Economy

It's Time For The 'Nordeuro': When The Euro Zone Gets Split In Two

Op-Ed: Germany is doing itself no favors by sticking with the euro. Instead of bailing out the hapless likes of Greece and Portugal, Germany should join other countries that share a similar economic culture and create a new hard currency: the “nordeuro.’’

Hans-Olaf Henkel

EU romantics will do just about anything to continue selling the single currency as a success story. And our media keep falling for it. Even former Chancellor Helmut Schmidt denies there is a crisis of the euro; continuing to characterize the situation as a few countries in a debt crisis.

But some pushback is required here! There can be no doubt that it is extremely difficult to get a handle on just how the euro crisis came about, as there are three separate underlying problems. The first is that many banks are still on wobbly footing thanks to the financial crisis. Secondly, some euro countries are over-indebted. Thirdly—and this is the thing that's not supposed to be publicly aired—the euro itself bears heavy responsibility.

Without low euro interest rates, Greece wouldn't have been able to take on so much debt. Nor would there have been a real estate bubble in Spain of quite such mammoth proportions. If Germany finds itself in the position of having to come up with money, credit and guarantees for debt incurred by other countries, it is because of—the euro! It's also because of the euro that students in Athens, strikers in Lisbon, and "the indignant ones'" in Madrid are protesting advice Germany deems reasonable. And again, the euro has a lot to do with the spectacle, recently seen at demonstrations in Athens, of Europe's flag with the gold stars aligned like a swastika. So now, instead of another rescue package, it's time to take a moment's pause and ask: Where is all this going, and are there really no other alternatives?

If the politicians stick to their Plan A— "it will cost (the Germans) whatever it costs'"— they're headed for a transfer union in which every country is responsible for the debts of other member countries. We know where that leads from our own German inter-state financial adjustment system whereby Bavaria, Baden-Württemberg and Hesse pay for the 13 other states. Based on this principle, Germany would become the donor country for 12 other euro countries, which is tantamount to organized irresponsibility! The eurozone's competitiveness would suffer, and the standard of living would decline within the zone. For that reason alone, the only criticism that socialists and greens have of Chancellor Angela Merkel's handling of the situation is that she didn't start helping Greece out sooner.

Plan B is basically a haircut: partial debt forgiveness with or without private creditors. This would lower the level of Greek debt, but have no effect whatsoever on the country's lack of competitiveness. That's the beauty of the haircut analogy. The debts are the hair. Cut the hair, and creditors lose a part of their investment. But hair grows back! Even if you were to shave Greece, it's going to need another visit to the barber soon enough. The possibility of throwing Greece out of the eurozone altogether is not a valid one, however. It would lead to a run on the country's banks, chronic over-indebtedness, and what's more set off a domino effect with other countries.

In a pinch, the banking sector could be de-privatized

It's high time we saw a Plan C, i.e. that we carefully unknot the tangle of financial crisis, euro crisis and debt crisis and get to work on each of the three strands in a targeted way.

With regard to the financial crisis: up until now, every "euro rescue"" has de facto been a bank rescue. Why else would the United Kingdom, which is not a member of the eurozone, participate in a "euro rescue"" in Ireland? Obviously in going down that route the finance sector would have to be monitored so it doesn't set the real economy ablaze again.

An even better way to solve the problem would be to overhaul national bank rescue schemes or, in a pinch, temporarily de-privatize the banking sector, something that has proven effective in the United States and in Sweden. For Germany, the move would be virtually irrelevant as nearly two-thirds of banks are already in state hands, and that figure is even higher in Greece.

With regard to the euro crisis: instead of letting French President Nicolas Sarkozy steer, Mrs. Merkel should grab the wheel herself, rally together other countries that are financially and economically in the same frame as Germany, break away from the eurozone and create a "nordeuro."" This is not the place to go into the details of how that could be done. Suffice it to say that it would work the same way the euro was introduced, just in reverse. If it was possible to make a single currency out of 17 different ones, then it should be not be difficult to turn one currency into two.

The advantages are clear: no German-financed transfer union, no run on the banks and minimized chances of chaos. Furthermore, a devalued euro would help nurse economies from Greece to France back to health and protect against higher inflation.

Finally, with regard to the debt crisis: two currencies better suited to the economic and financial cultures of adhering countries would ultimately save countries trying to solve their own debt crises from having to get involved in the affairs of others.

There are of course disadvantages to Plan C. A revalued "nordeuro"" would impact German exports negatively. Yet the fact that we import some 45% of our exports would make that a manageable risk. Nor would we be able to get out of the single currency without a generous farewell gift, for example some debt cancellation. But let's face it: we weren't likely to see that money again under Plan A or Plan B either.

In view of the current "euro rhetoric"" we're hearing from politicians, I see very little chance of a Plan C. On the other hand: who would have thought even a few months ago that Mrs. Merkel would be steering us the wrong way with regard to European energy policy? Maybe when she sees that voters are going to react to further rescue packages the way they reacted to Fukushima she'll make a rapid u-turn and head back in the right direction.

Read the original article in German.

Photo - Uggboy/Ugggirl

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Geopolitics

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.


But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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