Fear that shadows the euro
Once again this week the euro is set to unsettle markets and unnerve politicians. Public sector workers in Greece will strike, so giving an indication as to whether last week's austerity programme can be implemented. Pressure will grow on Germany in particular and possibly France to rescue Greece from its debt.
Saving the eurozone will no doubt edge its way onto the agenda at this week's informal summit on jobs and growth in Brussels. The IMF stands in the wings, ready and willing to administer its harsh medicine. Some or all of this may happen.
It may be that a short-term solution is found and the markets steady. Maybe the EU bends its rules and Greece is given guarantees and loans. Maybe Germany rides to the rescue, demanding sacrifices from the Greeks. "Greece has to realise that when you break rules over a long period of time, you have to pay a high price," said Wolfgang Schaeuble, Germany's finance minister.
Maybe it will fall to the Germans to crack the whip of austerity. Maybe the IMF will move in and be less squeamish than the EU in demanding the Greeks slash their public sector.
Whatever the fix, it seems unlikely that Greece will be allowed to default. The fear would be of contagion; that investors who had bought Portuguese or Spanish bonds would panic and start selling fearing further losses beyond Greece. So the expectation has to be that Greece won't be allowed to fail.
But none of that is where the greatest fear lies. For when this immediate crisis is over there will be a legacy. Firstly, damage has been done. The euro has been weakened. Secondly, it has revealed flaws that threaten its future.
The fear is rooted in the simple analysis of economists like Gerard Lyons, of Standard Chartered: "For monetary union to survive, it has to become political union." And that is a stick of dynamite.
You now hear plenty of voices saying: "You can't have a single currency when national economies are so different or where you don't have common fiscal policies." As Mr Lyons observed: "Monetary union needs fiscal union".
When the euro was launched critics said you can't have a currency used by 16 countries where "one size fits all". The past 10 years seemed to prove the critics wrong but now those early doubts are returning.
And there lies the rub. For national governments retain control over economic and fiscal policy. They could not surrender those powers without massive debate. Any idea of reviving the idea of political union would be hugely controversial and a crisis for the EU. The Union has just ended eight years of argument about institutions. "We now have the structures for the 21st Century," I have been repeatedly told.
But say the conclusion from this crisis is that the euro is fatally flawed; that it might survive this storm but will surely be holed next time around. Then, inevitably, the arguments will start as to whether the eurozone needs the equivalent of a single treasury.
In the Financial Times Nouriel Roubini, who made his reputation predicting the credit crunch, made this observation: That unless the EU worked out a way of dealing with individual states' problems then doubts about the euro's sustainability will return time and again. And that's the fear that lies behind the current turmoil.
I'm 
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The EUro: It is a simple, nice EU name.
The EUro-zone: It is a simple, nice EU idea.
The EUro in practise: It has the same 'value' for the Economies in Germany, Greece, Portugal etc. - - No! But, it does have a nice EU name.
The EUro-zone in practise: It is a currency equating to the individual needs of 16 Nations - - No! But, it is a simpleton's EU idea.
Now, imagine had the UK joined the EUro-zone and found itself in the present economic-financial mess!
I am quite sure Germany and France can come up with a 'one-size-fits-all' concoction of twisted-deviated rules to cover enormous Loans-Subsidies to drag Greece and perhaps Portugal etc. from the mire.
For Germany and France to have done the same for the UK Economy would be an impossibility - - the collapse of the EUro-zone would be unstoppable - - it seems therefore the UK and the EUro-zone should be grateful the old Pound still crosses the counters into the tills of the UK!
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The fear is rooted in the simple analysis of economists like Gerard Lyons, of Standard Chartered: "For monetary union to survive, it has to become political union." And that is a stick of dynamite.
Wait wait…just there in the back ground… I can hear it building up already…..let the whining begin! Let me savour it the sweet unrepentant refrain of hatred of foreigners (which ones?) running UK affairs.
After all the electorate prefer Good Ol’ Rupert Murdoch setting the agenda day in day out.
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"For monetary union to survive, it has to become political union." ...
"Monetary union needs fiscal union". ...
I quite agree with the sentiments but not the goals. The Euro is structurally flawed due to the EuroElite having real problems asking the people what they want. The halfway house was fine when the sun was shining but now the rain has rolled in, it is looking very cold with very shaky foundations.
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@3
It isn't hatred of foreigners running UK affairs my friend, it is hatred of unelected people running UK affairs-foreign or otherwise- we hardly have a perfect system as it is. You see, you are making assumptions that everyone who dislikes the EU in its present form is a rabid little Englander who hates foreigners and will whoop for joy if the Euro fails. Do me a favour and keep these thoughts to yourself. I don't deny that these people with nationalistic views exist in the UK but frankly they do not further the anti EU cause anymore than your "here they go again" approach moves things on from the pro EU standpoint.
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Hello Gavin Hewitt – I’ve been reading about you and your escapades. Don’t worry – nothing that would interest the tabloids – I’m three-quarters of the way through Robert Fisk’s ‘The Great War For Civilisation.’ What a fantastic book – one the best, if not the best, I’ve ever read. It should be on the national curriculum.
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“Greece won't be allowed to fail.”
I am not surprised that the historian-quants at the BOE and the Exchequer are guffawing at the Greece-Euro situation. There is the sense of déjà vu: flash-back to the Sterling Area of past British history. What quiet time that was: so many countries, so many economic policies, so many currencies but one major reference and reserve currency; the Pound Sterling. And, of course, too much trust in the Chancellor of Exchequer, the human custodian-guardian. Till, the Pound’s devaluation in 1967 and the Exchange controls in 1972. And in that accompanying confusion; the destroyer of the external value of the Pound was the custodian-guardian itself. Hope there is no such confusion in the EU. Whether to destroy or to protect the Euro?
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I think this is perhaps a case of things coming home to roost. When the Euro was launched all members had been expected to demonstrate a level of prudence in their budget deficits etc. However the political necessity to make it happen on a specific date with enough members meant that compliance was fudged, and the resultant lack of good fiscal behaviour continued in many Eurozone countries even during the "good times".
I suspect that this is not the end and some kind of resolution will be created, but hopefully a significant readjustment will occur in countries such as Greece and the scars of such produce a longer term fiscal responsibility. Closer fiscal convergence has always been an aim and considered highly likely result of monetary union, while this does not actually equate explicitly to a full political union it is a step in that direction…. Lets hope it happens sooner rather than later though, and under equitable terms for all member states, not just Germans etc having to shoulder the debts of incompetent treasuries elsewhere on the continent who in some cases appear to have actually tried to hide bits of their accounts (sounds a bit like the approx. 300 MP’s that are not facing criminal charges).
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How exactly will the Euro be brought down? I can't see how this would ever happen. The Greeks will be bailed out and given a good telling-off and this won't happen again for another generation. I can't see the whole currency collapsing while only the smaller economies in the eurozone partake in fly-by-night house-of-cards castle-in-the-sky pyramid-scheme economics. The Germans in particular are far too sensible to do this kind of thing and will always be able to bail out novices like the Estonians or Greeks.
In the absence of the single currency the Greeks would be in a much more serious situation, like the Icelanders. Don't the Icelanders now want to join the euro for precisely this reason?
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This posting is so laughably naive.
"Saving the eurozone will no doubt edge its way onto the agenda at this week's informal summit on jobs and growth in Brussels."
Oh how nice. We'll get around to it when that agenda item comes up for discussion. Frist comes the discussion on the curviture of bananas and the roundness of oranges. Markets don't wait for bureaucracies. They are now lightning fast. The rush to the exit when it comes could crash the Euro in a matter of hours. The EU created a ticking time bomb with the invention of the Eurodollar and it could detonate at any time now.
"The IMF stands in the wings, ready and willing to administer its harsh medicine."
Another naive and vain hope. The world's currency markets trade surpassed a trillion dollars a day many years ago. Anything the IMF or anyone else could try to bolster the Euro would be easily overwhelmed, swamped by the markets. The IMF could bankrupt itself by trying, making it impossible to help anyone else again.
"But say the conclusion from this crisis is that the euro is fatally flawed; that it might survive this storm but will surely be holed next time around. Then, inevitably, the arguments will start as to whether the eurozone needs the equivalent of a single treasury."
Laughable. Knowing that, why wouldn't investors simply get out now while they still can. There isn't going to be a next time. This is it. The first time will be the last time. The Euro is probably as good as dead and buried already. How fortunate for the UK that it still has the pound sterling...or should I say the pound pewter. If the UK were smart, it would quit the EU immediately to get out from under any and all obligations to rescue anyone but itself. And what a payback that would be to France and Germany.
The old adage proves true once again, that the flight to quality means a flight to the US dollar. There won't be any strikes in the US for more government spending. The anger centers around the government spending a lot less. It is said of the US economy that when the US catches a cold, the rest of the world catches pneumonia. What happens when the US catches pneumonia?
The chickens are on their way home to roost. The only question is when will they arrive and how much of their droppings will Europe have to endure. IMO this is all very good news for the US taxpayer and consumer. US markets should eventually do very well too as investment money comes pouring in to its markets from all over the world. Europe had its chance and blew it.
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It isn't hatred of foreigners running UK affairs my friend, it is hatred of unelected people running UK affairs-foreign or otherwise
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Unelected? Most of them were elected, we have European elections in this country as they do in every other country.
Just like in the general election, we can only vote for our constituent MP, we vote for our MEPs and the EU is run from that.
There should always have been stricter rules for joining the Euro in the first place.
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Marcus, don't you get bored of predicting an end that never comes?
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I saw part of Clare Short's testimony on C-SPAN. Very interesting. Beyond the issue of Iraq, she described a UK government that just doesn't work. Whitehall seemed virtually non functional. Cabinet meetings where there were no open or active discussions about anything that might cause debate, cabinet ministers deliberately kept in the dark when their departments had a "need to know" regarding issues that directly affected them, cabinet meetings routinely consisting of nothing more than private chit chats as she called them without formal discussions, and no meeting minutes. Tony Blair's account of how the cabinet approved of the actions he was about to take were in sharp disagreement with hers. According to her, Blair only consulted those cabinet members whom he could rely on to agree with him and then only privately, not in the cabinet meetings at all. In fact they didn't even trust each other not to leak sensitive information to the media, a subject she said they were obsessed with. If that is how the UK's government functions on a matter as critical as war, how does it manage to function at all on matters so routine as the economy?
Other than that the substance of her testimony insofar as Iraq was concerned was pure bunk IMO. For example she said she would have preferred Saddam Hussein being brought before the Hague the way Milosovich was ignoring the fact that he wasn't able to be captured until the US bombed the hell out of Serbia rendering it helpless and its recovery was held hostage to his surrender. The list of her absurdities goes on of course.
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It's Europe of the old. Europe of the shaky ententes, chronic fighting, and imperialistic hubris . Fighting each other to destruction, instead of seeking the rational choice peace and mutual co-existence. No lessons learned.
When will people realise that unity is more important than proving themselves right?
OK, so a Belgian is the head now. How do you treat a leader? Give him advice, debate with him, but in the end, just TRUST him to do the right thing. If he's wrong, get shoulder to shoulder again, discuss again and try to get it right. Share the blame. Get into a huddle. That's how groups work.
Doing something now is better than doing the best late. In the end it's the little man who is going to suffer. When things go wrong, the only thing that will give a man hope is the sight of leaders, with arms around shoulders, trying their best to protect him.
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I’ve posted this before but still.
You can let individuals fail, companies to, but not European nations.
Unless of course you want to see the EU go down with them.
If it’s going to be a European Union, as opposed to the European Nonsense, then there’s going to have to be some unity.
The ECB is going have to create more money and give it Greece. And when it’s done that it will have to create some more and give it Spain and Portugal.
The Irish won’t be too pleased having bitten the austerity bullet, so they might complain, I know I would if I were them.
Anyway, all those countries that have been economically sensible will have to see the Euro watered down a little. And they’ll complain as well.
Not that complaining will get them far of course, but that’s the price of being in the EU.
The politicians are the one’s calling the shots. And they have most to lose by the breakdown of the EU. So my guess is, they won’t let it happen.
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@3 Not hatred of foreigners chappie , just a deep seated mistrust of nations that historically meant us harm. Sadly there is no reason to believe that this has changed. Perhaps if the people of Britain who elect their governments in free elections had had any opportunity to elect the people driving the EU's expansionist Federal agenda , the situation might have been different.
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I hope the British public understand that the euro is flawed fundamentally and Britain would not have been able to cope at all during this recession had QE been unavailable as monetary tool. We should enjoy free-riding on the back on the trading efficiencies of only having to trade one currency without feeling the need to join the euro.
How would the British public like the idea of bailing out Greece. More to the point, how will Germany like it? What if this really gets out of hand and turns into Mediterranean sovereign debt crisis - would the rich countries be expected to come to the rescue and what would be the cost?
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Oh yes, another wishful thinking euro sceptic, Gavin. The pound and the UK nation 'ueber alles' and Europe still divided as in the olden days: Germany, France, Italy, Poland, etc. all nicely divided and fighting each other.
That was in the 19th and 20th centuries.
Maybe now that the EU is there in place (warts and all) and the euro is valid in all of Europe (except a few nations left without it) we can talk of rescueing Greece and Spain and Portugal. Before each one had to fall back to their own resources and fight it out alone.
