Euro Fools Can't Solve Their Own Problems but Tell Israel What to Do

UPDATED 11-21-2011 See at bottom.

The Eurozone countries, the 17 that use the common euro currency, have failed to solve their own economic problems and their solution for Greece's debt crisis in 2010 only made the situation worse. This has been obvious for a long time. Some economists even foresaw that the solution put into practice in the Spring of 2010 would only make the situation worse. The mistakes were so obvious that even the usually rock-headed Obama supporter, Paul Krugman, sumarizes the mistakes in his column in the Int'l Herald Tribune & The New York Times.

If it weren’t so tragic, the current European crisis would be funny, in a gallows-humor sort of way. For as one rescue plan after another falls flat, Europe’s Very Serious People — who are, if such a thing is possible, even more pompous and self-regarding than their American counterparts — just keep looking more and more ridiculous.

. . . . . . . . .
at this point, Greece, where the crisis began, is no more than a grim sideshow. The clear and present danger comes instead from a sort of bank run on Italy, the euro area’s third-largest economy. Investors, fearing a possible default, are demanding high interest rates on Italian debt. And these high interest rates, by raising the burden of debt service, make default more likely.It’s a vicious circle, with fears of default threatening to become a self-fulfilling prophecy. To save the euro, this threat must be contained. But how? The answer has to involve creating a fund that can, if necessary, lend Italy (and Spain, which is also under threat) enough money that it doesn’t need to borrow at those high rates. Such a fund probably wouldn’t have to be used, since its mere existence should put an end to the cycle of fear. But the potential for really large-scale lending, certainly more than a trillion euros’ worth, has to be there. And here’s the problem: All the various proposals for creating such a fund ultimately require backing from major European governments, whose promises to investors must be credible for the plan to work. Yet Italy is one of those major governments; it can’t achieve a rescue by lending money to itself. And France, the euro area’s second-biggest economy, has been looking shaky lately, raising fears that creation of a large rescue fund, by in effect adding to French debt, could simply have the effect of adding France to the list of crisis countries. . . . You see what I mean about the situation being funny in a gallows-humor fashion? What makes the story really painful is the fact that none of this had to happen.

Think about countries like Britain, Japan and the United States, which have large debts and deficits yet remain able to borrow at low interest rates. What’s their secret? The answer, in large part, is that they retain their own currencies, and investors know that in a pinch they could finance their deficits by printing more of those currencies.

If the European Central Bank were to similarly stand behind European debts, the crisis would ease dramatically. Wouldn’t that cause inflation? Probably not: whatever the likes of Ron Paul may believe, money creation isn’t inflationary in a depressed economy. . . . . But such action, we keep being told, is off the table. The statutes under which the central bank was established supposedly prohibit this kind of thing, although one suspects that clever lawyers could find a way to make it happen. The broader problem, however, is that the whole euro system was designed to fight the last economic war. It’s a Maginot Line built to prevent a replay of the 1970s, which is worse than useless when the real danger is a replay of the 1930s.

And this turn of events is, as I said, tragic. . . . .

Yet that achievement is under threat because the European elite, in its arrogance, locked the Continent into a monetary system that recreated the rigidities of the gold standard, and — like the gold standard in the 1930s — has turned into a deadly trap. Now maybe European leaders will come up with a truly credible rescue plan. I hope so, but I don’t expect it. The bitter truth is that it’s looking more and more as if the euro system is doomed. And the even more bitter truth is that given the way that system has been performing, Europe might be better off if it collapses sooner rather than later.

[ A version of this op-ed appeared in print on October 24, 2011, on page A23 of the New York edition with the headline: The Hole In Europe’s Bucket.]

