Wednesday, November 02, 2011

Elections 2011 - Fit the Third

Wednesday -

RNZ on Morning Report as I was avoiding the rush traffic between here and there included a “debate” between the leaders of the “minor parties”. Quote of the 20minute duration; Dunny himself with “Tureia is right up to the point where ideology steps in.”.

Thursday -

SMH this morning is trumpeting the fact that the UN has rated Australia only 0.1 points (on a 0 – 1 scale) behind Norway.

After reading through the whole article, one finds (in the very last para) that the top five are Norway, Australia, Netherlands, US, and NZ.

Say what? NZ is in there at number five? That just can not be true!!! After all, NZers are leaving in droves, herds even, for the much greener pastures of Australia in particular. It is (we are told on the hustings) the problem of the economy. This is why we have to lift our wage rates to compete. That is why our productivity is stuffed. We are so far behind Australia that it is not funny!!!

Well, that deserves a “Yeah, right!!” of the first water.

There is a dose of realism that needs to be taken with the sugar. NZ has vulnerabilities internally, and most especially externally.

The internal exposures stem primarily from size; we are the very small branch office in a very large global multi-corporate organisation; we are the very small leaf at the far end of a long branch of an oak tree. The internal threats is one thing that we should be concentrating on over the next three weeks. Decisions made now are going to shape what this country looks like in three and probably fifteen years as well. My greatest fear is that none of the relatively sane parties has the guts and the intelligence to go beyond the application of ideology to the solution of pressing problems.

There is one instance where I think this combination of belly driven common sense is becoming apparent and that is in the form of Papandreou and his proposal to take the Greek economic woes to the electorate. No, seriously; I mean, stop laughing like that!

This article from The Age gives a pretty fair run-down on the choices; the consequences. That it might be “unspeakable” a distinct possibility is exactly why I think Papandreou has taken this course.

If the electorate chooses to turn down the bail-out offered by the EU it will so do in the knowledge (I would hope) of the consequences. That, I submit, is exactly what Papandreou wants. If the electorate is not going to stand behind him and support the economic rebuilding that is needed then why bother making the start. I can well imagine that his political career would end the next day. This is essentially the thesis of Thomas’ “return to the drachma” article.

There are many who paint – with Rolf Harris like speed – terrifying portraits of the result of Greek default on its international loans. It would, we are told, lead to the failure of the Euro, the collapse of most of Europe’s banks and financial institutions.

So, I want to stand back for a moment and look at that. If Greece were to refuse to comply with the conditions imposed by the EU what would really happen?

There is already in place an agreement to write off 50% of Greece’s borrowing. That is being soaked by the banks and financial institutions. The other 50% will largely fall on the same funds sources. But, and no one I have read says this, there is also agreement to bail Greece out to the tune of a very large sum indeed. That, in addition, is being expressed in a way that implies the presence of a very large “AND” that would follow; the agreement to provide further funding down the track with Greece’s continuing compliance with EU restraints. What happens to those agreements and promises should Greece refuse? They immediately become void.

Germany and France, in particular, have promised the greatest part of that funding; most in the form of guarantees but with the provision of immediate cash as well. Hands up those who remember the NZ deposit guarantee scheme that was implemented with almost indecent haste (let’s face it, the response was essential) a couple years back. That is where the Euro zone nations should be putting their efforts if Greece fails to meet their demands.

And, I think, Papandreou would be among the first to say, “Good on yer, mate. Take care of home first.”.

I follows on from that to back at home here where a small number of young and enthusiastic improvers of the universe have joined in the fun and games (that started in Wall St NY) of occupying places. In Auckland they chose Aotea Sq, in Dunedin the Octagon. Their main beef is the power and greed of the major banks. Watching those same major banks taking a bit of a pasting on the fallout from Greece might have them smiling. Hearing that the EU is bailing out those same banks will no doubt add a great deal of fuel to the fire.

I can but wonder how many of those yaeiou will pause for a moment to reflect on the problems that Greece would be facing.


Monkfish said...

During the years of the Gnat Government, NZ has lost more people to Australia than it had under the previous government.

This has obviously gone some way to Key's 'closing the gap' with our ditchside neighbour. Ergo, what a success our PM has been!

The probligo said...

:D Can not be denied as closing the gap!

I question that "NZ has lost more people to Australia than it had under the previous government. " though. Do you mean "per annum"? After immigration from Asia and Somalia? Somehow that does not quite ring true.

I still maintain that the Jonkey's plan to catch up with Aus is dependant upon a fairly healthy rate of inflation. And that raises the thought that the Gofer has been very quiet about the impact of inflation on his CGT. "Real" numbers would be the answer, but that does not remove the spectre.