Doesn't it look better that European countries can help each other? Or should the euro go and all return to their own currencies and fight their own corners? The EU economy is just like the UK one: the wealthy areas of the north and the poor one in the South and one has to support the other; in the UK the wealthy areas of London and the South East have to live with the poor North: or should the UK split in half and give the poorer lot to the eurozone? Will our journalists ever stand up and look at the FUTURE and not at the past. The EU is young and growing, and 'growing up and older', is painful but also full of fun and improves the lot of everybody.
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Okay, this is the challenge for the EU and EuroZone I've been waiting for. I'm still not clear on how a single currency can cross 'political' borders. How can a 'Euro' have the same value in a country that has a sound economy and good fiscal governance (i.e. Germany) as a country that has neither (Greece)? I've always felt there is a dangerous 'blind spot' inherent in that situation. If the other countries in the EuroZone have to bail out Greece can Portugal, Italy, etc. be far behind? What pressure can Germany/France put on another member to apply better fiscal policies? None that I can see really and if Greece gets bailed out don't they get a 'blank check' to run their 'fiscal house' poorly? Maybe I'm naive or just missing something, but I have yet to hear an argument that 'holds water' as to how this setup is stable and workable long term.
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Hahaha! Greetings from across the atlantic. Welcome to federalism, big boys. Maybe you can learn something from us history-less, culture-less, quaint Americans afterall.
You see, sometimes you have to give in order to get. The wealthy states pay more in taxes than they get in services to the federal governement. But, then they have control over the financial sector and a cheap source of military blood in the south. So france and germany, step up! And poor foot soldiers by the 10s of thousands can be yours.
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Benefactor;
"Marcus, don't you get bored of predicting an end that never comes?"
Don't you get bored standing on the railroad tracks with your eyes glazed over waiting for the train to crush you like a bug? I think I hear that train whistle now. I think she's coming just 'round the bend.
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The proof of a contract is always in its breach. No one in the EU should be surprised that the test finally came: that was inevitable. If the monetary union survives the test, it will be the stronger for it in the long run.
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So "Monetary union needs fiscal union", then "it has to become political union" (or is it the other way round?)
So why decry the Euro ?
First we devolve power and some fiscal policy to Scotland, with half-way devolution to Wales. Now Wales wants the same powers as Scotland; Northern Ireland looks set for devolution, too.
Is this not fiscal and political dis-union ?
So whence the "strength" of the pound compared to Euro ? We are hardly the economic strong-man of Europe.
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Yes it's a fearful mess, and regardless of the emotions, a Euro without political union was always more risky than a Euro with political union. But let's get a grip before becoming too carried away with the idea of investment money pouring in to rescue the previously-doomed but now suddenly safe-haven dollar, or a new world dominated by China aided and abetted by a rising Brazil, India and Russia.
The root of the West's problem is debt; any idiot could see it coming, as did some intelligent people, if hardly any authoritative ones, and the problem of debt in the West is largely the result of the way democracy operates.
The aim of a politician is to be elected then re-elected, so little wonder it is he or she who promises the most for the least who gets to govern. It helps also if they are coherent, convincing, good looking, optimistic, and seem somehow different to the one who governed before.
So forget the Democrats or Republicans, Labour or Conservative politicos for any solution; to misquote President Reagan, they are the problem.
If the West in general and democracy in particular is to survive economically viable, it must find a better way to govern: more pragmatic, more open, more honest, less subject to powerful but irresponsible and unaccountable vested interests, less subject to short-termism and quick profit at the expense of the future. The principles are as easy as the answers are difficult - difficult, but not impossible if more people would accept a less partisan approach to the matter.
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@17 - That is a simple question that of cause it doesn't not need an answer.
The real question is "what alternative does the German government has to rescuing the Greek government" the simple answer is none, the only sensible thing to do is help them and even if they don't like they will help them. It can't be called a union if there is no help. The mistake the German government and the ECB made were to make statement such as "its their problem, they can solve it". I guess the French & German government thought a weaker Euro would not be a bad thing, but it looks as if blew up in their faces :)
Now most likely they will have (even though they say no) to issue some sort of a Euro-bond then Spain, Greece, Portugal, Ireland, etc. will be able to finance their goverment spend through that bond. It may make it a bit more exoensive for other government to borrow but it will reduce the borrowing cost for the countries that need the money. Such a bond will also allow the Chinese and other such countries will net savings to buy Euro-bonds as they will not have to deal with individual countries but with the Euro-zone.
So, life still goes on and it will make the Euro safer to use.
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As long as I get a referundum vote on the political union then I'm OK with the idea
Oh hang on .. the politicians in the Uk lied about giving us a referendum on Lisbon so why woudl I expect them to do anything different over this ..?
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"Unelected? Most of them were elected, we have European elections in this country as they do in every other country.
Just like in the general election, we can only vote for our constituent MP, we vote for our MEPs and the EU is run from that."
I sometimes wonder at people who produce comments like the above. Are they really that misinformed or uninformed not to understand the gripes that many miilions of citizens of the EU have with Brussels? The MEP's are of course elected, but they have virtually no power other than confirming the EU Commission members. New EU Directives and laws are produced by unelected officials in Brussels with no ability for the parliament to block this legislation. As a committed European (who has a British passport) who speaks 5 of its languages, I have been shocked at some of the wastefulness of our aid to countries like Russia (under TACIS) and the fact that the Court of Auditors of the EU has not been able to accept the accounts of the EU Commission for well over a decade. This is a major scandal that does not get enough press coverage and which indicates that a great deal of our monies are unaccounted for. This is nothing to do with Little Englanders, but it is all to do with the abuse of the European taxpayer!!
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@19 - Nom DePlume.
Yes, you are missing something. There mechanisms in place to check the countries that do run "balanced" budgets and that is what will happen to Greece now. As of this month and until its budget is under control, Greece is in supervision. As to how the Euro can be worth the same everywhere in the Eurozone, that should be simple enough to work out. wages are different between the different regions, property values are different between the different regions and food prices are different between the different regions. That's how it works.
The problem that we all have, UK pound, US dollar, Euro, etc. is that the banks etc. need to be regulated! For more than 1,5 years now everyone know we have a problem but no government is doing anything about it. The vast majority of people in the countries that use those currencies are in huge debts and that is because the market system we have in place ensures that all money flows to very few people, so although in the last 10 - 15 years there were huge productivity gains very little of that money reached the middle class, so the only option left to the middle class to maintain a standard of living was to borrow and borrwo they did. Now the time has come for people to pay back money, well that is not easy. So some people will have to loose some money and it is only people that have that can loose it. They will not like it but there is no other way around it.
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The euro will be fine. It may give and take a little on the market, but with the rest of Europe backing it and keeping the euro high value, it shouldn't change too drastically, even if Greece is not doing as well. Europe, in general, has wealth spread about. They always seem to come through and there are certainly plenty of resources/ideas.
That being said, maybe Greece hasn't made the best choices, but they are Europeans' neighbors. Hopefully someone can help them.
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IF GERMANY CAN BORROW AT 2%, CAN IT NOT LEND TO GREECE AT 7% TOO...WHERE'S THE PROBLEM? GERMANY WILL MAKE A LOT OF CASH OUT OF IT....WHAT IS STOPPING IT?
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Comes from only half doing the job and coping out of the hard decisions when setting up the whole edifice. Whilst times are rosy the risks are neglected, when times come hard the problem is magnified.
What rules there are were so regularly broken (how many years have France broken them without penalty even before the crisis?)they had no credibility and governments thought they would get away with it indefinitely.
This is fundamentally what happens when you notice the wheel is a bit wobbly but decide to do nothing about it but keep reminding yourself to visit the garage to get it repaired. Of course one day it falls off and a relatively inexpensive repair costs you a fortune assuming you haven;t died in the ensuing accident.
The wheel is now coming off - will the accident be serious or minor?
I am sure the markets will do the DubaiWorld exercise on Germany and France and ensure that they underwrite Greeces (and the other PIGS no doubt) debt explicitly - else we trash your currency. Then they will move on to the next target of opportunity.
We will be treated to the protestations that the ECB/Germans/French etc. will do nothing of the sort, procrastination whilst the paperclips are counted and then the inevitable folding of all resolve in face of the markets assault on the whole Euro.
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@ pragmaticaldo
"The root of the West's problem is debt; any idiot could see it coming, as did some intelligent people, if hardly any authoritative ones, and the problem of debt in the West is largely the result of the way democracy operates.
The aim of a politician is to be elected then re-elected, so little wonder it is he or she who promises the most for the least who gets to govern. It helps also if they are coherent, convincing, good looking, optimistic, and seem somehow different to the one who governed before."
I absolutely agree, but you haven't mentioned the root of this: that most people don't understand the concept of debt and so can't be expected to make sensible choices when voting. I've found this out recently myself now that I'm cohabiting: my girlfriend, who is otherwise intelligent, is absolutely determined that we spend more than our income, which is quite a shock for me as I've always been careful to put money aside for my retirement. Given that politicians are normal people with no training or qualifications and are elected by normal people, we shouldn't be surprised at all if they get into debt.
Clubbing together can protect the most foolish people/countries but I feel it's not the best solution.
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Could it be that Gordon Brown's best ever policy was the HM Treasury reports that steered the Labour Government away from wanting to join the Euro?
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I am surprised that everyone gives for granted that Spain needs rescue when its debt is well below the average of the Eurozone and much lower than that of the UK. Not to mention that a growth of 0,1% in the UK during the last semester of 2009 is not a much better figure than a contraction of -0.1% for the same period in Spain. If Spain needs aid from the EU, surely the UK is considering devaluation of the Pound?
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I was born and bred in the UK.
It has been run all my life undemocratically.
The Conservatives ran it for years without the support of most of the people.
And Labour have run it for years without the support of most of the people.
It makes little difference to me if it is run by a non-democratic Parliament or a non-democratic EU.
I'd just like it to be run by someone who knows what they are doing!
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I always thought UE needs more stability in human relationship than monetary union.
A strong strategy to built next European generations in a big and reliable Europe is to stimulate mixed marriages in our European countries as soon as possible.
Without this view, every speech is useless.
About euro’s sustainability I think our UE will stand up very well despite vultures of speculation.
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If the Euro wants to replace the US $ or join a consortium of currencies to replace it, Europe must adopt the Indian model – cultural autonomy to member states but fiscal-monetary powers to the Union. It may happen in time, when all the member states achieve similar socio-economic class character. Germany and France should also be willing to make some sacrifices!
Luckily for Europe, Obama's moderation, Democratic disarray and Republican obstructionism have re-empowered the very casino-capitalists and their lobbyists who caused the last melt down. The next BIG ONE may not be too far away! But to benefit from America’s folly, Europe’s bankers must resist the temptation to join the casino games – as they did with such random abandon last time! Otherwise, both the $ and Euro would be diminished. It would be BRIC's turn to fashion a new economic order!
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Germany is now dealing with new and painful economic facts: record public debt of about 100 billion Euros (or about 120 billion GBP and increasing as the Euro sinks against the British Pound in reversal of fortunes!), projections of faint economic growth of about 1.5 percent in coming years representing no significant job growth, and reports of sinking industrial productivity.
And this IS the major economy of the Eurozone and the nation that is expected to be the white knight on the white charger that is going to come to the rescue of the Pricess Euro by pour German wealth into Greece, Spain, Portugal and probably Italy to bolster the Euro? Somehow, the ECB is going to have to come up with other ideas and I fully expect that the IMF will eventually have to step into the Greek economic mess which will inevitably damage the credibility of the Euro ever becoming a Reserve Currency and make it more likely seen as monopoly money.
The Euro is the currency of both Germany and the EU and both economies will ultimately fail unless Germany takes on and becomes, de facto, the European Central Bank with absolute fiscal powers allowing the Euro to be managed and controlled by solely by Germany.
The economies of the nations that comprise the EU will have accept that Germany has to run Europe and manage their income and expenditure. The problem with that concept is that it will stick in the craw of the French who think they own the EU and there is no way that the UK Parliament would accept Germany running Europe and losing political control over the political relationship between the GB Pound and the Euro.
Ultimately, the Euro will fail because of the unwillingness of the EU nation states to cede political and fiscal power to Germany (or to the EU as a poodle of Germany) and so the Euro is doomed and the EU eventually destined to fail as a political super-government.
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UK people are waiting for the Euro to faill. Well I do think that the fraud of Greece coming to the survice is a good thing and force the the Euro countries to get organised quickly.
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32. At 3:59pm on 08 Feb 2010, jon_toronto wrote:
'I've found this out recently myself now that I'm cohabiting: my girlfriend, who is otherwise intelligent, is absolutely determined that we spend more than our income'
Well she's a woman for godsake. She'll likley change when she becomes a mother, and then it really will cost you.
If you think its bad now, boy are you in for a shock.
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The Greeks have to realise that going back to an ever devaluing drachma will not solve their problems.
The UK too has a public sector which believes that they have an entitlement to generous salaries and pensions regardless of the real world.
In our out of the Euro the problem has to be tackled.
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"This comment is awaiting moderation".
How appropriate.
This commentator is also awaiting moderation but I'm not sure it will show up !
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One thing I've learned about the media is that they jump on whatever subject is getting the headlines. Understandable, because that is why we have them. But don’t belief everything you read.
Whenever they talk about currency’s falling, going up, devaluations etc. take it with a pinch of salt. Not so long ago the Euro made its debut at 1,17 to the Dollar. Not long after the launch it was worth 1,18 to the Dollar and then is started to slide to its lowest at 0,82 to the Dollar. It went up and down again. In that time the media and the financial analysts, “the experts on currency dealings”, predicted the Dollar would continue to slide and the Euro would come to dominate. Then it went down and the Euro was sure to fail without a political union. It had no future and the UK we’re right after all not to join.
