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Charlie Hebdo, Islam & Musulmans

January 8, 2015 Leave a comment

Hier soir, tard dans la nuit, je me suis souvenu d’une histoire, de la visite du Prophète Mohamed (saaws) à Taëf. Pour faire court, le Prophète est allé visité Taëf après avoir enduré une année très difficile sur le plan personnel et même religieux: la mort de son oncle, la mort de sa femme, et l’étau se refermé sur lui et ses compagnons dans sa ville natale, Mecca. Une fois à Taëf, en compagnie de Zaid ibnou Haritha, les leaders de la ville lui ont préparé un comité d’accueil bien spéciale en exhortant les enfants et les adultes a les lapider et les insulter. Le prophète était blessé et il saignait des pieds et du visage. L’ange Gabriel vint à lui et lui a dit: Si vous me commandez maintenant, on peut effondrer ces montagnes sur cette ville. Vous me donnez l’ordre et ce sera fait. Le prophète, a t-il pris cette offre alléchante pour se venger? Est-ce que son compagnon lui dit: “Hey, Mohamed, pourquoi ne nous réduisons pas cette ville maudite en cendres mec.” Non, le Prophète n’a pas dit ou fait cela. Plutôt, le Prophète (saaws) a prononcé un des plus beaux du’ah que j’ai jamais lu, plein de compassion et même d’amour pour ses ennemis. Il a dit, oh mon dieu, si vous n’êtes pas en colère contre moi, je préfère ne rien faire, et ce qui m’arrive ne me dérange point.

Maintenant, nous les Musulmans avons adopté ce karaté-kung-fu d’Islam. Un Islam qui est plein de rituels et complètement vide de toute spiritualité. La plupart des Musulmans ont oublié qu’il est venu comme une bénédiction pour les mondes” (“وما أرسلناك إلا رحمة للعالمين). Le mot “monde” ici est au pluriel parce qu’il s’agit de ce monde et de celui qui viendra. Nous pensons que ce Prophète a apporté une sorte de manuel de karaté et de gymnastique. Tout ce que nous entendons de nos imams est un tas de codes — un code religieux binaire: hallal vs. haram, des 1 et des 0. Ok, très bien, toutes les religions du monde ont ce côté rituel, mais on doit donner autre chose à l’être sinon cette religion devient une sorte de mécanique. On doit nourrir le côté spirituel, nourrir l’âme et l’esprit. Dites-moi, pourquoi Allah c’est gêné d’envoyer un Prophète, son Prophète? Pourquoi Allah ressentait le besoin d’ajouter une autre religion? Et les réponses sont au cœur de notre religion parce que cette religion est une bénédiction pour les mondes, et non pas une malédiction.

Dans khoutbet al-wada’a, le sermon d’adieu, le Prophète (saaws) a dit: «Ô gens, écoutez mes paroles”–أيها الناس اسمعوا قولي. Il ne parlait pas aux Musulmans uniquement ou son audience présente ce jour-là uniquement, ou aux Arabes, mais le Prophète a choisi en connaissance de cause dans son DERNIER sermon (parce qu’il savait qu’il allait mourir) de s’adresser à TOUS, à ces contemporains et ceux d’après sa mort a travers cette planète en déclarant: «Ô gens, votre sang et vos biens sont sacro-saintes jusqu’à ce que vous rencontrez votre dieu”

أيها الناس اسمعوا قولي ، فإني لا أدري لعلي لا ألقاكم بعد عامي هذا بهذا الموقف أبدا ، أيها الناس إن دماءكم وأموالكم عليكم حرام إلى أن تلقوا ربكم كحرمة يومكم هذا.

Il n’a pas dit, vous ne pouvez pas tuer les musulmans, mais allez y, c’est le Mardi Gras pour les autres, vous pouvez zigouiller les Chrétiens et les Païens et les Juifs et même les extraterrestres si vous en avez la possibilité. Non, Il a dit: vous ne pouvez pas tuer. Arrêt complet.

