Sunday, September 11, 2011


It is a glorious September here.  The skies are cloudless, the fruit trees are laden. Though the temperature is in the 30s there is an autumnal softness to the heat. Now the holidays are over, the crisis can resume.

There are threats that the next tranche of the bailout will not be paid (meaning that the government could run out of money in October), strikes and demonstrations are starting again, there have been riots in Thessaloniki - by both protesters and football hooligans - whilst the perversity of EU trade imbalances are shown by the strangest story of the week, Greece spent €1.5 million importing olive oil from Germany!

The Euro crisis has neither gone away, nor has it been solved. Policy makers' extraordinary faith in austerity is being challenged by those who are expected to be austere. And still the sums don't add up.

Looking out at the tranquillity of late summer in Pelion it is hard to see the economic storm brewing, but the dénouement is looming. The Cheshire Cat has posted a good analytical piece on the black comedy of orthodoxy. His conclusion?
The Euro is a badly built road on an impossible terrain. Flattening everything may succeed in forcing Euro economies to converge towards a desolate landscape of abandoned businesses.  The strength of Europe has been its rich diversity; its weakness its inability to accept diversity.

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