Guns, Not Butter

Madness? This is Spaaaartaaaa!!!

I probably should run this story past KOW’s actual German speaker but, what the hell, let’s throw caution to the wind and trust in Google Translate. On Zeitonline one finds this intriguing story, ‘Schöne Waffen für Athen‘, the gist of which:

1. If Greece gets the next big (80 billion Euro) tranche of IMF-EU bailout moulah in March; then,

2. it will be able to conclude a whole bunch of new defence contracts including, inter alia, new Eurofighter jets, frigates from France, submarines from Germany, and Apache helicopters from the USA.

This is on top of a whole heap of kit purchased, largely from Germany, but not yet paid for–Leopard 2 tanks, Eurocopter helicopters, M109 howitzers, phased plasma rifles in the 40 watt range…

In case you’ve missed it, the Greek economy is tanking. In the Guardian today one reads:

…Greece’s economy is being smashed by the heavy spending cuts and tax rises imposed since the country accepted its first IMF rescue package. And as if Greece didn’t have enough problems – Germany’s finance minister Wolfgang Schäuble has urged its leaders to hurry up and agree a debt-reduction deal with its creditors:

Schäuble told German radio that:

‘Greece…could go faster. We are pushing hard for that.

Greece has to implement what was agreed. All the rescue packages in the world can’t help if the causes are not tackled credibly.’

Now, it would be easy to get on the high horse here, and I must admit I find Schäuble’s words a little nauseating in context. The ‘rescue package’ for Greece has very little to do with rescuing Greece and everything to do with rescuing its creditors and those who have sold it guns on credit. But I’ve got to say if the money has to be spent I’d rather it was on guns than on paying people in ‘arduous’ professions (barbering, waitering)  to retire at 50-55. I think they may find the former more useful since I reckon things are going to hell in a handbasket


6 thoughts on “Guns, Not Butter

  1. Francis Grice says:

    I’m not sure you can entirely separate the wellbeing of Greece from its creditors though. The creditors (presumably) lent the government the funds and resources in good faith, and so probably have some right to squeak about not getting paid back. The issue, though, is more that if the creditors get treated badly, then creditors won’t be willing to lend to it again in future (fool me once, more fool you, fool me twice, more fool me). Ironically, that means that the initial sets of creditors would get a hair cut, which would hurt quite a bit, but Greece would ultimately end up being the one who gets hurt more.

  2. There’s a rather good look at Greece and it’s debt problems in Boomerang by Michael Lewis in which he posits that Greece is being used by Germany in essence to drive down the value of the Euro as a whole to help German exporters. Its a rather neat (if slightly conspiritorial) idea. Since the Euro is heavily impacted by its weakest member, if you can control the performance of that weakest member you can control the overall performance of the currency as a whole. Right now it’s the IMG, Germany and France who have Greece in a rather tight grip, and of course, that sort of manipulation doesnt have to be tacit, or even concious, its just a nice side effect of the situation which has been created.

    The problem is that Greece does have fundamental issues, and so far no one has suggested a solution which does more than kick the can further down the path. At a certain point someone is going to take a swing at that can and shatter their foot, and its unclear whether, in a pinch, Germany or Europe as a whole could pull it out of the fire. More likely I think it’ll be let go, and the emphasis will then shift to Portugal, Ireland or (god forbid) Italy.

  3. Pingback: What we’ve seen so far: The Year 2012 in Review | Kings of War

Leave a Reply

Your email address will not be published. Required fields are marked *