A Greek Revolution?

Greek President Karolos Papoulias has faced difficult circumstances and situations in his short period in power in Athens.

Yet, it seems that his short spell as President may end sooner than had been hoped by international officials as last-ditch talks with various party members to secure support appear to have been fruitless.

Attempts to form a coalition and avert a further set of elections are Papoulias’ primary concern: even higher than economic issues. Should the Greek populace be put to the vote again, there is sure to be all manner of civil reactions from apathy to unrest.

Certainly, the Greeks will have lost all belief in the abilities of their leaders to govern and manage the state properly and efficiently. At best, politicians can hope for a resolution between party factions, for any further public disgrace could spell the end of Greek’s current political system.

In the event of an election, whilst a few may look with disinterest on a failing succession of Presidents and parties, the recent demonstrations and violence that have spread across the country suggest the possibility of widespread anarchism and potential revolution.

Of course, extremist positions that promote Greek exit from the Eurozone appear all the more enticing whilst faced with current alternatives. Riddled with debt, a persistently shrinking economy and mounting unemployment, Greece is certainly not the hotbed of industry and business that marked the new millennium.

Last week, a majority of Greeks voted for parties that want to rip up the country's bailout agreement with the European Union and International Monetary Fund (IMF) - including neo-Nazis.

The biggest winner was the leftist anti-bailout coalition, Syriza, whose share of the vote more than tripled and who describe the austerity imposed by the bailout as "barbaric".

Yet, the main problem that any incoming government could face is that there is no official guidance on a country exiting the EU. No, the naïve, bright brains behind the introduction of the EU did not foresee any member country wanting to leave the zone and so did not prepare for such an event.

Therefore, Greece could essentially issue a statement to Brussels stating its intent to leave the EU and then default on its debts. Its second default, that is.

The economic repercussions across both the EU and Greece however could be catastrophic as further member states could decide that restrictive measures on their economies are no longer suitable. As such, contributors such as the UK and Germany lose billions of euros in funds that have been pumped into these nations.

Meanwhile, a new Greek government could not guarantee the stability of any currency that it introduces or predict the volatility of markets towards the new position of the country.

Greece would probably have to impose capital controls to prevent all the money leaving, much as Malaysia did in 1998 after the Asian financial crisis.

So in the best-case scenario, Greece would have no buying power, and everything would be expensive: extremely expensive.

However, the play would be based around the hope that with such a weak currency, the economy would grow rapidly.

Whilst this route would be expensive and painful, it might appease those voters who feel manipulated and controlled by central authorities in Brussels who they believe have no appreciation of their situation. If the hypothetical economic reinvigoration were to pay off, to pardon the pun, it could be the lighting spark for further action in the EU zone and render relations difficult across the EU, ushering in a new era of European co-operation, or lack thereof.

Flower of Scotland

1916: In the middle of World War One, Ireland stages a bid for independence in Dublin, threatening the British chances of success at a crucial moment in the war effort.

2012: In the middle of the worst recession since the Wall Street Crash, Scotland stages a democratic bid for independence “in Edinburgh, in London, or anywhere the Prime Minister pleases”, with many deeming the act detrimental to British growth at a crucial moment of European downgrading.

Certainly, the debate waging around the possibility of independence versus unity has seen battle lines drawn, but these may be premature concerns.

Previous breakups of the United Kingdom in Ireland provide a primary cause for concern. However, the eventual independence granted to Ireland was more an appeasement following a costly war, with transition handled distastefully by both parties. Looking back over the course and administration of the change of power, there are easily identifiable mistakes that could (and should) be avoided in the case of Scottish independence.

Continued violence and hostility is the true legacy of Irish independence and that was a threat suffered particularly till the turn of the century, but a decade ago. Scottish independence, on the other hand, would be entered into through democratic debate rather than the forceful mode of conduct that kickstarted and marked the Irish movement. England, not as prominent on a world scene, would be more amenable to these discussions than its own rash nature almost 100 years ago, when maintaining status was a priority.

Besides, a peaceful resolution would be encouraged while resources are stretched so thin across the United Kingdom due to cuts.

However, Scotland would surely earn the lion’s share of these resources from a split. Economically vibrant at the moment, Scotland has, as expected, the second largest GVA per capita in the United Kingdom, after England. Yet, many do not appreciate, or are completely unaware of, the fact that revenue from the North Sea oil rigs are not included in these figures, as the profit is currently ‘distributed’ around the UK instantly. With independence, 91% of the oil area lies within the Scottish borders. The sudden wealth that would be available to the northern territory as a whole would transform many areas of public spending and investment: leaving Scotland with little deficit.

In fact, it is already recognised that Scotland is the largest producer of petroleum within the EU, and that there is potential for other offshore oil-sites.

Additionally, Scotland is the central zeitgeist for whiskey lovers worldwide. Exports in specialisms such as whiskey, shortbreads, fudges and fishing produce earn the Scottish country a reputation for delicacies renowned the world over. Add the prominence in manufacturing and construction (Glasgow for example houses the largest shipping construction area within the UK), and one can see the advantages to a booming Scottish economy.

