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Thursday, July 26, 2012

Seeing the erred ways of my thinking... (4)

During my career in the corporate world, one thing was a given: when a subsidiary, branch or whatever of your organization was in trouble, you went there personally to form a picture for yourself on the spot.

I would have thought that EU-elites, right after the outbreak of the Greek crisis, would have planned their next meeting in Athens. On one hand, to show colors to the Greek people that they could feel like being part of a family. On the other hand, to get first-hand information as to what the problems were and how they could best be solved in cooperation with one another.

Well, that's what I would have thought. I guess I was wrong.

Moral of the story
If there is a problem somewhere, one should first take a good and hard look at it personally before jumping to conclusions. If one doesn't get that assessment right, one is unlikely to get the solutions right.

The final question
Why in the world did EU-eliltes not do that?


PS: previous posts in this series: P1, P2, P3.

11 comments:

  1. "On one hand, to show colors to the Greek people that they could feel like being part of a family"

    "Why in the world did EU-eliltes not do that?"

    Maybe because, there is no family? Ahahaha! :)))

    Or maybe because Mrs Merkel,i suppose a loyal subscriber of Bild magazine, had already understood the problem at its root, so wasting time to fly to Athens was futile? :)))

    http://euobserver.com/843/32363

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    1. You completely misunderstand how entrepreneurs think and act! They don't ask whether there is a family. They see a family wherever there is an opportunity to derive mutual benefit from joint actions!!!

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    2. I thought you were speaking about the Eu politicians?

      Bandolero.

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    3. I was talking about what entrepreneuers would have done and what EU-authorities did not do. My mistake was to think that EU-authorities would act a bit like entrepreneurs.

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    4. Ah,i am sorry, i didn't associate this with the previous part, i thought you were talking about the politicians (as Eu elite).

      But, after all, politicians aren't businessmen. They are associated with businessmen, but that is different :)

      The majority of usual politicians, think as their business the wellbeing of their party, how they will manipulate pubblic opinion, how they will turn around polls, etc. In a way they run a "shop", but of different nature than a businessman, because a businessman thinks to optimize his business for maximum profit. The politicians tries to optimize his rhetoric for maximum votes :))) This often leads to economic blunders (see Kreiskandreou).

      Unlike a politician, whose party may recover after a political bludner, a businessman may never recover if stands wasting time or playing popularity contests like the politician does.

      bandolero.

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  2. I'm surprised you should in all seriousness perceive a supra-national entity such as the EU as being similar to a corporation with branches and subsidiaries. The difference can be summed up in one word - dominion.

    A corporation has dominion over its branches and subsidiaries, it can do as it pleases with them. It can pour money into them, sack the managers and appoint new ones, shut them down, sell them off to a competitor or management, or an asset stripper etc etc.

    Supra national institutions such as EU do not have dominion over their member states, who still retain most of their sovereignty - e.g. if Greece invaded Albania tomorrow then there is little the EU or even NATO could do about that. At best all the EU can do, as an institution, is to influence a member state by applying diplomatic & economic pressure. Greece, Ireland etc are not colonies and the EU is not the Evil Empire - when it starts sending millions to the gulags then it will be such a thing.

    In most nation states the powers of the central government are defined by a formal Constitution and/or established conventions, in a federal state they also define the degree to which the central government can dictate what a province can and can't do.

    The EU has no Constitution, that idea was scrapped when it was rejected by the _people_ of France and the Netherlands. Hence the EU's institutional powers are vested in treaties; just like the UN's, if treaties vested any real power in the "governing" institution there wouldn't be 20,000 dead people Syria.

    The EU is a democratic institution in the sense that the major decisions are not taken by EU bureaucrats, as many politicians prefer the people to believe; rather they are taken collectively by the governments of the member states. With the exception of Italy, all of the member states have democratically elected governments, all of which have a veto vote in the EU Council.

    Its easy to blame supra national institutions such as the EU and the UN if you vest them with imaginary powers. In reality they don't have much power, the sovereign nation states of which they formed make sure of that. But it suits the politicians to let them take the blame.

    Whenever the word "family" is used as it has been here, I immediately think of two other largely European institutions. FIFA with its "Football Family", and the IOC with its "Olympic Family". Neither of which are palaces of virtue, more like dens of iniquity. I also cringe when I hear the French talking about solidarity.

    Greece's problems are primarily of its own making, just as Spain and Ireland's were with their ludicrous housing property bubbles, and Iceland's with its daft banking bubble.

    I note that Ireland rarely gets mentioned on this blog. Twenty years ago it was not unlike Greece was at the time, in fact it was probably in worse shape. But it instituted reforms, changed its tax code etc to create an investment friendly economy. And it got the investments especially from the CIT and Pharmaceuticals industries, and became known as the Celtic Tiger. That did not happen because the EU told them to do it, or because the EU gave them any extra money, or because 100 German Mittelstanders suggested they do it. They did it because they finally realised that their most valuable asset was themselves. In that sense they did learn from others, especially Singapore, Taiwan, Japan and South Korea.

