Is the euro toast?

One does not have to be particularly versed in economics to see signs of panic among the continent’s finance ministers and PMs, whose default position always, always, always is to insist, Things are fine!

Last night I caught the Irish bloke in charge of his country’s finances (who would want THAT job just now?) standing at a podium somewhere and running through a list of the great achievements of the Irish economy in recent days. What great material for a revived Monty Python Comedy Hour. You had to pinch yourself to recall that this is a country that has just handed over its fiscal and monetary sovereignty to a committee from Brussels. A country that has been forced by its bank sector folly to introduce a package of austerity measures that will wreck an entire generation’s futures, led by a governing party about to experience its worst drubbing in history.

‘Growth has been in positive territory over the last six months, outperforming our earlier expectations’, droned the minister, or something equally absurd and meaningless.

These creepy fellows whose lives revolve around power develop a brutish, hectoring tone that must be required for parliamentary debate or cable interviews where you can’t cede the tiniest point or dare to sound nuanced. But it doesn’t work well when the walls are collapsing behind you, sort of like ‘Comical Ali’, Saddam’s spokesman during the Baghdad war saying that the Iraqi forces were on the verge of a great triumph while the Americans could be seen driving up in tanks over his left shoulder.

The pattern is Europe this year has been deny, deny, deny (everything is fine, no bailouts are needed); switch briefly to a reality-based discourse while the bailouts are being cooked up; then deny, deny, deny once again. Bankers are like Vatican bureaucrats, it seems, the pope is never ill, only dead. Economies are never imploding, except when the masses must save their local millionaires by turning over their life savings.

So far the pattern has included Greece and Ireland, but the who’s-next list grows apace: there’s Portugal, the favored candidate, then Spain, but whoa! now little Belgium is in the line-up, too. It’s like a cracked Agatha Christie with lots of corpses, ‘25 Little EU Indians’, but with whodunit announced in the opening credits.

One particularly amusing side note is that the two Irish behemoth banks were given a clean bill of health in the summer ‘stress tests’, just in time to be rescued by measures like the clawback of a full pound in the Irish minimum wage and the elimination of tens of thousands of state jobs. Doesn’t that sound familiar? Ours are also officially robust if perhaps breathing a tad heavily. Inspires confidence.

The Europeans’ pain stems from the same disease as the one we suffer, a bloated finance sector that has captured the commanding heights not only of the economy itself but a large chunk of the political apparatus as well. Under these conditions permanent, acute mendaciousness is inevitable, and all the talk that the ‘euro is sound’ is white noise for the credulous. They emit soothing phrases, but no one knows what will happen next except that the super-rich will not be made to pay.