Greece splinters euro dream - carry on

Ambrose has written one of those pieces which don't set out to tell you new facts so much as to analyse what we already know. Has Germany just killed the dream of a European superstate, he asks, and his answer is Yes. This is important enough to appear in the Telegraph's business section rather than in the main paper, where you can read about party leaders' wives.

His thesis is that the smoke and mirrors surrounding attempts to put together a European bailout for Greece have been blown away by clear refusals from Germany & Holland (Holland of course voted against the Lisbon Treaty), and that Greece will have its bluff called and will have to turn to the IMF.

In a paragraph cut from the printed version, he writes that:

Paris is watching nervously. As Le Monde put it last week, “behind the question of aid to Greece is a France-Germany match that pitches two conceptions of Europe against each other.” The game is not going well for 'Les Bleus’. The whole point of the euro for the Quai D’Orsay was to lock Germany into economic fusion. Instead we have fission.

Maybe the big crisis came several decades too soon for those who hoped that it would bring about More Europe.

Not that IMF support will be a Get Out of Jail Free card for Greece - first because the IMF is limited in the amount of support it can give ("the maximum ever lent by the Fund is 12 times quota, or €15bn for Greece, not enough to nurse the country through to June"). Greece can't devalue (the traditional route for the profligate, like the UK), so it will be "stuck in a slump with no exit route".

The Germans are not blameless. Commentators have been pointing out that Germany's chronic surplus makes the eurozone inherently unbalanced. Far from providing endless subsidies, German officialdom prescribes hair shirts. As Ambrose scathingly puts it:

It is not enough for the EU to impose a fiscal squeeze of 10pc of GDP on Greece, 8pc on Spain, and 6pc on Portugal, and 5pc on France over three years, we need a dose of 1930s monetary policy as well to make sure life is Hell for everybody.

He declines to blame Greece, Ireland, Italy, or Spain for what has happened (though that's pretty generous to Greece).

Nor do I blame Germany, which generously agreed to give up the D-Mark to keep the political peace. It was the price that France demanded in exchange for tolerating reunification after the Berlin Wall came down.

I blame the EU elites that charged ahead with this project ... ignoring the economic anthropology of Europe and the rules of basic common sense. They must answer for a depression.

Doubtless those same eurocrats will carry on, trying to look as if nothing has happened. But this holes any prospect of a federal EU below the waterline for decades.

For them, it would be safer to refocus on CO2. As Richard North has been pointing out, they are good at hiding vast spending on projects which were pointless anyway (as any "global warming" there may be is not caused by CO2) and which never produce any deliverables. They are unlikely to face challenges from the brain-lite so-called political élite (too scared to question any consensus they may come across), or from most of the media, and in UK terms they can brush off low grade rants from the brain-dead and corrupt UKIP.

Of course all the spending on cutting CO2 emissions will be money down the drain, and of course it will do positive harm, just like the euro project. But - despite their failures - the eurocrats face no serious challenge.