In the years that followed the Americans, burdened with multiple wars to fight, abandoned the strong Dollar policy. Though not publicly, because that would unsettle the markets. The Euro was once again the currency on the rise and would surely replace the Dollar as the preeminent de facto world currency. Central banks worldwide we’re starting to replace the Dollar with the Euro, though the dollar still ruled. The “experts” we’re predicting the Euro would continue to rise and saw 2 to the Dollar as a serious possibility.
In the meantime the Pound Sterling took a pretty good beating on the financial markets too and tumbled its way down. It fell so much the Pound almost reached parity with the Euro back in 2009. Now the UK was on the defense and everybody was talking about the possibility of them joining the Euro zone. The sun doesn’t set on the British Empire and nor will it set on our proud Pound Sterling, they must have thought. The British Empire is no more and the Pound Sterling’s days are numbered as well. But for now their wish came true and Pound clawed its way back up. The UK was right again not to join, the Pound could hold its own on the world markets.
Fast forwarded and Greece, GDP: 357 bln, is in danger of bringing the Euro zone, GDP: 13.565 bln, to its knees. The “experts” we’re right after all and the Euro’s days are numbered. They have fallen to 1,36 to the Dollar. Put your money on the Dollar, it’s clearly the winner. Wait, maybe the pound can beat it. No, it will fall again but then again maybe it won’t. Maybe the Euro will rebound and beat them all, but as its going it could just as easily fall flat on its face.
Financial analysts will move like the Union Jack on a summer breeze. They’ll go wherever the wind blows them!!
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"The Latin Monetary Union (LMU) was a 19th century attempt to unify several European currencies into a single currency that could be used in all the member states ... It was established in 1865 and disbanded in 1927." What's that old quote about not learning from history?
Well since a similar list of countries instigated the the LMU as the EMU, I'm sure they'll do a better job on thier 3rd attempt. Can't wait for them to inaugrate the GMU and to trade in 13th French Republic Francs for Globos
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Re 30 ONWARD HO
The idea is good in theory, but what happens if the Greeks default on the loan. Political suicide for any German politicians who put this forward without the implicit support of the rest of the EU countries.
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onward-ho (damn the torpedoes, full speed ahead :-)
"IF GERMANY CAN BORROW AT 2%, CAN IT NOT LEND TO GREECE AT 7% TOO...WHERE'S THE PROBLEM? GERMANY WILL MAKE A LOT OF CASH OUT OF IT....WHAT IS STOPPING IT?"
What's stopping it is that Greece won't be able to pay it back. The problem is they can't pay back the debts they owe already. Germany would be effectively buying bad debt. The Germans would be giving their money away. Welcome to Eurosocialism. Rob from the productive successes to subsidize the unproductive and irresponsible failures. How long will the Germans put up with it? Frist Greece, then Portugal, then Spain, then Ireland, then who knows Estonia? Even Germany has its limits and YOU KNOW the French never really give anything to anyone. This is the price that will be paid in money for the insane dreams of building a political megalith because some egos insisted that Europe must have great poltical influence at all costs. Yes it will be at all costs. In the end Europe will have neither political nor economic influence. It's eternal mode, utterly futile folly.
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the eu is only their so big companys world wide can go to any eu country with cheap labour and better still weak unions,ie leylanddaf dutch owened said it was cheaper to sack uk workers because we are not signed up to the eu charter,the norweigans never joined and they prospered unlike the political backward british the coolies of europe?shame on our mps who give us the worst of eu laws and say we are flexible work force for all to exploit,we have more agency workers than ever with no safeguards,weekly contracts only ease to sack back to the thirties,till uk workers stand up this is there lot
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Told ya so, once you relenquished your sovereignty to the Bilderburg group, why did you think you would get it back?
Lois White Buffalo
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Anyone else think this financial crisis was exactly what the technocrats at the European Union wanted? Firstly it frightens the Irish people into saying yes, for fear of saying no and being left to go as bankrupt as Iceland. Secondly,the likes of the Czech Republic and the eastern block suddenly find themselves even more dependant on the development grants and therefore highly unlikely to oppose the Lisbon Treaty, which basically lays the foundation stones for a European Executive i.e. a President, Foreign Office and European 'Defence' Force(EDF). Then finally Greece is in difficulty and suddenly people are talking about a centralised Treasury and centralised monetary and fiscal policy.
This all stinks of a false flag exercise to extend and consolidate the position of the European Union. My only question is …its simple enough to join the dots, but to what end????
In summary they want a centralised Treasury, Presidency and Foreign Office add that to a standing Armed Forces (EDF) a standing police force (Interpol) and don’t forget a Parliament for the illusion of Democracy. Add to that mix, a scared and manipulated public and you get all the makings of a future nation state. In the words of a famous politician “we are all European now” or at least we very soon will be!!!
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The EU is acting as "Supervisor" of Greece's attempt to control it's budget; but the Euro is not in the control of the EU. The European Central Bank is probably the most independent central bank of all: there is no single government that can pressure it to do other than it thinks fit.
Right now, the ECB seems to be holding fire on Greece; but if things get too hot, then they will surely act quickly to douse the flames. Why? Because after Greece the pressure will be on Spain, then Portugal, then ....
As was said at #37: we will have to follow India's example.
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"Is the euro being stretched to breaking point?"
No. In fact it looks better than the pound.
The euro might be stretched if the UK adopted it. Till then it is safe.
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Greece will remain in the EU, another 5, 10 or 15 years down the line. Other UK governments will have come and gone. Most Brits will still be anti this, that and the other. That is their nature. The EU and the Euro-zone will still exist. China and India will be stronger. The US will be weaker. Where will the UK be?
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#38 Menedemus
"The economies of the nations that comprise the EU will have accept that Germany has to run Europe and manage their income and expenditure."
I think Germany has tried this before haven't they?
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As I write, the Euro is at 0.87906 against the pound and 1.369 against the USD...
I hardly think that's 'slipping' is it?
Typical British media trying to bring the Euro down.
IF the Euro is so bad and shaky, why are so many countries looking to join (Iceland, Sweden, rumour of Russia)..?
Also, if it is so unreliable why were the Eurozone countries able to pull out of recession sooooo much faster than the UK and are predicted to recover within a fraction of the time?
Just some thoughts...
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@46
Umm, methinks you need to check things there. Last I saw, only Greece are in problems. Portugal are fine, Spain are much better off than the UK (0.1% growth compared to -0.1%), Ireland are one of the hottest economic spots ON EARTH and Estonia are laughing (seriously, they have no worries.)
Stop spreading rumour...
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As many have feared, the euro is begining to show it's flaws. I was not supprised when a few years ago the UK had decided not to join the euro. No country should be willing to have economic policies decided by those of another country, and now they will begin to discuss political decisions being made by others. I know that the United States has many problems of our own, but the idea that another countries difficulties of which we would have little or no control over would have such a detrimental effect on our economy is a frightening proposition. The idea that we (USA) would then need to join in a political collection of many different country and force each of the enjoined governments to follow one set of politcal/economic policies is downright frightful. From my point of view Europe has lost it's mind. None of these types of proposals would ever be accepted by the people of my country. We will climb or fall on our own merits. Government without representation provided one of the worst moments in the history between the US and UK. Remember that is why we separated from England, the idea was a bad one 200+ years ago and it is today.
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It was the kilos, it was the kilometers, now its the Euro.
For those who have some knowledge of how the Euro works, no country in Euro can leave the Euro. Its not going to happen.
Britain and the brits have attacked the Euro. Now even more because the exchange rate is lousy for the GBP. Brits cant enjoy France Italy and the Costas as they use to.
Brits pls wake up to realty, Nelson is dead, so is QEI, and Drake...
Join the continent. Its more fun and you know it.
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While correspondents are correct in identifying leverage and mis-measured risk as elements of the macro-economic/fiscal crisis facing some EU economies , the reality, however, is that these aspects are surface phenomena.
For in truth, the underlying threat to national and regional stability arises - as Martin Wolf and, more recently Lord Skidelsky, have alluded to - from global and intra-regional trade imbalances. Importantly, at the EU meso-economic level mis-alignment persists and worsens:and the EU growth and stability pact plus the Structural Fund have hitherto failed, as fiscal convergence may also, to deal with the tremendous productivity and trade-balance differences that prevail across the Union (worsened in fact by the arrival of the accession economies).
And so to the broader policy imperative.While the high growth/ high value added strategy contained within the Lisbon Agreement may correctly highlight the need to make the EU globally competitive contra BRICS and USA, an essential precursor has to be focused on extending real sustainable growth prospects to all memeber states within the EU. Failure to achieve this smoothing will condemn the Union to reoccuring and indeed worsening economic crises, particularly if economies choose once again the asset inflation road to growth, tragically followed recently by many states, including Ireland, Spain and of course the UK.
For interested parties papers at the ECB and Bruegel Institute websites offer views on these matters.
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No USA you cant join Europe!
Europe requires diplomacy
spelled:
D.I.P.L.O.M.A.C.Y.
USAmerican education obviously uses the cheapest of educational techniques otherwise why more emphasis on spelling than the meaning in words?
If only the USAmerican military would vacate the premises for good instead of keep threatening to leave.
The euro does not need you to defend it but your dollar does.
Bye bye don't shut the door.
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Re 55
Your comments about Spain being in a better position than the UK is a little wide of the mark as they grapple with an unmemployment rate of nearly 20%.
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The idea that the politicians of sixteen independent nations would all work together for the good of the whole even when it works against their own political interests requires a suspension not only of disbelief but of reality.
Greece is "too big to fail"? Where have we heard that kind of talk before? And where did it lead? The Euro Zone would do better to expel Greece, let it fail and swallow the loss than to prop it up and hope its politicians, and those of the countries who looked the other way while Greece bent the rules all those years, learn anything from the experience.
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Perran...
Re #154
'EUro-zone countries able to pull out soooooo much quicker..'
You do realise Greece is IN the Euro-zone? Also Portugal, Spain, Eire, Cyprus - - all in dire economic-fiscal circumstances.
This evening the Pound was worth 1.154 Euros according to my Bank's currency convertor: Now, agreed that's a long way off the 1.355 I was getting on my Pension 2 years ago, but equally it is a lot higher than the 1.499 I got at one stage mid-summer 2009!
Currencies rise and fall: The EUro is a decent Currency and will probably survive, but in much reduced form - - i.e. Germany, France (Paris forever cooking its accounts to stay with Berlin) and BeNeLux plus probably Austria and Italy - - one way or another the EU will find measures to allow other Nations to slide out of it as their economies simply do not match the strict requirements and Germany cannot bail them all out.
Some may still join: Sweden and Denmark seem likely contenders, but the EU ideal of all 27 Members taking the EUro as their currency is already as dead as any dodo!
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There are nearly 8€ billion in speculation against the Euro by Hedge Funds and the major US Banks. Both Bear Sterns and Lehmans were "done to death" by short selling and mainly; naked short selling. (Criminal in my eyes). The 5 major US Banks, and the Fed had a meeting just before the fall (Saturday). Guess who was NOT invited -Bear Sterns.The shorts came due immedieâtely after.
This is what happens if there is not strict regulation and the out and out crooks are not put into prison. It is time to eliminate Hedge funds - they have done nothing but destroy the manufacturing bases, export jobs and load companies with debts. They do not deserve to exist.
The speculation will make a large profit for the FED, GhastlySachs etc. Help weaken the social order in Europe (so that the rightwing-militarists can organise a new war with the uneployed), and bolster the dollar)
Prison, and the sooner they are incarcerated the better it will be for all the rest of us.
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I would like to remnd those people who are anti Europe and the Euro that we chose to join a political organisation which stated that it wanted "an ever closer union" at its foundation. In fact Britian was desperate join the EEC and had its application refused so many times.
In light of this, doesn't it make sense that there needs to be increased harmonisation of European fiscal policies, and possibly having a single European fiscal body? I think there will come a time when we (Britain) need to join in the Eurozone properly, as there will soon be a time when Britain will be unable to compete independantly in a global economy. Also, we should do so sooner rather than later, so that we have a greater chance of being able to shape European fiscal policy.
A single nationstate isn't going to happen soon, but I for one am looking to being part of a Federal Europe.
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USAmerica just got too buddy buddy with Communist China.
You'll pay for that long before the Euro goes.
China has the get out clause but the USA doesn't.
Ever been had?
Still eh USA... keep laundering all that money through London.
When the casino goes bust the Euro will be relatively MASSIVE.
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@11- yes unelected. I don't remember voting to the Commissioners or council. I do recall voting for the MEPs ( lets just see what they can do shall we? )As for the local council in Westminster-I even voted for one of their number.
@ 59- do you also mean exhuming those American Servicemen buried in France and removing them?
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Just kick Greece out of the Eurozone, ...until they either let Turkey in -- Turkey contributing to their rescue or they get it together..talk about expanding one too far! (Greece--they dont even like economics much less capitalism)
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MaudDib @ #53
And so did Japan. And both of these two nations' economies have blossomed since 1945 to make their membership of the UN Security Council almost inevitable and make these nations part of the G8.
There is an argument to be had that it clearly pays to lose world wars first before it becomes possible to achieve original objective of global/continental domination!
The question that I guess must be asked is, does Germany and the Germans want to sacrifice all that they have gained since 1945 by pouring even more of their national wealth into bolstering the Euro with most of that outflow going directly into the financial bottomless pits of Greece then, perhaps, Spain, Portugal, Ireland and even Italy.
