Europeans on this date in history:

1860 – Isaac Albéniz, a Spanish Catalan pianist and composer best known for his piano works based on folk music idioms,was born. (d. 1909)

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Friday Open Thread

Philip Stephens in the FT:

FT.com / Columnists / Philip Stephens - Merkel has joined Thatcher in Europe’s corner shop

Angela Merkel has begun to sound awfully like Margaret Thatcher. Germany has caught the British disease. If the affliction keeps hold, Europe is doomed. The European Union has learnt to live with Britain’s bean-counting. It will not survive a German decision to play the same zero-sum game.

OK, obligatory [Europe.Is.Doomed™ Alert] , but...

Stephens argues that the markets don't believe in European governments' commitment to underwrite the euro (and, given the signals emitted by said governments, that's hardly surprising). The hidebound German attitude is most at fault. Thatcher forgot that Europe offered the advantage of leveraging Britain's voice and power in the world, and framed the discussion in mere terms of penny-in penny-out accounts. Angela Merkel is on the same benighted track.

CIU confirma su abstención y salva el recorte y al Gobierno · ELPAÍS.com		CiU confirms its abstention and saves the cuts and the government - ElPais.com
El portavoz de CiU, Josep Antoni Duran i Lleida, ha confirmado que su diez diputados salvarán el decreto del recorte de gasto y, de paso, al Gobierno de José Luis Rodríguez Zapatero. Su abstención se sumará a la de Coalición Canaria y UPN, de tal forma que el decreto se convalidará por un voto de diferencia, si nadie se equivoca al votar.		The parliamentary speaker for CiU, Josep Antoni Duran i LLeida, confirmed that his 10 MPs will save the spending cuts decree and, in passing, the government of José Luis Rodríguez Zapatero. Their abstention will join that of Coalición Canaria and [Navarran centre-right] UPN, so that the decree will be confirmed by a one-vote plurality, if nobody makes a mistake when voting.

In Spain the government has the ability to legislate by decree, but the decrees must be validated by the parliament within a short time or they become null and void.

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Europeans on this date in history:

1908 – Birth of Ian Fleming, a British author and journalist. Fleming is best remembered for creating the character of James Bond and chronicling Bond's adventures in twelve novels and nine short stories.(d. 1964)

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How are you today? :)

Originally published on May 22

I read the news today, oh boy!

El Banco de España interviene Cajasur · ELPAÍS.com		The Bank of Spain puts Cajasur into receivership - ElPais.com
El consejo de administración de Cajasur ha optado por el suicidio. El consejo de administración de la caja fundada y controlada por la Iglesia católica ha rechazado la fusión con Unicaja (la primera caja andaluza) y ha preferido ser intervenida por el Banco de España. El organismo dirigido por Miguel Ángel Fernández Ordóñez decidió, a la 1,30 horas de esta madrugada, la sustitución de todo el consejo de administración por representantes del fondo de rescate (FROB). "Como consecuencia de los problemas de viabilidad y ante la imposibilidad de culminar la fusión con Unicaja", el Banco de España "garantiza que pueda seguir operando con normalidad". "Por tanto, los depositantes y acreedores pueden estar totalmente tranquilos", aseguró ayer de madrugada el supervisor bancario. "El sistema financiero español no va a ver afectada su solidez en absoluto por esta situación", afirmó el organismo que dirige Fernández Ordóñez.		The board of Cajasur has opted for suicide. The board of the Caja founded and controlled by the Catholic Church rejected its merger with Unicaja (the largest Andalusian Caja) and has preferred to be put into receivership by the Bank of Spain. The institution led by Miguel Ángel Fernández Ordóñez decided, at 1h30 this morning, the replacement of the entire board by representatives of the rescue fund (FROB). "As a consequence of its viability problems and faced with the impossibility of carrying through the merger with Unicaja", the Bank of Spain "guarantees that it can continue to operate normally". "Therefore, depositors and creditors can be completely calm", the banking supervisor asserted last night. "The Spanish financial system is not going to see its solidity at all affected by this situation", claimed the institution directd by Fernández Ordóñez.

Reportedly, Cajasur had losses of 114 million Euros last quarter and 596 million euros last year, so the Bank of Spain's claim that "creditors can be completely reassured" points to a bailout of at least 700 million Euros.

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Europeans on this date in history:

1913 – Wols, a German painter and photographer predominantly active in France, was born. (d. 1951)

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Uh, Oh, late but finally Open! :-)

Because I thought Migeru's Open Thread was a story, there are two Open Threads today.

