Thursday, April 7, 2011
Quite a week for the crumbling European Union, we have not yet moved over the recent brawl on the Irish and Greek bailout chocking interest rates and the recent attempts to renegotiation, that 2 new crises have erupted on the Old Continent.
Portugal is Bankrupt
The first is a deja-vu, yesterday Portugal after a faustian conflict of many months has finally thrown in the towel admitting they cannot cope anymore with strangling interest rates, ballooning debt and a blast of rating cuts.
They asked formally help to the EU which very willingly decided to expedite quickly a bailout they had ready and packed since months which is estimated will amount to 90 billion euros.
3 out and counting for the dwindling Euro zone. The markets did not even blink at news of bankruptcy from Lisbon, it is true that it was a foregone conclusion many months ago and that it was no longer a matter of if but when, I’m not sure though there will be the same pacate reaction when it will come to Spain and Italy which are next in line. Of course Spain has already declared they will not be affected by the Portuguese mess but yet Portugal was saying the same thing of Ireland and Greece just few weeks ago.
The faultlines in the Euro zone are widening more and more and it is quite clear at this point it is simply a matter of deciding what to do with those little dysfunctional PIIGS who are no longer able to sustain themselves.
Either they will resort to the old idea of 2 tiers Europe or they will kick out from the Euro those poor PIIGS.
Will the virtouso countries keep propping up the poor south or they will decide to relieve themselves of such burden as soon as their banks will have covered their reckless investments in the PIIGS sovereign market?
An appeal to unity and solidarity in Europe appears to be sustained exclusively by the necessity for the richest states to cover the liabilities of their banks and to avoid major losses, as soon as those liabilities will be covered a different scenario will open which could possibly be the dumping of the PIIGS to their destiny.
Italy-France immigration brawl
A second indication of how Europe is struggling to mantain its ideals of unity and solidarity in time of crisis is the recent brawl between France and Italy on the thorny african immigration issue.
This is a perfect example of how Italy is imploding and the consequences of it.
Italy has been begging for help in sharing the burden of 15-20000 immigrants flooding the country from Libya and Tunisia.
Germany and France correctly told Italy it is their problem and they need to take care of it, after all there are many more immigrants entering Italy with a touristic visa and overstaying then those crossing the Mediterranean.
Still for a collapsing government to deal with such a number in a single shot it is too much.
Any other major European country would have dealt with this situation without any scaremongering but the inefficient and corrupt Italian government has not even been able to police the immigrants when transferred to immigration centers, with the appalling videos of police standing by while hundreds of immigrants were climbing the fence to run away.
Of course the majority of them wanted to reach France but they were stopped by the French at the border and sent back to Italy, no doubt that in same cases the Italian government might have decided to let them go to France as a way to get rid of them and to put pressure on the French government to give support to their bankrupt immigration system.
After having created a bottleneck at the french border, the Italian government has come up with the solution to give them temporary residence permit, another excellent way to avoid dealing with the problem; by having a temporary residence permit they can travel all over Europe as legal Italian residents and avoid any kind of border check.
Pity that France did not buy in and decided not to recognize this residence permit unless accompanied with a passport and proof of financial means, of course the Italian government scorned at their attempt to dump the problem to their neighbours has decleared illegal the french decision and a violation of the Schengen Treaty.
Let’s us not forget that according to the Schengen Treaty Italy should have dealt with this issue on behalf of the entire EU with the utmost efficiency, but a government embroiled in scandals, corruption trials and total inefficiency has preferred to dump the problem somewhere else either due to incapacity or short term political gain and in this way effectively encouraging an immigration flooding from Northern Africa.
This is another example of how the EU institutions are ineffective to deal with any crisis, it is due time that either they start to work for the larger good or stop talking of pan-european ideals and values when it is clear that everyone is trying to pursue small national gains at the expense of everyone else.
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