The Germans already "own" the EU as it is by being the major contributor; why waste more of their GDP on it - they can let France atill thinks it own the EU and leave it to France to rescue the Euro .... I am sure that the French Government and its peoples will love having that honour.
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DR Eiffel
What do you really know of the USA except from questionable sources..ie, the internet????
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As an staunch federalist and a pro market economy person, I reject the idea of an fiscal union completely.
Why? It is because it obstructs and disrupts the natural working of the market.
When only member states can issue bonds, markets have calculate country by country what is the risk and price loans based on that. This will reward with low interest rates countries that have kept their fiscals good and economy working, it will punish those who have made bad decisions with higher interest rates, and in worst case scenario it will cut lending altogether.
Now if we allow the EU itself to issue bonds, either to finance its activities or the activities of its member states, we will open the flood gates. If EU had the ability to loan money or print new money, it would lead to bloating of bureaucracy and would allow politicians to go for pork and barrel styled policies. It would also remove valuation of individual state finances and economic factors leading to member state governments to spend money with fewer considerations. In few decades we would end up into a similar situation that the US federal government is facing: huge budgets with huge budget deficits without people actually knowing where the money is going or what are the people getting with it.
http://en.wikipedia.org/wiki/Pork_barrel
No. We don't need or want an fiscal union. The current system where responsibility lays with member states is a working model that in long term will guarantee best results and via social-economic evolution en-growth and develop all countries in the Eurozone to have better finances and more sound economic policies.
I would also make a note that the markets are screaming for the ECB and more fiscally sound Eurozone countries to step in because of their own failure to rate risks of loaning to individual Eurozone countries. Due note that before the economic crisis, from the inception of the Eurozone, bond rates for countries like Greece were priced lower than the economic history and accounts would have otherwise deemed them to be. In essence, markets didn't understand Euro, they didn't understand the new situation, they valued too low the risk of default with some countries, and now they are crying on about it.
If Greece is going to default, let it default, if that means that some pension funds or banks get heavy looses, that some people loose it all, then good, they deserve it. In long term due to letting the market work by rewarding for good and punishing for bad decisions we will make sure that markets function better, that organizations and people make better decisions and thus produce more.
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I've lived in both Greece and Portugal (not to mention the UK) and can assure any readers that they are very different cases. Anyone who assumes that they are the same just because they both happen to be medium-sized southern European countries is very ill-informed.
Having said that, I do not see why the current Greek government, having come clean about the false accounting of the previous one, should be regarded as lacking steel in sorting the problem.
As for exchange rates, the ECB will be more than happy if the euro does slip a bit on the foreign exchanges.
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Greece is barely a second-world country.
Why the likes of Germany, France and the Netherlands ever wanted monetary union with such a corrupt country beats me.....
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"Some or all of this may happen", "It may be that...", "Maybe the EU...", "Maybe Germany...", "Maybe it will fall to the Germans...", "it seems unlikely that...", "But say the conclusion from this crisis is that..."
...along with all the ifs and would-bes.
Rarely have I seen such a vain and contrived effort to stir hearsay from such a wild concoction of myth and imagination trying to pass itself off as premonition.
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HelenS @64,
Don't twist the truth.
Here in Britain we voted in 1975 to join the European Economic Community. (The notion of 'ever closer union' was well-hidden in the small print).
Once the political classes realised that their sneaky subterfuge had been rumbled, they made sure never again to let the electorate vote in a referendum on EU matters.
Apart from being devious, this also means that no-one in the UK under the age of 50 has ever had the opportunity to vote on whether or not we want to be part of this 'project'.
It will end in tears.
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The Euro is not going to fail any time soon and certainly not because of Greece's current budget problems. Greece's economy represents a mere 3% of the Eurozone
economy, it's public debt just 6% of the total. As a porportion of it GDPs, Greece's public debt (10%) is on a par with France and better than that of Spain (11%) and Ireland (17%). It's also doing better than Britain where deficit spending is currently running at over 300 billion dollars annually - that's 60% of the total Eurozone budget deficit, and a rather large 14% of GDP.
The Eurozone is the world's second biggest economy with a combined GDP of over 10 Trillion dollars a year. To think that Greece's tiny 330 billion economy can put a dent in that is simply nonsense.
Over the past 6 months the Euro has lost perhaps 10% of it's value, much of
it due to currency speculators. Think back 18 months when the pound
lost 35% of it's value, or to september 1992 when Britain crashed out of the
ERM, losing 4 billion pounds. Speculation is a fact of life in the market
economy, no currency is immune, though the Euro has faired better than most.
The worst case scenario with Greece is that it has to leave the Eurozone.
Whilst unlikely that may be the best course open to Greece who could then
devalue to ease the pain that will result from the belt tightening that
must come.
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Well, I think it's a bit hypocritical for Germany to be preaching to anyone. Especially Wolfgang Schäuble, the last budget saw him drag Germany into the greatest amount of debt the country has ever had to bear.
For years during Schröder's (introduction of the Euro/2002) time in office, Germany broke the rules constantly on debt and received warnings from the Central Bank left right and centre threatening to fine them if they didn't mend their ways.
So now for Germany to be raising the "moral finger" is a bit rich.
I'm sure France and Germany will work on a solution with Greece to eleviate it's woes, these countries don't have much of an option really. It's not in their long-term interest to devalue and thus destabilise the currency.
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The Euro not the EU,I agree they need political fiscal policy but what is at stake here is the survival of the Euro and if it fails then all bets are off.Any help accepted by Greece will further undermine the Euro club. the markets have taken an 8bn bet on its further demise. The sums here are truly staggering only last week the head a the Spanish mortgage association said there is 325,000,000,000. of debt held by banks secured on property.
Two banks so far have held thier hands up and admitted part of this leaving the smaller banks holding the vast majority of this debt.All of this debt is secured on a collapsing property market. This is one example of dozens effecting the Euro let alone Greece,portugal and Italy.On my last holliday in Spain 2009 I asked a banker what he thought of the property crash, he replied " we have the sun don't we"? I hope for the sake of the 4,000,000. unemployed in Spain, that it keeps on shining.
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@63 - Spot on! It has less to do with actual economics and far more to do with speculation, after they finish with the Euro, it will the turn on the pound. Regulate the markets! the only answer to this problem and the ones that will follow.
@70 - Jukka Rohila, your blind faith in the markets is beyond belief! on the one hand you admit "the markets" just about got everything wrong, but on the other hand your urge us to believe in them almost religiously. It doesn't add up.
For any union to work they must be solidarity. Just watch the EU split up faster then you can say "free markets" if there is no solidarity, if you have 27 countries pulling in 27 seperate ways then you have no union, you have everyone looking after themselves. If there is no help to converge then why on earth should the UK, Greece, Spain or anyone else buy Nokia or BMW, instead of develop their own? or buy a Chinese? You can not have the EU on the one hand saying to all member states cut your deficits below 3% have VAT on goods (i.e. here in the UK on children clothes) and then when things go bad for someone to get sorry you are on your own! Hold on I thought we were on a union.
Regarding your argument a country should be punished to learn, that's what happen after WWI Germany was punished, it was a nice outcome.
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The debt crisis has gone from individuals to companies and now to nations.
Individuals can be allowed to fail, companies to, but not nations.
The banking system is now a real danger to the stability of countries.
I have seen Portugal, Ireland, Greece and Spain referred to as the PIGS.
I feel this is wantonly disrespectful, and despite not being a national of any of them take exception to it.
Each of those countries has young children who hope for a future, but are being held to ransom by a banking system that is both corrupt and fundamentally flawed.
There are many people, both in the UK, the USA and in Europe who have paid a high price for the reckless behaviour of the banking fraternity.
If ever there was a need for nations to control the creation of money as debt, this is it.
And I refer not just to the UK, but also to the USA and Europe in general.
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@79 (Dempster) - I agree wholeheartedly that the use of the word PIGS is disrespectful. We must remember that a lot of this speculation (and name-calling) is being stirred up by investment bankers. Surely if we have learnt anything in the last twelve months, it is that we cannot trust the word of these people.
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To ChrisArta (78):
Market is a self correcting entity. In a short time span market, or more precisely majority of investors in a given market, can go wrong, however those who have made the wrong investment will be parted from their money and transfered to those who made rights decisions and valuations, thus leading to a self correction. In long term this natural evolution of the market will ensure that optimal resource allocation.
There really isn't any better method to do that resource allocation as markets condense all information available and information itself and methods of valuating information are all the time put on a test by placing money on the line.
In case of Greece, in actuality markets aren't punishing Greek citizens or corporations, they are punishing the Greek state on poor fiscal and economic policies. It is the Greek state that is indebted and it is the Greek state and its public services who have to make a ration for their continued existence not only in the eyes of the market, but also in the eyes of the tax payers. Even if the Greek state goes bust, the citizens and corporations still go on as they are shielded by belonging to Eurozone, they will still have money that is valuable and can be traded for goods and commodities, they will still have access to finances.
In case of the union, the union is already showing solidarity via Eurozone and EU normal assistance funding. If Greece wouldn't be a Eurozone member, there would have been a run to a bank, interests rates inside the country would have skyrocketed, individuals and corporations would be going bust left and right. There is solidarity already in the game, but solidarity doesn't mean an open cheque nor does it mean freedom from responsibility.
Let me also add that we should also look an what is fair. In my opinion it isn't fair for the ECB or the EU to write a blank cheque to Greece or any other country. The thing is that other countries have made sacrifices and hard decisions on coping with less resources and making the best out of what they got. Let me remind again what somebody already said before Greece has four times more teachers per student than in Finland. The only fair option is to insist that Greeks make their own rationalizations and cuts so that their states finances reach an acceptable level.
No. The only way out of this is for the Greek state and citizens to face the reality that they have lived over their means and now they have to cut their spending in order to pay the bills. It isn't nice, but it isn't that impossible or even hard. For example if my salary would be dropped by 10% it wouldn't feel nice, but I would make it still and live quite comfortably, it is same with most citizens, people will get fine when they get on it.
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To whomever reads my #62
Apologies - - the whole thing is a complete botch from start to finish - - I think I pulled together paragraphs from various other stuff and hey presto... crap ad nausaum..
Some may think, 'so what's new?', but to them & others I do apologise.
Cool-Brush-Work
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@79 & 80
I will also add my support to that!
Also about investment bankers in general not only we can't trust them, they have also proven to be totally useless in runing a smooth economy as according to them the economy will not run smoothly without them. what a joke!!
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You are perfectly right, Mr. Hewitt. Things aren't going right for the euro all the more so that a sort of nationalistic impulses are taking root in the core countries of the EU. We're very anxious to know in which way the leaders of Europe will react to the present financial mess brought on by very divergent attitudes and a deep cultural divide across the European space.
Thank you for calling a spade a spade at last, crossing the t's and dotting the i's.
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69. At 7:41pm on 08 Feb 2010, David wrote:
"DR Eiffel
What do you really know of the USA except from questionable sources..ie, the internet????"
Divide.
Please use my tag and not one you have manufactured.
I know the USA is a figment of USAmericans imagination.
That its population are forced to idolise a flag which when waved in front of them they forget the stupor rich who control their country are sending their jobs to China. They put their hands on their hearts as they give their country to China.
If the dollar crashes China will stop exporting to USA as much as it does and will initiate consumption within its own market.
In the ongoing global crash the USA is in the worst position...
All those health pensions don't look so safe now do they.
Best get yourselves some first world national healthcare quick before the boil bursts.
The USA is bound to China not the other way around.
Still eh.... dream on dream on
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@81,
Markets first:
- The markets got wrong for the last 10 - 15 years every few years, Asian crisis, dotcom crisis, financial crisis, new Euro crisis!
- Information is only as good as the idiot that reads it.
- If they are that good, what about the herd mentality?
- If they are that good at distributing resources, where can we see that fairness?
Come on Jukka, all that "the markets" is a closed shop elite that looks after itself, no one else matters them.
About Greece, Spain, Portugal, Ireland, Italy, Latvia, Lithuania, etc. if those countries where not in the Euro-zone or trying to be part of the Eurozone they would not have low interest rates for the last 5 - 6 years leading up to now! So, the argument that their currency is safe only because of the Euro is a bit crazy, you are only using the part that suits you. I like the Euro and I wished the UK was also part of it, but the club rules the way they are now are a bit stupid. I hope they change them soon. When the markets and the IMF say that Latvia did the right thing with cutting wages 50% and health budgets by 40%, I shows to me for sure that the markets do not work. Most likely you can live if you get a 10% cut in your wages, but when you get a 40% cut in health care budgets and operations can not take place and lives are lost, it shows complety failure of the markets. The argument "its not nice but it has to happen" is a cope out! Maybe markets is the best way to ensure fairness, but the rules need to changed to ensure the markets work for the good of the people and not for the good of a select clique.
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Unfortunately history has demonstrated time and time again that budgets and fiscal responsibility are beneath politicians and governments.
They have always spent more than the can or should and have always defaulted by utilising flexibilities within the World economy.
Now, it appears this flexibility has gone because all too many governments are recklessly overspending at the same time.
The problem with the Euro and its' implementation is that in order to have this panacea of monitary unionism it set in stone rules by which to govern. And as governments have shown (see earlier statement) they don't like being incumbered with rules, especially that affect how they spend their money.
That so many breached their 3% deficit rule for years without sanction demonstrated that the rules needed changing (how convenient for politicians. Don't like the rules you set yourself, so change them).
