In the article in the Wednesday, May 18 edition of the Wall Street Journal, “Oil Chief Leaves Libya As Regime Is Targeted”, Shokri Ghanem is pictured as fleeing Libya to escape the prosecution of the International Criminal Court — a creation of the hypocrisy of the twentieth century.

George Joffe, a Libya specialist at Cambridge University, said that Ghanem’s flight is linked to the prosecutor’s announcement that he intended to prosecute Gaddafi, Gaddafi”s sons, and Gaddafi’s brother-in-law for “crimes against humanity”.

Trials for war crimes have become all too common since the aftermath of World War I. But who is to put on trial these strong men and dictators? Judges from Western Europe or the United States? Such Western men are from a different culture and religion. They don’t think the same way as someone born and raised in Libya.

Not that I’m defending Gaddafi, who was behind the Lockerbie bombing. But who are we to stand in judgement, we who dropped the atomic bomb twice on Japan, beginning the atomic age? Think again! History is basically amoral. So are individual countries. They cannot be judged like individuals. It has been so since the beginning time and will be true for all time. Just think, in the U.S. we make our own president immune from prosecution for his decisions when in office. The last thing we need is a double standard for Libya.

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Gaddafi

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Nato strikes hit two government buildings in Tripoli, including the Interior Ministry, according to an article in the Wednesday, May 18 edition of the Wall Street Journal, “Oil Chief Leaves Libya As Regime Is Targeted.” Britain claims that a training base was also hit as reports say that a top oil official by the name of Sehokri Ghanem, has left Libya. These reports are reminiscent of Britain’s old ties to the region.

In the nineteenth century Great Britain moved into Egypt and made it part of the British Empire. Though it nominally gave Egypt it’s independence after the First World War, Britain continued to call the shots in the region. British Mid-East Headquarters continued to be located in the Citadel in Cairo. The officers continued to live on Geizira Island. This was the base of operations that General Auchinlek, the “Auk”, Wavell, and Montgomery used during the Second World War for their North African Campaign against Mussolini and Hitler. It is where Montgomery won the Battle of El Alamein on November 4, 1942 against Rommel.

Though Britain was formally ousted in 1956 by Nasser, it’s no wonder it is part of the war against Libya. And it’s no wonder the U.S. is now part of it, too. We joined in the ousting of Rommel from North Africa. And it is our fate to follow wherever the British Empire led.

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Archibald Wavell

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Erwin Rommel

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Bernard Montgomery

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Claude Auchinlek

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Dominique Strauss-Kahn was not present at the meeting

Yesterday’s meeting in Brussels of European Finance Ministers ended in a paradox, but the discussion must go on because Greece is a Balkan country and Balkan countries can cause disastrous problems. Serbia led to the start of World War I, and that began the twentieth century decline of Europe. In this case the unraveling of the Greek economy could lead to another financial crisis and further worldwide recession.

European countries are pressuring Greece to make budget reforms and raise cash by selling assets at the same time they debate billions more euros in loans. Greece will probably have to reschedule or reprofile loans, which means they will replace them with new bonds with longer maturities.

The $155 billion bailout from last year was not enough to get through 2012 without private lenders which of course they can’t get. Greece needs 60 billion euros in new loans for 2012-2013, but other countries now want collateral.

Teams of experts, including non-Greeks, have suggested more privitization programs. Greece is resisting politically. They don’t want to sell off bits and parts of their country for cash. Nor do they want to reduce the size of their government. Too many Greeks would lose their jobs.

Greece’s debt is now reaching 375 billion euros, which is 166% of their GDP. But if they restructure their debt three ominous things could happen:

1)Greek banks wouldn’t have sufficient capital

2)There would be no access to financing

3)The situation would spread to the other pigs — Portugal, Spain, Ireland, and Italy.

In an op-ed piece David Wessel suggests that the only solution is more foreign aid for Greece, not loans. Yet in the Northern Tier, in countries such as Germany, this is unpopular.

Germans must make the sacrifice. It will only increase the strength of their currency and their own economic muscle.

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In the Wall Street Journal article from Saturday, May 14, “Greece to Miss Deficit Goal, Complicating Bailout Plans’, we learn that Greece’s budget deficit will decline only slightly in 2011 and barely at all in 2012, causing Germany a lot of soul-searching about what they are willing to do in providing more aid and keeping together their economic sphere.

