We think single currencies really require single governments…There’s nowhere in the world that has more of a single currency without having more of a single government.
British PM David Cameron (HT: The Daily Mail).
In 2006, The Duke Law School sponsored an academic paper written by Buchheit , Gulati and Thompson. The paper, The Dilemma of Odious Debts, discussed how to handle an international incurred by an iniquitous government and them bequeathed to a less pestilential successor. A portion of the abstract defines the term “Odious Debt.”
Public international law requires that states and governments inherit ("succeed to") the debts incurred by their predecessors, ….Among the purported exceptions to the general rule of state succession are what have been labeled "odious debts", defined in the early twentieth century as debts incurred by a despotic regime that do not benefit the people bound to repay the loans.
In the aftermath of the bizarre, amusing and scary Greek Election this past weekend, Alexis Tsipras, the head of the Greek Party Syriza has been tasked with forming a Greek Government. He wants this New Greek government to repudiate all the debts that were run up by the Big Fat Old Greek Government. He is insisting that the banks of Greece be nationalized and that all of the debt that they owe under the terms of the EU-IMF bailout be declared odious.
The ECB* predictably slapped hard on the wrist of Tsipras. Jorg Asmussen (An important ECB official) explained that the Greeks could open their wallets and zip their soup-coolers.
Greece must be clear that it agreed to this rehabilitation program is no alternative, if it wants to remain a member of the Euro-zone
Asmussen, like British PM Cameron above has hit upon something vital. Economic cooperation pre-supposes a significant level of dare I say it, nationalism. People are either in on the deal to the bloody hilt, or they are completely and totally out. So the ECB can collect off of Greece or it can ostracize them in toto.
The dramatic repudiation of the center in Greek politics has made this impossible. There will be no “work-out” session between “reasonable men.” Tsipras gains strength in his inanity from the total deracination that surrounds him in Athens. If Chancellor Merkel and President Hollande have no interest in making a deal with Mr. Tsipras, permit me to introduce their alternative negotiating partners.
As for the debts, Greece is bound and determined not to pay back one red Euro. That money is probably gonesville unless the ECB wants to assume a more forceful posture in their efforts to recover the funds owed by Greece to the rest of Europe. Do the Greeks care if they are ostracized? The Golden Dawn (pictured above) doesn’t believe in cruelty to animals. Rather than putting moats filled with alligators on Greece’s borders, they believe in landmines instead. The also publicly and openly declare their hatred for Germany and its “banksters.”**
So yes, the Far Right’s version of Occupy Wall Street now has 21 seats in the Greek Parliament. While Golden Dawners in no way support the government of Hardline Leftist Alexis Tsipras; they certainly give him a serviceable boogeyman anytime he feels like making bankster-like minions of the Brussels bureaucracy dance to his tune. Thus, Europe gets to make The Devil’s Choice - cut a profligate Southern European EU member loose or militarily force their compliance. The decision made in Brussels will give us keen insight as to whether Francis Fukuyama was in any way right about history being over in Europe.
* - The ECB is Europe’s less lovable version of the FED.
** - “Bankster” – the new litmus test for idiots. Say this word w/o appropriate html sarcasm tags and I can classify your IQ as no greater than about 85.