There is no choice but for the Euro economies to act as one. Greece should be supported by France and Germany, and it is the price France and Germany should accept for implementing their grand plan. Quickly following Greece will be Portugal, Spain, and Ireland; with Iceland desperate to join the game.
At least for the U.K, when the money markets realise Gordon (and Edd come May) cannot afford to maintain the interest payments on all that money 'we' as a nation have borrowed from them. Well then there will be our own little soveriegn debt crisis with a massive devaluation in the pound followed by inflation bordering on the 20%+ mark as the only possible way of reducing our debts real terms. Governments throughout history have always taken more than they should because Governments throughout history have always deluded themselves that spending more and more will benefit all without taking into account productive return.
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To Mark (post #49)
Boy, you conspiratory-theory types see things behind every bush!
To make all those things come together would require villains that would try Jack Bauer!
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Greece represents a bit less than the 3% of the total EU economy. Bailing it out - if shared among the rest of the countries will not be the end of the world for any European country especially if this is to end all speculations about other countries and their deficits, bonds etc.
Actually the fist in Europe that really do not want this bailing out are the 70% of Greek citizens since they feel that will instantly mean "a forgiving paper" to all the inner politically connected sharks that swam all these years around the sardine packs were arriving from the E.U. Remember that the common voice among citizens when they heard of heavy taxation was "Yes! All welcome! But first pass from the sharks, the ones that ate 30 years now from the "packets".
One has to mention that unlike most other EU countries where the sharks (people attacking the money) are a small percentage of the population, certainly less than 5% who are practially lost in the size of the countries economies, in Greece this phenomenon - alongside the the phenomenon of cronism, favouritism, family-dynasties and such is much more intense and its indirect clamps reach to get around as much as the 30% of the population - an amazing corruption rate. In fact, corruption of that extend is not anymore corruption but a whole system in itself.
Asking the rest 70% why have they tolerated all that ill situation is pointless. People will tell you that "to create my own business", "to win a bid for a project", "to find a nice position in the hospital", "to find my son a job", "to avoid paying more tax than I should" = "I need to give the envelop". And the champion of that ill situation was of course "to win an EU funding" (= in he minds of sharks "money loan, never returned"). Really pointless to ask people why. When for the 30% of society is possible to live through that that way, the real easy livin'!, they will do it. When for the rest 70% there is no other case to survive socially that to find refuge, at some point of their life, to the good old bribing, they will do it again and again.
Now, when the EU comes to bail out Greece, it solves no structural problem of the country. It just gives a forgiving paper to what has been done and take a vague promise that the "bad boys" will behave better this time - they might do since they really have eaten a lot, thay are not at all bad (... easy to see when Athens has the largest concentration of Porche Cayenne jeeps in Europe...).
And down to the basics it is not at all about Greece but about the way Europe perceives itself. Giving money to Greece will simply aid it to pass this narrow path but will not solve its financial problems as these are structural and down to the basics are not even directly related to the EU or the euro. "euro" or "drachme" the greek economy is under-productive, costly with an unjustified civil service and a legal system that hinders the creation of new entrprises and the continuation of local manufacturing activities to the extend that local mid-range industrialists wonder if there was really ever any will of the greek governements to let anyone produce inside this country: well from what we have seen not at all: afterall its a country where the 30% of sharks rule, sharks ranging from the top end politician, the businemen that take up the large state projects to over price them so they can pay off the people they had to bribe to get the bid, the ones that organised the Olympics (smaller and poorest contry ever to have held the organisation) and paid the... ceremony's balloons around 15,000 euros for a real market price of 900 to 1500 euros (well yes!), the civil servant that will ask you 1000 euros to put you signatures you can built your house (otherwise you will wait next year losing more than 1000 euros - anyway you can fit this cost in the price of your house isn't it? 20 houses, a parking and 1 rural road, per year, hoopla! a Porche Cayenne!!! LG, life is good!).
Will the EU bailing sort out this mess? No. It will continue it. And unfrotunately things are even worse. Today Greece on the one hand has let practically more than the 60% of the manufacturing activities it had in the 1970s when - note this - was exporting workers and at the same time received 2 million illegal immigrants, the vast majority of whom have no skills at all coming from the most primitive of societies and who expect to work 1 month per year in the fields paid peanuts thus mainting the sick-situation in the farming sector (the "easy livin' of a few gun-bearing cowboys), then subscribe at best (if possible) for unemployment sums (petty somes but nontheless) or most often find refuge to crime (official records have ceazed to be publiced since the 90s because criminality has augmented in real numbers anything between 800% and 1600% when the addition to the population is about 20%) making a lot of areas in the country simply "lost cases". And all that adds up in numbers. No imporant contributions to social security, continuation and practical re-naissance of the black market, tragic deterioration of conditions of employment and stagnant salaries benefiting the very few, 10fold increase in the needs of police, huge sums to be spend in the hospital sector not all design for such a situation (the situation in public hospitals is tragic - the country has become the mother Teresa of all poor and sick of this world), and tragic increase in the expenses in the defense as-if to protect when we were doing the same thing without all these costly brand new helicopters and radars in the 1970s and 1980s just fine. Ah! On the top of that the country has to face off also a direct war threat by Turkey on which EU not only has clearly stated that "it will not help" but independently many EU countries are more ready to talk with a non-member Turkey than Greece (and I talk not of business but about geopolitical matters that are non of Turkey's business but should be only of Europe's). In the meanwhile Greece will be still force to maintain an army that is capable of figthing easily all EU countries apart the big three with fantastic ease, all that paid by the money of the Greek people (and implicitly by the loans - so you know where your money goes...).
And all that thanks to whom? On the one hand thanks to EU regulations starting from 1991-93 and/or the inability of EU to protect Greece (and thus EU borders) against the global geopolitical games - we should name US for a change... eh?
Greece has no chance. It is condamned to remain and might fall even lower bail out or bail out. If the EU ever cared to give a solution they would rather propose "what can be done" about solving the basics of the economy and not just correct the deficit for the moment.
Greeks (the 70% of the country) know 100% what has to be done:
Internally only 1 measure (yeap only 1):
1) start from dealing with the 30% for a change: problem not easily solved but it can be contained by opening new prisons and giving tight deadlines for "sell your Cayenne and give back what you took and was not yours or go behind the bars".
Externally 2-3 nice measures:
1) respect the international regulations and extend the Greek sea-space to 12 miles like all countries (including Turkey!) do.
2) In case Turkey wants to go to war, talk them strictly off, then if they go, give an instant response from the EU with a huge military task force joint with Russians sent to Konstantinople and telling the Turks to remain in their seats.
3) drive out Turks from Cyprus and integrate the island fully into the EU making it EU's basis in the Eastern Mediterranean.
4) Make strategic agreements with Russians for the passage of Russian ships from the Black sea to the Mediterranean.
5) Make strategic agreements with Russians for the passage of gaz through the Balkans, namely Bulgaria and Greece and via Greece to Italy and the rest of Europe.
Make any of the above - just any - and you will see how the Greek economy will turn the tables in a matter of years.
But are Europeans ready to accept the obvious? They are not.
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At the French Doc up there #86ish.
Your funny because you remind me of my little brother with his endless contrarian know nothing garbage that he spews to get some attention. He's a teenager. Whats your excuse? I suppose its because you resent your life and envy those who have worked and obtained what you wanted.
American debt as GDP is far less than almost all of Europe (with the exception of oil exporting countries). China owns about 1/5 of that (American's themselves about 1/3). If China revalues, they will end up with a raging unemployment rate when their political situation has been at its flash point for years. The only thing that revalued Chinese currency does is topple its government.
When that happens, the US will indeed have to deal with less flat screen TVs for a while, until our own manufacturers start making up for it. I'm not sure what a health pension is, but the imbalances of medicare will indeed be a shame for us as well as the world, because it is America's health system and overpayment by the people that finances the entirity of medical research, while Europe and the rest leach off it. We will certainly all be worse off without it, tho I suppose it will in fact be better and more fair for the population of America.
Open a news paper once in a while and stop trolling around english language blogs until you learn to use the language properly, Doc Eyeful
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The trap is closing and there is no way back and no way out.
Without rescue Greece will collapse. With rescue Greeks will take to the streets.
If Greece collapses next up (and probably very quickly) will be Spain and Portugal and the collapse contagion will be in motion.
If Greece is rescued markets will demand that Spain and Portugal are also "rescued." As Greece spirals into the chaos of protest Spain and Portugal will deny there being any need for their economies to be rescued. Therefore rescue will be imposed, and the populations will resist the rescue.
The "third way" is for a rescue on generous terms - in which case Spain and Portugal will suddenly reveal that their situation is much worse than previously thought and they need rather more rescue funds than could be imagined. The only possible candidate for keeping the south on easy street is Germany. Why would the Germans have any interest?
No way out, the Euro is doomed, just a question of timing.
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At least in the Euro zone there is someone to bail you out and impose some fiscal probity. Whose going to bail the UK out when our chickens come home to roost? Has everyone forgotten the 1970's and 'going cap in hand to the IMF'. People seem to think that being outside the Euro zone is a panacea for the UK which will solve all our ills - less pain in the short term perhaps but wait until we are two or three years down the line with a decimated industrial base (thank you Gordon, Tony, John and Maggie) a lower standard of living due to further devaluation and an insupportably large population largely out of work.
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I agree with Jukka Rohila's comments, they are well thought out and reasonable. Much of the rest are just emotional witch-hunts and finger pointing.
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Nik. 89. Yes.
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I have agreed with Nik's analysis, because the Greece's problems sound way too familiar to Russia. When corruption is a form of daily living for 30% of the population, it is no "corruption" but indeed a system, a way of life. When you can't do anything, obtain a single paper or a permit, without bribing.
The effectivve solutions to such a lay-out in history were only demonstrated twice so far - by Stalin and by China. Hand-cuffs, to make it a modernised version :o) of Persian shakh approach, Stalin's eastern cruelty, and Chinese how to say, unequivocal cruelty.
By own will no stake-holders of a system that allows to milk people will surrender such a business model. As it keeps fat 30% of population who happen to have a stake in this system and wish for such a system flourishing.
Russia only copes because it's Russia.
Greece isn't. So indeed this additional money influx should it happen from the EU sidde - won't help Greece nil.
It's the same as ordinary Russians don't care if the country is poor or rich, because down to them there won't filter down anything anyway.
So it's either EU takes care of itself short-term (fiscal measures) or it takes care of Greece seriously and thus of itself long-term.
To fix then to fix.
So, what is beeing fixed, exactly?
Build there something, at least. Some industry objects, or I don't know.
Lend Greece money so that they build themselves. Give them a fishing rod, instead of a fish. That 12 miles zone, what's with that?
Surely some EU countries if they think hard, can fogure out something mutually benefitial for them and for Greece at once, in terms of joint projects. Someone has to scratch his head, simply, do some thinking, and figure out an engine for them. Besides, they seem to have heaps of own ideas for improvement, so, for starters, Greece ought to be asked - what's your plan of the future?
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Jukka I agree with your idea of self-regulating market forces self-regulating all around. If the world was unlimited it would be so. But countries have borders at some place, and it doesn't flow freely round the world. Stucks at borders. This hinders the free competition you'd agree. And within own pools, big fishes never behave "fair" unless regulated. No one ever saw a big fish behaving fair in its own aquarium.
You have heaps of your neighbour Russia examples to illustrate, don't you see our case, blind?
Why an airplanne ticket Moscow-Siberia (half a country) is 2,000 dollars?
Because no other plane flies to that city and Kremlin does not control prices, monopolies or appetites of big fishes. Because foreign airlines aren't allowed to do domestic flights in Russia. (a border case, that I mentioned).
Why a bank loan standard percent in Russia is 35% interest a year?
Because foreign banks who'd gladly lend Russians at 15%, instead of lending at home at 5 or 7 or whatever incredible numbbers you've got :o))) - are not allowed to service private individuals in Russia. And will never be, because even the WTO deal looming somewhere in the distance always :o) has it stamped hard, in the first words - "foreign banks, foreign pension funds and foreign insurance agencies will be an exception - WILL NOT be able to work in Russia even when WTO is signed.
That's why I have no insurance. Neither on health nor on dacha nor on nothing. Local ones steadily disappear together with the money, useless.
So when un-regulated by the state - big fishes and your "market forces" only rip you off, eat like pirranjas to clean bones.
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Mike, cut eif some slack. Where he comes from...its a frog eat frog world :-)
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90. At 11:24pm on 08 Feb 2010, Mikey wrote:
again that old GDP myth...
Most of China's production is for export which is how GDP is arrived at.
When a country is running its economy internally GDP is irrelevant.
China can switch to it's internal market any time. USA is currently losing unless you are filthy rich of course and then you are a truly international creature and nationality is a mere detail. Oh dear I hear pensions and health plans going bust all across the disUnitedSTATESofAmerica... dream on dream on.
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Docteur_Eiffel
No offence -- I couldn't remember the exact spelling. Unlike some this is not very personal to me..more a privilege.
But, hating the USA is Too easy...dont listen to the anti- Europw brigade...I, myself, dont care what they say...
I am pro Europe, I know my history...
and propaganda/weak points are beneath the belt AND always seem obviously true DURING recessions
Wait til they talk of the economic miracles of the USA And Europe in a few years time...just chatting ,not preaching... "just waving, not drowning"
I love Stevie/Glenda Jackson's portrayal of that poet.--love G Jackson...the real heir to Bette Davis)
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JUST SAYING, Docteur_Eiffel,
That hating or looking at the negative won't make you any happier...I hope.
