This morning, two items of news seemed important to me. Firstly, Greece will only have to pay back half of its debts. They get a debt cut of 50 %. Our Federal Chancellor called it “Haircut” when I saw her live.
Well, where does this “New-German-English” word Haircut come from? The Greeks certainly will not get their hair cut. You could say more like the opposite. On the other hand, I understand the word “Cut”. Whenever I sit over my beer in the Forschungsbrauerei, they say it when the last litre of Doppelbock has been poured and it was a little too much, after all. Then you only get half a litre.
It is still not quite clear how the debt cut is supposed to be realized. Will the tax payer pay it directly, or will it be indirectly through the banks? In any case, it will be expensive.
Secondly, I now hear that Italy promised to economize drastically. They announced terrible savings measures. Of course, the first protests and resistance are also already visible. Regardless of the fact that nobody really believes the Italian government will force or be able to realize all those measures.
This morning, the DAX climbed immediately. I can understand that. After all, what to do with the money? Inflation is threatening – and in a case like that, investing in enterprises is perhaps not the poorest choice.
But still – I am horror-stricken!
[:]Next Thursday, I will give a presentation at the University of the Armed Forces. Its main message is: humans interacting is always a problem. If you have to deal with humans in general and employees or children in particular on a daily basis, you will know well what I am talking about.
And, after all, states and peoples are like humans. With states, the human-interaction problem is even worse – collectively. Perhaps the Italians will then no longer like the Greeks very much when it comes to “haircuts”. But quite apart from these additional possibilities, I predict that the Italiens, if they really will have to economize as hard as the Greeks, will insist on the same “Haircut” as the Greeks (and get it).
Then the situation of the EU will, of course, get even more acute and one after the other of the remaining states will come calling for the same. The Portuguese, the Spaniards, The Irish, etc. All of them will want “the hairdresser”.
And eventually, of course, the Germans as well. After all, our Federal German debt today is already so high that – due to interest payments and several practical constraints – it cannot be reduced any more, even if the growth rate remains high and costs are rigorously cut. Not to mention the structural problems, such as obsolescence, less births or environmental damage.
The current maneuvering will probably cause a further increase of Germany’s federal debt, maybe even by the factor one. As we all know, the debt is already increasing all the time, regardless of the “debt stop” and all the lip-service we pay and shams we activate.
Perhaps there was really “no alternative“ to yesterday’s decisions – today, because we were not courageous enough to declare insolvency on what was bankrupt. What annoys me most, however, is that politics kept denying that fact that – if you wanted to keep Greece in the EURO zone – there was no choice except to cut the Greek debt.
And who believes a lyer, especially if they performed in such a dilettant way.
I also want an immediate haircut. Of course, I will promise to economize. I will no longer use my car. I will eat less meat and drink less beer. I will probably go on a small cruise once in a while…