    Despite what's happened recently, those investments in Ireland are still operating and some are expanding. Many Irish people with IT skills went 'home' in the 90's, most are still there working in good jobs for Intel, Microsoft etc, some have started their own software enterprises.

    Maybe Greece could look to Ireland for inspiration, rather than waiting for Brussels or the German Mittelstand to tell them what to do.

    CK

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    1. If I have compared the EU to a multinational corporation somewhere, I take that back immediately. I don't think I have, though.

      I was referring to more "entrepreneurial thinking" on the part of EU-authorities. They spend all their time discussing the debt and seemingly no time at all discussing the countries' economies. A country's debt is the "derivative"; its economy is the "underlying". If you don't like the prices of derivatives, you have to do someting about the underlying.

      Entrepreneurial thinking on the part of EU-authorities would mean to me that they look at the Macro-situation of the EZ-economy and figure out ways to balance the current commercial imbalances. Instead of pouring water into a well (new loans) so that it can be taken out again (payment of maturing loans), I would have wished to see more time spent of fixing all of the wells which are drying out or have already dried out.

      Obviously, the bringing about of balances cannot be mandated by the EU. But incentives could be set in such a away that the balancing will come as a result.

      Here is one example. When Austria bought the unnecessary Eurofighters, the politicians made a big deal out of the alleged "compensating business" which EADS had to agree to (EADS' agreeing to shift some sourcing to Austria). At one point, it looked like the Eurofigthers would not only pay form themselves but even more than that. So much for political games...

      But the idea is valid. Obviously, there is a very fine line between doing this and touching on the principles of free trade and free competition. But that fine line must be walked. There is no reason why European companies could not be incentivated to shift investments which they might plan outside the EZ into the EZ (Diekmann's proposal of a year ago).

      I know you are against all preferential treatment, and in a way I am, too. Unless they are equitably distributed and serve towards the overall common benefit. Sort of like EU structural funds which have also provided preferential treatment based on, mostly, very solid reasons. Many EU-regions are not better developed and can carry their own weight whereas before they had to be subsidized. And, by the way, such things happen all the time everywhere, even in the free-market USofA.

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  3. E.U. is not a democratic entity by design. It had to seem like that as no sovereign state would retreat from his self orientation to get into such a union that initially was formed so the possibility of another great European war could be expelled.

    As things have turned out by now it is obvious that there are flows at its structure's design and conflict of interests as well. As for the democratic values one can refer to the last attempt of the bureaucracy to form a Constitution -without asking the over 500 billion citizens on the outset-.

    Apart from this political philology there are serious questions on what purposes did the eurozone actually have served apart from boosting both German's exports to the periphery and the deficits of the last.

    But the conflict of interest does not stops here.

    Greece par example happens to lie on E.U.'s border with -till recently— the whole Balkans, Turkey and Africa around. So it is the back door of illegal immigrants on their way to Europe, U.S. and Canada.

    What measures did the core E.U. took first to protect it's borders from any military violation or the illegal immigration?

    Not only nothing but awkwardly it ruled that illegal immigrants should return to the country of their first entrance, in this case Greece.

    As for the guarding of E.U.'s borders when the European army was founded it was decided that if any aggression between Greece and Turkey should happen then this army would have nothing to do about it.

    By the same time Germany made Greece and Turkey its best clients on arms selling.

    Furthermore it is well known the Siemens scandal and that the Greek minister of defense that all this years bought among others malfunctioning submarines and other arms from Germany is now in jail.

    This two scandals -that in Greece are indeed very rare to get exposed in depth- were revealed after the U.S. justice examined these cases.

    Cyprus, that by now is on the presidency of the E.U. can not freely exploit its EEZ on gas drilling.

    It is obvious from this quick examples that the E.U. experiment and especially the eurozone's, lacking economic, military and common foreign policy are doomed to fail or to transform to something new, by far less inspiring european and democratic.

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    1. Dear Mr. Dimko,

      I agree with all and add that i have found tragicomical each times that a EU treaty was being voted against in a country with a referendum, the first reaction of politicians was "let us have a 2nd one". What is this? Outvote them to exhaustion?

      In the greek case, you see how now the whole thing works, what people vote becomes secondary. Mr. Papandreou gets elected with completely different agenda (promicing raises to everyone) and he then suddenly goes to the small island of Kastellorizo, to say to the flabergasted greek citizen "Hello, there is no money, i am bringing you the IMF, sorry!".

      Then, in December 2011, you have finally Mr. Papandreou, after seeing that he is about to cause revolution, coming up with the idea of referendum in January. He clears out that the subject will not be "euro or drachma", but "memorandum or no memorandum". This would buy him time to power and appease the population. And what happens? You have Merkozy, recall the norty boy George Papandreou to Cannes, where he was submitted to the biggest humiliation that a greek politician has been submitted to during peace time, where they practically made him say "i will do referendum in December about euro or drachma, please don't spank me anymore madam Merkel!". So much for the democracy in EU. I find it remarkable that Mrs Merkel allowed us to have elections in May in the first place. But hopefully the "harsh negotiator" Mr. Samaras won, so that he could do his "harsh negotiations" :) I don't think the concept of "democracy" has been violated so much so many times in Greece since the junta.

