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Countercurrent of Globalism

- Fluctuating the World order by Greece crisis -

Cat: ECO
Pub: 2015

Shumpei Takemori (竹森俊平)


Averse current of Globalism


  1. Introduction
  2. mathematices:
  3. The origins of arithmetic:
  4. The origin of abstract matheatics:
  5. Excessive Principle-based Policies of Germany:
  6. Unknown Battle between US and Germany:
  7. Anguished IMF and Swaying the World Order:
  8. What Japan should Consider Seriously:
  1. 序文:
  2. 欧州統合に欠けていた戦略的思考:
  3. 危機の原因は共通通貨ユーロ:
  4. ギリシャ救済はどこで間違えたのか:
  5. ドイツの過剰なルール主義:
  6. アメリカとドイツの知られざる闘い:
  7. 苦悩するIMF、揺らぐ世界秩序:
  8. 日本がいま真剣に考えるべきこと:
; Angst; Bail-in; Cannes G20; Capital flight; Currency snake; Democracy gap; ECB; ESM; Eurogroup; FT Series; Gläubiger; Grexit; Home Bias; Imperial overstretch; Last resort; Light touch; Liquidity crisis; LTRO; Maastricht Treaty; Troika support; MBS; No Bail-Out; OMT; Periphery; QE3; Sell and Run; Status-quo positive; Sterilisation; Ukraine;

>Top 0. Introduction:

  • 2017 will be a year of countercurrent of Globalism; again in EU, and may be in Asia, or other places. It would be a year drawn into the voltex of confusion.

0. 序文:

  • 2017年は、グローバリゼーション逆流の年となろう。EUのみならずアジアでも。それは逆流というより渦巻き現象かも知れない。

>Top 1. Lacking Strategy of European Integration:

  • End of 2009: European crisis (European sovereign debt crisis) has took place
    • Greece, Portugal, Ireland, Spain and Cyprus were unable to repay or refinance their government debt.
    • There has been strategic miss; without clear strategic goal and method of European integration.
      • Such goal should include width and depth of the goal:
        • Width means which areas EU should integrate.
        • Depth means what level of integration EU should aim.
    • >Top Euro crisis started from periphery of EU states:
      • The problems of Greece and Ukraine could be the beginning of reverse-globalization worldwide
      • EU, particularly, becomes more serious because of its common currency Euro becomes the cause of crisis.
  • 1999/1/1, Eurozone:
    • Euro € is the official currency of the eurozone of 19/28 member states.
    • Euro is managed by ECB (European Central Bank) in Frankfurt.
  • >Top 1992/2/7 Maastricht Treaty (Treaty on European Union, TEU):
    • Obligation of the treaty:
      • Annual deficits no greater than 3% of GDP.
      • Sound fiscal policies, with debt limited to 60% of GDP
    • Only Luxemburg cleared this criterion.
      • Other countries got involved in the 'Creative Accounting' or window-dressing.
      • 2001 Greece became EU member.
  • Heterogenetic Europe (different languages and religions, etc.):
    • has caused dialectic development (including quarrels and arguments), or incessant wars in its history.
    • on the other hand, Japan has been much more homogeneous, and unified from earlier times.
      • Japanese culture rotates in the similar places, pursuing more refinement.

1. 欧州統合に欠けていた戦略的思考:



  • Long-term interest rates of Gov-bond: Wiki


  • 財政赤字 GDPの3%以内
  • 公債残高 GDPの60%以内

>Top 2. Common Currency Euro was Cause of the Crisis:

  • >Top Home Bias of portfolio is obvious in each countries;
    • EU is typically lowered after introduction of Euro n 1999
    • In equity:
      • US and Japan-Australia: almost 70% owned by domestic, while EU 50%.
    • In bond:
      • US: almost 90%, Japan-Australia 80%, while EU 60% own by domestic.
    • Actually, financial institution of each country usually determines its portfolio.
      • Eg.: Japanese banks owns mostly Japanese Gov-bond, which is easier to convert to Yen.
        • Japanese Gov-bond has higher liquidity because of its large amount of issuance:
        • Ranking of issuance of Gov-bond: Japan (#1), US (#2) and Italy (#3)
      • This is the reason why 'Home Bias' of EU is getting lower after the introduction of Euro:
      • Eg: German banks buy Euro-denominated Italian Gov-bond.
        • In 2011, yield of Italian Gov-bond: 6-7% pa., splitting interest premium about 4% between German Gov-bond.
        • There had been a mythology that any Gov-bond in EU is similarly useful to secure liquidity of Euro.
    • Euro has taken away the boundary of exchange market.
      • But the globalization promoted by Euro has just flown back after the beginning of economic crisis.
        • Smaller countries in EU, such as Ireland (4.6M) and Iceland (0.32M) had thrived by its financial center.
        • >Top Such smaller countries function as special economic zones, or financial free zone in EU, with through deregulation and reduction of corporate tax policies.
          • Eg.: Ireland lowered its corporate tax from 43% to 12.5%, and succeeded to invite major IT industries such as MS, Intel, and Dell, as well as 'light touch' controls for financial transactions.
          • Eg.: Banks' asset amounted 9 times of its GDP. If only 10% of the banks' asset became bad loans, which means almost total loss of its GDP. It is a lesson of European crisis that the banks' assets should not be swelled, so much so that the nation could not control.
    • EU has attained currency union, but not financial integration; any bank crisis in one country should be solved by each country, not by all EU.
  • >Top ECB (European Central Bank) conducted LTRO (long-Term Refinancing Operations) with 3-year period less than 1% interest pa.
    • When Italian banks borrow this LTRO and reinvest Italian Gov-bond; they can earn 5-6% margin.
      • This operation is one of the typical trend of reverse-globalization.
  • >Top Capital flight:
    • The essence of European crisis is a sudden 'capital flight',
    • Complicity of the crisis; between the core and periphery.
      • Periphery countries were higher inflation rate than the core ones.
      • Real interest rate = Nominal interest rate - Inflation rate
        • In Germany, the nominal interest rate is, say, 2%, while its inflation rate is, say, 1%; then the real interest rate becomes 1%.
        • In Spain, the inflation rate is assumed 5%, then the real interest rate (borrowed for investment in Spain) becomes -3%. It is much favorable to invest in Spain rather than in Germany.
        • Earn a profit margin:
          borrow money at the lowest inflation country, and invest at the highest inflation country.
  • International competitiveness:
    • Usually this is adjusted by exchange rate.
    • But in the case of EU, it is adjusted by the inflation rate of each country, not by its exchange rate.
    • Bipolarization:
      • Producing countries: Current account +; Inflation low
      • Consuming countries: Current account -; Inflation high
      • Eg.: It is economically rational action that German lends money and Spain borrow money to consume.
    • ECB operates common financial policy.
      • Euro interest: only one
      • Measures against deflation: Deflation is favorable for creditor nations, which is unacceptable for debtor nations.
      • Board of ECB looks like meeting of creditors and debtors; one country one vote principle plus directors votes.
    • German and French banks need to compete with US banks:
      • In US: subprime loans for low-income borrowers.
      • In EU: loans for consumers in periphery.

2. 危機の原因は共通通貨ユーロ:

  • Home Bias in Equities (Market Capitaliza;tion-weighted for ech region; surce IFS & FIBV)


  • Light touch control: 政府による規制の縮小

  • ECB: 欧州中央銀行
  • LTRP: 長期資金供給オペ





  • Capital flight, 資本逃避
    • Exodus of financial assets and capital from a nation due to events such as political or economic instability, currency devaluation or the imposition of capital controls.
    • Real interest rate vs. nominal interest rate.




  • 国際競争力
    • 通常は為替レートで調整
    • EUの場合は、各国のインフレ率で調整
    • 二極分化
      • 生産国: 経常収支+; インフレ低
      • 消費国: 経常収支-; インフレ高
    • 欧州中銀による金融政策
      • Euro金利は一つ
      • デフレ対策: 債権国と債務国の立場の違い
      • 独仏銀行は米銀行と競争

>Top 3. Where was the Mistakes of the Greece Rescue Plan:

  • No Bail-out Clause:
  • Politics of Greece:
    • Center-right party: ND (New Democracy)
    • Center-left party: PASOK (Panhellenic Socialist Movement)
      • governing party sine 2009
      • revised financial deficit from 4% to 12.5%
      • Risk premium of Greek Gov-bond became 3% spread between German Gov-bond.
      • >Top asked for financial support from the Troika (EU, ECB, and IMF) system.
      • >Top No description of 'Euro withdrawal'
        • Brexit
        • Grexit discussed art G20 summit in 2011/11
          • Greece could accept the conditions of Euro, or become the default;
          • Scenario of Grexit (=Z plan); may cause panic run on the banks; how to distribute new Greek currency (Drachma)
          • Remittance system: Greek Central Bank - ECB - Foreign banks
          • Amputation or Domino of crisis
        • IMB Report in 2013; admitted major failure in Greece problem.
      • The Troika Support System:
        • Financial supports to Greece: €143B (in which, IMF supports €30B)
        • >Top EU and ECB are restricted by the no-bail out clause.
          • Only to finance to stabilize the financial market.
          • ECB seems not of the lender of last resort.
      • 2012/6 ECB's OMT (Outright Monetary Transaction):
        • ECB announced to undertake outright transactions in sovereign bond market, aimed at safeguarding an appropriate monetary policy (unlimited buying operation).
  • IMF lending principles:
    1. Abnormal tension in balance of international payments.
    2. Public debt is sustainable in middle-term period.
    3. Direct finance could be plausible from private capital market.
    4. This support program could be mostly successful.
    • IMF assessed that the above 2. could be impossible. But without this support program, the total Euro economics, or eventually global economics could be exposed to threat.
    • But this Greece support program reached a deadlock:
      1. In 2011, Greek primary balance (Fiscal balance except Gov-bond interest payment) improved profitable, but caused serious recession, decreasing Greek production 22% in 2008-2012.
        • Improvement of primary balance 4% attained by cutting government expenses.
        • The numerator of Gov-bond balance divided by the denominator GDP; the both numerator and denominated decreased by reduced budget.
        • In Greece, Gov-bond balance is twice of its GDP. (if GDP is 100, then Gov-bond balance is 200) If Gov-bond balance decreased 10, the numerator decreased 5% (10/200), while the denominator decreases 10% (10/100). Thus value of the fraction increase.
      2. Greek GDP dropped to 17%, from original estimate of 5.5% down.
      3. Greek unemployment rate increased 25%, from original estimate of 15%.
      4. Greek Gov-bond increase 170% in 2011 from 130% in 2009, which will increase 220% in 2013. The original estimate was 153% in 2013 as the peak, then gradually shrink within 120% by 2020.
  • >Top Bail-in or Bail-out:
    • Debt problem has two types of solutions:
      1. Bail-in method: solution by the lender and the debtor. Usually the lender needs debt waiver.
      2. Bail-out method: solution including intervention of the third party (particularly, Central bank would make bridge loan.)
    • The case of Greece crisis, the bail-in solution was initially not considered. Actually, EU and ECB rejected reduction or waiver of debt, mainly due to worrying moral hazard or propagation of the crisis.
      • >Top But the bail-in solution of the Greece crisis eventually gave time allowance for German and French banks to escape sell (sell and run) of the Greek Gov-bond.
    • In easing repayment conditions, EU accepted to lower the interest rate, but never the principal.
      • Reduction of the principal is considered as the clear violation of 'Non-bail out clause'.; In Germany this may cause appeal to the Constitutional Court.
      • Either interest or principal can reduce the debt cost to repay.
      • Real debt cost should be calculated based on DCF (Discounted Cash Flow): the debt cost can be reduced by either principal, interest, and repayment period. (PIP)
      • The solution by bail-in was the solution between Greece and European banks; but which was replaced by the public loan and the problem became the relationship between nation to nation.

3. ギリシャ救済はどこで間違えたのか:

  • 非救済条項: <bail 保释金 bǎoshìjīn
    • bail-out: 緊急の経済援助・救済措置
  • ギリシャの政党:
    • 財政赤字額の訂正: 4%→12.5%
    • EU離脱条項規定なし


  • IMF Credit Line:
    Usually upper limit is 600%. But Greece could be supported up to 3200% as well as the peirod beyond 6 years (usually 3-5 years)


  • Greek Gov-bond Owers:
    • The Troika System succeeded to relieve European banks, without relieving Greece.
    • After 2011, the bail-in policy was applied, only for the credit of privat sector.

  • Gov-bond/GDP (2006-2016):


>Top 4. Excessive Principle-based Policies of Germany:

  • ESM (European Stability Mechanism) and EFSF (European Financial Stability Facility):
Legislation International law Luxembourg law
Duration Permanent organization Temporary organization
€700B €780B
Capital transfer Member countries who receive loan must pay their capitals. Member countries who ask loan are exempted from their assurance
Max loan €500B €440B
Right to claim Preferred creator (next to IMF) Equally preferred.
  • What is the reason why German position in economics increased?:
    1. Money lenders become stronger, particularly in economic crisis.
    2. German competitiveness in technology and production cost; having strong export position to China; established complimentary position in economics with China.
    3. Difference of political position:
      • German: higher approval rating of Angela Merkel coalition government of CDU and FDP
      • France: lower approval rating of François Hollande government of Parti Socialiste.
    4. Germany has been promoted 'Economic Liberalism' since post-war; keeping away form adopting Keysian policies, particularly in economic depression period.
      • Even in the period of Euro crisis, Germany could increase export to China and others due to the weak Euro caused by periphery crisis.
      • Germany continued to persuade the other EU countries to take tight-financing policy.
        • Then why other EU countries accepted such tight-financing policy.
        • France (Hollande) once tried to adopt Keynesian p0licies together with Italy, but returned to follow German policies. France purchased to be a German-style honor student in the market.
          • Germany attained to lower financial deficit, gov-bond ratio in GDP, with stabilizing unemployment ratio even in economic recession; these are highly appreciated in the market.
          • German performance in export improved due to weak Euro, as well as large fund returned to Germany, causing historically lower level of interest rate.
          • The situation of France is different. France has expected some kind of discipline (or sanctions) by the market by introducing Euro.
  • >Top 2012/8/2 OMT (Outright Monetary Transaction):
    • ECB makes purchases ('outright transactions) in secondary sovereign bond market issued by Eurozone member-states, aimed at safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy.
      • OMT: market stabilization measures (functions as the lender of last resort)
      • ECB: price stabilization measures (to avoid inflation and deflation); big purchase gov-bond;
        • quantitative easing like FRB of US.
        • >Top In US there are two big markets; Gov-bond market and MBS (Mortgage-Backed Security) market.
        • FRB purchased many MBS by QE3 (Quantitative Easing 3).
        • In US 2/3 of housing loans are securitized, while in EU such securitization is not occurred.
    • In monetary crisis period, there would be no French, Italian, Spanish culture in EU.
      • Each market would be categorized or rated by only criteria how it is operated like Germans:
        1. First-grade market: Germany itself
        2. First & half grade market: Austria, Netherland, Luxembourg, and Finland
        3. Second-grade market: France, Belgium
        4. Third-grade market: Italy, Spain
        5. Non-German market: Greece
      • This is an economic movement how each market approached to that of German.
        • Prior to happening of the crisis, the market had not evaluated German-likeness.
        • Even German banks considered investment to Balcerona would be favorable than to Dresden. But one the crisis occurred, the spread became obvious.
        • 2015.1 the general election in Greece made a revolting government against German hegemony.
          • If Grexist occurred, other member states must recognize German norm in economic operation.
          • German norm is not an abnormal one. It is quite normal.
          • The essence of German norm is to obey 'No-bail out clause.'; ECB should not purchase mass purchase of Gov-bond.
  • Modern mythology of Germany:
    • 1933 hyper-inflation: then German central bank directly underwrote Gov-bond.
    • 1933 NSDAP (Nationalsozialistische Deutsche Arbeiterpartei), or Nazis; Antipathy to Nazis, which maximized state authority, and its result was miserable.
      • The cause of Nazi regime attributed to the former government of Heinrich Brüning who promoted tight-financing policy, causing 6M unemployment.
      • German could not support versatile or flexible operation of Keynesian policies, particularly in economic depression time.
      • German style economic liberalism:
        • Government must entrust what the market decides, including social conflict, and its solution.
