Eurozone Crisis: Latest Episode

Surely it is now a matter of time before Greece exits the Eurozone. Only the deluded (and Angela Merkel) still believe that Greece will abide by the Draconian austerity measures imposed on that country.

The Greek voters have severely punished the pro-austerity main-stream parties on both sides of the centre. The vote share of the two parties New Democracy (right-of-the-centre) and Pasok (left of the centre) collapsed. Pasok, which, in the 2009 elections had garnered 44% of the votes, saw its vote-share tumble down to just over 13%.

The country has seen the sudden rise of the ultra-left Syriza party, with its young leader (described as charismatic in some newspapers) Alexis Tsipras, now being asked by the Greek President to see whether he can cobble up a coalition.

Tsipras says he wants to stay in the Euro but rejects the austerity measures. He wants to renegotiate the terms with Germany. It is a bit like a hedgehog wanting to negotiate the right of way on a country road with a steam-roller.

In any case Tsipras simply does not have the requisite numbers. Pasok leader, Evangelos Venizelos, is refusing to renege on his party’s pledge to implement the terms of Greece’s aid package. So he is not going to join hands with Tsipras, who is against austerity measures. At the other end are the Communists, who have rejected Tsipras because they want out of Euro.

There will probably be another election in a few months, and the pro-Euro parties may feel that they have another chance to curry favour with the voters. The chances of Ed Miliband discovering charisma are higher than that happening.

There are really only two options left for Greece. Either it negotiates an orderly exit from the Euro or it is kicked out. The former would be the preferable. Berlin will accept that the Greece politics has become so fragmented (or polarised or whatever term that is acceptable) that the politicians will find it impossible to get the Greek public round to the idea that it is in their interest to stay in the Euro, which means that austerity measures—which have hit the poor and the public sector work force the hardest—are inevitable. There is always a teeny-weeny chance that the military will step in, in which case we shall have the pleasure of witnessing the first military dictatorship in the Eurozone. And Greece won’t be the only one to leave Euro. Other peripheral countries such as Ireland, Portugal  might leave Euro too. Perhaps Germany and its allies such as Netherland can form a group and have its own currency, and the rest of them (Spain, Italy included) can continue with a devalued euro.

The other scenario is of course that one inconclusive election will be followed by another one and essentially there will be anarchy. The reforms demanded by Berlin (and Brussels) will not be met, and with no Eurozone aid there will be no money left to honour contracts and pay public sector workers. Greece will be where Argentina was a few decades ago and Iceland a few years ago. There will be no money left to pay the creditors and the country will be declared bankrupt.

The headache for Brussels and Berlin is that Greece going bankrupt will have a direct knock-on effect on other Eurozone countries such as Ireland, Spain, Italy, and Bulgaria. Investors may start pulling their funds out from these countries which would leave Berlin and Brussels with a bill that would be larger than if whole of Greece were to subsist entirely on the Eurozone largesse.

The Spanish economy, the fourth largest in the Eurozone, is just a few notches above the junk status. The economy is in recession for the second year running and unemployment has risen to 25%. The government borrowing has jumped to 6%, and, if Spain, whose economy is seven times the size of Ireland, needs a bailout it will cost the Eurozone hundreds of billions of pounds. Spain’s property market has collapsed and Bankia, its fourth biggest bank, created by amalgamation of seven struggling banks, is more exposed to property than a P-listed British diva to the Caribbean sun. Spain’s conservative government (elected in 2010) announced that public sector money won’t be used to prop up struggling banks. (Sounds familiar? I will bet my ex-girl friend’s life that tax-payers’ money will be used as a ‘last resort’.)

Portugal, which has negotiated (so far) a 78 billion euro bailout deal, is scrapping 4 of its 14 yearly public holidays. The wages of public sector workers have been cut and taxes have been raised. It’s like arranging the deck-chairs as the Titanic sank.

The newly elected Socialist French President, Francois Hollande, is making noises about focusing on growth. However, his idea of growth is probably different from the idea of growth of others in the Eurozone. Hollande would not be in a hurry to reign in the role of the state, and would go on about loser (and easier) fiscal and monetary policies. Also I don’t think Germany is fully convinced about it. Germany may pay lip service to growth, but what it is pushing for is austerity measures, although that is not working either (as events in Greece and Spain demonstrate). When troubled countries are forced to trim their spending very fast (and simultaneously raise taxes, which is what is happening in Britain, too), it actually makes it much more difficult for these countries to reduce the debt as percentage of the GDP—because the GDP itself is shrinking. As a Euro-sceptic friend of mine (he hates the Germans) never tires of reminding me, euro is beneficial only to Germany and to no other country. They tried to take over Europe twice in the last century, but were unsuccessful. It might be third time lucky for them. (It never ceases to amaze me how these fanatics manage to turn any debate to the subject of their pet-hate.) This friend is also predicting that the USA is headed for a fall and is advising anyone who is willing to give him an ear (mercifully not many) that they should buy Swiss franks and yuans, the Chinese currency (an advice he is regrettably unable to follow himself, as he last worked in 2002). He told me in a conspiratorial tone that Russia, India and Brazil are already settling deals in yuans, as they know that the dollar is going to lose its status as the world's reserve currency.

