You thought you already knew about EU corruption? Read this
By Alan Johnson World Last updated: June 11th, 2014
“Greece, Ireland, France, Italy… a familiar transaction.
The BBC Europe Editor Gavin Hewitt’s The Lost Continent is a superb page-turner about the crisis of the European Single Currency. I found it so jaw-dropping I added my own entry in the index for “WTF moments: best of.”
I learnt that “Two journalists from Corriere della Sera discovered there were 72,000 official cars [in Italy], costing 1.85 billion euros annually”.
In Spain, “the airport of Ciudad Real boasts one of Europe longest runways. Its vast airy light terminal is designed to handle 5 million passengers a year. It cost nearly a billion euros. Yet there are no planes.”
During Ireland’s property boom, “In the space of 10 years, 553,000 houses had been built. Nearly 300,000 of them lay empty.” One city, Valencia in Spain, ran up a debt of 25 billion Euros.
German stability culture it wasn’t.
In a sense, the single currency – monetary union without fiscal union, let alone political union – not only helped get European countries into crisis, it has also stopped them getting out of it.
Introduced prematurely – and there is an understatement! – in 1999, the Euro was a political act by a political class-cum-bureaucracy that saw itself as the vanguard party for a European super-state. It was always about politics not economics. It was supposed to be the next stage to an “‘ever-closer union”.
Unfortunately, the single currency was also an open invitation for countries with very different economies, and very different economic and political cultures to Germany’s, to get into serious trouble.
As interest rates tumbled, and in some southern european countries they halved, borrowing and spending exploded and debt rocketed. The financial crash of 2008 brought the hang-over: exposure, markets pushing up the cost of borrowing so high that only EU/IMF bail outs could prevent a default; and then the grim troika of the EU, the IMF and the ECB enforcing a new religion of austerity on the sinners. The results of that have been recession, riot, and the rise of some ugly populisms.
Hewitt exposes a culture of cheating (everybody, it seems, knew the Greeks were cooking the books to meet the criteria for entry to the single currency in 1999), crony capitalism (“crucially, there were always friends in government”, he writes of the networks of politicians, developers and bankers that organised the spectacularly ridiculous Irish property bubble), corruption (“Politics was built on favours”), dodgy accounting (Greece was “a modern European country anchored in the European Union, but it was not keeping proper accounts”), tax evasion (In Greece “paying tax was regarded as almost a lifestyle choice … the State was fair game to be ripped off if the opportunity arose”) and vanity projects. (My favourite is the 70,000 Euros to restore the penis to the statute of Mars that adorned the entrance to Palazzo Chigi, Silvio Berlusconi’s official residence).
Having helped get Ireland, Greece and Portugal, to name only the worst hit, into trouble, the single currency and the regime that enforced it then stopped them getting out of trouble.
When you can’t devalue your currency, or default on your debt, all you have left is growth. But you can’t have that either because you can’t grow while slashing and burning pensions, wages and social services, deflating your economy, and seeing your tax-take shrink. Austerity has brought only stagnation, falling revenues and more debt. (And maybe it was always really intended to prevent contagion rather than to set Greece, Ireland or Portugal on the road to recovery – a suspicion eating away at the very idea of “Europe”.)
Hewitt’s book is a stinging indictment of all the hubris and elitism of a project “driven not by the dreams and hopes of the people, but by an elite that believed destiny lay in building an ever-closer European union”.
One last story sums up where we seem to have landed. The 700 villagers of Vilanova d’Alcolea in the province of Castellon in Spain, where olives and almonds have been grown for a very long time, saw 155 million euros spent on building an airport nearby with an 8,856-foot runway (though Valencia airport was only one hour away). According to Hewitt, the project was forced through over their objections by a local politician, Carlos Fabra, who then spent another 300,000 euros of public money commissioning a statue of himself to grace the entrance to the airport.
No plane has ever landed there. The locals, Hewitt records, “shake their heads at the madness”…”
( Daily Telegraph)
So, when the European “Union” has devoured itself, and contemplates sheepishly and feebly its own rotting carcass; what sovereign nation states will remain valid amongst its original members? What democracies will survive with the physical strength and moral vigour to provide support for other nations in their critical time of need? However ludicrous the surface froth of EU bureaucratic corruption, the deeper implications for world peace is no laughing matter. ( Penstorm)
Finally, from “The Conversation” Japan is more trusted to manage its huge debt than Greece: