While EU leaders look forward to a multitude of emergency meetings until July 20, when Greece has to pay back a government bond with a volume of €6.6 billion, the fate of Greece's bailout may ultimately lie in the hands of the Green party in the dwarf nation Austria.
Austria's Green Party sent an open (German language) letter to the country's chancellor Werner Faymann on Thursday, threatening to boycott a vote in the Austrian parliament where a 2/3 majority is needed for a change of the constitution that would allow Austria to participate in the €138 billion bailout package for the Hellenic peninsula. As a Euro member Austria has the obligation to take part in the bailout that is hugely unpopular with voters/taxpayers.
The Greens got 9.8% of the votes in Austria's latest elections, making them the 4th biggest party in the five party Austrian parliament.
In their German language letter published on the party's website the Greens demand 2 key adaptions of the bailout package from Austria's socialdemocrat-conservative coalition government. The letter is signed by Chairwoman Eva Glawischnigg, budget speaker Werner Kogler and foreign policy speaker Alexander van der Bellen.
- Firstly the Greens demand an obligatory inclusion of private creditors (that's the banks) and the regulatory introduction of an orderly default mode for bankrupt Euro members that shall be part of the final version of the legislature of the moneyless €750 billion European Stability Mechanism (ESM) that shall come to life in 2013 when the current European Financial Stability Facility (EFSF) will end. The greens explicitly noted that chancellor Faymann should inform the other Euro governments of their intention to block a constitutional change for the ESM if such measures are not taken.
This initiative finds my full support as it is clearly written on the wall that the Eurozone will see more defaults than Greece only. This was also indicated by Dutch central bank governor Nout Wellink last week. He proposed to double the ESM to an almost unimaginable €1.5 Trillion. This sum may still not be enough as Greek debt currently stands somewhere between €310 billion and €467 billion.
Europe needs a clear framework for such events that are historically much more frequent than politicians want to admit. In the last 2 centuries almost every European country has defaulted at least once. It was a major political blunder in the creation of the Euro not to include rules for those who turn out to be too weak for the Euro.
- Secondly the Greens would support the issuance of Eurobonds by the European Central Bank (ECB) as proposed by outgoing ECB President Jean-Claude Trichet, arguing that this would strengthen European solidarity and could also help preventing another attack of speculators on bonds of single countries.
This second point is rubbish as such a Eurobond would raise financing costs for the Euro hardcore comprised of AAA-rated Austria, Germany, Finland, Luxembourg and the Netherlands. Sorry, there is no solidarity among these populations with the book-cooks from the souther European hemisphere and never will be. Why should Austrians or other Eurozone inhabitants accept that Greek public servants retire with 53 years when their own politicians already discuss to push out the legal retirement age past the 65 year limit applied in most Euro countries?
It has yet to be seen if the Greens will stick to their strategy and really prevent the Greek bailout package as it it highly improbable that the Eurozone will come up with a framework for sovereign defaults before the deadline on July 20, when Greece will have to pay back a maturing bond.
But they would very likely gain in popularity for the courage to stand up against the worldwide political concept to fight debt with more debt.
The Greens in Austria are in dire need of a popularity booster as they fell behind far right-wing party FPÖ in the last elections and are soul-searching for a policy line that does not estrange their core constituency of environmentalists and the young left that does not find a home under the roof of the socialdemocrats.
Standing up against the financial tyranny of the EU would also help to win back anti-EU voters which are currently lured by the two xenophobic parties, the FPÖ (Freedom Party) - now leading in polls with 30% ahead of the two coalition parties SPÖ (Social Democrats) and ÖVP (Christian Conservatives) - and the BZÖ (Alliance for the future of Austria).
Occupying a critical position towards an undemocratic EU would break the dam that only right-wingers publicly oppose the repressive regime of the Moloch in Brussels that tends to overregulate every aspect of life while salting away billions in taxpayer money by widespread subsidy fraud.
It would also help restore the image of an autonomous party favoring liberal policies over Brussels' law-spewing machine that is increasingly opposed by most Europeans except the politicians that live very well from and with the EU.
Therefore I call on the Greens: Please give financial sanity a chance in the world and do not back down from your key demands. It is now entirely in your hands to push Eurozone policies back on a sound path. Bailing out Greek again will only lead to more expensive bailouts as it delivers a bad example to the other budget sinners in the Eurozone. Help stop the money printing madness arranged by a clueless set of Euro politicians that will retire comfortably no matter what happens instead of becoming a complicit partner in the robbery of Europe's future.
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