Euro 'Diktats' risk terrorist response across Southern Europe

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6...

It is becoming dangerous to associate with economic and ideological power in Southern Europe, or what Europol calls the "Mediterranean triangle" of anarchist violence.

By Ambrose Evans-Pritchard, International Business Editor
Published: 6:50PM GMT 20 Dec 2009

Greece's Revolutionary Struggle detonated a car bomb at the Athens Stock Exchange in September. Citigroup's branches have been targeted twice this year.

Hooded extremists attacked the rector of Athens University in his office this month, sending him to hospital with head injuries.

In Milan, the Informal Anarchist Federation (FAI) planted 2kg of dynamite last week at Bocconi University, the symbol of the free market in Italy.

The FAI left a note threatening a "bloodbath" for capitalists. Security forces have issued alerts for the Milan bourse, Unicredit, and Barclays. Italians have begun to ask whether their country is returning to the 1970s, the "years of lead" when the Red Brigades murdered ex-premier Aldo Moro.

The FAI is no friend of Europe either. It sent letter bombs earlier this decade to the heads of the Commission and the European Central Bank and to the European Parliament.

In Spain, Barcelona's anarchists have been conducting a low-level campaign against bank cash machines, supermarkets, and firms such as Manpower. Valencia and Galicia have seen a wave of attacks.

"Activities by left-wing and anarchist terrorists and extremists are increasing in quantity and geographical spread in the EU," said Europol.

Portugal has its own twist. The Trotskyist-Maoist Bloco emerged as third party with 11pc of the vote in the June elections. Premier Jose Socrates is attempting to impose austerity by minority government. Good luck.

The hard-Left resurgence cannot be blamed on monetary union as such, yet the two are linked. EMU has always been viewed as a capitalist conspiracy – a "bankers' ramp" – in Left-wing circles. While their view may seem odd to us, they are entirely right to think that poor people in certain countries are victims of the experiment.

Unemployment is 19pc in Spain (43pc for youth) on Eurostat data. Greece is catching up fast. Labour minister Andreas Loverdos said Greek joblessness has jumped above 18pc over the last two months as EU-funded workfare schemes expire.

This will get worse. Southern Europe is being ordered to carry out IMF-style austerity, without the IMF-style devaluation required to rectify the massive imbalances that have built up between North and South under the euro. The victims are caught like France and Germany under the Gold Standard of the early 1930s, when society was broken on a wheel of deflation decrees.

The EMU system has condemned Club Med to structural depression, with no way out. The logical – yet politically absurd – response of German Chancellor Angela Merkel is to talk of overriding national democracies in order to save the euro. "The question arises over what authority Europe has to tell national parliaments what to do, in order to avoid damage to Europe itself? National parliaments don't like to be dictated to about such things, but we need to address the problem," she said.

I do not wish to paint this is as German bullying, let alone a conspiracy by Berlin. Germany is being swept along by events like every other country that entered EMU blindly. Yet here is a German Chancellor talking about "dictating" to the Hellenic Parliament, within living memory of the Axis occupation, the Swastika flag on the Acropolis, and the hated Security Battalions. Neither Greece's Communist unions, nor Greek army officers, will react well to such diktats. That goes double for Epanastatikos Agonas and fellow terrorists.

Matters will be tested over the next two to three years. Standard & Poor's said Greece's public debt will reach 138pc of GDP by 2012 (from 99pc last year) as it downgraded Greek bonds to BBB+.

The IMF expects Spain to contract by a further 0.7pc next year, even assuming a global recovery. Moody's delivered its axe-blow last week, downgrading a third of all Spanish mortgage bonds and a string of regions.

Italy will bounce along in perma-slump, as it has for a decade. The country has lost 30pc in labour competitiveness against Germany since the late 1990s.

Across Southern Europe there is a mood of national powerlessness, a feeling that events have moved beyond their control – as indeed they have.

Eurosceptics argued from the start that EMU would prove unworkable over time without a debt-union; that the inevitable euro crisis would be used (consciously or not) to create an EU central government; that weak states on the edges would be reduced to colonies and that far from binding Europe together, EMU would lead to acrimony and perhaps reopen Europe's can of historical worms. Were the critics wrong?

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