        • Rules first principle; which says rather negative-oriented sentiment, saying 'don't do such things'
        • In the post-war policies, German has pursued 'economic liberalism' rather than Scandinavian government aimed welfare state. Economic liberalism has objected either excessive intervention by the state or excessive welfare expenses.
        • German denies American-style mass society, where mass production and mass consumption usually happen; this trend produced dominant producer.
          • In Germany, traditional organizations are necessary to prevent the impact of powerful central government;
          • City size: there is no such a major cities like NY, London, or Paris.
          • German universities represent middle-sized cities since Middle Ages, like Göttingen, Heidelberg.
          • Traditional guilds unions constitute professionalism in economics.
    • >Top German 'Angst'
      • Germans feels Angst about 1) business models using Internet, 2) financial services, and 3) quantitative easing.
        • Uber services in Frankfurt, was banned by the court as unfair competition.
          • Uber service vs. Guild of taxi service
        • Old liberalism emphasized German tradition and culture, denying mass.
        • Old liberalism also appreciate moral philosophy and a petit bourgeois.
          • German 'Schuld' means 1) guilt, 2) blame, 3) debt, and 'Gläubiger' means 1) creditor, 2) religious believer.
          • Stockholders' ratio: 13% in Germany, and 52% in US.
      • >Top Unless EU economic crisis occurred and unless Euro currency, German old liberals had not caught such an attention.
        • Germany has become the only one economic leader in EU.
        • At the last general election in 2012, CDP's political message was 'no major issues' existed; status-quo positive campaign.
        • But actually Grexit issue has not yet solved; which would be more serious.

4. ドイツの過剰なルール主義:

  • ESM 欧州安定メカニズム
  • EFSF 欧州金融安定5−基金





  • OMTは最後の貸し手



  • Angst: a feeling of deep anxiety or dread, typically an unfocused one about the human condition or the state of the world in general



  • CDU's election campaign in 2013:
    No major issues in Germany, status-quo positive campaign:

>Top 5. Unknown Battle between US and Germany:

  • President Obama's existence in EU:
    • Worldwide credit crunch caused by subprime crisis in 2007 and Lehman shock in 2008.
      • Active collaboration is urged between US and EU governments and central banks.
      • Expertise against such financial crisis is different between US and EU.
        • Benjamin Bernanke has seriously studied the case of Japanese economic depression and deflation.
        • US government and FRB took active collaborative actions in the case of subprime loan issue and Lehman Brothers bankruptcy; in particular capital injection based on TARP (Troubled Asset Relief Program) was effective.
      • Financial measures in EU against financial problems have been delayed.
        • For EU, it is important to have a rival horse to the leading Germany; which could be France, Italy or Spain, but also needs to borrow the power of US. (Cf: FT Series)
        • Even French Circusy (said 'Marcus') continued to ask support from US to persuade Germany.
        • France & US aimed to install higher firewall using expansion of SDRs, but Germany opposed easy expansion or distortion of function of SDRs.
        • US had used the function of TARP (Troubled Asset Relief Program $700B) in 2008/10; while EU has only EFSM (European Financial Stabilisation Mechanism, €60) which is not sufficient as the firewall.
      • The Cannes failure supplied another oxygen to the crisis; surged borrowing cost of Italy 7.5%, and Greece 33%.
      • Sarkozy lost re-election in 2012 and François Hollande (Parti Socialiste) became French president.
        • Again 2017 election will be important for France and for EU.
      • Italian Mario Monti, famous economist, nicknamed 'Super Mario', became Italian president after Silvio Berlusconi。
  • >Top OMT (Outright Monetary Transactions):
    • 2012/9/6, Another Mario appears: Mario Draghi, president of ECB announced OMT which can buy directly sovereign bond issued by the eurozone under certain condition; aimed at safeguarding n appropriate monetary policy transaction and the singleness of the monetary policy interventions, provided the bond-issuing countries agree to certain domestic economic measures.
      • Conditionality of OMT:
        1. Support from bailout funds EFSF/ESM
        2. MOU (Memorandum of Understanding) shall be compiled.
        3. A sovereign state will have managed to regain complete access to private lending markets, only when it has succeeded to issue a new Gov-bond with 10-year maturity.
        4. OMT purchases of Gov-bond with 1-3 year maturity.
    • OMT is not the same as QE (Quantitative Easing) operations; it has the principle of 'full sterilisation'.
    • In summer 2012, Merkel consulted key persons on this matter; with Jörg Asmussen (German economist, member of executive board of ECB), Jens Weidmann (Chairman of Bundesbank), and Philipp Hildebrand (head of SNB, Swiss National Bank); all talked about enormous cost of Grexit. Then Merkel decided not to select Grexit idea.
      • Merkel admitted tacitly 2012/9/6 new decision of OMT by Mario Draghi, though only Weitmann opposed.