DALLAS — As the U.S. Gulf Coast battled a massive oil spill, former President George W. Bush told the American Wind Energy Association conference here today, "It's in our economic interests that we diversify away from oil."

"It's in our environmental interest," the onetime Midland oilman added. "And, finally, it's in our national security interest."

Bush, speaking at the Dallas Convention Center, said he believes that his grandchildren "will be driving electric cars, powered primarily by renewable sources of energy."

Obituary: Martin Gardner dies at 95; prolific mathematics columnist for Scientific American - latimes.com

Martin Gardner, for 25 years the master of matters mathematical for Scientific American's "Mathematical Games" column and later the punisher of the paranormal and the pseudoscientific in his column "Notes of a Fringe Watcher" for the Skeptical Inquirer, died Saturday at a hospital in Norman, Okla. He was 95. No cause of death was announced.

So what will turn out to be the biggest story of the month, the one that will be remembered in history books, if any?

• the euro "crisis" (debt worries & fall of the euro version);
• the deflationary government-shrinking policies being put in place;
• the renewed tensions in Korea;
• the oil disaster in the Gulf of Mexico?
• something else?

Europeans on this date in history:

1938 – Lyudmila Petrushevskaya, a Russian writer, novelist and playwright, was born.

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Write your comments

I was thinking about how to structure the second installment of the saga of this unfolding disaster (part 1 here) that has been inflicted on the Greek working population, part of the development of the Great Crash of 08. There is a lot to be highlighted, especially concerning bogus data and statistics circulating among world media and organizations, that are then used to "explain" the inevitability of the neoliberal shock therapy which Greece is being subjected to (and which is I am afraid a first test for far wider application in the continent of similar shocks).

The IMF fortunately, I see, has helped me out a bit on this, by issuing a compilation of bad statistical urban legends and hearsay on the Greek crisis and endorsing it as policy background. In its web-site, the Fund has thus created an FAQ section on the Greek crisis. This is a document riddled with outright lies and strategically propagated half-truths and obfuscations, along with wishful thinking and handwaving serious questions aside, to an extent impressive for an official document, coming from one of the pillars of the world economy. It is the ideal place to start to tackle the (already dwindling in the face of the globalisation of the Euro crisis) moralizing and the lies that have been used to "explain" why working Greeks should suffer the economic equivalent of a nuclear attack. Let's check out some of the claims made to see how credible the IMF's analysis of the statistical and factual reality in Greece is...

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Europeans on this date in history:

1846 – Birth of Naim Frashëri, an Albanian poet and writer. He was one of the most prominent figures of the Albanian National Awakening in the 19th century. He is widely regarded as the national poet of Albania.(d. 1900)

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It's open (finally)

Paul Krugman says that wages in the eurozone periphery are a bit high:

WAGES IN THE PERIPHERY NEED TO FALL 20-30 PERCENT RELATIVE TO GERMANY.

and wage cuts are one of the pillars of the Brussels (neé Washington) Consensus to which There Is No Alternative.

We all know that wages got completely out of control in the booms. In Ireland, for example, progressive-economy@tasc reports that:

In this calculation, Irish labour costs rose by 33.4 percent compared to a rise in other EU-15 countries of 26.4 percent (our peer group percentage increased by slightly less at 25.4 percent).

which is obviously unsustainable, leading to wages way above the EU-15 averages:

[In manufacturing] We rank 12th with labour costs running at €20.76 compared to an EU-15 average of €25.03. Labour costs in our peer group (excluding the four poorer Mediterranean countries) averaged €28.90.

In 2007, Irish labour costs in the wholesale/retail sector were €19.20 per hour, compared to an EU-15 average of €19.85. Our peer group average was even higher at €23.06. To reach our peer group average, labour costs would have to rise by a staggering 20 percent.

Turning to the public sector, we find a similar pattern. Using public administration (unfortunately, in the health and education sectors there is no distinction between public and private sectors), we find that Irish labour costs were €25.88 per hour in 2007. The EU-15 average was €27.90 while our peer group was €30.16. Irish public administration costs are below average – and in comparison with our peer group, over 16 percent below average.

What?

Irish wages are much higher than in Spain, Greece or Portugal.

Is the story that the periphery have to be kept poor for the good of the core?

And, if the biggest concern is public debt, can someone explain how rapidly shrinking the tax base is going to help in the slightest?

Europeans on this date in history:

1932 – Arnold Wesker, a prolific British dramatist known for his contributions to kitchen sink drama, was born.

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Spring has come to the Rhineland!