is that by joining the eurozone they put themselves into an economic straitjacket.Finland had a very severe economic crisis at the end of the 1980s — much worse, at the beginning, than what it’s going through now. But it was able to engineer a fairly quick recovery in large part by sharply devaluing its currency, making its exports more competitive. This time, unfortunately, it had no currency to devalue. And the same goes for Europe’s other trouble spots. Does this mean that creating the euro was a mistake? Well, yes.”

When reading Prof. Krugman’s works, it’s prudent to fact check. Prof. Krugman has always been in the Eurosceptic camp. Indeed, the essence of many of his pronouncements can be found in declarations from a wide range of Eurosceptic parties.

This post first appeared at Cato.org.


Steve H. Hanke

Steve H. Hanke is a Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore.

Europe Needs Regime Change in Greece: They Won’t Get It by Stephen Davies

It seems the saga of negotiations between the Greek Government and its creditors has arrived at a denouement but almost certainly not a final conclusion, and we may expect this show to return to the stage at some point, probably in the near future. The reason for this is the real nature of the ultimate problem facing both parties, something of which the creditors are still unaware.

The negotiations over the last few months have been marked by a remarkable degree of acrimony. Most of the other eurozone governments have become increasingly (and publicly) exasperated with the Greeks, and the expressions of hostility towards the Greek government from members of national parliaments have grown ever more outspoken.

Some of the reasons for this are well known — above all, the lack of a true European demos: there simply is not the kind of solidarity or shared interest in Europe that one finds in, for example, the United States.

However, there is another reason for the acrimony that has not received much attention. The creditors misunderstand what it is they are asking the Greek government and society to do. This lack of understanding is why any deal made now is likely to prove a disappointment.

The impression given by media reports is that this is all about debt, specifically the debts run up by the Greek state before 2009. Certainly there is a problem, but it is one that is soluble and does not require the kind of fraught negotiations we have seen.

The difficulty is that the fiscal state of Greece before the first bailout in 2010, and the underlying state of the Greek economy, are symptoms of a much more serious underlying problem. This is one not of debt but of competitiveness.

Quite simply the Greek economy is not productive enough to support the levels of income and public spending that it now has, without significant capital inflows from outside Greece. Before 2008 these came in the form of private loans, since then by government bailouts (even if much of this has been recycled back to private creditors).

Greek firms and labour are simply not competitive with their counterparts elsewhere in Europe, above all in Germany. Being in the euro means that they cannot adopt the traditional way of regaining at least some competitiveness by devaluing their currency. Instead, they have to deflate internally, and the attempt to do this has devastated economic life in Greece.

This is all well known. It is the reason why the creditors are demanding that, in return for a third bailout, the Greek government introduce a series of reforms to public spending, the tax system, and the machinery of the Greek state, particularly it’s tax collecting apparatus. Successive Greek government have either refused to do this or promised to do it and then failed. This is why the rest of the eurozone is becoming ever more exasperated. It here however that the misunderstanding comes in to play.

What the creditors think they are asking for is a major shift in public policy. They recognise that the shift they are asking for is radical, and many also realise that what would be involved would be a shift in the general ideological basis of Greek politics, towards a more market liberal direction. However, they are actually, without realising it, asking for something much more fundamental and drastic.

One question that should be asked is why Greece got into a position that was so much worse than that of other “peripheral” economies. Also, why has the performance of the Greek economy been so much worse than that of other countries that have had bailouts and austerity, such as Spain, Portugal, and Ireland? The answer lies in the fundamental nature of the Greek state and the political economy of Greece.

Greek political culture is dominated by practices and institutions that certainly exist elsewhere in Europe but are not as dominant. The state has a narrow tax base, with powerful interests such as the Orthodox Church effectively exempt. The revenue collection apparatus is completely ineffective so that tax evasion is endemic at every level of income.

This means that simply raising or extending VAT for instance is not enough because so many transactions are off the books. At the same time, the Greek state provides generous pensions and other benefits, which it cannot fund.

The political system appears to be a modern democracy but is in fact a much older model. The key institution is clientelism, in which political actors give out rewards to their clients in the shape of handouts and sinecures in the very large public sector. This is done much more directly than with the kind of interest group politics that we find in most democratic countries, and it is central to the whole way that politics works.