5. アメリカとドイツの知られざる闘い:

  • Benjamin Bernanke: Japanese Monetary Policy: A case of self-induced paralysis?
Money, unlike other forms of government debt, pays zero interest and has infinite maturity. The monetary authorities can issue as much money as they like. Hence, if the price level were truly independent of money issuance, then the monetary authorities could use the money they create to acquire indefinite quantities of goods and assets. This is manifestly impossible in equilibrium. Therefore money issuance must ultimately raise the price level, even if nominal interest rates are bounded at zero.


>Top <FT Series: How the euro was saved>

2011/11/3-4 G20 Summit at Cannes> The Big Read

  • Angel Merkel, German chancellor said angrily, tears welling: "That is not fair... I am not going to commit suicide."
    • It was shocking enough to watch Europe's most powerful and emotionally controlled leader brought to tears.
    • The two objects of her ire; French Nicolas Sarkozy and US Barack Obama.
    • Greece was imploding politically; Italy, a country too big to bail out; Ms Merkel could not be convinced to increase German contributions to the eurozone's firewall.
      • It was the feeling that with the contagion, at tis point, you were on the brink of explosion.
  • When the history of the eurozone crisis is written, late 2011 through 2012 will be remembered as the forever changed the European project.
    • Strict budget rules were made inviolable; banking oversight was stripped from national authorities; and the printing presses of ECB would become the lender of last resort for m
    • On 2011/10/27 in Brussels, George Papandreou (Greek political dynasty, leader of PASOK) had agreed to the largest sovereign default in history - a €200B debt restructuring that cut what Athens owed private bondholders in half.
    • That weekend, he would call a national referendum on the new €172B bailout programme. Those criticizing the agreement, would be forced to pick sides, and most would back the rescue - particularly since without EU bailout funds, disorderly default and euro exit was the likely outcome.
      • Mr. Papandreou presented his plan as a fait accompli to parliamentarians from his centre-left PASOK party.
      • Yields on Greece's benchmark 10-year bond spiked by 16.2% in a single day.
      • Mr Sarkozy's initial reaction was to force Mr Papandreou to reverse course; that either he accept the new bailout conditions immediately or Greece would be forced out of the euro.
      • Mr Sarkozy called Ms Merkel and agreed a strategy. They would summon Mr. Papandreou to Cannes, where the G20 was to get under way in just 48 hours, and persuade him to hold a referendum on whether Greece would remain in the eurozone.
      • In Berlin, Ms Merkel was torn over the issue of Grexit, with several advisors - particularly Wolfgang Schäuble, her powerful finance minister.
  • >Top Mr Nicolas Sarkozy summoned his fellow leaders to the Palace in Cannes (2011/11/3), an hour before they were due to meet Mr George Papandreou, to agree on how to confront him. Those invited included Ms Merkel; Jean-Claude Juncker (Luxembourg prime minister); Chirstine Lagarde (managing director of IMF); and EU's two presidents, José Barroso and Herman Van Rompuy.
    • Mr Sarkozy's six-point plan was clear and tough; Mr Papandreou must accept the bailout plan agreed the week before, and no further aid would be forthcoming until his parliament voted its assent.
    • The referendum shall be only on the membership of Greece in the euro area and the EU.
    • Mr Papandreou's referendum had created a dilemma for Greece but it also gave rise to a much greater fear that contagion from Athens would spread across the eurozone. No country posed more of a contagion danger than Italy.
    • With nearly €2,000B in sovereign debt - the fourth-largest debt pile in the world - Italian estimated a three-year bailout programme would cost about €600B. There was not enough money in EU or IMF to foot that bill. Italy was simply too big to bail.
      • We could not afford Italy, said a French finance ministry official. No one could afford Italy, so that was the end probably of the eurozone.
      • Ms Christine Lagarde (IMF) arrived in Cannes with a plan to put Italy into an €80B precautionary programme, a line of credit that could be used in emergency but would also come with intensive monitoring. Only then, would markets begin lending again at sustainable rates.
        • Sovereign debt (2011): Italy €1,907B; Greece €355B; Portugal €185B; Ireland €169B.
    • Once Mr Papandreou and Mr Venizelos arrived in the conference room, Mr Sarkozy began 'the full Sarkozy': a pointed, angry denunciation of Mr. Papandreou's referendum decision.
      • "We've done everything to help you, we've done everything to keep you in the eurozone, we've taken financial, political risk. It's "he biggest debt restructuring in the world, ever, and now what you do is you betray us"
      • The position of Sarkozy was very offensive. It was not polite. Very, very strong and very offensive, in order to put Greece in a dilemma: in or out."
  • The Greeks attempted to fight back. The referendum would be in a month's time, and it would force Mr Antonis Samaras (leader of Greek ND, New Democracy) and his own PASOK rebels to fall into line, since even his most virulent mainstream critics could not oppose the country's only lifeline to staying in the eurozone.
    • Then Mr Papandreou read his proposed wording for the referendum.
    • Ms Merkel was the first to respond, and she was not happy. "We either solve this among ourselves here, or we will fail in the eyes of the world. We must decide. Either you want to stay in the euro or go out."
    • Unbeknown to Mr Sarkozy or Ms Merkel, Mr José Barroso (Portuguese politician, President of EC, 2004-14) had called Mr Samaras, the Greek opposition leader, from his hotel before the meeting. He knew Mr Samaras was desperate to avoid the referendum. Mr Samaras told Mr Barroso he was now willing to sign on to a national unity government between his New Democracy party and PASOK (Panhellenic Socialist Movement).
      • They began discussing names of possible technocrats to take over from Mr Papandreou in a national unity government. The first person was Lucas Papademos, who had left his post as vice-president of ECB a year earlier.