Sommes-nous mieux que le Prophète (saaws)? Qui sont ces imams, ces chouyoukhe qui justifient leur fantasmes malades par notre religion. Nous avons tous besoin de revenir au message de base de notre religion “وما أرسلناك إلا رحمة للعالمين”. Nous ferions mieux de se rappeler de cela parce que nous — et par nous, je veux dire les Musulmans du monde entier– avons fait une moquerie, une dérision de ce beau message. Nous avons prostitué le message du Prophète, et nous serons appelés un jour a dire pourquoi, pourquoi nous n’avons rien dit.

Et non, il n’y a pas de complot fantasmatique ourdi contre nous. Ce qui nous arrive est une suite presque logique qui reflète l’état social, académique, économique, politique, et culturel dans lesquels on est coincé. Rien de ce qui nous arrive était ou est imprévisible (il faut lire Malek Bennadi). Pendant plusieurs siècles, nous (et par nous, je veux dire nos autocrates et nos régimes dictatoriaux et nos leaders et nos imams) avons tué le débat d’idées en dogmatisant et déifiant jusqu’au point de l’idolâtrie des concepts et les hommes religieux. Et quand vous tuez le débat d’idées, vous tuez une culture; et quand vous tuez une culture, vous tuez une civilisation, disait Bennabi.

Mais, je termine sur une note positive: On est là et on ne se laissera pas faire. On ne permettra pas à ces voyous d’être l’avant-garde ou les porte-paroles ou les protecteurs des Musulmans ou de l’islam. Non, je ne suis pas Charlie parce que je n’ai jamais lu le journal, mais je suis livide, en colère que ces hommes et ces femmes innocents été tués par des voyous au nom du Prophète, alors qu’il les aurait maudit, là ça me touche et ça touche mon identité. C’est pour cela que ce Prophète même aurait dit non. Et dire non pas uniquement pour ce qui s’est passé hier, mais des autres crimes perpétrés au nom de ce message. On ne permettra pas à ces voyous d’être les protecteurs de l’islam parce que c’est simple: Si nous faisons cela, nous capitulerons effectivement à notre bourreau, et on ne va pas capituler.

La France: Un pays entier paralysé par un humoriste

January 10, 2014 Leave a comment

Un pays entier paralysé par un humoriste, c’est la blaque de 2014! Ce matin, j’ai parcouru rapidement la une des journaux français (voir ci-dessous), et presque tous les titres de tous les grands journaux ont parlé et ont couvert la même histoire, celle de Dieudonné. Pendant des semaines et des semaines, une petite querelle insignifiante entre un humoriste (dont j’en ai rien à cirer) et le gouvernement domine la France entièrement—l’ensemble de l’establishment politique, gauche, droite et centre, la nation et ses élites, et les intellos de gares ont complètement perdu tout sens de priorités, toute proportion, et tout respect pour les libertés fondamentales.

Ce qui se passe en France avec cette histoire ridicule de “La Quenelle” est tout simplement une agression contre la liberté d’expression, et par conséquent une agression contres toutes les libertés. Comme George Orwell l’a si bien dit, “Si la liberté signifie quelque chose, elle doit signifier le droit de dire aux gens ce qu’ils ne veulent pas entendre.” Une liberté n’est valable et précieuse que quand elle est attaquée, et que quand elle teste notre goût et les limites de notre tolérance.