The extent of patronage means that the Greek government (whoever they are) does not have a modern, Weberian, bureaucracy to call on. Instead, most of the people in the public service owe their positions to networks of patronage and these command their loyalty.

The economy is highly regulated in ways that entrench settled interests and inhibit innovation. In particular, a very wide range of occupations are subject to rules that make it very difficult for new entrants into those sectors. Because of the inefficiency and the existence of a plethora of rules that are irksome but ultimately unenforceable, corruption is endemic and widespread throughout Greek society.

This system cannot maintain anything like the standard of living to which most Greeks aspire and as such it means that, via membership of the euro, we have seen the development of an economy that depends upon inward transfers — to a much greater degree than is the case in countries such as Spain and Ireland.

Given all this, it becomes clear that what the creditors are asking for is much more than a shift in policy, no matter how sharp and dramatic. Policy shifts of that kind are part of the normal or regular political process that take place infrequently, but still regularly, in most polities. The shift brought about by Margaret Thatcher’s election in 1979 is an example.

What is needed in Greece, and what the creditors are asking for without realising it, is something more fundamental, a change in the very nature of the political system and in the entire nature of politics and government, rather than a change of policy within a system. This is a regime change in the original and correct use of that term.

The point of course is that changes of this kind are extremely difficult and only happen extremely rarely. Sometimes it requires a revolution, as in France; on other occasions, it takes place in the context of a fundamental crisis such as defeat in a major war. Very rarely it can happen when there is a near consensus in a society over what to do, as in Japan in the 1870s.

The current Greek government is almost certainly aware of this, but, apart from ideological objections to part of the list of reforms, they are quite simply unable, rather than unwilling, to do what is asked because a change in the political order is simply very, very hard.

So the creditors are likely to be disappointed and will then become even more enraged. Moreover, being in the euro makes any attempt at systemic change in Greece even more difficult than it would be already, because if removes a range of policy options that could alleviate some of the transition costs.

As most economists of all persuasions now think, the best option is a managed Greek exit from the euro. If this does not happen (as seems likely) then this farce is a production that will run for some time.


Stephen Davies

Stephen Davies is a program officer at the Institute for Humane Studies and the education director at the Institute for Economics Affairs in London.

What Greek “Austerity”? by Steve H. Hanke

greek president

Greek Prime Minister Alexis Tsipras

It’s hard to find anything written or spoken about Greece that doesn’t contain a great deal of hand-wringing about the alleged austerity — brutal fiscal austerity — that the Greek government has been forced to endure at the hands of the so-called troika (the European Central Bank, the European Commission, and the International Monetary Fund).

This is Alice in Wonderland economics. It supports my 95% rule: 95% of what you read about economics and finance is either wrong or irrelevant.

The following chart contains the facts courtesy of Eurostat.

Social security spending as a percentage of GDP in Greece is clearly bloated relative to the average European Union country — even more so if you only consider the 16 countries that joined the EU after the Maastricht Treaty was signed in 1993.*

To bring the government in Athens into line with Europe, a serious diet would be necessary — much more serious than anything prescribed by the troika.

* Ed. note: The treaty created the EU and the euro and also obligated EU members to keep “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP.” Ha!

Steve H. Hanke

Steve H. Hanke is a Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore.

The Greek “OXI” (NO) vote is all over the news. But, what’s next? by LaRouchePAC

Revive the Glass-Steagall Act — It’s time for our own United States to take the next historic steps to free the world of austerity.

If you don’t know what the Glass-Steagall act is, please take a moment and review the background of the law, and what it did.

Lyndon LaRouche’s call to action, below,  is our historic responsibility not only to other nations of the world, but to ourselves, so that we might give a future to the next generations.

LaRouche: To Save the Trans-Atlantic Region, Implement FDR’s Glass Steagall Act Now

July 6, (EIRNS) — Lyndon LaRouche today responded to Sunday’s landslide rejection by Greek voters of the Troika’s genocidal austerity program, by clearly spelling out how the United States can play a decisive role in solving the otherwise irreversible collapse of the entire British-run trans-Atlantic financial system. LaRouche called for the United States to immediately adopt a return to President Franklin Delano Roosevelt’s original Glass Steagall policy.

