Greece’s bankruptcy, which led directly to yesterday’s referendum and has left millions of pensioners and welfare dependents not knowing where their next square meal is coming from, is the consequence of the ruthless pursuit by the arrogant communist commissars who rule the European tyranny-by-clerk of policies as insane as they are illegal.
The hideous lesson from the Greek tragedy unfolding with the stately inexorability of an Aeschylean play is that Mr. Obama favors every one of the lunatic policies that, having already devastated Russia and China, are now destroying Greece and will soon put an end to free-market capitalism not only throughout Europe but also in the country whose dedication to liberty once made it most successful: the United States.
In 1996, I gave a lecture to a joint meeting of the faculties of economics and of international relations at the University of St. Andrews. In that lecture, I confidently foretold the collapse of the euro, which had not at that time even been introduced. A Marxist lecturer walked out, for the European Union had already become a top-priority Communist project. But those who stayed were left in no doubt: the euro would fail, and fail expensively.
Those of us who have studied the economic theory of currencies knew well that the euro could not possibly succeed unless only countries whose economic maturity and strength were sufficient were allowed to join. The theory of optimal currency areas mandates that if attempts are made to force incompatible economies into a single currency union disaster will rapidly follow.
For that reason, Britain had taken very great trouble to insist that eight economic convergence criteria were written into the Treaty of Maastricht, which led to the creation of the euro. The treaty specifies that no country shall be permitted to join the euro unless it meets all eight criteria.
The two key criteria were that the nation’s annual deficit should not exceed 3 percent of the value of its total annual output, and that the accumulated total national debt should not exceed 60 percent of the value of one year’s total output.
Greece’s national debt is already well over thrice the permitted maximum. How, then, did Greece and so many other basket-case countries get into the euro in the first place?
In the spring of 1996, the commissars reviewed the economic performances of each of the nations that wanted to participate in the euro. To their horror – but not at all to my surprise – they found that only one nation met all the criteria. That nation was tiny Luxembourg, run by a benevolently despotic ruling family that knew how many beans made five.
Written by Lord Monckton
Full report at WND
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