Jean-Claude Trichet, European Central Bank President, who calls himself a “true European”, gave a speech accepting the Charlemagne Prize for European Unity. He proposed a “deeper intervention” in the economies of struggling countries such as Greece and praised the idea of a “fiscal union” instead of merely a “currency union”. This would give leading countries such as Germany, France, the Netherlands, and Finland “veto power” over sloppy budgets proposed by such countries as Greece, Spain, Portugal, and Ireland.

Of course what’s he’s prosing is a greater political unity which he terms, as many have before him, “the United States of Europe”.

This is not a new idea. Alexander started it. Caesar perfected it. Charlemagne, the emperor for whom the prize is named, achieved it once more in the Middle Ages. Centuries after that Napoleon dreamed of it. And even the unsuccessful Adolf Hitler had vaguely romantic notions back in the 1930’s when he nicknamed his train, “Amerika”.

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Greek Protests Turn Violent

The German taxpayers don’t want to be left holding the bag. The Greeks don’t want to lose their coveted government jobs in a country totally dependent upon them. The IMF wants assurances that Greece can make it through the next two years before it releases its next slice of previously agreed upon aid. The German government says, through Wolfgang Schauble, that there should be a “reprofiling” of the Greek debt, making Greek bond holders share some of the responsibility by agreeing to take payment later. But the European Central Bank warns that this policy will lead to a domino effect, causing panic in other pig countries such as Spain, Portugal, and Ireland and will also lead to the closing of Greek banks.

No one can agree. Politicians and economists are at each other’s throats. But the bottom line is that the twelve-year-old currency, the euro, must be saved at all costs. At the end of the squabbling an agreement must be reached. Germans will probably have to shoulder the burden and pay more money in loans to Greece that will probably never be repaid.

Why can’t the Greeks grow up? Why can’t they reform their society, sell off government assets to businesses, collect more taxes, and cut spending to the bone? Maybe Americans can be excused for such naivette, but Europeans must know better. Saying that the Greeks should act more like the Germans and should imitate Germany’s sale of East German assets during the 1990’s to private businesses, is like whistling Dixie. East Germany was in Soviet hands for only forty-five years after World War II. Greece was in Ottoman Turkish hands for hundreds of years. And Greece has not until now been independent for thousands of years — since Roman times, in fact.

To say Greeks should be like Germans is like fighting history.

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Germany agreed to an uneasy political compromise today, pushing off dealing with the Greek debt until at least July, if not later this summer. That way it does not have to deal with the future of its ideas of an economic empire right now, according to an article in the Wall Street Journal

The Germans aren’t going to push immediately to have a rescheduling of the Greek debt. They aren’t urging Greece for now to tell its bond holders that it will pay them at a later date. For now the IMF will get assurances that Greece will get the money it needs for the next two years so that American-made institution can release its next slug of funds due under the original bailout.

The Greeks themselves seem to hardly notice the hastily put together, temporary compromise to avoid a blow up before July. They continue to protest for the sixth straight day. Professors walk off the job because they weren’t yet paid. Some universities don’t have enough paper.

Germany and Greece are worlds apart. But at least now the worlds won’t collide this summer.


Greek protestors

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Adolf Hitler with Blondi

Most Americans think of Adolf Hitler, the Chancellor of Germany during the Third Reich, as a mad carpet-eater. They watch the black-and-white newsreels of his speeches and imagine the German dictator flailing his arms about and raving twenty-four hours every day.

They would be shocked to read Dr. Jan Bondeson’s new book, Amazing Dogs: A Cabinet of Canine Curiosities, and learn that the same man supported scientific research during the 1930’s to teach dogs to talk.

The Germans tried to train intelligent dogs to read, write, and speak with some success. Puppies were collected across Germany and put through training sessions at the Tier-Sprechschule ASRA, translated as the School for Dog-Human Communication, in the town of Leutenberg.

Trainer Margarethe Schmitt taught Rolf, the Airdale Terrier, who could discuss religion, complex mathematics, and communicated in an alphabet-code that he tapped out with his paw. Supposedly one pup named Don barked “Mein Fuhrer” when asked who Hitler was.

Bondeson speculates that after the war started the program may have been attempting to train the guard dogs to take over for their masters and supervise military prisoners.