      • "We have to kill this referendum," Mr Barroso said. This idea would also be the end of Mr Papandreou.
  • For months Barack Obama had been watching the eurozone crisis with frustration and mounting concern.
    • Tim Geithner, US Treasury secretary had tried to impart lesson learnt during their banking crisis.
      • "The eurozone has to be saved because otherwise we'll enter into a depression in Europe, and this will impact the economy of US and my reelection."
    • The awkwardness was epitomized by Washington's relationship with Ms Merkel, who occasionally found US intervention improper and unwelcome. Berlin had pushed for the Washington-based IMF to be part of the crisis response.; Merkel would tell colleagues that European decisions should be made by Europeans.
    • Still, many in Brussels, Frankfurt and Paris welcomed American intervention, particularly as a counterweight to Berlin.
      • Although the two leaders appear similarly cerebral and unemotional; their styles are fundamentally different. Mr Obama can be professorial and lecturing, something Ms Merkel finds off-putting. Ms Merkel shuns such academic musings and is more short-term and tactical in her decision-making
      • On other occasions, the German government called on Washington to push struggling eurozone countries to implement promised reforms.
      • When eurozone leaders were summoned again by Mr Sarkozy in Cannes, several were surprised to find Mr Obama chairing the meeting. It was also a signal that Europe was not able to do that; it was a sign of weakness.
      • Many in the room expected the evening to be dedicated to persuading Mr. Silvio Berlusconi to accept IMF assistance. The Italians had rejected it that morning, arguing it would create the impression they could not handle the crisis on their own. They countered with an offer to accept IMF monitoring, but not funds.
    • Mr. Obama had a new plan to increase the size of the eurozone firewall - an idea that put Germany front and centre.
      • The most obvious source for that firewall was ECB, having the power to print money. US had demonstrated the crisis-fighting power of a central bank when FRB bought up huge tracts of Treasuries in the wake of Lehman Brothers' collapse.
    • But Berlin has long opposed using a central bank to fund governments. German opposition was rooted in tis dark history; the hyperinflation of the interwar years that helped doom the Weimar Republic had been caused, in part, by central bank printing presses.
      • At German insistence, ECB had been modelled after the Bundesbank, which was given complete independence from meddling politicians when it was established in 1950s, to avoid a repeat of 1920s. The German government also demanded that EU's 1992 Maastricht treaty, which laid the foundations for the euro's creation, bar ECB from buying sovereign bonds.
      • Both Mr Geitner and Mr Sarkozy had spent months trying to solve two seemingly mutually exclusive problems.
  • On the eve of Cannes, US and French delegations agreed a new plan to increase crisis-fighting reserves they hoped would be acceptable in Berlin. It involved a form of cash known by few beyond the cognoscenti of international public finance; SDRs (Special Drawing Rights).
    • SDRs are not money. They are an asset created by international agreement in 1969 and held by IMF for its member countries, a substitute for gold or US dollars in global financial accounting. (Paper Gold). Yet they have real vale, with one SDR currently trading close to one British pound.
    • In 2009, in the wake of the Lehman crisis, G20 increased the amount of SDRs by 250B.
    • At Cannes, US and France wanted to do it again but instead of giving them to IMF, the eurozone would devote €140B in SDRs to its depleted bailout fund.
      • ECB should act a bit like FRB did but that doesn't seem to be viable option, Mr Obama said at the start, in a clear reference to German opposition.
      • Ms Merkel now had another problem. SDRs are not controlled by national governments; the head of the Bundesbank was opposed.
      • Mr Jens Weidmann had quickly drafted a letter to the German government outlining his objections. Using foreign reserves to fill the bailout fund would send markets the wrong message. SDRs are part of a government's foreign reserves, which are the exclusive responsibility of the independent central bank to manage - not for politicians to commit willy-nilly to rescue programmes. The Bundesbank had no problem with the 2009 decision to increase SDRs for the IMF, since that is what SDRs were for. But committing them to the eurozone's bailout fund set a dangerous precedent.
      • It had become clear to Ms Merkel's camp that they were about to be surrounded; The French, the Italians all would be willing to do this.
      • Bundesbank had rejected it and Ms Merkel could not agree without the Bundesbank. She supported the plan politically, and if Italy agreed to the 80B IMF programme she may be able to go to the Bundestag to increase the size of the rescue fund itself. But on SDRs, the answer was no.
      • Mr Sarkozy attempted to manage the three-way impasse. US wanted Germany to contribute its SDRs but Germany was only willing to give a partial commitment if Italy gain in on the IMF programme. Would the Italian monitoring plan, plus a commitment by Germany to contribute bilateral loans, be nought, Mr Sarkozy asked.
      • "No. Germany has 1/4 of all eurozone SDR allocations," Mr Obama objected.
      • Ms Merkel, "That is not fair. I cannot decide in lieu of the Bundesbank. I cannot do that." Mr Obama asked whether Ms Merkel could work it out with the Bundesbank by Monday. Merkel said, "I'm not going to take such a big risk without getting anything from Italy. I'm not going to commit suicide."
  • The leaders met again the next morning but the momentum was gone. The storm was over. The SDR plan would never again see the light of day. Italy would get a monitoring programme but no funding.
    • The Cannes failure provided new oxygen to the eurozone fire. When markets reopened, Italian borrowing costs soared. Within the week they would touch 7.5%. Greece's would go above 33%, a level almost without precedent for a developed country.
    • Now, with no new firewall in place, it was unclear what would save the euro.

