Nothing much has been solved

The Greek Parliament has voted narrowly for a, so far unspecified, austerity package, the details of which will be voted on tomorrow and after that the main problem, that of implementation will come to the fore. Meanwhile, the 48 hour general strike with some attendant violence is continuing. The people of Greece or those of them who can be bothered to turn out on a demonstration when the weather is nice and the beaches call, say that they owe nothing and will pay nothing and the government has no right to sell anything or, indeed, introduce measures to control the debt. In fact, the funders of the Greek several decades long jamboree have no right to demand any conditions on heaving more money over.

This blog takes slightly different views from other eurosceptic outlets. In the first place, the idea of a general collapse across Europe or, even, just the eurozone (not that riots in Greece will cause that as they are historically too common) does not appeal, possibly because of a somewhat wider knowledge and experience of what that sort of collapse entails. People should not assume that the nastiness they see whenever there is a riot somewhere is somehow limited to other people - riots are riots, revolutions are revolutions and real poverty, unknown in this country for many decades, are not pleasant occurrences.

Secondly, this blog has limited sympathy for people who think that the world owes them a living, whether they are school leavers in Britain, people who borrow money from banks with no real intention of repaying it, or the population of Greece. As it happens, they do owe the money and when you owe money you have to pay it back; if you want to borrow more, you must abide by conditions lenders will impose. This should apply to Greece as much as it applies to Sub-Saharan and other developing countries, with the difference that, by and large, the people of Greece have had more of the bonanza that has been pouring into their country than the people of many developing countries.

Those who think that the Greek Parliament should not be imposing austerity measures or selling those extensive state possessions might like to produce some real alternatives. (Just saying we ought never have got to this situation is not good enough. I, too, have been saying that and am one of those who were abused in the late nineties for insisting that the eurozone was unsustainable. The Greeks did not listen, the East Europeans did not listen and our own establishment did not listen. Well, we told you so, but the situation exists and something needs to be done.)

In the meantime City AM has an article that is, unfortunately a little sloppily written. A Legal Battle Could Yet Sink The Greek Bail-Out says Craig Drake.

ALTHOUGH the Greeks will vote today on the adoption of austerity measures, that vote could mean nothing if a court case launched by a group of five German citizens derails Germany’s financial contribution to the bailout. The group, led by Peter Gauweiler, a member of parliament for the Christian Social Union (CSU) party, includes legal academics led by Nuremberg constitutional law professor Karl Albrecht Schachtschneider. They argue that the bailout is unconstitutional both in German and European law.

It goes through the various Articles in the German Constitution that make German funding of the Greek bail-out essentially unconstitutional and, above all, Article 125 of the Lisbon Treaty that specifically prohibits any bail-out of an EU member states either by the EU or other member states. Though, as we know, Article 122.2 can, with a little fudging, be said to allow just that.

Mr Drake thinks that the legal challenge will fail but in the worst traditions of British journalism, omits to mention certain key facts, such as where exactly is the challenge mounted: the German courts, the German Constitutional Court or the ECJ. It makes a lot of difference.

Bloomberg answers the question as well as explaining some of the background in a far more pithy fashion. The case is in the German Constitutional Court in Karlsruhe and it is, in fact, not a new case at all but, just as I suspected as I read the article on the tube, one that has been around for some time and was mentioned on this blog almost a year ago.

As the Bloomberg piece says:

The Federal Constitutional Court in Karlsruhe will hear oral arguments in three cases over the issue on July 5, the court said in an e-mailed statement today. The cases were brought by a group of academics and lawmaker Peter Gauweiler.

“In this lead case, the court for the first time decides in the main proceedings on constitutional questions relating to the Greece aid and the Euro-rescue package,” the court said. “There are many additional cases pending over the issues which will be ruled on subsequently.”

The German high court has drawn criticism for not acting on the suits swiftly on the suits, which were filed in the first half of 2010. The judges declined to issue emergency orders blocking the aid package for Greece in May 2010 and the euro- area rescue fund in June 2010 and didn’t schedule a hearing on the main legal questions in the cases until today.

The likelihood is that the case will fail but one cannot be too certain. Craig Drake's comparison with the badly argued challenge mounted by Stuart Wheeler in 2008 against the ratification of the Lisbon Treaty does not stand. I am sorry to have to say this because, on the whole, I like City AM.