Je ne connais pas ce Dieudonné (j’ai brièvement visionné une ou deux de ses vidéos sur youtube), et j’accorde la possibilité à ses critiques qu’il pourrait être un trou-du-cul stupide. Mais même les abrutis stupides ont le droit d’exprimer leurs opinions aussi fort et aussi odieusement que possible. Si vous limitez le droit d’un trou-du-cul à exprimer son opinion idiot au nom d’un certain standard d’une rectitude politique bizarre, et l’Etat met toute sa puissance pour l’écraser et le persécuter, dans ce cas quelles garanties le peuple a que l’État n’écraserait pas un discours légitime et valide un des ces jours? Parce que quand l’Etat commence à piétiner, à écraser, et à étouffer un discours que nous n’aimons pas, un jour ou l’autre l’Etat piétinerait, écraserait, et étoufferait un discours que l’Etat n’aimerait pas, et cela c’est la definition même de la tyrannie. Une fois qu’un Etat est attaché au principe de faire taire les voix de l’opposition ou des voix à l’encontre d’un certain consensus social basé sur la tyrannie de la rectitude politico-politicard, il n’a qu’un seul chemin à suivre, celui de ​​la répression, et cela jusqu’à cette Etat devienne une source de terreur pour tous ses citoyens.

Oui, la liberté d’expression ne protège pas les idiots qui l’abusent, et oui la liberté d’expression a des conséquences, mais ses conséquences doivent être du domaine de la sphère privée, pas celle de l’état. Il appartient aux citoyens et au public de sanctionner cet humoriste en refusant d’assister à ses spectacles. Ce n’est certainement pas à l’Etat d’émettre une injonction juridique et de forcer les théâtres de fermer leurs portes à son spectacle. Cela est purement et simplement un acte tyrannique. Cet affaire Dieudonné est un indicateur de la petitesse et de l’étroitesse de la voie sur laquelle la France s’est engagée pendant ces deux dernières décennies. Une France qui a peur de son ombre, fermée et recroquevillée sur elle-même, et qui refuse de s’ouvrir sur le monde parce qu’elle n’est plus sûre de ses valeurs, de ce qu’elle représente, et de ce qu’elle veut. Bref, une France qui se rétrécit et se contracte rapidement, timorée et tirée entre son soi réactionnaire basé sur l’ethnocentrisme et la xénophobie et son désir de rester et de représenter quelque chose qu’elle n’est plus en mesure de l’être et/ou de représenter.

Et juste pour finir, c’est vraiment drôle de constater que l’Etat français se comporte avec Dieudonné comme Khomeini et la théocratie Iranienne se sont comportées avec Salman Rushdie en interdisant son livre. En outre, que faut-il dire aux millions de musulmans de France qui ont été choqués et dégoûtés par les caricatures de Charlie Hebdo du prophète Mohammed? A cette époque-là, l’ensemble de la classe politique française chantait en unisson les louanges de la liberté d’expression que les braves cartoonists de Charlie Hebdo representaient. Et c’est grâce à cette liberté que les cartoonists avaient le droit de représenter le prophète comme un pédophile ou un terroriste. Ces politicards et les intellos de gares disaient au monde “C’est ça la France!” “La France est l’incarnation de ces libertés universelles, vous pouvez soit faire partie de la France ou de la quitter.” Et vous savez quoi? Je suis entièrement d’accord. Mais alors, où est cette classe politique française? Et où sont ces politicards et ces intellos qui chantaient magnifiquement les louanges de la liberté d’expression il y a de cela quelques années?  Où est cette France? Pourquoi est-elle muette maintenant alors que cette même liberté d’expression qui a couvert et a protègè les cartoonists de Charlie Hebdo doit aussi couvrir et protèger Dieudonné? Oh l’incohérence intellectuelle est la marque même de l’imposture et de la duplicité. Lorsque les lois et les valeurs sont appliquées d’une manière aléatoire, il serait mieux ne pas les appliquer du tout.

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France: Le Rapport sur l’Intégration–“une occasion à ne pas manquer…”

December 17, 2013 Leave a comment

Voici l’ integralite du “Rapport sur l’Intégration” qui a été remis au Premier Ministre Français,  Jean-Marc Ayrault. Ce rapport a été préparé par cinq groupes de travail thématiques portant les titres suivant: 1) “Faire société commune”; 2) “Habitat”; 3) “Protection sociale”; 4) “Connaissance reconnaissance”; et 5) “Mobilités sociales”. Ces cinq groupes qui ont été constitués ont vut la participation des représentants des services de l’État, des collectivités territoriales, des associations, des partenaires sociaux ainsi que des chercheurs d’ universités et des think-tanks.