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Bring on the political union.
by the way, where is EUPrisoner..I almost miss him.
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China thousands of years of empire experience...
USA much much less...
only your friends are going to tell you the truth.
USA losing the economic conflict. Thought you could have one over China. That comes from the arrogance of empire. Something the whole of Europe has had to come to terms with and learn from. Still if you shout loud enough and insult enough people maybe you can get a few subtle "diplomatic" points across and gain the admiration of the world.
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I like/love France, Docteur...
I know where the English language and Medieval and continental (1000 yrs of) history ("the glory of France") come from -- France.
I stood in Paris, Saint Malo, the channel coast, Mont Saint Michel ..and did feel transported to an alien beautiful world I never want to see suffer..from anything:)
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For me, the Euro was a great way for France and Germany to ease trading, and for them it worked. Others saw it working and wanted some of the same. Who in all honesty could blame them. I mean, they saw the French and Germans developing, growing and getting rich out of it.
Sadly, many of these nations (and Greece is simply the tip of the ice-berg) couldn't afford to join this particular club. Equally sad is that the French and Germans lowered their standards as a club without members isn't a club.
So, what happens now? Either the French, and more specifically the Germans, pay for their lowered entry criteria to keep the club going, or ask the members with bills they can't afford to leave.
It would hurt both Greece and the Euro if Greece was asked to leave. It would hurt the Euro more to keep them in. Pay for one Greek default and you have to keep on paying as if they can't make this payment their chances of meeting the next don't get better!
Equally, you must then pay the Italian, Spanish, Portugese, Irish and others debt too as they are equal members. I mean, the UK should join the Euro if the French and Germans will pay off our debts!
And what do they receive in return for paying Greek debt? Hearty thanks? Free Feta? Greek compliancy?
And if they receive Greek compliancy, doesn't Greece simply become a Franco/Germanic protectorate? The French and Germans would in essence OWN Greece, and possibly others.
Ownership = rule. Greek elections would become meaningless (or depending on your viewpoint more meaningless). War and occupation without the death of a single soldier.
Eventually you end up with a Franco/Germanic United States of Europe (united by debt, but united nonetheless) with a rotating head of state.
Why aren't the Germans up in arms over this situation? Why aren't the Germans going nuts at their taxes being used to buy another nation? Why is it that due to serious financial mis-management that only the Greeks are revolting?
If the Euro pays Greek debt, then these same demostrators will be dancing in the streets.
I say force the Greeks out. Better a weakened Euro than a corrupted one.
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99. At 01:30am on 09 Feb 2010, David wrote:
I don't hate the USA. I have friends and family who are USAmerican citizens.
Not all USAmerican citizens are arrogant ignoramuses. This Greece nonsense is a red herring and a smoke screen. The real problem is USAmerica and China.
China because they are underestimated and the USA because they are overestimated and weakened by internal competition and extreme division.
China has USA by the middle stump. USA needs to wake up quick from 30-40 years of continual misdirection. There is no real difference between the Democrats and the Republicans. They are no more than a couple of old redundant religions these days.
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eif;
"China thousands of years of empire experience...
USA much much less... "
Considering how short a time America has been around compared to China, we're catching up to them rather quickly, dontcha think :-)
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http://en.wikipedia.org/wiki/Citizen's_dividend
http://en.wikipedia.org/wiki/Thomas_Paine
Wake Up America.
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Agree...except its the Demoocrats who will split,
and form the next rival parties..w/the repubs on one side/liberal.. health and equality on the other side..social liberals.
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106. At 01:54am on 09 Feb 2010, MarcusAureliusII wrote:
eif;
"China thousands of years of empire experience...
USA much much less... "
"Considering how short a time America has been around compared to China, we're catching up to them rather quickly, dontcha think :-)"
Actually no. USAmerica is losing badly. And no amount of flag waving will change it. You have to drop the arrogance of empire to stand a chance. You have to understand your own advances in neuroscience which prove our specie is not naturally competitive but has its greatest survival optimum from cooperation. Adam Smith's theorem that we are naturally competitive is bunkum.
http://en.wiktionary.org/wiki/bunkum
At best as useful as hand writing analysis and phrenology.
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well its looking like all the fortune tellers where right as the usa has made the strongest start to the recovery and as the dollar strenthens against the other western currencies i'm sure the germans won't begrudge the pigs(portugal/italy/greece/spain)giving them a hand against us brits with devalued euro. industrial revolution is in the air and the first races to get started will pick all the low hanging fruit.
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I'm confident that the Euro will be saved because in fact, there is no other way for the Eurozone countries (and the other EU countries, the UK included) to go, much unlike what some people have suggested here. Germany leaving the Eurozone or Greece being kicked out? Unthinkable!
Those of you who are familiar with the economic history of the period from the end of the Second World War until now and with the origins of the EU itself will understand why.
The EU, previously called EC (before 1992), developed out of the ECSC, EEC and Euratom. In particular the first two were designed to facilitate trade in Europe, based on the idea that a Europe connected by trade was a Europe that was less likely to go to war because of mutual dependence. Furthermore, the founding of these predecessors of the EU took place against the background of the collapse of the colonial empires. Without their colonies as markets to sell their products, the European industries and therefore the European states were very vulnerable. In fact, for the Brits here, if you look at the reasons why the UK did not join the original Six founding countries in 1951 and 1957, it was in part because of the colonies the UK still posessed. In the 1960s, when the British government realised it was going to lose these and the Commonwealth was not going to be a stable trading partner, it applied first for EC membership.
Trade still underlies the EU today. Not the bureaucrats in Brussels, or a club of federalists is the force behind European integration, it is globalization. In a world where the old European powers like the UK and France have mostly lost their status of greatpowers, new greatpowers are rising: China, India, Russia, Brazil are about to join the US and Japan. In this new world the small European nationstates, even the biggest of them, are vulnerable to the economic tide.
That is where the EU has stepped in. By creating a Single Market, the EU has solved the problems of the European industries. Because unlike what most media report, not the US is the biggest economy in the world, the EU is, thanks to the Single Market. And this economy dictates other economies. Because industries from outside the EU so dearly want to sell their products in the EU, they have to comply with European rules.
However, while the Single Market makes trading easier, it doesn't solve all the problems that are related to small economies. Because just making it possible for an industry to sell products in another EU country doesn't make it automatically profitable. This is because different currencies make investing in another country and trading to another country very risky. If the exchange rate of the two countries' currencies changes between the moment you invest in a country or you produce a number of good and the moment you expect a return on the investment or the profit from your sales, the profit could disappear. In order to prevent this risk from happening, countries can peg their currencies to one another so that they rise and fall in value simultaneously.
This is the moment when looking at the economic history of the last six decades becomes relevant.
After the Second World War, the US set up a system called the Bretton Woods system. This involved two organisations, the IMF and the World Bank, and a monetary system. In the 19th century, the global economy had already been globalised thanks to among others the Gold Standard. All currencies were linked to gold and could thus be exchanged without risk of losing money on the process. This system had, however collased as a result of the First World War and the Great Depression. The US and the UK wanted to bring back this system. Therefore the US dollar became linked to gold with a fixed exchange rate. In turn all other currencies were fixed to the US dollar. This, together with efforts to cut tariff walls in the GATT (predecessor of the WTO) allowed the world to move back to wards globalisation. The European economies in the 1950s and 1960s flourished as did the American economy and many other economies in the world. But after two decades the fun was over. Excessive American spending, causing huge trade deficits undermined the convertibility of the Dollar to gold, the situation could not continue. In 1971 President Nixon terminated the convertibility to gold. At once the foundation under the monetary system had collapsed. Suddenly all currencies in the world were floating. The fixed exchange rates had to be terminated and gone was the financial security of the previous two decades.
The 1970s are known by most and not least the generation currently in power as a period of extreme economic instability. Investments collapsed, oil crises took place, unemployment skyrocketed, inflation skyrocketed (25% in the UK), in fact anything that's nasty for the economy and for people's wallets.
To bring order in this chaos, the European governments decided to strive for a monetary union: a single currency for all the EC. In fact this ammounted to nothing less than a new Goldstandard, but then only for Europe instead of the world. Such a monetary union was unfeasible politically and economically back then, so they settled for a less ambitious plan: to peg the currencies to one another, as I mentioned above. In practice this meant that every currency in the EU was pegged to the German Deutsch Mark. If the DM would rise, so would all the other currencies. Devaluations were possible, but only after approval from the other countries. This went very well until 1992. Instability in the European economies encouraged speculators to bet that the British Pound Sterling, the Swedish Krone and the French Franc would forcibly devaluate as a result of their countries' economic policies. This put so much pressure on the Pound Sterling and the Krone that the British and Swedish central banks could not save their currencies from devaluation against the DM. Speculation forced Britain and Sweden out of the European Monetary System. In Addition, the Bank of England had spent half of its financial reserves and lost many billions of Pounds, which it would never recover. For sweden the story was the same. France just managed to save the Franc and escaped.
This proved for once and for all that pegging currencies to one another was not enough to bring financial stability. By that time, however, the EU member states had already decided that they would found a monetary union with a single currency.
Why does the single currency not have these problems? Well simple: there is no pegged currency to bet on and no national central bank obliged by treaty to maintain the fixed exchange rate. There is only the euro, just as there is only the dollar in the US instead of each state having its own currency. Instead of national central banks there is a supra-state central bank, the ECB in the EU and the Federal Reserve in the US, which decides on the monetary policy.
As the current crisis in the Eurozone makes apparent, a single currency is not an end to all problems. The risk of Greece defaulting on loans and Spain, Portugal and Ireland doing the same is undermining the faith in the Euro. Whereas in the case of the pegged currencies in the EMS the Greek Drachme (and before Greece the Irish Pound if Ireland had been out of the Eurozone) would have devaluated the way the Icelandic Krone collapsed, now these weakened economies drag down the Euro. They won't make the Euro collapse, but do cause it to depreciate significantly.
We have seen a similar effect of government overspending with borrowed money in the Latin American Debt Crisis in the early 1980s, causing these economies to go into heavy recession (much like the one we've experienced, only for more years) and a collapse of their currencies
Will this happen to Greece? No. Greece won't be kicked out of the Eurozone, the Euro won't collapse and the Eurozone won't break up for the very reason that it's way too costly economically. Breaking up the Eurozone would send the European economies right back to the 1970s with all the disaster of then. In a time when Europe is becoming politically and economically increasingly vulnerable to the effects of the actions of the greatpowers, breaking up the Eurozone would be the most stupid thing one could do. It will make Europe as a whole less competitive and will reduce the wealth of most Europeans significantly (we're talking about 10s of percentage points). With this in mind and their own experiences of the 1970s and 1980s, our leaders will definitly not go down that road.
What road will they take? To ease the problems for Greece, the European Central Bank could first relax its policy on collateral. The ECB decides autonomously, but it's not unsensitive to the problems in the market and it for sure won't steer the Euro into troubled waters. A warning from Berlin or Paris that these governments don't want to bail out Greece, and certainly not Spain will be heard loud and clear in the halls of the ECB. In the long run, however, this will prove problematic since relaxing the collateral policy will undermine the Euro as well. But for th moment it's a way out.
Germany, France and other economically sound countries like the Netherlands could jump in and back Greek government bonds, a bit like the way Germany saved Ireland a year ago. These governments would then guarantee that in case Greece would default, they would pay. This should make the interest rates drop and ease the pressure on the Euro and allow the Greek government to spread its reform plans over a longer period of time.
The EU could call in the IMF which would put Greece under guardianship and force Greece to make the necessary cuts. It might cost a few Greek governments and prime ministers, but this will eventually solve the problem. The downside is that like some posters here still remember how the UK had to call in the IMF to help it in the 1970s, the EU and the Euro will suffer a loss of prestige.
In the long run, however, the EU will have to move towards a system similar to the US. Whether we like it or not, in 20 years time, I'm sure financial and fiscal policy will be decided on by an EU Treasury.
Once again, that is not because bureaucrats in Brussels or a club of federalists like it that way, but because our leaders and a majority in our societies (the middle and upper classes) support globalisation and these measures are the only way to economically and politically survive in a globalised world. The other alternative, as our grandparents and great-grandparents found out at the end of the first period of globalization in the 19th century, is one or two world wars, and nobody wants that again, do we? Thus globalisation it will be.
Is it bad then, an EU Treasury? Well as long as it's democratically controlled, and democracy is definitly on the rise in the EU for those who have paid attention, I don't see a problem. You don't hear Americans complain about the USA either and in fact most educated Americans admire how far Europe has come. Time to convince ourselves of that too now? ;-)
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eif;
""Considering how short a time America has been around compared to China, we're catching up to them rather quickly, dontcha think :-)"
Actually no. USAmerica is losing badly."
Shhhh. Pssst. Hey, lets just keep this a secret between the two of us. If we don't talk about it maybe nobody else will notice :-)
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Docteur_Eiffel,
We here in the USA are waking up from our depressed slumber and realizing China is a huge Kleptocracy--hate to be mean.
But did you know?
They stole the patent from Apple Co. for the Iphone and now sell it from a Chinese corp. to otherwise poor people who couldnt afford it,then
They condemn our patents as hegemony holding sway over them as in "tyranny."
What illogical crap--or is it ..
traditionally to them "all property is theft." I like them but dont have any lack of realism regarding trust towards even their society.
so, wait a few years and see us THE USA gravitate to Japan and India as our best Asian allies and friends.'