8. <FT記事: 如何にユーロが救済されたか>

要約: 金融危機を巡る世界史的な出来事

  • 2011末〜2012にかけてギリシャ国債危機(€200B)への支援を巡って、トロイカ(EU, ECB, IMF)による支援が行き詰まり、カンヌG20 (2011.11.3)を機に米国が介入した。
  • 仏サルコジと米オバマ両大統領中心に、米国でのリーマン危機対応をベースに、欧州中銀(ECB)が米国FBRのように、SDRの拡大運用 (€140Bを使って救済)を共同提案。
  • 独メルケル首相は、政治的には同意するものの、SDR運用は、独Bundesbankの同意がなければ、EUの非救済条項(No-Bailout Clause)の原則を曲げられないと反対。
  • 特に伊の国債残高€2000へ連鎖すると、もはや大きすぎて救済不能。独は、伊のIMF介入を求めるも、伊は、救済は固辞し、モニタリーグのみ受入とした。
  • 歴史に残る厳しいやりとりの結果、合意に至らずギリシャ危機は次の段階(実質的なEU脱退)へ突入する可能性大。
  • ギリシャのパパンドレウ首相は、大連立構想に失敗し辞任。11/11のパパデモス新首相(前ECB副総裁)が就任。
  • 2012/5 ギリシャ総選挙の結果、財政緊縮反対の左派勢力躍進したが、大連立ならず翌月再度総選挙し、財政緊縮支持が第一党。この間、GDPは17%減少(2009-2012)し、デフレが進行中。
  • その後2015/1の総選挙を経て、チプラス(Alexis Tsipras)首相就任し (急進左派連合, Syriza)、党内反対派を抑えて2015/9の再選挙を経て、ぎりぎりの緊縮財政(Austerity package)を推進中。VATは13%→23%
  • 一方で、ギリシャは独に対し、ナチ時代の略奪に対し€279Bの賠償を要求


  • Papandreou's dilemma:


  • Grexit: Greek Exit from EU
  • No-bailout clause:

>Top 6. Anguished IMF and Swaying the World Order:

  • >Top Eurogroup: collective term for informal meetings of the finance minsters of the eurozone 19 members.
    • Mr Euro, or president Jeoen Dijsselbloem (Minister of Finance of the Netherlands)
  • ESM (European Stability Mechanism); intergovernmental organization, with capacity of €500B, replaced temporary EU funding programmes of EFSF (European Financial Stability Facility) and EFSM (European Financial Stabilization Mechanism).
  • IMF aided $17.5B to Ukraine.
    • 2014/12 The second quota Japan required Christine Lagarde of Managing Director of IMF recent accountability about Greece and Ukraine.
    • IMF supported Greece by €240B; considering Japan's quota of IMF is 6.56% (2nd) after US 17.69% (1st), Japan could not neglect that IMF's injected funds are becoming too ambiguous, too big, and too risky.
    • IMF's fund amounted $430B as of 2012; within which Japan contributed $60B, compared with total EU's contribution $200B.
    • Decision of important matters of IMF shall be decided not less than 85% vote; US hold 17.69% excess of 15%, having veto of IMF's major decision, such as change of rules, appointment MD, decision of finance.
    • Is it reasonable to use the finance of IMF to prevent Grexit and military support to Ukraine, considering more serious and strict conditions applied to the cases of Asian financial crisis (or actually liquidity crisis) in 1997-98.
    • Robert Rubin, then US secretary of treasure, called Korea as 'Crony Capitalism'; but now the IMF's attitude to Europe could be called 'Crony Favoritism'. French banks could escape from Greek gov-bond, while MD of IMF is French economist. Furthermore, the quota of Chine (2nd GDP worldwide) is less than sum of Belgium and Netherlands.
      • In 2010 IMF itself recognized such imbalance of quota of IMF, but this reform was rejected by US congress; which leads to the establishment of AIIB (Asian Infrastructure Investment Bank) in 2015/12/25.
      • The voice or floor may changes according to the power balance; lenders' voice becomes stronger than borrowers. Once Asian countries were borrowers, while US and Europe were lenders. Now the current was changed. since 2010 Greece crisis, Europe became borrowers. European problem should be solved within EU (ECB cold print euro money limitlessly), without depending IMF to which other countries contributed their moneys
  • >Top IMF's finance to Ukraine:
    • There seems less reason of aid to Ukraine than to Greece. The finance was done to Ukraine to prevent expansion of pro-Russian power; but the situation became a civil war, or actually the battle of Ukraine and defacto Russian. If the aid to Ukraine is necessary, which should be not a finance but a grant like Marshal Plan after WWII. But IMF or US government hesitate to grant $50B to Ukraine immediately, or no other western countries could afford it. It take longer time to have a conclusion of such a big grant money in the congress as long as the opinions of sanction to Russia vary.
    • >Top Democracy gap: political leaders considers some policy seem indispensable, but the general public could not follow or support it. In 2013 German election, Merkel's message was 'no serious issues' and won the election. But now could she appeal the approval of enormous grant money to Ukraine?
      • ECB succeeded to establish the function of last resort considering the measure against 'liquidity crisis'.; there has been no such democracy gap in ECB, whose action should be rapid as last resort.
      • But if the finance by IMF was defaulted (in Greece or Ukraine), then other stakeholders of IMF surely claim it; China or Russia, or maybe mostly US congress which usually concerns soundness of IMF loans.
      • Once economic performance became worse, most of countries tend to be more inward orientation.

6. 苦悩するIMF、揺らぐ世界秩序:

  • ユーログループ
  • ESM

  • IMFのウクライナ支援






  • デモクラシーギャップ

>Top 7. What Japan should Consider Seriously:

  • In 2015, Merkel came to Japan since last visit to Toyako summit in 2007.
  • Germany and China are economic complementary relationship: Germany has high technology but higher production cost, while China is the opposite with having not so high technology but lower in production cost.
    • Germany and Japan compete in technology and production, like VW vs. Toyota.
    • The themes talked between Germany and Japan seemed void of content.
    • Merkel emphasized more interchange of education, considering sharing of common value.
  • >Top Hard peg or soft peg:
    • Before euro, there was EMS (European Monetary System, functioned in 1979-99), which aimed to prevent currency fluctuation more than ±2.25% (currency snake).
      • George Solos made speculative attact against UK pound
      • 1992/9 UK and Italy withdrew from EMS.
      • Euro was considered as the hard peg rathen than soft peg.
    • The problem is the hard peg (nail) seems stronger than the wall (local economy).
    • Once Grexit problem became serious, then continuous 'disintegration' might occur; Portgues, Spain, then Italy ....
    • >Top George Solos comment; European integration is a kind of bubble; swelling process of bubble economy, leverage of loan increases, but shrinking process, deleverage occurrs.; 'Imperial overstretch' like ancient Roman Empire, which could not keep logistic strategy to periphery.
  • 2015.12.25 AIIB (China's World Bank) started as the representative of emerging countries, asking 25% equity other than Asia area.
    • 2015.3: Gerge Osbourne, chancellor of exchequr UK decided to join AIIB, then major EU countries followed.
    • US considers IMF regime has been the backbone or American hegemony after WWII together with its economic and military powers. Japan simpley follows this regime.
      • It is forcasted that about $8T would be needed to construct Asian infrastructure.
      • AIIB secured about $50B capitals, but $100 would be totally needed.
    • US government could neither reinforce the existing regime (IMF), nor alternative to AIIB.

7. 日本が今真剣に考えるべきこと:

  • メルケル首相7年ぶりに訪日
    • 独中接近
    • 日独は経済では競合関係


  • ハードペッグかソフトペッグか
    • ユーロは究極のハードペッグ
    • 帝国のオーバーストレッチ


  • AIIB設立の意味
    • 西欧の参加
    • 成長センターアジアへの接近


  • 米国の内向き傾向
    • IMF改革の遅れ
  • 日本の孤立感
  • There are many thesaurus of adverse current, such as, adverse wind; back current; back run; back stream; back-flow; back-streaming; backing up; backset; backward flow; backwash; backwater; contrary current; counter flow; countercurrent; countercurrent flow; crosscurrent; flowback; flow reversal; flow upstream; opposite current; refluent; reflux; regorge; regurgitation; retrograde flow; reverse flow; reverse current; reversed flow; setback; slip back; tidal bore; unfavorable current; F. régurgitation; S. regurgitación; régurgitation; 逆流 nìliú
  • Strange coincidence of three/nine/eleven of major Armageddons:
    1989.11.9 vs. 2001.9.11; then 2008.9.15; and once again 2011.3.11 vs. 2011.11.3

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