The BBC economics editor, with her defiantly optimistic view, wrote that these developments need not spell the end of Eurozone, but uncertain times are ahead. (I have been saying this since 2008). What seems to be happening is that the crisis is moving up the food chain. Spain is next; and after that Italy.

I think the next book I will read is As I Lay Dying. It is chosen by the bookgroup which has extended a cordial invitation to me to join. More about it some other time.

Books I am Reading Now

I am currently reading two novels by women writers. One is entitled Mr. Rosenblum’s list, with a subtitle that is longer than the queues at Heathrow. It is the debut novel of Natasha Solomons. The other is entitled It’s a Man’s World, which also has a subtitle. It is the sixth novel of Polly Courtney, a former investment banker.

Mr Rosenblum’s List is about a Jewish man who arrives in England from Berlin as a refugee, becomes wealthy by hard work and enterprise, and is driven by a desire to assimilate—be like an Englishman. Towards that end he wants to become a member of a golf club. Except that no golf club would have him as a member (because he is Jewish). Undeterred Mr. Rosenblum decides to build his own golf course and buys a cottage and 60 acres of land in rural Dorset.

Mr. Rosenblum’s List has apparently been translated into nine languages. The front page of the paperback edition has a comment from The Times, which described the novel as hilarious. I am almost half-way through the novel, having read 150 of its 310 pages. So far, the novel, while not tedious, is not exactly gripping either. The protagonist Jack is obsessed about building a golf course, helped by a hick from the nearby village. The narrative is not particularly riveting and, while I would like Jack to complete his golf course, the truth is I couldn’t give a toss whether he succeeds or not in his endeavours. He is just not very interesting.  I am also marooned in that section of the novel where there is rather a lot about golf courses and golf-related scenes—about as interesting as watching my moustache grow, as I have zero interest in golf. Jack's wife, Sadie, is a bit more interesting, but her character is not developed sufficiently. (The tedium is not relieved by long and repetitive descriptions of Dorset seasons and the flowers in the region.) Which is a pity. The novel started with the quaintly charming list of means and ways to become English.  I am tempted to throw in the towel, but will probably persevere, seeing as I have only 150 more pages to go. I don’t know what twist in my character compels me to carry on reading novels I don’t find interesting. Not finishing a novel feels like a personal failure (when it ought to be seen as the failure of the writer to write a novel engaging enough to keep the reader interested). At least I didn’t buy the novel, but borrowed it from the library. The book is a bit like Aero chocolates: there is not much substance in it.

I have written on this blog about Polly Courtney when she publically ditched her publishers (Harper Collins) because they had the cheek to promote It’s A Man’s World as a chick-lit, i.e. something frivolous and racy when what Courtney had attempted to do was write a novel on an important social issue with a sombre message. It  interested (and amused) me to see a writer who (from the description provided of said novel seemed like a chick-lit) throwing an apoplectic fit that the publisher promoted it as a chick-lit. It was a bit like a butcher waving a shoulder of lamb and shouting, ‘What? They killed a lamb?’ I had not read It’s A Man’s World at that time (but I didn’t allow such trifles come in the way of banging out a post).

Therefore, when I spotted the novel last week in the library I decided to give it a go.

I have read only the first two chapters of It’s A Man’s World, but already I am finding the novel engaging and reasonably entertaining. It is an easy enough read (partly because so far there are lots of dialogues—which I find easier and quicker to read—rather than descriptions of nature). Also I think I am more keen to find out whether Alexa, the heroine of It’s A Man’s World holds her own as a managing director of a lad’s magazine than whether Jack completes his sodding golf course.  

And yes. It is without doubt chick-lit. 

Book of the Month: The Good Earth (Pearl S Buck)

Pearl Buck, the first American woman to win the Nobel Prize in Literature (in 1938), was a prolific writer. In her long life Buck published more than 70 books of fiction and non-fiction.

Of the more than 35 novels Buck wrote probably the most famous, certainly the one for which she is most remembered, is her second novel, The Good Earth. It won the Pulitzer Prize in 1932. Six years later, when Buck was awarded the Nobel Prize in Literature (within 12 years of her starting to write), The Good Earth was one of the two books (the other was a biography Buck wrote of her parents) the Nobel committee heaped praise on. Buck was praised by the Nobel committee for her ‘rich and truly epic descriptions of the peasant life in China’. 

Upon its publication The Good Earth, which vividly depicted for the Western readers—probably for the first time—, the peasants’ lives in rural life in China, became a best-seller. Over the decades it has sold millions of copies, and it is said that the novel has never been out of print in America.

Pearl Buck was perhaps best placed to give the Western readers a panoramic view of what until then were poorly understood ‘oriental’ culture and country. Daughter of a fundamentalist Christian missionary, Buck had spent her childhood and adolescent years in China. She was bilingual and could speak Chinese fluently (indeed, according to WikiPedia she also had a Chinese name). She returned to America in 1911 (on the eve of the Boxer revolution) where, three years later, she graduated. In 1914 she returned to China, where she lived for the next twenty years. In 1931, when The Good Earth was published, Buck had spent all but three of her 39 years in China.