It is a well-known fact, though it contradicts his image, that Hitler was fond of dogs and training dogs. He was frequently seen with his favorite dog, Blondi. He often used to boast about her tricks. He took her with him to East Prussia. She stayed with him at the Wolf’s Den. She was there when von Stauffenberg tried to blow up Hitler and failed in July of 1944 during the “July Plot”.

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Jean-Claude Trichet, President of the European Central Bank

Germany and the European Central Bank are holding back on an interest rate increase for one month. Instead of raising the rate in June, they will raise it in July. That is the respect that the economic leader of Europe is paying to its followers — the “pigs” — Ireland, Greece, Spain, and Portugal.

In an article entitled “Trichet Signals Rate Changes Aren’t Imminent”, Jean-Claude Trichet, the President of the European Central Bank, says just the opposite, mincing words just to be politically correct. At the same time in a speech in Berlin he praises twelve and a half years of vigilance about inflation on the part of the European Central Bank. For countries such as Germany inflation is always the big bugaboo and has been so since the hyper-inflation of the 1920s in the wake of World War I led to the rise of Adolf Hilter and that country’s defeat in World War II.

Thus the European Central Bank won’t raise rates at its next meeting in June but will wait for July after raising rates in April to 1.25%, up 1/4 point and the first increase in 3 years. They expect to raise it to 2% in 2012 by 1/4 point increments. The economies of Germany, Frnace, and the Netherlands, the places where most of the output of the European Union occurs, are overheating. Already the inflation rate is 2.8% and soon to be 3% when everyone agrees it shouldn’t be more than 2%.

If increasing the interest rates does damage to the economies of Spain, Portugal, Greece, and Ireland, Germany doesn’t know what to do. The voters don’t want to give out more aid to Greece when they are not going to be paid back. But they should consider that the price of their new economic empire. That is in some respects as important as paying attention to inflation.

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Reuters reported on Monday, May 9, 2011 that the famous Cunard ocean liner was carrying stowaways in an article entitled, “Queen Mary II Luxury Liner Used In Alleged Smuggling Case” — reminding the reader that almost one hundred years ago German spies sneaked aboard the doomed Lusitania.

On May 1, 1915 at the Cunard Pier in New York City German spies stowed away on the last voyage after Germany’s warning to all who sailed her to beware. The men were caught by Captain Turner two days into the seven-day voyage and imprisoned in the brig, to be dealt with as soon as the ship docked in Liverpool. What exactly these men were up to we don’t know to this day. This might have been carrying acid bombs that ignited on contact which was something German spies were known to be doing in those days. But their fate was certain. They went down with the ship about six miles from shore near Queenstown once another German, a U-boatman, torpedoed the ship and made it sink in eighteen seconds.

A Malaysian man was arrested for smuggling 9 Chinese aliens into the U.S. on the ship just this year, 2011. The Chinese carried forged Japanese passports but couldn’t speak Japanese. They were caught by immigration officials after disembarking on April 26 after boarding the ocean liner in Dubai. Speaking on behalf of the cruise line, Jackie Chase, Cunard public relations manager, told the press, “To the company’s knowledge, this is a first time occurrence.”

They ruins of the Great War casualty, the Lusitania, still at rest in a seabed off the coast of Ireland, attest to the cruise line’s mental lacuna.


Queen Mary II, fellow Cunarder along with the Lusitania

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Adolf Hitler may have been a National Socialist Dictator, but even he did everything he could to get the Germany economy ticking again in the 1930’s. Without respect for the means of production, he wouldn’t have been able to produce all those Tiger tanks and fight World War II. That’s Germany. Greece is a Balkan Land. The Greek mindset is miles away from Germany’s. So it’s no wonder that the Germans get increasingly frustrated when Greece doesn’t see things the “right way”.

George Papandreou, Prime Minister of Greece, reported yesterday that talks between him and the opposition leaders failed, thus making it even more unlikely that Greece is going to get the additional 60 billion euros it seeks. For example, New Democracy Party leader, Antonis Samaris, refused to accept the latest calls for austerity to save Greece from default. He says that the only thing worth discussing is how to re-negotiate the bailout. He says about the current German plan, “We won’t pre-sign a policy that fatten the economy and destroys society.”

