The Dutch uncontrolled hate & rage about the new Greek crisis with Tsipras & Varoufakis may require an explanation.
But first remember Keynes.
Keynes on loans and debt
J.M. Keynes gave the argument twice:
- After World War 1: that victors and creditors should allow Germany to recover.
- After World War 2: that the USA as victor and creditor (also of the UK) should give easy terms to the rest of the world, to allow for their investments and exports.
Thus there is not only the responsibility of the debtor. There is also the responsibility of the creditor. The latter responsibility might even be larger since the creditor has more leeway.
The Press Conference of January 30 2015
Jeroen Dijsselbloem was mortally insulted when Yanis Varoufakis killed the Troika. Dijsselbloem had gone to talk and help in Dutch Polder Model fashion. His attitude was Calvinistic, as the Dutch tend to be. Varoufakis slammed this door shut, and they departed in ice.
Helena Smith for The Guardian:
“Send off for Joren Dijsselbloem ended with incredible stand-off as Varoufakis socked him one over the troika. The Dutchman looked enraged, bending forward to whisper something in Varoufakis’ ear to which the Greek finance minister did not respond. Greek finance ministry staff standing behind me said “Oh my God.”” (The Guardian, 2015-01-30)
To understand this:
- This crisis concerns money, which is an issue that is dear to the Dutch heart and mind.
- The Dutch find themselves exposed as greedy fools who have lent money to Greece, while they should have seen that it wouldn’t come back.
- Holland is Calvinistic, with sin & eternal damnation, and looking elsewhere to avoid responsibility. (Catholics in Holland are still rather Calvinistic, and differ from those in Southern Europe or the Orthodox Greeks.)
- Holland is a rather small country, and the natural temptation is to pick on an even smaller country.
- Germany and Holland with their surpluses on the external account are a prime cause for the crisis, but Holland will not criticise Germany, let alone exert self-criticism.
- The directorate of the Dutch Central Planning Bureau (CPB) censors the proper analysis since 1990, so that the Dutch public and young policy makers like Dijsselbloem have been trained for at least 25 years to see the world in a distorted mirror.
Jean-Claude Juncker stands with empty hands
Jean-Claude Juncker felt forced to embrace and hold hands with Alexis Tsipras, to show that the EU still loves Greece. However, Juncker doesn’t offer much. He stands with empty hands, so to say. The Tsipras-Varoufakis approach is fickle and incompetent at heart, see the earlier discussion.
The proper resolution must be looked for in Northern Europe, and Holland in particular.
Hence, let us look deeper into the issue of the Dutch uncontrolled hate & rage about Greece.
Dijsselbloem seemed rather controlled in his rage, but beware of appearances
Just to be sure:
- Dutch behaviour and statements might seem to be controlled and polite. Do not be deceived.
- Controlled hate & rage are properly defined as: both dealing with the emotion and maintaining one’s logical capacities.
- The Dutch hate & rage show from the inability to apply logic and common sense & decency.
- Dutch upbringing of children is targeted at conformity. This means the sublimation of emotions into the illogical conventions of the day.
- Thus hate & rage are not shown, and they neither are a cause to think again and to analyse their origin.
- Logic and analysis may be a cause for non-conformity and thus must be avoided.
- We might also say that the Dutch hate & rage are repressed, but this neglects the consequences of such repression. It is better to say that they are uncontrolled, since this causes an awareness of such consequences.
- I am just a tentative psychologist in suggesting this diagnosis. See my earlier suggestion how to apply social psychology to economics. The master is Daniel Kahneman with prospect theory. The value of a gain may be less than the regret of a loss.
One of the Dutch parameters thus is:
The value of a logical insight may be less that the regret of not conforming to social convention.
The young Dutch fail in holding their own elders accountable
The proper response of the younger Dutch generation would be to hold their elder Dutch generation accountable for past policy errors like the euro and the censorship of science since 1990.
It is easier to blame the Greeks, even when they are young.