      The illegal immigration is as you say YET another show of "EU democracy", where "the weak and the moron pays for all". Another of Mr. Papandreou's illustrious political victories, as he was the one to sign the Dublin II Treaty in 2003. Practically, all the illegal immigrants coming to EU, will have to be "accepted" from the first state, which must see who deserve political asylum and well...cope with the rest. If however, illegal immigrants manage to arrive to their desired destination (ex. France) and are arrested there, France has the right to send them back to the first state they entered, Greece. Isn't that a MARVELLOUS idea of how all the others can unload their problem to the weak-moron Greece? Full of EU ideals about human compassion and solidarity...

      So you have:
      - Greece must remove all mines from turkish borders for humanitarian reasons.
      - 90% of immigration towards Europe arrives to Greece via Turkey(300 every day for the past years). Greece is forced to accept them.
      - Then the usual EU institutions or amnesty international slaps Greece for "bad living conditions" (yes, the entire Italy has facilities for 3146 people, in Greece these arrive in 10 days), so Greece all these years,was holding them for 1 month and then was giving them a ticket to Athens, with a paper saying they must leave the country (and of course nobody did).
      - You also have the EU threatening to oust Greece from Shoengen zone because of not being able to enforce perfectly the Dublin II treaty.
      - You have the EU complaining that Greece doesn't give asylum quickly enough.
      - You have Frontex (finally EU help!!! or not?) doing nothing except for identifying the new immigrants so that if they manage to arrive to Germany, they can be sent back to Greece.
      - And you also have european law that forbids mass expulsions for illegal immigrants.
      - And recently you have Italy who sends back even those with political asylum.

      The question is, if half of Syria, after the Afghans also comes to Greece, Greece must accept them because the EU says so?

      >

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      And all the EU countries, pointing the finger to bad Greece, that isn't coping the problem, at the same time Greece can't send them back to their home countries because mass expulsion isn't allowed and because their home countries won't accept them without legal documents, which the immigrants tear as they come to Greece, so that they can claim they are from a country that deserves political asylum (I am Palestinian, not Egyptian).

      And then, in all Europe, the hypocritical biggots, are "disgusted" that Golden Dawn appeared in Greece.

      Some union of "democrats" and "humanitarians". I especially like Sweden that is very sensitive to migrant's living conditions, but doesn't want to take the migrants that come to Greece only because they want to go to Sweden. It is as Slavoi Zizek says about revolution. "They like human rights, but from far away. The further they illegal migrants stay, the better. Greece, keep them in Greece".

      And then you have the EU Comission "ah, bad Greece, bad, you have the highest shadow economy, shame on you". Ah, yes, imagine if half of the shadow economy would pass to the real economy...

      About Turkey this was since the start an obvious dead-end. Greece was one of the best arms clients in the world. You don't do anything to help them, since they give the money to your industry. After the fall of USSR, good clients are hard to get by. Most countries reduced their national budgets to 1% for defence, Greece was the only to keep it at 4,5% of GDP.

      All hail the "Union". At this pace, Golden Dawn will become goverment, only to have, again, a "shocked" european union say "my God, what happened to the greek democracy, how could a fascist party go to goverment! All this racism in Greece! Why can't they accept another 2 million immigrants and make them work in the numerous greek factories!".

      If Greece goes back to the drachma, at least it will be a golden opportunity, to trash the Dublin II treaty, get out of Shoenghen, seal the border, push back to Turkey whoever arrives and open our northern and western border. I would even give free transportation to a border area of their choice and 500 euros to start to all illegal immigrants trapped in Greece that want to make a run for the northern countries that they wanted to go in the first place.

      That's the only thing that will make Golden Dawn deflate.

      Bandolero.

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  4. Well said, but there is more….

    Take a good look at the numbers. After Greece entered the eurozone – allegedly achieving to hide secret swaps from the rest of the civilized world – the Foreign Direct Investments in Greece proceeded by far from Germany that invested about the double (1,200 billion euros 2003- 2010)from the second – France - while the trade surplus between Greece and Germany – in favor of the second – skyrocketed by 2009 reaching the 9,1 billion dollars which were mainly put in the industries of food, tobacco and drinks.

    At the same time banks in Greece started a crazy "lending dance", by taking phone calls almost begging people to take a cheap loan for every possible reason.

    So while Germany profited insomuch from its exports in Greece, the arms sailing and the domestic – boosted by the banks – overconsumption, the thousands of immigrants that were stockpiled being stacked in the country were ready to be used for cheap building stadiums and roads during the second bubble – the first was in the stock market – the Olympic games. That brinks us again to the infamous Siemens scandal for which I will only add that part of the compensation that was agreed with Greek state - aka PASOK - will be paid through seminars that the company will organize for the Greek public servants “against corruption”.

    Not wanting to overload this blog and at the same time thanking its owner for the hospitality, I guess that as the "Greek plumber triggered the crisis in the outset, now its time for electrician to ruin the euro zone".

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