Greek Crisis and Southern Europe Immigrant situation

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luciano malocco writes: Europe is facing a crisis. Well actually Europe is facing two and both of them are of their own making and almost as serious as each other.   The news that nearly 1000 illegals from Libya died over the weekend making the treacherous journey from North Africa to the Italian coastline should shock nobody. This is the result of a disastrous policy by the West namely the US to destabilise not only Libya but also Tunisia, Egypt and previously Iraq. It was called the Arab Spring back in 2011 when the region which was filled with hope for better times to come and a fairer way of life, while Western commentators spoke of bringing democracy to the people of these countries. It was sold to the Western population as the Arab people standing up to their cruel authoritarian rulers to demand something that we here in the West take for granted, Democracy.

So our leaders decided to arm and help, through bombing key government targets, the rebels especially in Iraq and Libya to help overthrow the ruling class. But looking at the resulting carnage that has been left behind after the toppling of these so called tyrannical rulers, we see a land or lands that has seen the removal of the rule of law, the removal of any type of working government and the rise of ISIS which far from being just the scourge of the West are fast becoming the scourge of the Muslim world also. When the US targeted both Iraq and more recently Libya we were told that this was necessary and also just.

Was it though? What was Gadhafi’s crime, did he as was suggested of Saddam Husain purposely use chemical weapons against his own people?  Was he harvesting WMD’s as was also said of the former Iraqi regime? Or was the real reason that he wanted an Arab alliance to form together and remove dollars as the currency that oil was quoted in and replace it with euros? This was one of the last things he did try to do and this project died with him when he was captured and killed by the rebels. There can be no doubt, looking back that we were misled over Libya. Gadhafi, whilst a hard line military leader, was not killing his own people indiscriminately or threatening the West in any way militarily. His crime it seems was having an idea about moving oil into euros from dollars, an idea he had set his mind on bringing to fruition. The problem was that since the 2008 financial crisis the dollar has been in danger of losing its status as the world’s reserve currency and had oil actually been placed into euros it would surely have signalled the end for the dollar having that status. That could not be allowed to happen so Libya was targeted by the US and its allies.

This leaves us to where we are today. With thousands fleeing Libya on a daily basis, hoping to reach Italy or France, and prepared to risk their lives in the process. So what can Italy do to stop this flow? Should it expand their already stretched coastal services which will help reduce the amount of boats sinking and the number of casualties? Well if they do that which seems like the most likely course of action considering a meeting has been called of all EU ministers today to try and resolve the crisis. The problem is that they will solve one problem but be then faced with another. For if they expand the costal operation, the simple fact is that even more boats will leave Libya as they know that not only are the chances increased that they will be found and detained but if they sink they also have a much higher chance of surviving. This leaves Italy with the problem of trying to home these immigrants, and with its migrant services and accommodation already stretched to the very limit it seems that help from its European allies will be needed. This however is a medium to long term problem and not something that can be fixed easily or quickly.

This brings us to Europe’s second problem, another problem that is also of Europe’s own making. That problem is Greece.  Now problem with Greece like problems with Libya are nothing new, however due to not dealing with the problem properly in the first place now the Greeks are able to hold Europe to ransom, and its exactly this that they are currently doing.

The reason for this is that Greece is going to default on their debts. It’s not anymore a matter of if they will; it is now a matter of when they will. This will be a catastrophe for Europe let’s make no bones about it. A Greek default will cost EU banks and German banks billions in capital that they have already lent to Greece.  A default by Greece will not keep the euro single currency low it will in fact make it soar higher for without the Greek economy the euro would be a much stronger currency. This however will not help the Germans. Not only do their exports depend on a low euro but with their banks are set to lose billions in bad loans to the Greeks. 

The ECB is also set to lose billions and let’s not forget that over 60% of Greek debt is actually owed to other EU countries, the EU will without a doubt re-enter recession. Liquidity will become tight once again and there will be continued risks of contagion, in the form of another at risk Euro-zone country, most likely Spain also deciding to leave to follow the Greeks path. But what will happen to Greece? Well Greece will begin printing a new Drachma once again and its value will plummet in the days and perhaps weeks after it is launched, but this will only last for a relatively short period of time before Greece and the Greeks will recover. Tourism will be the main driver, that and exports as the Greeks take advantage of their newly competitive currency. When we get to that stage in the game then Europe will have some real problems at its door. For if the Greeks manage to turn their situation around in a relatively short space of time how long will it be before the rest of the so called PIG nations, Ireland, Spain, Portugal and Italy decide to also turn their backs on the euro and the EU to go it alone. Couple this with the rise of the immigrant refugees coming from North Africa and Europe’s problems could reach crisis point in a very short space of time.

By Luciano Malocco

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