Might this really happen down here?

It is made much worse by the unpleasant discovery that elected governments can do nothing to escape the trap. They have lost control over their own destinies.

Spain and Portugal are trapped in chronic slump with over-valued currencies. While they have clawed back some lost labour competitiveness by cutting wages, this has merely – and necessarily – compounded the debt-deflation disaster. It has pushed them closer to bankruptcy.

The Draghi bond plan can certainly put off the day of reckoning. It can lower borrowing costs across the board and cushion the slump. But it cannot in itself stop the slow asphyxiation of these societies.

We are moving from the financial phase of this crisis to the full-blown political phase. It really is playing out like the 1930s.

People sometimes ask when I became a pessimist. The answer is the summer of 1991 when I accompanied Serb troops into the Baroque city of Vukovar – shattered by howitzer shelling within a comfortable drive from Vienna, and strewn with the bodies of dead children – and watched 300 wounded prisoners taken from hospital. I assumed they were at last safe. We learned later that they were machine-gunned shortly afterwards at a collective farm nearby.

The unthinkable was happening before my eyes, though it was small in scale compared to the slaughter of 8,000 Bosnian Muslim men and boys at Srebrenica, which I later covered at a trial in The Hague.

When things go wrong, they really go wrong. Cuidado, Querida España

Ouch, very much ouch.

9 thoughts on “Might this really happen down here?”

  1. As the bond vigilante artillery pounds the Berlaymont bunker, this is the moment to post a link to a Downfall parody.

  2. He’s very good, is E-P. I take it that Portugal is at least spared the risk of attempted secession, Tim?

    Do you suppose any countries are being threatened with force if they try to leave the Eurozone? Or the EU?

  3. If Spain joined the EU all of these nationalist tensions would disappear overnight. For the EU is the fountain of peace and stability, Amen.

  4. I can see secessionists fighting and dying to be rid of the EU, or defend their notion of what constitues Spain, Italy, Greece or Portugal. But I have a hard time imagining people taking up arms in defence of the EU.

    “Forward, men, in the name of unelected technocratic oligarchy! CHARGE!”

  5. I suppose, one quiet afternoon, the nutters in Brussels will enact some boring document, tucked in the small print of which will be a reference to internal security of member states being an EU competence.
    And then we will have to hang ’em.
    We’ll have no option

  6. I don’t think the EU has enough of an army to police the geographical spread is it’s territory – those forces ‘Europol’ which it does control would be more like Ceaucescu’s Securitate – A Secret Police whose methods are terror rather than Brute force. It’s a claim often made by dim witted supporters of European integration that the Eu ‘has kept the peace’ in Europe. Quite clearly that’s bollocks, due to the fact that sheltering under the umbrella of the US has enabled almost every European country to run its armed forces down to a skeleton level.

    In addition, as AEPs excellent article (how much better was it than the Guardian effort quoted in Tim’s previous entry?) points out, the tragedy of Yugoslavia took place within 100 miles of the Austrian border (not then a member of the EU officially but in all but name) – it could easily happen, and unless the Eurozone is broken up I have every reason to assume it will happen!

  7. The timeline of the Thirties went something like: Sino-Japanese conflict, followed by conflict onthe Iberian peninsula, followed by Poland and all out conflagration.

    Now we have: looming Sino-Japanese conflict, secesion demands in Spain leading to a potentially violent break up of the country. Who gets to play Poland this time?

  8. Van Patten,

    The events described in E-P’s article of course FOLLOWED the breakup of Yugoslavia. So, if the EU breaks up……maybe another European war? That would be consistent with the way in which previous attempts to create a super-Europe have ended.

    I think the Euro is the biggest threat to European peace since the Second World War.

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