The United States, LaRouche declared, should set the example for Europe, by immediately reinstating FDR’s Glass Steagall.

“The U.S. should solve the problem of the European mess, starting with the mess in Britain, by a Glass Steagall reorganization, clearing out the oversized and useless debt. Cancel all the debt with no intrinsic value, by going back to President Franklin Roosevelt’s successful model.  Only by such a debt cancellation can there be any prospect of a longterm recovery, in real physical economic terms.”

In his weekly live broadcast dialogue with LPAC’s Policy Committee, on July 6, LaRouche elaborated on his call for immediate Glass-Steagall:

“What has happened, as a result of the Greek operations during yesterday and today, has created a situation in which… Europe, most nations in Europe, and also the United States, are implicitly bankrupt. This is number one.

“Now what I mean on number one, on the bankruptcy, is that Wall Street in particular, and everything that coordinates with Wall Street, is now actually worthless.  That will be shown in due course, that we hope we can get this thing under control. What this means, we have to go to a Glass-Steagall action.  The only way we can do this, is a Glass-Steagall action.  That means, in the trans-Atlantic region, I’m talking about right now the trans-Atlantic region:  The situation is that the United States in particular is in a collapse.  That is, Wall Street and the things which are associated with Wall Street, are now actually worthless, which means a great amount of what is called money, among the business community, especially the financial business community, is worthless, and it is going to be very difficult for Wall Street and President Obama, both, to try to cover things over in this matter.

“Now the other side of this situation is, that it is perfectly possible for us in the United States itself, and with cooperation with certain circles in Europe and elsewhere, we’re quite capable of solving the problem.  And the solution is obviously, Glass-Steagall, Franklin Roosevelt’s own Glass-Steagall.  That is essentially the key thing.

“And the only way that the United States and the people of the United States could possibly escape from a general breakdown of the financial system of the United States, is to go back to Glass-Steagall.  That would mean we would simply cancel most of everything that’s called Wall Street, or anything like it; just cancel it.  It’s rubbish.  It has no intrinsic value.

“And therefore we have to go back to Franklin Roosevelt’s policies in order to save the United States economy.  Now, it’s going to be a tough row to hoe, because we have very poor skills available in the U.S. population.  The productive power of labor, in the United States’ population, has collapsed to a great degree…

“We see that, when people say, ‘well, some people are poor, they’re not worth keeping.’ Well, that’s not the problem, that’s not the truth of the matter. What they’re trying to do is kill off people, as in the case of California.  What’s happening in California, is actually an intentional determination, to kill off as many people in California and adjoining areas as possible. That’s what the policy is; that’s plain talk, no beating around the Bush.  And the Governor of California is one of the leaders, who is leading toward a campaign for mass-slaughter of people in California and adjoining areas.  That’s the reality!

“However, if we go to Glass-Steagall, Franklin Roosevelt’s Glass-Steagall, with means which I’m fully aware of as feasible, we can prevent that.  But the key thing now that’s driving it, is the fact that the European economy is going into a spin, downward, and this includes the British system itself, and it means other areas.”

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Greeks Prepare to Be Pillaged by Jeffrey A. Tucker

In the world of banking, a “holiday” means you can’t get your money. It’s been a few years since we’ve seen that happen in any developed world economy, but that is exactly what the Greek government is doing, starting now, to stop a massive bank run.

Greece owes the International Monetary Fund a payment of $1.5 billion, due tomorrow, from the last time the government was bailed out. But, of course, governments can’t make wealth, and the money didn’t just magically materialize. They have to beg, borrow, and steal to get it, and Greece has finally found those limits.

Athens had hoped that it could once against tap the European Commission. But drained and fed up, other governments refused to extend yet another loan to Greece unless they agreed to reform their bloated and corrupt welfare state.

Unfortunately for Greeks, the ruling coalition in Greece swept into power in January on the platform of stopping “austerity” and rolling back budget cuts. They balked at the EU’s (and especially Germany’s) conditions for the next round of bailout money.

As a result, Athens has really and truly run out of money, and they will default on their debts starting tomorrow — and the European Central Bank has said it will cut off emergency credit to Greek banks if the government fails to pay its debts.