Cette étude a déjà créé  et suscité une certaine polémique en France, chose previsible, et c’est parce qu’elle recommande des réformes sérieuses et profondes à l’ensemble du modèle Français de «l’intégration», qui ne peut qu’ être décrit comme brisé/cassé, autrement dit “kaput”.

Je dois dire que je n’ai pas encore lu le rapport tout entier, mais je l’ai balayée des yeux, et parmi les recommandations formulées par ce rapport sont:

  • Retour sur l’interdiction du port du voile à l’école;
  • Révision des programmes d’histoire pour y inscrire l’histoire des mouvements de populations;
  • L’abandon symbolique du terme “intégration” etc.,

Voici l’intégralité du rapport et je vais y revenir pour l’analyser avec soin dans les prochaines mises à jour.

Bonne Lecture…

RAPPORT – CONNAISSANCE RECONNAISSANCE

RAPPORT – FAIRE SOCIETE COMMUNE

RAPPORT – MOBILITES SOCIALES

RAPPORT – PROTECTION SOCIALE

RAPPORT INTEGRATION HABITAT

Algerie: Bouteflika hospitalisé, la mauvaise graine ne meurt jamais

April 29, 2013 1 comment

Algerian President Abdelaziz Bouteflika was transferred to France–military Hospital Val-de-Grâce near Paris– for medical tests on Saturday night after suffering a minor stroke. Apparently, the autocrat is still alive, the mini-stroke has had no impact on his intellectual capacity. Besides the fact that the president chooses to go to France to seek medical treatment and does not have any confidence and/or trust in his own country’s physicians, this health crisis has very little impact on the future of the Algerian regime.

Photo d’un hôpital Algérien: où Le Peupe se Soigne

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Photo d’un bloc opératoire a l’Hôpital du Val-de-Grâce : où Le Bouteflika se Soigne

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So what does that all mean? Nothing really. If Bouteflika, who preparing himself to run for another term, doesn’t kick the bucket and die, another thug like him would replace him, and the long nightmare of Algeria continues. If he is successful at fighting the security and military apparatus and imposes himself as the unique candidate again, well he will probably rule for a couple of more years and then dies in office. Either way, it’s a lose-lose situation for Algeria.

There is something that foreign observers of Algeria needs to understand: Nothing seems as it looks, and nothing looks as it seems. In theory, Algeria is a democracy with a vibrant and even sometimes rambunctious political parties. However, in reality and practice, power has always been confined to a small secretive inner-circle of military and security men. All that civilian power is a shiny coast of veneer to provide the regime with some legitimacy on the international scene.  So If Bouteflika doesn’t dies or doesn’t run for another term, his successor will most likely be chosen behind closed doors and away from any popular input and accountability because this is where resides the real power in Algeria.

The real power in Algeria is like a vampire always hidden from the sun and abhors transparency and accountability. The real political competition in Algeria is not at the ballot box, but it is between Bouteflika and his clan, and the military-intelligence services and their clan. Briefly stated, the real tug-of-war over power–therefore the control over oil rent–is between General Mohammad Mediène, aka Toufiq, and Bouteflika. And whoever wins, will be the ruler. Anything else is a pure show.

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How do you keep the population from uprising and claiming transparency? Well, open up social spending, subsidize everything, and engage in systemic and systematic disinformation.

In describing what Stalin was able to do in Russia during WWII and the post-period, and how he was able to make the Russian people tacitly accept his dictatorial rule, the great British historian Alan Charles Bullock said the following

“No one understood better than Stalin that the true object of propaganda is neither to convince nor even to persuade, but to produce a uniform pattern of public utterance in which the first trace of unorthodox thought immediately reveals itself as a jarring dissonance.”