The Good Earth tells the story of a man called Wang Lung, who starts his life as an impoverished peasant, leading a hand to mouth existence, in the north of the country; but attains wealth and prosperity by intelligence and hard work. The period is not explicitly specified, but it is most probably late 19^th and early 20^th century, that is, the years leading to the revolution that overthrew China’s last Imperial Qing dynasty. The novel opens with the wedding of Wang Lung. Born into a family of poor farmers, Wang Lung can not aspire to marry anyone other than a slave girl called O-lan in the house of one of the richest family (the house of Hwang) in the nearby town. In the next 300 pages the reader is treated to the vicissitudes of the life of Wang Lung, and, through them, day-to-day lives and customs of the Chinese peasantry. Wang Lung might have been born into a poor family, but he has a constant desire to better his lot. And he has figured out that the way to prosperity lay in acquiring land. The problem is he does not have the money to buy land, and, when the famine arrives in his region, he, like many other farmers, is forced to leave his village and go to a prosperous Southern city where his children beg and he does manual labour, dreaming all the while to return to his land. When the revolutionary protests reach the city and the rich flee, Wan Lung and O-lan are amongst the city’s poor—most of them displaced villagers like themselves—who loot their empty houses. Wang Lung returns to his village with silver and jewels and, with a zeal that would have modern-day venture capitalists nod with approval, goes around acquiring land. In due course the once-poor farmer who had to marry a slave girl is one of the richest men in the region. Rich enough not to worry when the floods arrive after seven years and most of the land is under water (but rich enough to worry that other, poverty-stricken, farmers would attack his house). In fact the floods present Wang Lung with the opportunity to frequent a ‘tea-shop’—which also serves as a brothel— regularly, and, much to the unhappiness of the faithful (but ugly) O-lan, who has borne him three sons, Wan Lung brings home a mistress in the tradition of rich Chinese men of his generation. Financially Wan Lung prospers year after year, but if you thought prosperity brought the man happiness and peace of mind, you’d be wrong. All of his sons are disappointments to him in different ways. The long-suffering O-lan dies a painful, lingering death. And, as Wan Lung nears the end of his long life, he realises that his sons do not share his love of the land that has brought prosperity to the family.

The Good Earth is a story full of family drama and intrigues, narrated in a style that suggests that the unseen, omnipresent narrator is keeping her cool distance from them. If it was only that The Good Earth wouldn’t have won the Pulitzer and would not have fetched the Nobel for its writer. The Good Earth also gives the Western reader a taste of what the life was in pre-revolutionary China. The approach is unsentimental, but also non-judgmental. One guesses that Buck was able to achieve this neutrality because she had grown up in China, watching its way of life around her. Nevertheless it is still remarkable because Buck, a daughter of fundamentalist Christian missionaries and married to one at the time, must have had her Western identity and cultural values, which, to put it mildly, were different from those in rural China. Buck might have spent all her life until then in China; she might have had great love for the Chinese; she might even have had a Chinese name; but she was not Chinese. In her core values she was a Westerner. (Buck returned to America in 1934 as the climate became increasingly unsettled and dangerous in the country with the civil war type situation, and never returned to China, although that was probably not because of want of trying.  During the Cultural Revolution Buck was denounced as an ‘American Cultural Imperialist’ and in 1972, when Richard Nixon famously visited Mao’s China, Chou En Lai refused Buck the visa.) The narration of rural Chinese customs some of which, such as foot-binding, must have seemed strange (to say the least) to the Western sensibilities (while some others such as taking on a mistress and installing her in the house would not have been totally alien, although it was not done openly and attracted societal disapprobation). Some other practices such as poor families selling female children as slaves to rich families were clearly dictated by the grinding poverty—it was either that or death by starvation. The approach of Buck towards what she must have seen all around her and that which she depicted in The Good Earth befits that of a university professor (she taught English at the University of Nanking throughout the 1920s) dispassionately explaining a theorem. Nothing wrong in a writer wishing to keep a distance from the characters in his novels; Arvind Adiga has done this brilliantly in his Last Man in Tower. The Good Earth takes detachment to another level altogether; reading it gives you the feeling of reading something that is lacking in passion and vigour. The narrative is curiously flat, and matters are not helped by the dialogues, which, while easy to read, sound (certainly by today’s standards) dated. At no stage does the narrative suck the reader in the dramas of Wan Lung’s life. The two main protagonists in the novel, Wan Lung and his wife O-lan, do not really come alive for the reader, their inner lives do not light up. Reading The Good Earth is akin to watching an hour long documentary on the Masai warriors on the BBC: we learn a lot about the quaint customs and practices of these African tribes (and depending upon our dispositions may swoon or shudder), but we do not really understand how they think. I guess this has happened (in the novel) because Buck spent live amongst the Chinese, not with them.

The Good Earth is an outsider’s account of the life in rural China in the late 19^th and early 20^th century. One can understand why it appealed to the Western minds at the time of its publication. It certainly is a landmark novel in the 20^th century fiction in English language. Is it a great novel? Probably.