The news that no deal would be reached sent bank depositors into a panic, and thousands have been lined up at ATMs all over the country since Friday.

Prime Minister Alexis Tsipras announced that he was closing all banks for at least a week as a way to stem the tide. Many ATMs are empty; the rest, by government order, will only dispense €60 per person per day. The government is now imposing capital controls to stop cash from leaving the country.

One thing needs to be said about this frantic authoritarian approach: It never works. Bank closings add to the atmosphere of panic. They are often followed by an announcement that the government is going to devalue or outright steal people’s money. Whatever trust remains in the system is drained away along with the value of the currency.

But there’s another factor in play, for the first time. People are looking at Bitcoin as a way to store and move money.

There is now a Bitcoin ATM in Athens that is reportedly doing a brisk business. Redditors are sharing tips. And, of course, the exchange rate of Bitcoin is on the move again.

This past week, I was out of touch of the news entirely because I was at the New Hampshire liberty retreat, Porcfest. There you can buy almost anything with Bitcoin, so I was checking the price often. I noticed the upward price pressure, and I had an intuition that something serious was happening.

Sure enough, this morning I was awakened by a call from Russia Today. They wanted me on a two-hour segment today to talk about the meltdown in Greece. I turned them down because I haven’t followed it closely enough (though that doesn’t usually stop most commentators!).

But when I looked into it, I suddenly understood: Sure enough, Bitcoin is on the move for a reason.

Many price watchers are predicting another spike in the exchange rate if Greece actually defaults and leaves the euro. Maybe, maybe not. It actually doesn’t matter. The exchange rate can be anything; it doesn’t affect the utility of having access to a global currency and payment system that is outside regional banking systems — one that can’t be closed, controlled, confiscated, or devalued at the whim of desperate regimes.

Cryptocurrency is here to stay. It is the world’s new safe haven, displacing the role that gold once played. The reasons are rather obvious: Bitcoin is more liquid than gold. It takes up no space, weighs nothing, and is more secure. Once you are an owner, nothing can take away what you own — and you don’t have to rely on a third party such as a gold warehouse or a bank (or a government) to take care of your money.

Given all of this, there is supreme irony in the announcement made by the Greek central bank last year that consumers should be wary of Bitcoin. Bitcoin is vastly more safe and reliable than any national currency, including the euro and the dollar.

There is no government anywhere that would decline to shut the banks if their ruling class feared financial meltdown. That’s what’s happening in Greece. That could happen in any European country, and it could happen (and has happened) in the United States, too.

In the end, government regards itself as the ultimate owner of all a nation’s currency and the wealth it carries.

It’s wise to have another option, and people have long known that. The question is: What is that option? Today, not for the first time, and not for the last, Bitcoin is here to save the day.


Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.

Grexit? A flesh wound compared to Frexit (exit of France from EU)

The Telegraph reports this morning that Greek economic minister Varoufakis now threatens to sue in a higher court if the EU attempts to force Greece to leave the EU (our thanks to G. in the UK for this tip).

The article quotes French President François Hollande as follows:

“What is at stake is whether or not Greeks want to stay in the eurozone or want to take the risk of leaving,” said French president Francois Hollande.

Now you would think from this bold statement that Hollande heads up a country that pays its bills to the EU on time, wouldn’t you? After all, financial pundits are all saying that if Greece leaves the EU, Spain, Portugal and perhaps even Italy could be next. No one mentions France.

However, there’s a colossal French debt that no one wants to talk about, except some brave journalists like Francis Journot at the site Agora, who shows that France is actually the elephant in the EU room.

My translation of the opening paragraph of this extraordinary article follows:

The French State’s public debt has reached 6 trillion euros, equivalent to 5 years of tax receipts and nearly 300% of GDP. The process of extravagant financial operations [tentative rendition of cavalerie financière, see below] on the public debt that are available to the government since the banking law of Jan 3, 1973 exposes France more than ever to the volatility of the financial markets and to a default. More-confidential commitments, off the balance sheet and allowed by the State, for payment of retirement pensions of government employees and the like, could also prove impossible to meet in the long run. An exit from the EU could eventually be the only way out of a fraudulent system that is threatening to blow up. [my highlighting] [original text below]

This debt has been constantly fed by new loans to ensure reimbursement of the elderly and their interests, as well as new deficits. The amounts kicked down the road in this way are far greater than those payable by the Greeks. But the off-the-books debt is no less than the debt shown on the books. The author makes it clear, citing authorities, that this debt could never be paid without major growth through new investment in industry. Some of the debt is owed to the IMF and hence, represents US exposure.