What is Greece’s beef? Most of the jobs are in the public sector. If the government sells off parts of what it controls to private companies, many are doomed to lose their jobs. The same thing with other austerity measures. Olli Rehn from the European Monetary Affairs Commission says that he expects Greece to tow the line like any other country (i.e. any other Northern European country). But he gets his answer from the Greek youths who on Friday held a protest outside the Greek Parliament building in imitation of their confederates in Spain. They are also answered by the public sector unions that are staging strikes to oppose the bailouts.

If Germany doesn’t figure out a way to deal with non-Germans in a multi-ethnic currency confederation they will lose out in their dreams of competing with the United States.


Olli Rehn, European Monetary Affairs Commission

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Jean-Claude Juncker

Luxembourg’s Jean-Claude Juncker said on Thursday that the bailout program for Greece may be doomed. Thus Germany can count the days until June 29, when the next bailout money was to be released to Greece. These days may spell the doom of the Euro Zone.

One of the important provisions of the bailout program was supposed to be that Greece promised to line up enough loan commitments to carry them through the next twelve months.

Representatives of the IMF, The European Commission, and the European Central Bank went to Athens to find out what’s going on. No one thinks Greece is going to have sufficient loan commitments to pass the test.

The only choice? Germany must open its purse string and give aid, or the Euro Zone will be a thing of the past.

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Wolfgang Schauble, German Finance Minister

The euro can’t make the progress against the dollar that it was making one month ago. It’s held down by the Greek debt and the threat of restructuring. And so are Germany’s ambitions for a greater economic union held hostage.

Instead investors are piling money into dollars, pounds, and the Swiss franc. The euro reached new lows against the franc.

The only reason the euro doesn’t slip any more is because Greek Finance Minister, George Papaconstantinou, said that Greece was going to stay in the Euro Zone. And in addition, the new European Central Bank chief, Mario Draghi, said the European Central Bank was going to raise its interest rates.

But at the same time, the European Commissions Greek representative said that Greece might “distance itself from the euro” if forced.

Only time will tell if all this bad news will have a domino effect and bring down Germany’s house of cards.

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Angela Merkel, Chancellor of Germany


Since Bismarck in the nineteenth century Germany has been engaged in all sorts of empire building, mostly failed experiments. But this time when they thought they had hit upon the winning formula, a loose currency union among the continental European states and even some Eastern European ones, it seems to be unravelling at the seams. Why? In techincal terms it seems to be because it is a “currency union” and not a “fiscal union”, let alone a political one.

Ever since Alexander the Great and Julius Caesar Europe, particularly Western Europe, has been trying to get together. Most of the history of Western Civilization has been one war or another that England, France, Spain, the German states, Scandanavia, and Italy were fighting. There were religious wars, disputes over territory, wars to eject the Turks, and wars just to see who was the top dog. But never until after World War II did Europe, and Germany in particular, get the idea to form a “currency union” so Europe could in effect become the United States of Europe, able to compete on the world stage against the United States of America.

But no one predicted the Great Recession of 2008, the biggest downturn since the Great Depression of the 1930’s, that helped to start the Second World War when Germany really lost big. The last thing Germany wants is another failure at its door as the leading power of Europe.(World War II never really changed that.)

The political powers that be in Germany, Angela Merkel’s coalition, cannot ignore voters and opinion polls that state plainly that Germans would rather have their tax cuts than have to pay to give Greece more aid of the kind that doesn’t get paid back with interest. German voters are angry that one year ago Greece received a 110 billion euro bailout and now needs another one according to the Wednesday, May 25 article in the Wall Street Journal, “Europe Split On Debt Crisis Worsens”. Is there no end in sight? Nor do they have the control to reform Greece’s internal finances, which would mean a political commitment of the kind that they have eschewed since the days of the Third Reich.

There is a paradox. They cannot allow themselves to participate in a currency in common with Greece and have Greece default through “restructuring”. That would lower the value of their own currency! And yet they can’t handle a “fiscal union” whereby they would always be willing and obliged to pay Greece’s debts to prevent such a default and prevent the default’s effects throughout the Euro Zone such as the closing of Greek banks and the contagion that could spread to Ireland, Spain, Portugal, and Spain.

Germany needs to decide quickly before events decide for it what kind of union it really wants — one where it values the EU above all instead of one where unpredictable events are in charge and could very well undermine its own economy against its own will.

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