Eurozone finance ministers did a deal earlier this week to make a partial reduction in Greece’s debt and permit an 11th-hour, 34bn euro bailout. But the deal, presented as a win-win for Greece and its creditors, depends on Athens borrowing a further 14bn euros to finance a bond buyback scheme that the Greek finance sector doesn’t want a bar of. It’s debt piled upon debt, for an economy that has been shrunk by a quarter in the past six years and so has no prospects of repayment.
Serious doubts have surfaced across Europe too, with commentators seeing the deal as a manoeuvre by German Chancellor Angela Merkel to get the issue off the agenda before next year’s elections. As a spokesman for the Commerzbank put it: “The whole structure of the Greek aid deal is intentionally concealed from the taxpayers,” and there is every likelihood that the major European banks will end up having to write off large chunks of the Greek debt after all.
But debt is now a European-wide problem. Greece is a very small economy, while France is the fifth largest in the world. Its public debt is more than 90% of GDP, which is climbing towards Greek levels, and its public spending accounts for 57% of GDP, the highest in the European Union. French manufacturing has declined drastically in recent years to 11% of GDP, way below either Germany or Italy, and the current quarter’s results will almost certainly confirm that the economy is in recession.
President Hollande’s government appears paralysed, unable to meet its election promises or even get its budget through the Senate. As for the prospect of Hollande getting French voters to accept closer integration with the EU, that’s a firm “Non”.
No wonder a recent issue of The Economist called France “the time-bomb at the heart of Europe”.
Meanwhile the Organisation for Economic Co-operation and Development (OECD) is warning that the European debt crisis is an even bigger threat to the global economy than the prospect of America falling off its fiscal cliff.
Greece has never been the source of the sickness. It was just the first country to manifest the symptoms.
BRADLEY MANNING AND AMERICAN “JUSTICE”
To understand what is at stake in the case of Private Bradley Manning, and why Australians should be deeply concerned at the possibility of Julian Assange being extradited to the United States, it’s as well to consider evidence reviewed by Michael Ratner on the site Counterpunch.
Ratner is the president of the US Center for Constitutional Rights which supports the demand by WikiLeaks, Julian Assange and other media organisations to make the documents from Manning’s current trial public.
He reports that forensic psychiatrist Captain William Hoctor, assigned to advise on Manning’s care in military prison, told the pre-trial hearing at Fort Meade that marine officers persistently refused to take on board his medical recommendations. “I had been a senior medical officer for 24 years at the time, and I had never experienced anything like this,” he said. “It was clear to me they had made up their mind on a certain cause of action, and my recommendations had no impact.”
Ratner concludes that the military is out to break Manning “for a crime that amounts to believing that one’s highest duty is to the American people and not the American government”. You can read the full article at http://www.counterpunch.org/2012/11/27/breaking-private-manning/
SYDNEY AND THE BUSH
I’m just back from a second working trip to Sydney in a month, and it’s good to be home in the Tweed Valley, surrounded by trees and within sight of Mount Warning – known to the local Bundjalung people as Wollumbin, the cloud catcher.
After four months without rain we’ve had about 120mm in November, enough to green up the place but barely enough to soften the ground. Along our favourite stretches of coastline, at Cabarita and Kingscliff, the evidence of continuing coastal erosion is unmistakable.
We’re a very long way from the northern hemisphere’s permafrost belt. But as I look at the disappearing sand dunes, I think of the recent scientific reports of the melting permafrost and the dangerous acceleration of global warming that entails, and I wonder how the so-called “climate sceptics” – science deniers and friends of Tony Abbott – can sleep at night.
Sobering thoughts for the start of summer.