Well, in Algeria, 50 years of systematic and systemic social, religious, economic, and especially intellectual charlatanism and “charlatanization” of the Algerian people has produced a uniform pattern of public utterance in which the first trace of unorthodox thought immediately reveals itself as a jarring dissonance. Therefore, even if the people are unhappy, they accept the dictate because they are incapable of imagining by themselves and for themselves an alternative model of governance; because they have built their lives and livelihood on a system that has no rules; because they have grown accustomed to anarchy, chaos, thievery; and because most Algerians have become a thieving, conniving, and corrupt people. So any change in Algeria has to be more than political. Any change has to be so drastic and so radical that it will need to shake the very foundations of the country, of our history, of our social and political structure. And this change, ladies and gentlemen, can only be violent, bloody, and with a long period of unrest.

So, let me comfort my dear DRS readers who have been bombarding me with hateful emails and messages. I know that you are reading every post i write, and thank you for that. At least you sleep less stupid every time you read my posts. But i leave you with  Churchill’s warning about change. He said “We must take change by the hand or rest assuredly, change will take us by the throat.” So you have the choice. You either take change and guide it, or it will take you and claim you as a victim.

Union Européenne: La crise de la démocratie européenne

May 23, 2012 1 comment

This is an Op-Ed written by Dr. Amartya Sen for the NYTimes.  Dr. Sen is  Thomas W. Lamont University Professor, and Professor of Economics and Philosophy, at Harvard University and was until 2004 the Master of Trinity College, Cambridge. He is also Senior Fellow at the Harvard Society of Fellows. Earlier on, he was Professor of Economics at Jadavpur University Calcutta, the Delhi School of Economics, and the London School of Economics, and Drummond Professor of Political Economy at Oxford University. To top this already impressive resume, Dr. Sen Nobel was awarded the 1998 Nobel Prize in economic sciences for his work on welfare economics and social choice theory. Briefly stated, Dr. Sen is an authority in the field.

The Crisis of European Democracy

By AMARTYA SEN

May 22, 2012Cambridge, Mass.

IF proof were needed of the maxim that the road to hell is paved with good intentions, the economic crisis in Europe provides it. The worthy but narrow intentions of the European Union’s policy makers have been inadequate for a sound European economy and have produced instead a world of misery, chaos and confusion.

There are two reasons for this.

First, intentions can be respectable without being clearheaded, and the foundations of the current austerity policy, combined with the rigidities of Europe’s monetary union (in the absence of fiscal union), have hardly been a model of cogency and sagacity. Second, an intention that is fine on its own can conflict with a more urgent priority — in this case, the preservation of a democratic Europe that is concerned about societal well-being. These are values for which Europe has fought, over many decades.

Certainly, some European countries have long needed better economic accountability and more responsible economic management. However, timing is crucial; reform on a well-thought-out timetable must be distinguished from reform done in extreme haste. Greece, for all of its accountability problems, was not in an economic crisis before the global recession in 2008. (In fact, its economy grew by 4.6 percent in 2006 and 3 percent in 2007 before beginning its continuing shrinkage.)

The cause of reform, no matter how urgent, is not well served by the unilateral imposition of sudden and savage cuts in public services. Such indiscriminate cutting slashes demand — a counterproductive strategy, given huge unemployment and idle productive enterprises that have been decimated by the lack of market demand. In Greece, one of the countries left behind by productivity increases elsewhere, economic stimulation through monetary policy (currency devaluation) has been precluded by the existence of the European monetary union, while the fiscal package demanded by the Continent’s leaders is severely anti-growth. Economic output in the euro zone continued to decline in the fourth quarter of last year, and the outlook has been so grim that a recent report finding zero growth in the first quarter of this year was widely greeted as good news.