Those oh so clever Europeans who have solutions for everybody else's problems, can't solve their own. In Greece's case, they gave the country billions in bailout funding but left Greece to borrow money in the open market without a guarantee from the European Central Bank [ECB] or any other institution, like the IMF, that it would back up the loan repayments on Greek state bonds. Hence, the interest rate that Greece had to pay went up and up and Greece obviously could not pay back loans at 40% or higher. Moreover, the solution that the wealthier or more fiscally sound Eurozone states forced on Greece just happened to kill growth in the Greek economy. That too made it impossible for Greece to pay off debt at high interest rates on its own. How come nobody in Euroland foresaw this outcome 18 months ago? If somebody did foresee it, it was not part of the "rescue" plan for Greece. As Krugman says, the Euros took a problem and made it worse. The solution was itself a problem. The remedy made the illness worse. And the foolish Euro physicians who made the disease worse may end up by killing the patient. In light of all this, how can we trust the Euros' proposals for "solving" Israel's problems?? Are the Euro solutions for Israel meant to kill the patient?? Of course, the US State Dept's cures for Israel's problems might be just as deadly as those of the Euros.
- - - - - - - - - -
11-21-2011 Barry Rubin wonders why the EU, in the midst of its own dire economic crisis, has just increased its financial aid to the palestinian authority, headed by the corrupt Mahmoud Abbas & Salem Fayyad.
Bat Yeor offers a philosophical explanation of the European Union's Judeophobia & Arabophilia/Islamophilia [here]

Arab Prisoner of Arabs Says No Human Rights in Arab World

The usual suspects, Amnesty International and UN secretary-general Ban Ki-Moon, have been making the expected hypocritical comparisons of Gilad Shalit's treatment to that of the 1000 Arab prisoners, including hundreds of mass murderous terrorists, who were released today in a trade for Gilad Shalit. Ban, who is supposed to be neutral as UN secretary-general, made a equivalence, just like Amnesty did. How curious!! He told Reuters today:

"I am very encouraged by the prisoner exchange today after many many years of negotiation," Secretary-General Ban told Reuters today. "The United Nations has been calling for (an end to) the unacceptable detention of Gilad Shalit and also the release of all Palestinians whose human rights have been abused all the time."[UN Watch]

Omri Ceren summarizes the Amnesty statement [here]. More pro-Hamas propaganda. That is, more propaganda that equates the mass murderers of Hamas with the civilized state of Israel:

But Amnesty’s statement on the Shalit trade, titled “Israel-Hamas prisoner swap casts harsh light on detention practices of all sides,” is a barrel-scraping embarrassment even by the organization’s notoriously low standards. The vast majority of the press release is handed over to criticizing Israeli detention policies, while a grand total of two paragraphs are spent condemning Shalit’s ordeal.

Shalit’s name does not even appear below the fifth paragraph of the 20-paragraph statement, while alleged Israeli human rights violations- relevant to the swap or not – are repeatedly noted. Israel is explicitly and twice accused of Geneva violations.

Amnesty's statement is, again, clever propaganda.

NGO Monitor explains that neither Amnesty nor the ineptly named Human Rights Watch raised its voice in over five years of Shalit's incarceration under conditions illegal by int'l law. That is, he was not allowed any visits by the Red Cross [ICRC] nor was he allowed into the sunshine nor, it seems, outdoor exercise. Apparently, he was kept underground. We know about the lack of sunshine since it has been reported that he has a Vitamin D deficiency, a result of not getting sunshine [Ayala Hasson on Israel TV Channel 1 tonight]. Other so-called "human rights groups" too failed to demand that Shalit be treated according to the international law of war regarding prisoners.

On the other hand, let's hear the testimony of an Arab --a Palestinian Arab in fact-- who was the prisoner of an Arab regime. Ashraf al-Hajouj was a physician held prisoner in Libya for 8 1/2 years by the Qaddafi regime, along with 5 Bulgarian nurses. They were all charged with deliberately inoculating 438 Libyan children with AIDS virus in the Benghazi pediatric hospital. Dr Hajouj and the nurses were released in July 2007 by the intervention of President Nicolas Sarkozy of France. Hajouj said after his release:

In the Arab world, there are no human rights. . .
En el mundo arabe no hay derechos humanos. . .
[El Pais, 26 July 2007; tambien Pagina/12]

He spoke of

the corruption that rots away at Libya and many other [Arab] countries.