One rendition of the term I rendered as “extravagant financial operations” is “Ponzi scheme” and that is just a more direct way of saying the same thing.

Now, if a Grexit is a threat to the integrity of the EU, a Frexit would spell certain doom to the already-shaky entity, and the entire globe is exposed.

Original text:

La dette publique de l’État français atteint 6 000 milliards d’euros, équivaut à plus de vingt années de recettes fiscales et près de 300% du PIB. Le processus de cavalerie financière de la dette publique auquel les gouvernements ont recours depuis la loi bancaire du 3 janvier 1973, expose plus que jamais la France à la volatilité des marchés financiers et au défaut de paiement. Des engagements plus confidentiels, hors-bilan et portés par l’État, pour le paiement des pensions de retraites des fonctionnaires ou assimilés, pourraient également s’avérer, à terme, impossibles à honorer. Une sortie de l’UE pourrait s’imposer comme l’unique voie de sortie d’un système de cavalerie qui menace d’exploser.   

End quote

Cavalerie financière is a fraudulent financial practice based on the discrepancies between the amounts and periods for recording income and outflows to mask a failure between resources and debt owed. Other possible renditions include “can kicking” and “Ponzi scheme.”

RELATED ARTICLE: The euro is a straitjacket for Greece

The European Union: Borders on the Brink of Breaking

The borders of Europe are coming under severe strain. As we predicted here earlier this year, the migrant ‘crisis’ is no such thing. It is, rather, an ongoing situation of continent-wide turbulence with no foreseeable end. European ministers this week met to discuss the situation, but even they will find themselves unable to solve the problem.

Because the problem they face is that the drivers of the situation are far beyond their control. They are beyond any one politician or any one government. Indeed, they are also proving to be beyond the continent. Let us imagine for a moment that the civil war in Syria was able to be stopped by outside intervention from the EU. This would over time lessen the flow of refugees from Syria. But it would do nothing to prevent the human tide of asylum seekers and economic migrants heading towards Europe from Eritrea and sub-Saharan Africa.

What is the EU plan to deal with these situations? In truth, the EU is finding it difficult to control its external borders. So it is highly unlikely to achieve peace and stability across one continent (the Middle East) and prosperity to another (Africa). Until those things do occur, the pressure of mass movement of people towards the entry points of Europe will continue.

So what can be done? It is a very ominous sign that in recent days, weeks and months so many countries have gone increasingly unilateral. The Austrians have severely tightened their border with Italy because they do not trust the Italian authorities. Hundreds of migrants have piled up in a backlog at a border which is wholly closed to them. Hungary is planning a physical wall to go up on its border with Serbia. And at the French port of Calais there are desperate sights as migrants clamber onto vehicles bound for the UK. With other European countries refusing to share Italy’s burden, the Italians are threatening to give refugees travel permits that would effectively make them able to go anywhere. It is a grenade they have not yet thrown, but a grenade nonetheless.

The dream of the EU was that the borders of Europe would come down. But as the continent comes to terms with this latest crisis, it has not been able to stand together. The free movement of EU citizens within the EU is one thing. But the free movement of non-EU citizens within the EU threatens the cooperation of the whole enterprise. If Europe is to face up to this challenge it must first accept what it cannot do. And then swiftly move on to doing what it can.


mendozahjs

FROM THE DIRECTOR’S DESK 

I am writing this week’s column with one eye fixed on a TV screen outlining latest developments in France and Tunisia, where the scourge of Islamist terrorism has once again struck with a tragic beheading at a factory near Lyons this morning and one at a tourist resort in Sousse this afternoon.

Words cannot adequately describe the senseless brutality of these acts of terrorism. But they can go some way to explaining it and similar acts of violence carried out in the name of religion as can be seen through Rabbi Lord Jonathan Sacks’ masterful new book,Not in God’s Name: Confronting Religious Violence, which was the subject of a parliamentary discussion hosted by The Henry Jackson Society this week with its author.

