The Greek crisis is no longer viewed as an isolated event. Only a month since my last note. And a real game changer of a month. First, the Greek government managed a relatively successful renegotiation of its debt. The debt is adjusted (i.e. reduced) by about 20% for private banks and rolled-over into long term commitments. The debt guarantees are improved however, which made banks happy as the original debt paper was trading as junk. A number of international banks have since written-down their Greek debt holdings at between 20 to 50% but are happy it has retained some value. On the downside for the Greek state it is now much harder to default on the new debt commitments.
And that would have been it. A circle of congratulatory pats in the back and celebratory dinners (on public expense of course) if it was not for the upheaval of the downgrade of the US debt, the long-overdue downgrade of Italian debt, the debt crisis in Spain and the impending rumoured downgrade of French debt. All this on the backdrop of substantial losses on all key international stock markets over the last couple of weeks. Significantly, Asian sovereign funds (cf. China) have indicated their displeasure with the probability of the US currency being on a downwards glide for the foreseeable future (4-5 trillion in US$ reserves in Asia constitute a veto point in the global market). There is no party that appears happy (except from the grannies still hiding gold coins in the mattress). The Swiss are unhappy with the appreciation of their currency, the oil producers with the slide of energy prices, world commodities are declining, the developed countries with the probability of a double-dip recession, the developing with worse growth projections, the US Republicans with universal healthcare, the US Democrats with Obama’s perceived lack of brinkmanship, the French with Sarkozy, the Germans with Merkel and so on.
In short, we are facing a discontented time in world affairs. And maybe news of ‘inexplicable’ or ‘unjustified’ riots in England, Chile, Greece and Spain is symptomatic of wider processes at hand.
But not all is gloom and doom. Even if China is about to launch four aircraft carriers while the UK cannot afford one, even if Syria seems likely to slide into a Libyan impasse (with the obvious implications to Iranian leveraged in the region), even if Pakistan is increasingly radicalised and the Somalian humanitarian situation deteriorating.
So, what is gong well? Where will future human dignity, economic growth and political values come from? Obviously not from Fox News. Yet even the debasement of political debate, political values and reason offers an intrinsic benefit. In the so called western world the cause of multiple current problems lie with the unconditional acceptance of ‘liberal’ values in the mainstream. This is both undemocratic and inherently chauvinistic. It assumes that a set of values are superior. Yet even elemental such values like gender or racial equality are consistently undermined without being directly challenged. Since such values are worth their integration into our value systems they need to be rigorously defended. And continuously debated. Political correctness represents the death of ideas by stealth. A value not defended becomes not defensible.
Game changers in recap: the Western debt crisis, resultant economic order shifts, escalating involvement of the ‘West’ in the middle east quagmire (not lacking an exit strategy but an actual strategy), the surge of authoritarianism in global politics, militancy triumphing over reason, and the debasement of political debate (pop-liberalism vs pop-tea-chauvinism) herald a change. Evidence to this change is blatant for all to see although the social outcomes are patently uncertain.