The Dutch government consists of a coalition of VVD and PvdA that betrays campaign promises. Prime minister Mark Rutte (VVD) is a neoliberal ideologue. He recently got the Rathenau prize but the kind people who gave the prize made a conceptual error. The social-democratic PvdA with Dijsselbloem has lost compass and integrity decades ago. The political opposition parties are escapist, like the fickle D66, the xenophobic Geert Wilders or the (Maoist) Socialist Party (SP).
The distinction between PvdA and SP might be somewhat enlightening. The PvdA (in government) belongs to the European Socialists (Socialist International), who apparently also want to change “socialist” into “social-democratic” ( PES). Their logo has a rose in a fist, and one also hopes that the rose has no thorns (or perhaps it should). Their international outlook should make that the PvdA should want to help their Greek labour brothers. Instead, the SP (in opposition) is nationalistic, similar to the nazi’s but without the antisemitism and only a mild aversion to immigration. Their emblem is a tomato, and they want that the Greeks throw their own tomatoes. Mao’s principle was not to follow convoluted Western socialist ideology but to follow popular sentiment so that the party can grow. Following Mao, the SP is opportunistic but with tight organisational control so that internal democracy consists out of following the leader who has the best nose for popular sentiment. (Dutch readers could look here.)
Dutch economists and journalists fail
Dutch economists and journalists fail in properly analysing the situation and reporting to the general public. Even the professionals blame the Greeks and want their money back. They don’t explain in adequate fashion what the Dutch export surplus means and how austerity blocks even the Dutch national investments. (And observe the perfidity, that low investments mean higher unemployment, which the Dutch translate as more wage moderation so that they can export more, implying the “exporting of unemployment”.)
There is one report that I can agree with for 99%: that is by Michel Verbeek on Sargasso (2014-12-30 in Dutch), who is not an economist but a biologist now working as a computer system manager (his own weblog), and who applies common sense to try to understand the economic crisis.
My 1% disagreement is that you need my own analysis to complete the picture, see here. Fellow economists are advised to read my books DRGTPE (before the crisis, free PDF) and its supplement CSBH (2012, during this crisis, paywall).
Diagnosis and treatment of the European crisis
The ship is not lost. Diagnosis and treatment w.r.t. the European crisis are:
- The European Monetary Union (EMU, euro) is a political project, and advised against by many (though too few) economists.
- The current EMU treaty fails and a new one is required.
- The EMU is also a product of a breach of scientific integrity, see the censorship and abuse of power w.r.t. Bernard Connolly in 1995.
- The situation might also have been different had my analysis not been censored in Holland in 1990. If Dutch parliament had done an inquiry in 1991 into the Dutch export surplus then many of these problems could have been resolved.
- Greece squandered its loans and the rich Greeks left the country with the proceeds.
- The Troika suffers from neoliberal economic ideology & incompetence.
- See my suggestions for a solution approach as I already explained to Varoufakis in 2012. (A kind reminder, no rage.)
- Overall, see the lecture Cause and cure of the crisis (2014).
PM. A short term escape route for Tsipras & Varoufakis
Professor Bagio Bossone already pointed to this provision:
“Article 14.4 of the ESCB statute states that: “National central banks may perform functions other than those specified in this Statute unless the Governing Council finds, by a majority of two thirds of the votes cast, that these interfere with the objectives and tasks of the ESCB. Such functions shall be performed on the responsibility and liability of national central banks and shall not be regarded as being part of the functions of the ESCB.” (ESCB 2008).” (Bagio Bossone, VoxEU 2013) (Check the Statute.)
If Tsipras & Varoufakis find a bit more than 1/3 of the vote that give them the benefit of the doubt, with measures that would conform with the overall objectives and tasks of the ESCB, then they might be able to prevent a collapse of the Greek economy, now that the ECB has stopped supporting the Greek banks. I would tend to favour that idea, and advise Dijsselbloem to do so too.