Since he had been brought to Libya when he was two years old and raised there, he was bitter over how the Libyans treated him:

I always considered Libya my country. . . If [Libya and the family members of the children who got AIDS] seek the truth about the AIDS contagion, they will have to look away from us [himself and the Bulgarian nurses] because we are all innocent. [El Pais, 26 July 2007]

Al-Hajouj was apparently abandoned by the PLO/PA who did not defend him or the nurses against the silly charges of deliberately infecting the children. Nor did the Arab League defend him. So he was granted Bulgarian citizenship and went to Sofia, capital of Bulgaria, after his release. Only al-Hajouj and two of the nurses --out of five-- were well enough to talk to the press. "We have returned from hell to paradise," one of the nurses said. "Only God knows that I will show the whole world that we were always innocent," Dr al-Hajouj added. One nurse tried to commit suicide because she could not tolerate the torture she underwent, including electrical shocks. Another nurse said that their first year was the worst when the women were kept in a tiny room in a police station with one single mattress as their only furniture. In that year they were allowed four visits with diplomats from the Bulgarian embassy -- but they were not allowed to talk to the diplomats. The husband of one of the women was also living in Benghazi. He too was incarcerated but only for five years up to 2004. After that, since he was not allowed to leave the country, he stayed in the Bulgarian embassy until leaving Libya at the same time as his wife.

The five nurses and the physician were taken into the elite military hospital in Sofia for a physical and psychological check up. The director of the hospital, General Stoyan Tonev, stated that they were suffering "submarine sailors syndrome," which affects people who have lived "enclosed for a long time in small spaces under bad conditions."

So it seems that these six prisoners in Libya were held under conditions closer to those of Shalit than to those of the terrorist prisoners in Israel. But Amnesty, Ban Ki Moon and HRW want to draw a false moral equivalence between how Israel treats prisoners and how Hamas treats prisoners. Recall that Shalit was never allowed a visit by the Red Cross, as required by the international law of war.

During part of the time of the nurses' and the Arab physician's imprisonment in Libya, Libya held the chairmanship of the UN Human Rights Commission. One does not suppose that the Commission ever criticized Libya on account of how the nurses and the physician were being treated.

Obama Flunkey Leon Panetta Comes to Israel, Threatening Us with Lies

Anti-Zionism is the anti-imperialism of fools

US Secretary of Defense Leon Panetta came to Israel today to pressure Israel to make more concessions --which habitually evoke more Arab demands. Panetta's technique is to lie where he thinks it useful. Which is what Hilary and Bill Clinton do too. Not to mention Obama himself. Obama's recent speech at the UN was rather favorable to Israel, considering his past statements and positions on Israel issues. Carolyn Glick pointed out that he had merely propounded a moral equation between Israel and the Palestinian Authority, which for him was less hostile than past speeches on Israel. But the relatively short and sweet honeymoon is over.

Panetta came to Israel, warning/threatening Israel through reporters on his plane:

"It's pretty clear, at this dramatic time in the Middle East, when there have been so many changes, that it is not a good situation for Israel to become increasingly isolated. And that is what has happened. . . . The important thing there is to again reaffirm our strong security relationship with Israel, to make clear that we will protect their qualitative military edge. . . . As they take risks for peace, we will be able to provide the security that they will need in order to ensure that they can have the room hopefully to negotiate."

Panetta said he was confident Israel had maintained its military superiority in the region "but the question you have to ask is - is it enough to maintain an military edge if you are isolating yourself diplomatically?"

"Real security can only be achieved by both a strong diplomatic effort as well as a strong effort to project your military strength." [msnbc/Reuters 10-2-2011]

Note that Panetta demands that Israel take "risks for peace." We have been there before. We have taken risks. Or several Israeli governments and prime ministers have taken risks, ostensibly on our behalf [such as the ill-fated Oslo Accords]. That ended in blood and tears. It resulted in mass murder by unsatisfied Arab terrorists. Meanwhile, Panetta does not demand any risks from the Arabs, from the Palestinian Authority.

But he is willing for the US to help Israel keep its "qualitative military edge". This acknowledges that Israel's ostensible peace partner, the Palestinian Authority is not and will not be trustworthy once it is transformed into a state, that it may not keep the peace. That is why making concessions to the PA in exchange for "peace" means taking "risks." Now since the PA/PLO cannot be trusted to keep the peace and it continues to indoctrinate crude but effective Judeophobic hate propaganda among its population, including school children --the future generation-- then there really is no reason to take risks. But Obama and traditional State Dept policy going back to the Republican secretary of state William Rogers in 1969, has proposed a "peace" with merely "insubstantial alterations" [Rogers' words] in the pre-1967 armistice lines [the 1949 lines]. Obama is continuing the policy of Richard Nixon's secretary of state, Rogers.