It becomes clearer every day that Greece will need a new bailout plan to survive through 2012. Their budget deficit in 2011-2012 is 21.1 billion euros or 9.5% of their gross domestic product. The population is not taking the necessary course to make themselves eligible for private loans. For instance, they can’t improve tax collection. Right now Greek bonds are rated as junk. The EU and the IMF must bail them out.

What to do will be at the top of the agenda at the meeting of EU finance ministers this week.

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Meeting in Brussels May 16, 2011

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Germany’s first quarter growth for 2011 was 6.1% annualized (the U.S. was only 1.8%) according to the Saturday, May 14 article in the Wall Street Journal, “Euro Zone Expands At 2 Speeds”. The growth rate for the EU as a whole was 3.3%. The market for German luxury cars in China is big and growing bigger. So is the demand for German machine tools. But in the powerhouse economy of the EU, consumer spending and investment are also up.

But at the same time the economy in Greece lags farther and farther behind its northern neighbors. They haven’t found private investments or jobs to make up for the shrinking public sector. It is the diametric opposite of Germany.

No later than July Germany wants to increase its interest rates to cool off an economy that might overheat. That would be bad news for Greece that needs stimulus and low interest rates.

The danger is not so much that Greece’s failing economy will hold Germany back. After all, the

economies of all the “pigs”: Italy, Spain, Portugal, Ireland, and Greece accounts for only 6% of the EU’s GDP. But there is a real political danger that cuts two ways. First the Germans themselves could get tired of paying for Greece. There could be a taxpayer revolt. The even greater danger is that Greece will drop out of the EU all together because of the unpopularity of the economic measures Germany has decreed. Then the tribute to Germany’s economic might, the euro, will fail.

After the defeats in the two world wars, Germany doesn’t want another failure laid at its door.

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Brandenburg Gate, symbol of Berlin and Germany itself

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Greek dancers

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When Montgomery stopped Rommel at El Alamein in November of 1942, Britain had reached its high water mark in military prowess for the twentieth century. It was all downhill from there. Less than three years later Montgomery had to sit by and watch the Russians take Berlin just to please Eisenhower when his own forces could easily have gotten there first and spared the later part of the twentieth century much of the Cold War.

Britain has permanently become such an arm or leg of the United States armed forces. Last October David Cameron, the British Prime Minister from the Conservative Party, Churchill’s own party believe it or not, decided to cut the defense budget by 7.5 % and cut the head count by 10% over 5 years. They even decided to get rid of the only two British aircraft carriers, leaving them with none. They are now at the point where the heads of the army, navy, and air force said in a meeting of the Parliamentary Defense Committee that Britain no longer has a “full-spectrum military force”. They cannot counter insurgency and state to state combat at the same time. Charles Guthrie, the former head of the British Armed Forces from 1997-2001 said that Britain will no longer be the leader of the second tier of military powers anymore.

Britain might be in the midst of the most dramatic fisal tightening since the 1930’s, but does that mean if they are attacked they will elect another Neville Chamberlain who will talk about appeasement and “peace in our time”? If there is another Blitz, say by Iran, will they ask for Lend Lease all over again?
It’s easy to pick out the winners and losers in the group below:

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Neville Chamberlain

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Winston Churchill

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David Cameron

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Bernard Montgomery

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Dealing with a recession of the magnitude of the current one, which is the biggest since the Great Depression of the 1930’s, is the first big test of the EU’s power to stay together.

A delegation from the EU and the IMF arrived in Athens yesterday to see if the Greeks plans to pay off their debt will work. This is necessary before they release the next slice of money promised to Greece one year ago as part of a 110 billion package of aid.

Germany has already provided the following suggestions to Greece: 1) slash spending 2) raise taxes 3) sell government assets such as Olympic stadium, parcels of land, and a horse racing facility. But such suggestions are not politically possible in Greece, which is where its northern partner’s value system is in conflict with its Balkan neighbor’s.

German Finance Minister, Wolfgang Schauble, said that Germany could provide more aid if certain conditions are met. He has suggested lowering the interest rate on Greece’s debt, providing more aid out of the EU’s bailout fund, or having Greece’s debt holders trade in their bonds for ones of a later date of maturation. In extreme circumstances Greece could pay less than it owes on the bonds, giving the bond holders a “haircut”. But this could create a domino effect throughout the southern tier of Europe and tear at the fabric of the EU apart even more.