They are a big ship..is it in our power to steer them, and then wait for freedom of info and law against theft of info?
That is the big new concern ...there and here. But, we are young and impatient, oui or non?
Read the Economist site..
this Apple story was there written by a British professional....now instead of "wow China," I'm like "a Python and ongoing suffocation":(
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no. 112
Mammothly good and well written, history-like (Gods viewpoint type ..from above) ... Its like reading a chapter from a good college level book:)
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I meant no. 111, sorry Marcus -u read it, Marcus, see, read, conquer
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David;
eif is just mad, it's all sour grapes to him. The French are jealous as hell of us. The real secret is now the Brits are too. Here, maybe this will cheer you up;
http://www.nationmaster.com/graph/eco_gro_nat_inc-economy-gross-national-income
Don't be fooled by GDP. That only tells you how much wealth is generated within a country's borders. GNI is what they get to keep. Our economy is in fact 8 times China's with less than one quarter as many people. Click on the "per capita GNI" tab. Just compare. Now look at the tab that says "per $ GDP." That's the percent of what they make that they get to keep. We keep 85 cents of every dollar of wealth produced in the US. China keeps 15 cents of every dollar of wealth they produce. Where does all the rest of their money go? Mostly to us. We make more off them each year than our government owes them all put together. They are where we send our low paying nasty jobs and industries to get done without worry of OSHA, EPA or anyone else. To get from being a thousand years behind us to being only 140 years behind us, they've had to turn their entire country into the world's biggest toxic waste dump. It will never be cleaned up. The place is a disaster which is why so many people pay those snakeheads whatever it takes to risk their lived to get out. Why do so many go to Europe? Because it's too hard for them to get to America.
Don't be too upset about the iphones. eif knows that for every $1000 Louis Vuitton handbag that sells on Fifth Avenue in New York City at Bonwitt's or Bergdorf's, there are tens of thousands of Chinese made knockoffs that look exactly like them to the untrained eye that sell at flea markets all over America for around $15 to $20. Everything they make the Chinese copy like that. And now we make even better wine than they do. Yep, just sour grapes. Believe me you wouldn't want to live there. In the big industrial cities, on a clear day at noon you can't see halfway down the block because of the smog. That's the reports I'm getting from friends who go there.
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@ 81 - Jukka,
"
In case of Greece, in actuality markets aren't punishing Greek citizens or corporations, they are punishing the Greek state on poor fiscal and economic policies. It is the Greek state that is indebted and it is the Greek state and its public services who have to make a ration for their continued existence not only in the eyes of the market, but also in the eyes of the tax payers. Even if the Greek state goes bust, the citizens and corporations still go on as they are shielded by belonging to Eurozone, they will still have money that is valuable and can be traded for goods and commodities, they will still have access to finances.
"
I forgot to comment on this in my earlier post. Anyhow - wrong! If their government bond rate are 4% more than Germany, or Finland their banks will not be able to lend to the business at 2,5% but at 6,5% or 7% or god knows what! So business will suffer and their business and citizens see no befit from been in the Euro. That also makes it hard for business to grow or work.
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Im sorry for Greece.
Pity is needed now and Mentoring..not hectoring..what is bad is that
for the EU foreign entanglements mean inside European "borders--enough to make one cry in frustration.
Foreign policy is never avaiable to Europe now--They are too busy for that capability..Interior frontiers and all:(
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well
that makes me feel better bout China, MA.
I wonder bout their growth rate figures too...now..made up?
:)
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@101 - Gheryando
"Bring on the political union." - yes please! :)) the sooner the better
@111 - Caspar Heetman
Thank you, Perfect sense!! No emotional rubbish :)
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MA
too late for my tired intellect tonite--the link..tomorrow's assignment:)
Cheers
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Silly me as I don't understand economics at all. I have never understood the morality of Futures that, as I recall were allowed into Britain by that nice Mrs. Thatcher. .We are taught that gambling can lead to moral disaster. I cannot see that working the stock market, bonds, futures etc. is anything but gambling. Now we see in this article that if Greece falls investers in bonds in Portugal and Spain may well sell their bonds thus creating a crisis, just like the bankers did with their high risk policies. The difference with this to simple betting on the horses is that when you lose on the horses you lose but bankers and 'investors' are protected by Governments using tax payers money
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Remember David Owen?
He'll be saying I told you so.
The economies are too divergent for a single currency to work.
Politically it will be easier for the likes of Greece to leave the Euro & so devalue.
This is the about the only advantage the UK has to outweigh the massive disadvantage of having such a dominant financial services sector.
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Hi Gavin
I agree that this week the focus will remain on Europe. The situation is quite difficult and I have found the notayesmanseconomics blog very helpful in explaining what is happening and what needs to be done. Ireland has dodged a bullet for now but Portugal is on a slippery slope as is Spain.His views on currency union without fiscal and political union are also interesting.
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It seems to me the fundamental problem was that the euro was a political project rather than an economic project.
Had it been an economic project countries would have been expected to align with the eurozone over time before formally adopting the euro. But in a political project the objective is to tick the boxes as fast as possible so those pushing hardest can claim the credit, and worry about the details later. In that regard this situation is really no different to the sub-prime crisis where money was lent, deals were made, and the details sorted out later once bonuses had been received.
When the euro was launched its proponents constantly used the US as an example - a single market must have a single currency, they said. But the US also has a single language and a national identity rather than a local identity.
If you ask someone from Wyoming and someone from Florida their nationality chances are they'll both say "American". Just try doing the same with someone from Germany and someone from Portugal. I'll bet you won't get two people saying "European".
The language issue is also huge. If you're an unemployed plumber in Wyoming and there's a lot of work in Florida it's easy enough to pack up and move to Florida. The climate might be different but the language is the same. An unemployed plumber in Portugal doesn't have the same freedom to move to work in Germany, simply because of the language barrier. The theoretical freedom is there, but practically it just wouldn't work out.
Whether the great and the good didn't think of those things or chose to ignore them is academic, when such a huge project runs into serious issues that the average man in the street could see coming but our leaders apparently couldn't (or chose to ignore) it highlights questions of ethics and competence.
If they were inept they need to be sacked. If they were malicious they need to be sacked. It really is that simple.
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#111, interesting theory about relaxing collateral requirements but unless something fundamentally changes within Greece (specifically a combination of rising income and/or reducing debt) all it does is stall the inevitable.
Burning your furniture to keep warm because you can't afford to pay the heating bills might solve the problem today but only by creating a bigger problem for tomorrow.
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10. At 1:35pm on 08 Feb 2010, MarcusAureliusII wrote:
This posting is so laughably naive.
I did read your post, despite the disclaimer at the start. And you are absolutely correct, your posting is breathtakingly naive, in fact it's pactically a wish-list, but even so, may I thank you for admitting it yourself. It is both refreshingly honest and surprisingly self-aware.
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#10 MarcusAureliusII
I think you are right to be pessimistic about Europe's future; it's just how long it takes.
But I think your wrong to be so optimistic about the US.
Maybe the US will benefit in the short-term, but the US is debasing its currency & inflation beckons.
Good reasons not to hold euros or dollars, or any fiat currency for that matter.
Hence the Chinese & others buying up all the precious metals they can get hold of.
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"we chose to join a political organisation which stated that it wanted "an ever closer union" at its foundation." (HelenS, 64)
If you're referring to the 1975 referendum, the question on the ballot paper was:
“Do you think that the United Kingdom should stay in the European Community (The Common Market)?”
As you can see, there was no reference on the ballot paper to "an ever closer union".
And does the European Community (or the Common Market) still exist? If not, why should it be assumed that the British people gave their assent in 1975 to British membership of any successor organisations? No mention of any successor organisations was made on the 1975 ballot paper.
"there will soon be a time when Britain will be unable to compete independantly in a global economy." (HelenS, 64)
Yes we have serious problems, but I disagree that we will be unable to compete. Your statement looks like wishful thinking, given your enthusiasm for a Federal Europe. How we perform as a nation is up to us - there's no Marxist inevitability about that or anything else.
In any case, economic competitiveness is hardly the hallmark of the EU. May I refer you to the Lisbon Strategy of March 2000? (http://en.wikipedia.org/wiki/Lisbon_Strategy). Its objective was that, by 2010, the EU would be "the most dynamic and competitive knowledge-based economy in the world .....". Do you think that objective has been achieved?
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The Greeks need not do what the ECB,IMF,World Bank, and NWO tell them to do. The average Greek is as little responsible for the recent financial and economic chaos as the average Briton or Icelander.
A change of Government through democratic or non-democratic means is all that is required to assert themselves as a Nation State once more.
Then the tearing up of the "Treaty of Rome" on Public Television and a Declaration, "WE ARE OUT."
They will be threatened, they will be bullied, but at the end of the day there is nothing the Biderbergers can do if the people just walk away.
The Drachmae can then be reinstated, devalued, and once more make their country a magnet for deperate sun-seekers from UK,Germany and Scandinavia.
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I don't think every EU nation needs to be administered centrally - rather, the EU and the relevant nation need to make a decision as to whether they'll continue in the same currency and then commit to that decision.
The inability to de-value your own currency is a big problem in all the EU states that are feeling the pinch at present, and one that appears impossible to solve while we all cling to the euro.
Irish economics journalist David McWilliams' book, Follow The Money, suggests Ireland come off the Euro and return to a nationally managed currency to ensure it's capable of returning to growth and shaking off / managing its debt burden via controlled inflation.
I think if these potential problems with Greece, Spain etc. become real, we'll see a move away from the currency before we see a move towards central government.
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@129. At 12:09pm on 09 Feb 2010, CornwallCoastPath wrote:
Re "If you're referring to the 1975 referendum, the question on the ballot paper was:
“Do you think that the United Kingdom should stay in the European Community (The Common Market)?”
As you can see, there was no reference on the ballot paper to "an ever closer union"."
The Treaty establishing the European Community mentioned 'an ever closer union'.
We know the UK citizens as sensible people, therefore we may assume that before casting their vote in the 1975 referendum on EC membership, they had read the treaty founding the EC, thereby agreeing to an ever closer union.
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David;
Don't worry about China's growth rate. It will never catch up to the US. First it must achieve 6% just to stay where it is. Second they are starting from a very low base. If you have only one dollar and suddenly you have two, you have grown 100%. They have had to build an infrastructure in a few decades the rest of us built over centuries. You didn't expect them to build 19th century buildings, replace them with 20th century buildings, and then 21st century buildings do you? Of course what they build now will be the most modern design. But it is limited to new big cities and is of variable construction quality. Their society is thoroughly corrupt. Considering what it took, the 10% rate of recent years is unsustainable over the long term.
It is improtant for our security that China and India prosper sufficiently to remain politicially stable and connected to the outside world. That is why the US deliberately shifted focus in the 1970s from developing Europe which was recovered to developing China which was as isolated and starving then as North Korea is today. It was dangerous for one billion + people to remain in that state. But catch up to the US? Never. How could they with 1.3 billion people, almost no available arable land, very limited resources within their own borders? Why do you think they are buying up Africa right out from under Europe? China's population is aging. It has dissident minorities like Moslems, Tibetans, and others who demand their rights and some of them like Moslems have a culture that is alien to the Han Chinese mainstream. The rising and prospering middle class will demand more freedom than the Communist party will allow. These factors suggest long term political and social turmoil and instability especially when word gets out of the past atrocities the Chinese government perpetrated on its own people they don't know anything about yet. For entirely different reasons, China's future is as gloomy as already declining Europe's.
Of course people like eif are enraged with jealousy over America. How infuriating to his countrymen that upstart America and not France is what the world really aspires to, admires, envies, tries to copy. How many recent French movies are playing in cinemas in India or Japan?
For all it's problems, America's perpetual reinvention of itself, its infallability to attract money and much more importantly the most energetic talented and ambitious people from around the world allowing them to make full use of those talents and energies to their own benefit and for the rest of us, and its history of overcoming impossible adversity give every reason for optimism even in the darkest of times (which historically these are not.) Europe by contrast is in terminal decline, a death spiral of its own invention it now can't escape. If Greece were the only problem facing it, it would mean nothing. But Greece as everyone including the financial markets know Greece is just the tip of the iceberg, a harbinger of much worse to come for them. All it will take is one surprising event to get them to all jump up at once and run for the exits. And what a day that will be.
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My friends - or I hope you are!
A few words from the The tail of the pig . PIGS get it? Oh well never mind - we don't.
In my opinion, this whole thing is about one thing and one only: REGULATION.
Spain holds the present 6 month Presidency, I give you a quote from the joint statement issued by José Luis Zapatero, President of the Spanish Government and Herman Van Rompuy, President of the European Council:
Italics mine.
No wonder the British media is in such a stew! Getting the vapours and headless chickens come to mind.
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60. POOR OLD PENSIONER
"As Spain battles with an unemployment rate of 20%.. things are much better here."
Signed on 2.5 Million, "Sick and Disabled," 2.5 Million, at University(ages 19 to 23) 2.5Million, unemployed between 55 and 65 years of age but not signed on ( no point, no Jobs,no money),Est.1.5 Million. Illegals, cannot sign on whether working or otherwise engaged as they should not be here. Est. 1.5 Million. Part time Workers, scrapping for pennies, struggling to survive, cannot sign on and retain their integrity
Est.1.5Million. TRUE UNEMPLOYMENT RATE 20%.
The Spanish Government is merely being more honest than the shower we have here.
