Monday, June 25, 2012

Travels to St Petersburg

When they asked John Dillinger why he robbed banks , his response was "that's where they keep the money". So in the same vain, instead of hearing third hand about the reports of the economic demise of Europe, I decide to come and see for myself if it was better or worse than I was hearing and reading  A friend of mine had recently been to Portugal and sent me a note saying that everything that we had been hearing about Europe was false. It was far worse than we could have imagined. At the time I had a vague  idea about what he was talking about. However  since  having arrived in Europe I now realize that it  is far more complicated  than just the dollars and cents issues we faced in the bailouts of the USA and UK financial system.

At the heart of it all we are not only looking at a possible wide spread collapse of financial institutions and governments but underlying it is a  wave of nationalism and an unwillingness by the everyday person to help neighboring countries who have either mismanaged or misappropriated monies in their own interest, stupidity or probably a bit of both. While the world leaders meet in the beautiful Venice of the north, St. Petersburg,  to discuss Europe's on going plight, it appears that against a nasty world economic climate from China slowing down, USA lacking growth, commodity prices staring to show signs of weakness and the people of the bankrupt countries showing no willingness to accept responsibility for their fiscal mismanagement let alone their lack of tax paying. Buying time maybe the only saving grace for Europe. That is if  if they can get some acceptance of a shared bailout concept by all the tax payers of Europe.

Not a particularly good deal if you  are your average responsible taxing paying citizen of one of the few countries that didn't run wild with abandonment over the last twenty years like numerous institutions and countries have done. So they ask, tell me again what's in it for the Germans to bail out Greece and the other rag tag countries of bad management and in some cases they say here, just  pure theft, oh ya to save the euro.  Well I can tell u being here at the World Economic Forum that may be the party line for the leaders but unfortunately the common man and woman don't feel the collective responsibility for all of Europe. Quite honestly why should they, the Euro is an economic union not a melting pot of nationalities into one European nationality. The situation here is significantly worse and with far more individual agendas than the Fed and Treasury had to deal with in 2008.

In Europe there  is no one person either the elected or appointed with a mandate to do what  is in the best of everyone. While Merkel is trying her best she must also be mindful of balancing Germanys needs and stand  on whatever deal she does for her re election. Recently the press has been reporting how the youth of Germany have no interest in paying for the likes of Greece , Spain, Portugal or any of the other failing Euro institutions or countries. Not so simple right.  We are already staring to see the European flu impact not only themselves but the earnings of North American companies, while also seeing the countries that have benefited from the commodity boom are starting to get a little jittery too. So it begs the question , " who is left in good shape around the world?". While it is difficult to appreciate the full extent of what is happening in Europe  thru North American news in little snippets, it is totally different when you are here and talking to local people, who quite honestly don't have a shared feeling of collective responsibility. 

In reality it's  probably a good thing that we don't quite realize how bad it is otherwise we would all be even more shit scared about what's  happening and the potential  impact on our lives going forward.  You see the reality is the common European doesn't care about bailing out his neighbor in Europe, in fact they aren't particularly fond of each other unlike the UK and the USA,  the bailout saved their own citizens, I repeat their own citizens. I have realized long ago that prognosticating about  situations like this are dangerous pastime, however what I do now know is that this is long  term game with a delicate balancing of politics, nationalism and trying to steer  a course that give plenty of room to all the people with competing agendas to get on board in a reasonable time frame.

There is clearly no easy, ready made or singular solution for Europe nor will it or should we expect it to be solved quickly. What is important for all of us to understand is that it is the ultimate game of Jenga with nobody speaking the same language and possibly not having the same desired outcome. Pretty scary if u ask me ? Stay tuned, we are just at the shrimp cocktail stage, the main course has yet to come.

Be back soon.

No comments:

Post a Comment