The World Prepares for The Crash

This week the impending sense of doom surrounding the prospects of recovery in the global economy has loomed over Washington, London, Paris, Berlin, Tokyo and other capitals like an alien mothership bringing the invading hoard to colonize out home planet, enslave us all, the men to work in labour camps, the women to breed a supply of human babies as food for the aliens. Things could not get any worse you might think. but they can and they are about to.

Europe’s punch drunk leaders leaders are caught between the rock of failure for their unification project and the hard place of voters fury, in the northern nations at being asked to shoulder the burden of debts run up by the whole EU, in the basket case economies of Club Med, the so called PIIGS (Portugal, Ireland Italy, Spain, Greece) at the austerity measures required if the intonational community is to continue funding their luxurious and lazy lifestyles. Political leaders cannot understand why they are being held responsible for the looming double-dip recession and are being criticized by everyone.

At a dinner for the finance ministers of the world’s 20 leading nations on Friday night, the message was plain. One by one, as ministers from each country took their turn to talk, they attacked the Eurozone members sitting round the table.  Speaking the following day, George Osborne hinted at how uncomfortable the event must have been, saying: “There is pressure now on the eurozone from across the international community and that was felt at the G20 dinner.” It’s OKish for Osborne of course, Britain is an EU member but opted not to join the single currency because the government at the time was prescient enough to realise the current chaos would be the inevitable result of tying a peasant economy such as that of Greece or Portugal to an economic powerhouse like Germany. 

Even former third world economic basket cases are landing punches on the Eurozone. Brazil’s finance minister, Guido Mantega, singled out the European Monetary System for criticism, warning that dithering over whether to save Greece or not would jeopardising the developing world’s growth. “The centre of this crisis is the EU. European countries are taking a long time to find a solution. We believe we can avoid this if we act quickly to avoid the sovereign debt crisis,” he said.

Patience may be wearing thin in the G20, but time is also running out. After the dinner, a brief communiqué was issued giving Europe six weeks to solve its problems, to bolster the bailout fund (it will take more than six weeks to push that one through the Bundestag, bail out the banks most exposed to Greek debt and present a clear and convincing strategy for indebted countries to reduce their borrowings.

Even if Germany could be persuaded to buy into that, Europe’s other solvent nations, Austria, The Netherlands, Finland and Luxembourg would balk at being asked to stump up any more of their tax revenue.

The deadline for a clear and agreed strategy will be the Cannes G20 summit on November 4. As has been hammered home at every opportunity at this meeting, the issue now is about leadership but who among the Eurozone’s leaders has not been found lacking in the charisma department.

And finally …
Even more bad news was heaped on top of Greece’s economic woes as the government official in charge of food supply announced a shortage of two Greek favourites, Taramasalata and Tzatziki.

“The country is in a double dip recession, he said.

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