Of course, Panetta warns [= threatens] Israel that it is becoming "increasingly isolated." Later in his remarks he accuses Israel: "you are isolating yourself diplomatically." This is a threat that if Israel does not do as Obama/Panetta/HClinton demand, Israel will be "increasingly isolated," since the Obama administration will make sure of it. But it would be foolish to substitute momentary approval by great powers, including a USA guided by the State Dept and Obama's ilk, for tangible security assets, which is a wooden way of saying that we need territory in mountainous Judea-Samaria for our defense, in order to have the "secure. . . boundaries" stipulated in Security Council res. 242, but also because these areas contain the ancient heartland of the Jewish homeland plus most of the age-old traditional Jewish holy places and places of great importance in Jewish/Israeli history, such as the Tomb of the Patriarchs in Hebron, Rachel's Tomb in Bethlehem, Herod's palace at Herodion east of Bethlehem, southeast of Jerusalem, etc. Panetta, Obama, Hilary & Bill Clinton and Co. seem not to know that all of Judea-Samaria were part of the internationally designated Jewish National Home established in international law about 90 years ago and never revoked.
A peace agreement with the Palestinian Authority allowing it to set up a state with the 1949 armistice lines as its borders would be an injustice to the Jews, not only jeopardizing their security but depriving them of their historical and religious heritage.

Israel is not necessarily becoming "increasingly isolated." Yes, Erdogan in Turkey doesn't like us and will not like us regardless of Israeli concessions to the Arabs or apologies to Turkey. We have always been "isolated" from the Arab states, when not at war with them. Yet Israel has good relations with a number of states in the Far East, Africa, South America, North America and even in Europe. Even the Arab states are now turning toward domestic and intra-Arab problems, not to mention the prospect of a nuclear Iran. However much they may detest Israel, it is not their priority concern. Despite arguments made by US diplomacy in fulfillment of the Baker-Hamilton [Iraq Study Group] Report recommendations, that the Arabs would not support action against a would-be nuclear Iran unless Israel gave the Palestinian Authority what it demanded, we have since learned from Wikileaks that a nuclear Iran was a greater concern for several important Arab govts than Israel was. So describing Israel as "increasingly isolated" was not a description of the real world but a threat of what would happen to Israel if it did not follow Obama/State Dept policy.

Panetta did utter a true statement. He said that "real security" needs both strong diplomacy and military power. This is true as a generalization. But applying Panetta's principle of Israeli "risks for peace" would not achieve "real security" but would lessen it.

The only thing positive in Panetta's remarks was that he states that a Middle East peace cannot be achieved through the UN but only through negotiations.
- - - - - - -
Panetta confirms pro-PA/PLO policy in talks in Ramallah [here]. Mahmud Abbas repeats demand for Israel to surrender before negotiations.
Panetta warns against unilateral attacks on Iran [here, contains a video of Panetta's remarks]. Does that mean that the USA under Obama doesn't want to disrupt or have anyone else disrupt, the Iranian nuclear bomb program? It probably does mean that which would be in line with previous policy.
In the video Panetta states: "I want to emphasize that there is a need and an opportunity for bold action on both sides to move towards a negotiated two state solution. There is no alternative to negotiations." "Bold action" usually means Israeli concessions. But here Panetta calls for "bold action on both sides." That may be a slight pro-Israel nuance. But in his visit to Ramallah, Panetta seemed to reaffirm support for the PLO/PA, as Saeb Erikat reported on the visit. Panetta also said that the Obama administration would not follow Congress in stopping funding of the PLO/PA over its unilateral endeavor to have a state recognized through the UN without negotiating with Israel. But if there is no funding cut off, how can Panetta and Obama bring about a PLO/PA return to direct negotiations with Israel? Will they adopt the PLO/PA's preconditions for negotiations as their own? These demands are, as is well known, a full, immediate stop to what the PLO/PA calls settlement activity, as well as accepting Obama's demand of May 19, 2011, that negotiations be based on the pre-1967 armistice lines with land swaps, which is essentially the 1969 Rogers Plan as an explicit demand.
More on Panetta in Israel [here]
Jonathan Tobin comments on Panetta's demand that Israel take "risks for peace." Tobin essentially agrees with me on this point [here].
Michael Rubin reports that the US State Dept gave Ahmadinejad's son and daughter-in-law visas to come to New York for the UN General Assembly meeting with Dad. This is relevant in view of Panetta's urging that no unilateral attack on Iran be undertaken by anyone, certainly not by Israel. It also shows the State Dept's role in being cordial to barbarians. [here]