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Generational Dynamics Web Log for 28-Jun-2014
28-Jun-14 World View -- USS Bataan with 1000 marines to join six other warships in the Persian Gulf

Web Log - June, 2014

28-Jun-14 World View -- USS Bataan with 1000 marines to join six other warships in the Persian Gulf

We have Jean-Claude Juncker to kick around again.

This morning's key headlines from

We have Jean-Claude Juncker to kick around again.

Jean-Claude Juncker and David Cameron
Jean-Claude Juncker and David Cameron

Jean-Claude Jüncker is to become the next president of the European Commission, roughly weaker equivalent of the president of the United States, after the European Council backed his nomination this afternoon in Brussels. The European Council, the leaders of the 28 nations of European Union, voted 26-2 in favor of Jüncker. Only Britain and Hungary were opposed.

Jean-Claude Jüncker is a total politician. Almost everything he says is completely full of crap, but his political skills are so great that he can sell it to a credulous press that acts to him the like the NY Times and NBC News act toward President Obama.

It was always great having Jüncker around. He was head of the Eurogroup, the eurozone finance ministers, and so he was in charge of the efforts to bail out Greece. At every point in the bailout, he would make a statement that Greek fiscal crisis had been solved, and he would back it up with some figure that was completely ridiculous. But the mainstream press would lap it up the way they lap up everything Obama says, and it's up to someone like me to point out what's going on.

The most amusing moment occurred in May, 2011, when Jüncker was caught in a lie so obvious that even he couldn't BS his way out of it. Finally he said When it becomes serious, you have to lie, to explain why he lied. From that point on, we could always assume that everything he said was a lie, since everything was always serious.

Jüncker was prime minister of Luxembourg from 1995 to 2013, and when he retired, it was assumed that he would go off to a Swiss chalet and write his memoirs. But he wanted the job of President of the European Union, and when the European Parliament ratifies the nomination on July 16, then he'll have what he wanted. And we'll have him back to kick around again. Irish Times and Reuters

Britain's David Cameron hints at leaving EU because of Juncker

Jean-Claude Jüncker in 2005, shaking his fist at British prime minister Tony Blair (BBC)
Jean-Claude Jüncker in 2005, shaking his fist at British prime minister Tony Blair (BBC)

Britain's prime minister called Jean-Claude Jüncker the wrong man for the job of EU president, and said:

"There are times when it’s very important that you stick to your principles and you stick to your convictions even if the odds are heavily stacked against you rather than going along with something that you believe is profoundly wrong. And today is one of those days. ...

If the European Council, the elected heads of government, are going to allow the European Parliament to choose the next president of the European Commission in this way I wanted it on the record that Britain opposed that.""

He added that support in Britain to remain in the EU is "wafer-thin," and that Jüncker's accession would harden the opposition.

The dispute is bitter and personal. There have even been reports of Cameron meeting with other leaders earlier in the week to discuss Jüncker's heavy drinking and smoking problems. Jüncker's liking for "a cognac at breakfast" was causing concerns. One European diplomat said: 'His alcohol consumption has been raised by a number of leaders since the (European) parliamentary elections.'

However, this was not the first bitter, personal disagreement between Jüncker and a British prime minister. In June, 2005, at an EU budget summit, Jüncker was demanding of Britain's PM Tony Blair to agree to give up a $5 billion rebate that Margaret Thatcher had negotiated in 1984. Blair refused, unless France's president Jacques Chirac agreed to reduce the large agricultural subsidies that were given to French farmers. Jüncker shook his fist at Blair, and at a post-midnight press conference, a furious Jean-Claude Jüncker clearly condemned Blair and the UK, saying he felt ashamed that "certain people did not have the will to reach agreement when some poorer other countries were willing to do so."

Britain and Jüncker represent opposite poles on the spectrum of EU federalism. Jüncker wants to give as much power as possible to the politicians in Brussels, while Cameron, and Blair before him, want Britain to retain as much individual sovereignty as possible. The appointment of Jüncker to the EU presidency is a real thumb in the eye of Cameron and Britain, and this story is not yet over. BBC and Daily Mail (London) and Telegraph (London)

The financial crisis in Greece continues

Jean-Claude Jüncker led the way in the bailout of Greece. Greece's financial crisis hasn't been in the news much recently, so it's appropriate to ask how Greece is doing today.

In October, 2011, European leaders announced a new plan to bail out Greece. For details, see my article at the time, "28-Oct-11 News -- Markets explode on crazy Rube Goldberg eurozone deal". The heart of the announcement was that investors holding Greek bonds would "voluntarily" lose 50% of their investments -- take a 50% "haircut." (It later turned out to be 75%.) In return, Greece would go on an austerity program that would lower its deficit to GDP ratio from 160% to 120%, by 2020.

That turned out not to be enough, and in November, 2012, Jüncker announced to the world what was to be the final bailout of Greece. (See "28-Nov-12 World View -- Europe's new charade in Greece's bailout announcement") At the 2 am press conference, here's Jüncker's announcement:

"This is not just about money. This is the promise of a better future for the Greek people and for the euro area as a whole, a break from the era of missed targets and loose implementation towards a new paradigm of steadfast reform momentum, declining debt ratios and a return to growth."

Since the situation was serious, we can assume that Juncker was lying, and indeed he was.

Where's Greece today? The unemployment rate is 27%, the highest in the eurozone. Greece's inflation rate is -2%, putting it into the worst deflationary spiral in the eurozone. And its debt-to-GDP ratio has gone up - to 175%. In other words, instead of going from 160% DOWN to 120%, the debt ratio has gone further UP, to 175%.

So Jüncker's fatuous babble about "a new paradigm of steadfast reform momentum, declining debt ratios and a return to growth" was completely wrong on all counts. And Greece's financial crisis is far from over.

In May, I wrote about Europe's 'political earthquake' election, where anti-EU parties surged in several nations. In Greece, the far-left Syriza party got 26.7%, its highest ever, and the neo-Nazi Gold Dawn party got 10% of the vote, its highest ever. Greece is going to keep from being pulled apart, it's going to need more than fatuous political babble from the EU president. Real Clear Markets

USS Bataan with 1000 marines to join six other warships in the Persian Gulf

CNN is reporting that the USS Bataan is being sent to the Persian Gulf with 1000 marines on board. There is no word of a planned invasion. That will make seven warships there -- The USS Arleigh Burke, the USS Truxton, the USS Gunston Hall, the USS George HW Bush, the USS O'Kane, the USS Philippine Sea, USS Mesa Verde -- along with helicopters and warplanes that can be used for an invasion or for an evacuation of US citizens. There have been US drones flying over Iraq for several days, but now it's been confirmed that the drones are armed with Hellfire missiles, to provide air support and force protection in case the 180 or so US military advisors currently in Baghdad comes under attack. CNN and Politico

(Comments: For reader comments, questions and discussion, see the 28-Jun-14 World View -- USS Bataan with 1000 marines to join six other warships in the Persian Gulf thread of the Generational Dynamics forum. Comments may be posted anonymously.) (28-Jun-2014) Permanent Link
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