Already a relatively rich nation, the boost proffered from continued exports would ensure gained capital and circulation of the pound. In 2007 alone, Scotland’s top 10 export destinations alone earned the country in excess of £18,825 million. Imagine the growth in this figure with Scottish independence, backed peacefully by England.

In turn, this could help Scotland to tackle its slums and poverty problems. Despite the economic benefits of the oil, there is still marked difference between lifestyles of many Scots and their counterparts south of the border. An average male in Glasgow for example only has a life expectancy of 69. Scottish public services see themselves as inhabiting a different social area than England and Wales, with different key issues of poverty, drugs, and unemployment to tackle.

However, even with the separation, use of the GBP will insure continued intrinsic links with the remaining UK factions. Extra trade on the pound from Scotland will ensure continued circulation that benefits England and Wales itself in the long run.

A poll by YouGov last May showed marginal support for the move, but an overwhelming rejection from Scotland itself.

Perhaps the break-away of Scotland would also encourage a deeper look at the British image: a modern twenty-first century conglomerate of cultures hinged on London. The investment seen across Scotland should be mimicked across larger areas of the UK. HS2 makes some steps in that direction, but relatively few and relatively slowly. England is not capitalising upon its current market opportunities. Expanse of infrastructure would allow greater migration of peoples across the country for jobs. Focussing our main sources of income on development would allow a certain independence in a time of Eurozone uncertainty, creating a more stable market area.  A galvanised population to the North could teach English people a thing or two about national pride for sure.

Scuppering Salmond’s hopes for Scotland however are the Welsh and Irish members of Parliament, claiming that Scottish dominion in its own right would leave the two areas outvoiced within Westminster.

Nonetheless, considering moves towards Welsh parliaments, it would appear rather foolhardy to prevent progress for the sake of tradition. Not only does the move allow England a greater democratic voice, but it is not in the apocalyptic fashion that the Welsh and Irish describe: rather radicalisation on both sides of the border due to the split would see new ideas emerge as to how the country should be run and here lies the prospect of wide social and cultural change (the thing the Welsh and Irish appear to advocate amidst a Tory government).

With no date currently set for the vote (despite furious debate over timing this past week), we shall have to watch the development and resolution of lingering issues, such as currency, military, and Nuclear warheads over the coming months.

Shaking of the shackles of union is never an easy transition, but for the cultural, economic and social benefits that Scotland could wager, perhaps the UK should be more amenable to the shouts of “FREEDOM”.

12 Unresolved Questions of Scottish Independence. 

Delors Created A Monster: The Euro Currency.

In economic downturn, any politician’s own trivial punch at the current state of the financial crisis can really knock confidence and cause extra downturn and problems.

But this has not phased Jacques Delors, one of the main architects of the single European currency, the Euro. Perhaps his honesty is the wake up call needed for future generations to never again be so flippant in their approach to international banking and funds. Perhaps it’s just a last jibe: an “I told you so” move that satisfies no one but himself.

However, the politician spoke out last week, stating “The Eurozone was flawed from the beginning”.

These are no doubt so bold and troubling words, at a time when the Eurozone has never looked so increasingly fragile. More countries turn to the Markozy central block for loans and bailout plans in an web of dependency that is surely already too far stretched. With other key members such as Spain and Italy, not thought of as in danger until quite recently, defaulting, there is a huge lack of faith in the value of the Euro, and its shared unit only serves to weaken those central powerhouses further.

Why the sudden backlash from Delors? As head of the European Commission from 1985 to 1995, he played a key role in the process that launched the euro and his comments effectively bring about questions of its true validity.

Delors claims that the single unit is not itself at fault, but “a fault in execution” by those who saw its implementation, who did not consider the economic backgrounds of certain member states. He continued by adding that “the finance ministers did not want to see anything disagreeable” and so instead of focussing on kinks of the single currency, they blindly promoted its benefits regardless.

Perhaps his most poignant move is to admit that those, like the British, who objected to the Euro certainly “had a point.”

In fact, a jump (or at least jump by today’s variable standard) was seen in the pound vs the Euro trading after this admission was made. Trade rendered £1 worth €1.17-€1.18. Not that this necessarily signals a growing strength in the pound, but rather a worse Euro. And Britain should remain wary of this, for its markets are key traders in the Euro currency. Our own economic growth is dependent on the fiscal balance sheets of Europe, even if we like to disagree.

On Friday, German Chancellor Angela Merkel said Europe was working towards setting up a "fiscal union", in an effort to impose budget discipline by members.

Yet, this surely would have been a logical launch issue? In some regards, it seems the lax approach to the Eurozone was deliberate, creating a free for all market, wherein all countries could reap the rewards. Bearing the consequence was never at the forefront of decision making.

And if the Euro should collapse, where will blame rest? With the French and German governments who prop and support and continue to make crucial decisions for the future of their economies? With the lesser countries who added to the imbalance of outgoing money? With the lack of a central union from the beginning?

Delors doesn’t have a definite answer, but sees all the moves of leading parties as “too little, too late”. But then is this the fault of Delors in his initial approach to the Euro itself? The history books will decide.