There is, in fact, plenty of historical evidence that the most effective way to cut deficits is to combine deficit reduction with rapid economic growth, which generates more revenue. The huge deficits after World War II largely disappeared with fast economic growth, and something similar happened during Bill Clinton’s presidency. The much praised reduction of the Swedish budget deficit from 1994 to 1998 occurred alongside fairly rapid growth. In contrast, European countries today are being asked to cut their deficits while remaining trapped in zero or negative economic growth.

There are surely lessons here from John Maynard Keynes, who understood that the state and the market are interdependent. But Keynes had little to say about social justice, including the political commitments with which Europe emerged after World War II. These led to the birth of the modern welfare state and national health services — not to support a market economy but to protect human well-being.

Though these social issues did not engage Keynes deeply, there is an old tradition in economics of combining efficient markets with the provision of public services that the market may not be able to deliver. As Adam Smith (often seen simplistically as the first guru of free-market economics) wrote in “The Wealth of Nations,” there are “two distinct objects” of an economy: “first, to provide a plentiful revenue or subsistence for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services.”

Perhaps the most troubling aspect of Europe’s current malaise is the replacement of democratic commitments by financial dictates — from leaders of the European Union and the European Central Bank, and indirectly from credit-rating agencies, whose judgments have been notoriously unsound.

Participatory public discussion — the “government by discussion” expounded by democratic theorists like John Stuart Mill and Walter Bagehot — could have identified appropriate reforms over a reasonable span of time, without threatening the foundations of Europe’s system of social justice. In contrast, drastic cuts in public services with very little general discussion of their necessity, efficacy or balance have been revolting to a large section of the European population and have played into the hands of extremists on both ends of the political spectrum.

Europe cannot revive itself without addressing two areas of political legitimacy. First, Europe cannot hand itself over to the unilateral views — or good intentions — of experts without public reasoning and informed consent of its citizens. Given the transparent disdain for the public, it is no surprise that in election after election the public has shown its dissatisfaction by voting out incumbents.

Second, both democracy and the chance of creating good policy are undermined when ineffective and blatantly unjust policies are dictated by leaders. The obvious failure of the austerity mandates imposed so far has undermined not only public participation — a value in itself — but also the possibility of arriving at a sensible, and sensibly timed, solution.

This is a surely a far cry from the “united democratic Europe” that the pioneers of European unity sought.

Union Européenne: Non, l’euro ne survivra pas la sortie de la Grèce

May 19, 2012 8 comments

No Mr. Wolfgang Schäuble, the euro won’t survive Greece’s exit


The German minister of Finance, Wolfgang Schäuble, stated in an interview with the “Rheinische Post on 11 May 2012 that Europe has the capacities to cope with a Greek euro area exit. He went on to say that Germany and its partners have learned a lot during the last two years and have put in place several protection mechanisms. Basically, this is a strong signal from one of the highest German officials stating that the euro can survive without Greece.  Let me say this upfront: No, the euro—and probably the whole European Union project–cannot survive Greece’s exit from the Eurozone. Schäuble’s statement could have been correct if it was given 2 years ago. But now, his statement is tantamount to a Eurozone suicide. And this is why.

However, before we get to why Greece’s exit from the Eurozone would lead to the total collapse of the euro as a currency and probably to the collapse of the European Union as an ambitious yet salutary political project, we need to briefly remember how we got to this point.

The project of the European Union started or was imagined as a purely political project by its founding fathers.  On the ruins of the disastrous and destructive second World War, Robert Shumann, Jean Monet, Alcide De Gasperi, Paul Henri Spaak and Konrad Adenauer (two Frenchmen, an Italian, a Belgium, and a German respectively) began imagining a political project that would knit together the different European countries and make the prospect of another destructive war between European countries an impossible endeavor. Of course, this started with a closer economic cooperation limited to a certain number of goods and services and just between a small numbers of countries, which would later on represent the core countries of the European Union. This limited economic cooperation created a spillover effect, and over time, more goods and services were included and more countries wished to join. Long story short, this economic cooperation spilled over into a political cooperation and led to the necessity of creating a common currency—i.e., the euro.