Leaving aside the exemplary nature of Rabbi Sacks’ delivery of his central themes – which was described by the Member of Parliament hosting as the finest speech he had heard in his 18 years in the House of Commons – what came across clearly is the idea that while to deny that those who state they are acting on religious motives in committing violence are actually doing so is absurd, neither can it be said that there is an inherent relationship between religion and violence. As the author puts it: “there is a connection between religion and violence, but it is oblique, not direct.” Indeed, to take Rabbi Sacks’ argument further, as he does in the book, it is possible to see violence being carried out in the name of religion, but in reality it is being employed in pursuit of political, not religious objectives. Thus what ISIS and its adherents actually aspire to is temporal power in the form of a caliphate, even if this is dressed up in spiritual rhetoric.

This is an important factor to remember when considering events such as those witnessed today. We cannot deny the role of religion in terrorism, but we cannot consider religion just part of the problem and not also part of the solution. Arguably, it is only by Islam stripping away the political parts of its more extreme followers’ agendas from the religious ones of those of the moderate majority – as Christianity and Judaism did in their turn beforehand – that we will find the lasting way to meet the Islamist challenge.

Dr Alan Mendoza is Executive Director of The Henry Jackson Society

Follow Alan on Twitter: @AlanMendoza

Proposed EU Quota for Distribution of Illegal Migrants Draws Fire

The European Commission’s (EC) European Agenda for Migration has floated its proposals for dealing with the massive surge in illegal migrants being smuggled across the Mediterranean by human traffickers. That has created discord among the 28 EU members about the rescue burden placed on so-called front line countries in the Mediterranean like Malta, Italy, Greece and Spain versus the relocation burden on major members like Germany and Sweden. It has also given rise to UN criticism for a controversial plan to destroy the rickety boats of human traffickers in Libya and elsewhere in North Africa, originally proposed by EU Foreign Relations Commissioner, Frederica Mogherini. A side show has been the UN and European Parliament adverse comments of  the ’horrible’ national survey in Hungary opposing EU and UN setting allotments and quotas for distribution of asylees and refugees. Hungary’s PM Orban is a prominent member of the large center right European Parliament EPP coalition. The formal release of the EU Commission’s proposal is scheduled for Wednesday, May 13th.

We wrote in our NER article on this roiling debate in the May edition, “Stemming the Surge of Deadly Illegal Migration Across the Mediterranean”:

The EC proposed a pilot project to re-distribute 5,000 refugees who meet asylum requirements stranded outside the EU, as an attempt to fairly distribute the burden of asylees. That flies in the face of objections by major northern countries to further asylum quotas. In 2014, 626,065 refugees filed asylum claims, a 44% percent increase over 2013. As one example, Germany experienced a sharp rise is asylum requests over the first quarter of 2015 to 85,394, double over the same period in 2014. By contrast the U.S. received 47,500 asylum applications.

The majority of those asylum seekers hail from Kosovo, Syria and Albania. Germany currently has a backlog of over 200,000 applications. This has given rise to complaints by municipalities in Germany about the impact on facilities and community integration. In the most controversial proposal, the EC requested EU Foreign Relations Commissioner Federica Mogherini to develop rules of engagement enabling it to capture and destroy illegal smuggling vessels. Overall EC President Donald Tusk of Poland said the illegal migrant crisis is a” complex issue” that will “take time to tackle.”

The EUObserver reported  the leaked contents of the EC proposals and reactions:

Leaked documents, seen by EUobserver, indicate that both ideas are now back on the table in an effort to help ease pressure on select member states.

“The EU needs a permanent system for sharing the responsibility for large numbers of refugees and asylum seekers among member states,” notes the draft document.

Some 80 percent of all asylum applications are processed in six EU countries, with most refugees from Syria either ending up in Germany or Sweden.

Germany’s Angela Merkel reportedly backs the commission’s proposals but the issue has already generated a backlash elsewhere.

Hungary’s PM Viktor Orban on Friday described the commission plan as “mad and unfair”.

Earlier this month, he proposed setting up new national legislation to keep out immigrants even it runs counter to EU rules.