Schauble and the Germans will not give up easily. I suspect that they will continue to provide aid to the Greeks until it is no longer needed if that ever happens. Greece now owes 350 billion in debt and it is growing. Some doubt if it will ever be repaid. But if Germany is ever going to have a wide reach for its own currency, they must not abandon Greece.

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Wolfgang Schauble

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Germany faces a severe challenge to its leadership in the EU over the Greek crisis, but it’s a challenge well worth figuring out. A century ago Germany was hit by a crisis emanating from another Balkan country, Serbia. That led to the Great War, the first of Germany’s two momentous defeats in the twentieth century.

On Wednesday tens of thousands of protestors converged in the streets of Athens for a general strike against government austerity measures dictated by the powers that be in the European Union, who gave them a loan that insisted upon Greece cutting its debt. Greek police responded with pepper spray. Public servants such as teachers, hospital workers, school and university employees, ferry and rail workers, and public transport walked off the job along with journalists. There was a news blackout on television and radio.

Protests against measures trying to force Greece to raise taxes, abolish guarantees of lifetime employment, and make deep cuts in social programs are nothing new. Last May they flared up when assailants fire bombed a bank, killing people.

Germany is willing to extend the dates when the Greek bonds mature to cover the money that Greece is trying to raise to fund itself, but even Germany can’t fork over more foreign aid unless Greece shows progress in combating its own ills. German workers expect tax cuts and are now not getting them because they have to fund the Greeks.

Very grave for Germany’s purposes are recent poll numbers listed in the Thursday, May 12 article in the Wall Street journal, “Greeks Strike Over New Austerity Measures”. 60.3% of Greeks disapprove of the bailout deal Greece struck with the Northern Tier in Europe. And a telling 26% want to drop the euro as their currency.

Could this be one of the biggest economic challenges facing Germany since World War I and the hyper-inflation of the 1920’s that led to the rise of Adolf Hitler? Only time will tell.

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The business party in Germany, the Free Democratic Party, Angela Merkel’s junior coaltion partner, doesn’t like the bailout of Greece. They don’t care about her statement, “The euro is Germany’s destiny.” They want tax cuts for their constituents, according to an article in Wednesday, May 11, 2011’s Wall Street Journal, “Key German Party Shuffles Line-Up.”

The rising political tide to stop bailing out Greece and think of Germany first caused an upset in the March election. The Free Democratic Party was ousted in Baden-Wruttenberg after six decades of rule stretching back to the end of World War II. They need 5% of the vote to hold a seat in Parliament, and now they are losing that, too.

In an emergency move, the Free Democratic Party is replacing Rainer Bruderle, the Economic Minister with Philipp Rosler who has strong support among the base and could prevent the party from being marginalized for sticking with Merkel

Still what kind of future can Germany expect if it drops its Euro Zone partners and thinks only within its own borders in a world that it become more international all the time? For their currency to stay competitive, they have to think in bigger, more expansive terms.

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Philipp Rosler

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A spokesman for German Chancellor, Angela Merkel, said, “Greece dropping out of the EU was never being considered in earnest and was not being considered now.” That statement of intent to do whatever it takes to keep Greece and the other southern European nations, ie Portugal and Spain, in the fold defied growing public opinion in the Northern tier of Europe, especially Germany and Finland, to stop propping up the “pigs”.

The indignant public points to the fact that only one year ago a 750 billion euro safety net fund was created and Greece got a loan of 110 billion euros, as reported by a Tuesday, May 10 article in the Wall Street Journal, “Greek Woes Fuel Fresh Fears.” The money got wasted. They say it’s like pouring euros down a black hole. German economist Hand Werner Sinn says that the economies of Greece, Portugal, and Spain might not work right for decades.

Nevertheless the German government keeps on pushing for a delay in the maturity of the Greek bonds despite the value of the euro falling to a low of $1.42 against the dollar due to the Greek bond crisis. They avert their eyes to how Standard and Poors lowered Greece’s bond rating to a single B from a BB-. Merkel’s advisors think patience will win out in the end by providing a greater economic sphere for Germany.

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Angela Merkel, Chancellor of Germany

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