After the Maastricht Treaty (also know as the Treaty on the European Union) was adopted and ratified by most of the countries, the euro was introduced.  It was first introduced to the financial markets as an accounting currency in 1999 (it replaced the old ECU) and then introduced in circulation in 17 of the 27 EU member states replacing their national currencies in 2002.  The introduction of the euro caused a certain euphoria in the financial markets. Suddenly, countries that were deemed risky for investment saw a drastic influx of cheap capital—i.e., loans. Basically, cheap money started pouring in southern European countries like Greece, Italy, Spain, and even in Ireland and Austria. Belonging to the Eurozone made these countries safe places, though some of them had deep structural flaws (as we came to discover that later on). This influx of cheap capital financed huge housing boom-like bubbles and increased trade deficits.  And then, the 2007-2008 financial crisis hit. It started in the U.S., but soon migrated to the European continent. The influx of cheap money dried up. This caused severe economic slowdowns and downturns in almost all of the Eurozone.

Since the European Union is an unfinished economic integration project topped by an even more unfinished political integration, countries like Greece, Spain, and Italy were literally up the creek without a paddle.  The economic crisis of 2008 led to a huge fiscal crisis in these countries since they had no control over their monetary policies, and they were obliged to keep their budgetary spending within the 3% allowed by the EU agreements.  However, in a time of severe economic crisis, one needs to engage in fiscal deficit spending in order to get out of the hole. The last thing a country needs is drastic cut in public spending. Why? Because drastic cuts in public spending lowers consumption, which lowers demand, which leads to less investments, which leads to less revenues.  And the more austerity measure a given country adopts, the more it reinforces this infernal downward spiral. But what did the EU leaders do? They did exactly what they should not have done.

Germany and France (Sarkozy’s France) forced most of the EU members to engage in drastic public spending cuts hoping that fiscal discipline would calm financial markets and stop speculations. However, these EU leaders misread completely the message that most financial markets have been sending. They were not looking for strict fiscal discipline, though some discipline doesn’t hurt. They were looking for serious economic growth prospects.  Since spending cuts depress economic growth (just look at the economic growth in the Eurozone countries in the last 2 years and you notice that cuts caused economic stagnation and recession in France, Spain, the UK, Italy, Greece, and so forth), investors and bond markets lost confidence in the Eurozone, and that led to higher interest rates on short term borrowing. Not only are these countries killing their economic growth with all those drastic cuts, but also they can’t even find cheap capital to fund short-term operations. Consequence: 3 European countries—Greece, Spain, and Italy—are on the verge of total economic collapse and serious political turmoil.

So, what if we let Greece out of the Eurozone like Wolfgang Schäuble wants? What would happen to the rest of the Eurozone?

Let us game this scenario for a second.

As we speak, Greece is under a slow-moving financial blitzkrieg.  There is a slow moving bank-run on the Greek banks (or what the bankers call a bank-jog). What does that mean? It means that depositors are pulling out their capital to anticipate a possible Greek default or an exit from the Eurozone.  This bank-jog has been going on at a very low rate for the last 2 or 3 months, but it has accelerated since the last legislative elections.  However, the ECB is backstopping, or for the lack of a better word, financing this bank-jog through lending to Greek banks the necessary capital. More accurately, the Greek banks are using the emergency liquidity assistance until the EFSF (European Financial Stability Facility) agrees to release its bonds, so they can use them as collateral.

However, when the ECB decides to stop financing Greek banks (and that’s what the German minister of Finance, Wolfgang Schäuble, means), Greece would effectively be forced to leave the Eurozone and abandon the euro as a currency, and revert to issuing again its own national currency, the drachma.