“If [other EU members] want to receive immigrants, they can do it. But then they should not send them back here, or through us,” said the Hungarian leader.

According to the leaked commission text, the EU executive wants member states to resettle around 20,000 new refugees every year, although the final figure could change.

An initial figure of 5,000 had been floated last month at the EU emergency summit, but was then dropped.

[…]

The number of relocated migrants to be taken in by each state would depend on the member state’s population size, economic strength, unemployment level and number of refugees already there.

“The commission will table legislation by the end of 2015 to provide for a mandatory and automatically-triggered relocation system to distribute those in clear need of international protection within the EU when a mass influx emerges,” notes the commission paper.

The proposed quota system would not be binding on Ireland, the UK and Denmark.

This has brought an immediate reaction from the newly elected Conservative government of UK Prime Minister David Cameron.  The Guardian reported:

“We will oppose any EU commission proposals to introduce a non-voluntary quota,” a spokesperson told the paper.

Britain is instead pushing for an UN-backed resolution to “destroy the business model of the traffickers” by sinking the boats and rubber dinghies used to ferry migrants across the sea.

The UK’s Royal Navy’s flagship HMS Bulwark and its three Merlin helicopters are already at port in Malta.

Debate at the UN Security Council session yesterday in Manhattan revealed criticism of the EU Foreign Commissioner’s proposal to attack the smuggler vessels engaged in trafficking of illegal migrants. The EU Observer reported:

Peter Sutherland, the UN special envoy on migration and a former EU commissioner, issued the warning at a meeting of the UN Security Council (UNSC) warned the EU that “innocent refugees”, including children, will be “in the line of fire” of any operation to sink migrant smugglers’ boats.

He noted that in the first 130 days of this year “at least” 1,800 people drowned in the Mediterranean Sea trying to get to EU shores.

“This total represents a 20-fold increase over the same period last year. At this pace, we are on course to see between 10,000 and 20,000 migrants perish by autumn”.

He said about half the people who make it have a legitimate need for EU protection.

EU Foreign Relations Commissioner Mogherini replied:

EU foreign affairs chief Federica Mogherini told the UNSC, also on Monday, that she’s been tasked “to propose actions to disrupt the business model of human trafficking networks across the Mediterranean”.

“We have in these [past] weeks prepared for a possible naval operation in the framework of the European Union Common Security and Defence Policy. The mandate of this operation is currently being elaborated with the EU member states”.

“We want to work with the United Nations, in particular with the UNSC”, she added.

She took pains to say the military plan is part of a wider approach.

She also pledged that “no refugees or migrants intercepted at sea will be sent back against their will”.

[…]

“This is not all about Libya, we know that very well. This can happen in other parts of the world. But we all know also very well that the vast majority of human trafficking and smuggling in these months is happening in Libya, or rather, through Libya”, Mogherini noted.

Given the divisions within the EU, it would appear the roiling political debate over how to handle the deadly illegal migrant surge of illegal migrants across the Mediterranean may be irresolvable. Much of the illegal migrant flight is driven by civil war and jihad conflicts in Syria, Iraq and Al Qaeda-linked terror groups in Africa. This despite the suggestions of  Dutch Freedom Party leader Geert Wilders that perhaps the only ways to deal with the surge is to adopt the Australian model of returning the stream of illegal migrants for possible relocation in North Africa and other areas in the Middle East. That is likely to be objected to by the UN High Commissioner of Refugees seeking to depopulate huge refugee camps in Turkey, Jordan and elsewhere across the Muslim Ummah. The Saudi-led Gulf Cooperation Council would clearly object to such a scheme involving the members of the GCC embroiled in a war against Iran–backed Houthi Rebels in Yemen.

The question is whether that means an increase in refugee resettlement  allotments  courtesy of the UNHCR  might be coming here in the U.S. The arrival of Syrian refugees in the U.S. Refugee Admissions Program is  already causing a rising debate among localities in the American heartland.

EDITORS NOTE: This column originally appeared in the New English Review. The featured image is of illegal migrants picked up in the Mediterranean. Source: Migrant Offshore Aid Station

Greece Jumps from Scylla to Charybdis

A new Socialist party has seized Greek power by Iain Murray:

Every Greek child reads Homer in school. So Greek children are familiar with the legend of Scylla and Charybdis, from Homer’s Odyssey. The sailor Odysseus, returning home after the Trojan War, is faced with a desperate choice in the straits separating Italy and Sicily. To one side is the monster Scylla, who will tear his ship and eat his crew. On the other is the whirlpool Charybdis, which will suck his entire ship down to the depths. He chooses to sail past Scylla, and loses only a few of his crew. Greece, in its recent parliamentary election, faced a similar choice. But unlike Odysseus, Greek voters chose Charybdis.

The whirlpool was represented by Syriza, a radical leftist party that sprang out of nowhere to fill the void created by the collapse of PASOK, the long-established Greek Socialist party. It was the last PASOK government, headed by George Papandreou (from a family that produced three Socialist prime ministers), that steered Greece into these straits in the first place.

Papandreou was presented with the boon of cheap money following Greece’s entry into the eurozone in January of 2001. At the time, the European Central Bank (ECB) pursued policies aimed at shoring up Germany’s then-flagging economy by borrowing heavily to finance public spending. The result was the debt crisis that began in 2010.

Greek voters came to regard PASOK as the party of nepotism and corruption, and shifted their support to the Coalition of the Radical Left, known as Syriza for its Greek acronym. Syriza positioned itself as anti-corruption, anti-bank, and (at least implicitly) anti-euro, and for increased levels of public spending and welfare.

Syriza narrowly lost to the center-right New Democracy party in the 2012 election, but was able to capitalize on increasing public discontent with that party’s policies afterward. A majority of Greeks perceived New Democracy to be governing at the behest of the “troika” — the European Commission, the ECB, and the International Monetary Fund — that set conditions for the Greek bailout.

The troika’s conditions were characterized as an austerity program intended to lower the country’s debt burden. It consisted of a combination of increased taxes and lower public spending by means of privatization, staff layoffs, and welfare cuts. But it did not include major structural reforms, so the Greek economy has yet to recover, with unemployment at 25 percent overall and 60 percent among young people.

Syriza’s platform rejected austerity. Instead, it offered a return to prosperity by lowering taxes on the working class and increasing spending to stimulate demand, while providing “free” electricity. How would it pay for this? By more heavily taxing “the rich” — of course! — and by diverting money from bond repayments to public spending following a negotiated debt restructuring. It also expects the ECB to steer its new quantitative easing program toward buying Greek debt.

This set of policies, described euphemistically as “mild Keynesianism” by its prime author, is precisely what got Greece into trouble under PASOK — spending financed by the rest of Europe. But this time the rest of Europe is unlikely to stand for paying Greece’s bills. German finance minister Wolfgang Schaeuble has already signaled that he expects Greece’s new government to abide by its international agreements.

All this sets Greece on a straight course for another whirlpool: default and a possible “Grexit” from the euro. The new prime minister, Alexis Tsipras, has said he wants to avoid both eventualities, but it is hard to see how he can achieve this without forcing the troika and Germany into a humiliating U-turn.

There is a strong argument that Grexit would actually be good for Greece, which should probably never have entered the eurozone in the first place, but the Greek people remain strongly in favor of the European project. They would likely blame Grexit on Germany, leading to even greater political tensions. The fact that Syriza’s coalition partner, the right-wing populist Independent Greek party, is militantly pro-Russian would just exacerbate this further.

Not all the blame for this terrible situation should fall on Greek voters. While the austerity program of New Democracy and the troika looks impressively Thatcherite at first sight, it includes very high taxes and misses out on one vital element: institutional and regulatory reform. Greece’s financial and labor markets are still hopelessly bureaucratic. New Democracy’s attempts at reform were half-hearted at best.

As long as Greece remains beset by a bureaucracy that promotes corruption as the best way around it, its economy will remain in the doldrums, regardless of how austere or profligate any one government may be.

Greece does not have to choose between Scylla and Charybdis. As the accompanying cartoon from 1790s England suggests, it is possible to steer between the rocks of anti-establishment populism (in Greece’s case, Syriza) and the whirlpool of an arbitrary executive (the troika). It can do so if its sets a straight course for the safe harbor of liberty.

ABOUT IAIN MURRAY

Iain Murray is vice president at the Competitive Enterprise Institute.