The first fallout of such a move is that financial markets would lose total confidence in every Eurozone countries. Greece leaving the Eurozone means that the euro is reversible, and any country could decide to abandon it.  Do you remember that bank-jog we just talked about in the previous paragraph? Well, that bank-job would turn into a bank-run on Spanish, Italian, Irish, and possibly French banks. All investors and all financial markets would pull out all of their money at once. Ladies and gentlemen, no bank in the world and in the history of banking has had enough cash or securities in its vaults to face a cataclysmic event like this one. This means that most banks in Spain and Italy would collapse overnight.  A large numbers of banks in France, Germany, Austria, Netherlands, and Belgium would also collapse. This would trigger a worldwide chain reaction and some U.S, Japanese, and Russian banks exposed to Eurozone debts would also be severally affected.

What we would be looking at is a total blow-up of the European Union and a severe global depression.

This is what it means to let Greece leave the Eurozone now. On top of the financial and economic global calamity, we would also have a political one. The rise of extreme right and left political parties in Europe and elsewhere would surely be the most likely political outcome. Mainstream parties would be blamed for the catastrophe and would be completely discredited in the eyes of most voters, which would directly benefit the extreme right and extreme left political leaders.

What to do then to avoid such a calamity? Not only must Greece stay in the Eurozone, but also a more encompassing political economy must be devised. First, the mutualization of the debt must be organized. Second, the ECB must be restructured to issue euro-bonds so member states can directly borrow from the ECB at low rate instead of borrowing from banks. Third, a serious economic growth agenda must be considered so countries like Spain, Italy and others could trigger decent economic growth rates and emerge from the infernal cycle of austerity and depression.

Finally, the ECB must increase the Eurozone inflation rate to at least 4%. Why?  In a recession, you expect average wages to adjust to a lower level. As the unemployment rate increases, workers are willing to accept lower wages, and as wages decrease, employers become more willing to hire more workers. If this does not occur, the recessionary cycle deepens and becomes persistent.  There are several ways to fix this problem, but let us concentrate on the one most suited for the Eurozone. One of the problems in Spain, Italy, Greece and most of Europe is that their workers have become increasingly uncompetitive over the past decade—higher wages, high unemployment rates, and low investments leading to a highly uncompetitive Eurozone worker. One way to correct this is by devaluing the currency, which would effectively reduce wages in a country compared to the rest of Europe. But this solution is not available to most Eurozone member states because they do not have control over their monetary policies. The Eurozone monetary policy is dictated by the ECB.  So how do you reduce wages in those countries when you can’t manipulate your currency? Well keep wages constant, but allow a higher inflation rate. If the ECB allows the inflation rate to run at a 4% level, you effectively get no wage increase, but an effective drop by 4%. This would increase the competitive edge of the European worker.

This is the only way out. But to reach these set of solutions, the ECB and the Germans need to get over their obsession about spending, inflation, price stability, and moral hazard. If Angela Merkel keeps on doing what she has been doing and keeps on bullying the rest of the Eurozone member states into these suicidal austerity programs, she would literally cause the collapse of the European Union. Lastly, the ECB needs to embrace its function as an independent central bank facing drastic economic crisis with a possible political and economic collapse of the whole area. The ECB needs to get over its rigid ideology of price stability and face  reality. Otherwise, there will not be an ECB in a couple of years.

Merci, Grazie, ありがとうございます, Arigato,شكرا, Gracias, & Thank you!

May 7, 2012 1 comment

This is just a quick note to thank all of you who made this blog your first destination yesterday. You were tens of thousands from all over the world (from Japan, Chili, Peru, Italy, South Africa, Saudi Arabia, Qatar, Egypt, Cote d’Ivoire, Australia, Morocco, Algeria, Tunisia, Indonesia, France, Spain, the UK, Sweden, the USA and so many other places–sorry if i forgot your country) hitting the reload button again and again and checking the results that i thought the blog was going to crash.

I really appreciate the fact that many of you made this blog your first stopping place (and for many, the main place) and i hope that i provided you with timely and accurate information last night.

Sorry, i won’t be able to reply to all the thank you notes and/or comments that you guys sent me, but just know that i appreciate every single one of them very much.

Again, thank you!

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