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re130 - honestgradgrind : This is exactly the opposite of what I am trying to pass here: that the financial problems of Greece have little to do with the Euro. We had drachmas back in 2001. In preparation of the Olympics - with all these loans taken and yet not spent on the projects which were done at the last minute in 2003. What was the case of Greece with its national currency? Same problems, an ever increasing deficit (most often re-re-re-corrected to pass the standards), never ending loans, little change in the public sector apart the catastrophic privatisation of energy and telecoms, market with high prices relatively to the economy, the income of people and of course its productivity, indeed a very low productivity, the usual corruption of the infamous "the 30%", scandals in the military and other state provisions, scandals in the stock-market including the then PASOK (current governing party) prime minister K. Simitis etc. etc. Don't you realise that Greeks see the same story since 1975 (when the democracy was re-established - by the ones that had taken it out in 1967, the US of course, "what else" as my friend George would say). And yet Greece was then as now under the direct threat of US-backed Turkey and faced all sorts of problems with all its neighbourhood including having to deal with a US-backed (and UK/German-backed - what a shame!!!) war in Jugoslavia.
Do not get me wrong. I am not "exporting" the root causes and throw it up to the bad Americans like others love to do - it goes without saying that a great part of the responsibility is up to Greeks. Americans, just like Russians just like ancient Romans and Chinese are as bad and as good as their geostrategic interests permit them to be, they are a super power and have to remain so, they are not the mother Teresa of this world. Unfortunately, Greece no matter its absolutely friendly background has the tough luck to be 9 out of 10 times on the negative side and that is because the US has simply inherited and continued the bulk of the earlier British geostrategic plans in the Middle East (oh, yes, Greece is integral part of the Middle East in geostrategy in case you did not now...), something which explains why Greeks are hugely anti-Americans as they have been anti-British (important note: referring only to governments' external politics, Greeks have excellent relations with American and British people).
Even if you guys think I become boring I will never cease repeating it. Talking about economies and refering to numbers, salaries, pensions, power of buying, even productivity and such etc. etc. are trivialities. Had numbers ever worked countries US (oorry US guys! it is just one known example, there are tons of other) would be bunkrapt. Yet it comes back to borrow more and "print more paper-money on its printers". Why? Because when you are the big-guy you simply owe to nobody (in reality you owe but "no problemo") cos you define the game. And to do so the keyword is having a coherent geostrategic plan for the whole globe, something that currently only the US has, Russia is re-formulating its own and China and India are currently creating for the first time their own. Europe in that issue remains the poor relative.
Re 95 WebAliceinwonderl
I have seen your views, and they are most often if not always right on the spot. It is not accidental you are a Russian citizen, nothing ethnical about it (Russians are smart, and a deep culture anyway) but you are inherently due to the position of your country to be more able to grasp some basics of the link of economy to geostrategy than a French or a German citizen who only know how to to count 1+1=2 (but never ask where these two 1s come from! There is no parthenogenesis obviously!).
While Greece has had its problems independently of the EU, the main problem of Greece today is linked to the main problem of Europe: lack of geostrategic vision. A lack of geostrategic vision means that the economy will remain slave to the surrounding oceans' waves and Europe under the current vision (or lack of it), either we like it or not, becomes increasingly a small island in a huge ocean.
Re 96 WebAliceinwonderland
Said correctly. Truly open markets rarely unless being a world leader, linked directly on the "positive side" of the opposite leader, or being a small tropical island that serves as a fiscal paradise to tax-evading companies of other countries.
I need not say a lot on this, I only need to mention that the US, preacher of the free markets, somehow had forgotten AT&T for more than 80 years as an absolute monopoly all over the US. Amazing? Where was the famous monopoly law? Finally in the 80s they decided to act and break it... why in the 80s? And why in the 10s, 20s, 30s, 40s, 50, 60s & 70s AT&T played the same role as any public telecommunications company would play in any capitalist or socialist state? Double standards? Well Americans had done the right thing: afterall economy is no religion, you do what it works. What it does not work, you change it. In some kinds of markets a free economy benefits everyone, is some others a free economy benefits a small minority - the "how" and "where" is down to the type of country and it is up to the countries to find their own golden standard (that changes over time and conditions of course).
And no, in case of Greece, questions of regulated or free market are not at all the main issue. As I said it is much more deep.
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#79, #80
I wholeheartedly agree. It's time the people of Europe united and took back control of their collective economic future from these vultures.
It's sad to see so many people here banging the drum for these people, who are only interested in preserving and increasing the wealth of phenomenally rich people. At the same time, they destabilise our countries and cause deep recessions through their reckless behaviour.
It's time for Europe to reform its financial system - leave the American's to their toxic capitalism (and the British too if they wish to continue being insular and afraid of Johnny Foreigner).
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The EU is an idea that has been fermenting for a long time in the minds of politicians who wanted to see their names in the history books. It is imposed from the top-down and has yet to find a footing among the peoples of Europe. That is where the EU will fail as it has so far shown contempt for the voters and the needs of ordinary people.
Address this issue properly and maybe this EU has a chance otherwise it will become another one in a long line of Pan-European failures.
-Dutchman living in Belfast.-
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#116
"And now we make even better wine than they do."
The USA now makes better wine than the Chinese?
I'm really impressed. Give yourself a pat on the back.
Go and watch Zeitgeist and start stocking up on food. The 21st century will not be the American century after all, and it's not going to be pleasant for all you ostriches. Time to pull your heads up and get ready for the storm.
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I'd like to politely object to the use of a derogatory acronym such as PIGS.
According to agenciafinanceira.iol, the Swiss investment bank UBS says Greece is the worst country risk in Europe, followed by (note the ranking) Portugal, Ireland, UK, Spain, France and Italy. GIPSIFUK?
More generally, many of the comments embrace a few flawed opinions:
1. The UK is faring better than the Eurozone in the current crisis. It is not.
2. Federation among different countries is wrong. The 13 American colonies were more diverse than today's EU countries. When Germany and Italy got unified, they comprised many different states.
3. If the UK had adopted the euro, the British would now have to rescue Greece. Rather, the rest of the Eurozone would have to rescue the UK.
Complacency, whether American or British or whatever, won't take any country very far.
The Germans have put their economic house in order--at least as much as possible. They are admirable. They are not trying to run Europe, but they often say something sensible that the rest of Europe should heed.
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Nik, @ 136. Yes, I am afraid we've got a natural inclination to it :o) the word "politics" normally in Russia looks like "geopolitics", rarely isolated, without "geo".
Can be because we don't master the other one :o))
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137. At 2:01pm on 09 Feb 2010, U940859 wrote:
'It's time for Europe to reform its financial system - leave the American's to their toxic capitalism (and the British too if they wish to continue being insular and afraid of Johnny Foreigner)'
The British do not fear Johnny Foreigner. They fear Johnny Bank Manager.
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Re: Honestgradgrind 130
You are right about unemployment in Spain.
1) Of the 4 million, 2 million are Spanish and 2 million are Immigrants, mainly from South America. The husbands and sons of those who came to do cleaning or caring for old folk and children. There never were many jobs for these people who lack the required skills, experience and education.
2) For anyone who has worked for say 10 years, whatever their circamstances, they can get benefits for up to two years.
3) There are still more people in Employments in Spain at any time before 2008.
That does not mean the we don't see the present situation as bad and need to be address but, and it is a big but, the jobs need to be both productive and permanent. There are no quick fiexes available her or anywhere else.
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Ahhh UBoat. Another jealous European. Did you know that in the Northern hemisphere, massive cyclonic storms spin counterclockwise while in the Southern hemisphere they spin clockwise? Physicists call that the Coriolis effect. When its a massive European economic storm I call it the Maastrict effect.
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Caspar Heetman
Re #111
An erudite and informative contribution.
Its Historical analysis was flawed in parts from start to finish, but a very interesting interpretation of the salient points post-WW2 to the present day.
Believe me I read it twice and it was impressive, however, it also reminded me of the Lord Reith Lecture by Prof David Henderson in 1985 at which he complained about what he called, 'do-it-yourself economics'. He went to great lengths to point out 'amateurs', i.e. politicians and their officials in departments, were frequently acting without proper, deliberated advice from those he classed as being in the 'Economic Profession'.
Well, post the ERM debacle across much of Europe (it is often overlooked it was not only the UK in crisis) that situation of 'amateurism in economic decision-making' rapidly changed not just in the UK, but in Europe, USA etc.
The Economist took centre-stage: They brought their expertise to the field of economic-philosophical-political policy-making in most Nation's Government across the World throughout the 1990s and the first decade of the 21st Century.
My, my, that was certainly a success for the 'professionals/experts', wasn't it!?
Let us face it: As we enter the second decade on many of the most important aspects of Economics there is disarray bordering on outright disillusion-confusion among 'professional Economists' and 'Political leadership'. Economic problems in general are as serious as they have ever been and in specific areas pertaining to European (inc. UK) and World Economic trends at micro and macro level there is no concensus at all as to what is the right course of action. The entire World of Economics is divided.
Exchange Rates and the 'floating' Pound, EUro etc.: It is very debateable to suggest as the founders of the EUro-zone Currency do that one Monetary Value can hold across 12, 15, 16, 27 etc. National Economies - - such a Fiscal achievement of stability is so far proving illusory - - as previous and present crisis reveal.
The fundamental flaw in the EUro 'one-size-fits-all' theory is that the Open Market has never shown any inclination to believe it is feasible. Under ERM 'floating' effective Exchange Rate/s was calculated, to show the 'Value' of Sterling, EUro, Yuan in relation to a bundle of other currencies, with each Currency receiving a 'weight' according to the extent of trade with UK/Europe/China etc.
Re, ".. period of 1970s.. extreme economic instability.. unemployment, inflation sky-rocketed..Why does the single currency not have these problems?"
It does have these problems: Every Nation that adopted the EUro has experienced a massive Manufacturing, Transport and Retail Price Rise, and in the last 2 years Unemployment within the EUro-zone has skyrocketed whilst Inflation has eaten into Pensions and Savings and National Government Spending; Greece, Spain being prime examples of these experiences.
To pretend otherwise is the 'pro-EU' once more re-writing the reality to fit the preferred scenario.
In 1999 the 15/16 EU Nations fixed irreversibly their Currency against the EUro, however, the issue of immensely powerful German, French econmies and the lesser lights of Europe did not disappear - - it just took on another guise - - to regulate 'demand' by Fiscal Policy is what is happening with Greece at this time.
However, according to EUro rules it is supposed to be dependent on the Monetary Policy of the European Central Bank. There lies another problem so adroitly brushed aside in #111:
Re, "..no pegged currency to bet on and no national central bank obliged by treaty to maintain the fixed exchange rate... only the EUro.."
The ECB is supposed to be independent; its remit and policies clearly are at odds with the sort of deals about to be done to 'save' Greece from defaulting, departing the EUro-zone and risking another 2, 3, 4 Nations following suit.
Therefore, this supposed "..supra-state Central Bank which decides on Monetary Policy.." is not actually being allowed to do that because if it did so Greece and doubtless other National Economies within the EUro-zone WOULD go to the wall.
Re, "...Is it bad then, an EU Treasury?" Well, we certainly will not be able to compare the ECB's activities with any other bona fide Central Bank as the interference from Brussels and from National Governments (principally Paris-Berlin) means this present EUro-zone and pan-UK-EU crisis is not the responsibility of the ECB.
As for, #111 totally inexplicable assessment: ".. Well, as long as its (ECB) democratically controlled and democracy is definitely on the rise in the EU for those who have paid attention.."!?
So, the increasing merger of every financial-economic institution and ongoing encroachment of the ECJ within the EU27 Nations since Maastricht in 1992, despite the knock-back of the 'Constitution', the 3 successive lamentable and declining Citizen Voter Turnout for EP Elections, failure of indication of any significant Citizen support for the Lisbon Treaty among the EU Citizens constitutes 'democracy on the rise'.
One wonders what Public display is needed for 'democratic initiatives' to appear at least modest in Heetman's estimation!!?
Re, "...Whether we like it or not I'm sure in 20 years time financial and fiscal policy will be decided on by an EU Treasury.."
Did not take long for the 'pro-EU' element to abandon (***whether we like it or not***) the 'rise' of 'democracy' theme!?
"..Once again, that is not because Bureaucrats in Brussels or a club of Federalists like it that way, but because our leaders and a majority in our societies (middle and upper class) support Globalisation and these measures are the only way to economically and politically survive in a Globalised World."
Have to concede, it has been plain for 20+ years almost all of Europe's present Political Leadership are mesmerised by 'globalisation': That elite group are of course in tandem with 'Big-Business' in their belief there is no alternative; and with Business ensuring the avaricious majority among the body-politic are indulged there is very little likelihood of a change of 'pro-EU-Federalism' policies stemming from the top echelon of the pecking order.
However, as to the perceptions among the 'upper/middle classes' on the virtues and certainties of Globalisation the jury is very far from reaching a majority verdict not just in the UK, but across the EU and indeed the World at large.
Afterall, it is one thing for Jacob and Marina to sit on their self-assembly recliner from IKEA pre-built/packed in South Korea, infront of your made in China television-satellite dish, speaking on your Nokia mobile made in Hungary to a Credit Card desk based in India whilst eating a ready-made meal processed and packed in Argentina, but that is not what 'Big-Government/Big-Business' understand by 'globalisation': Profit, enormous profit for those who would dominate all 'societies' by the control and exploitation of the Citizens from Tierra del Fuego to Capetown to Colombo to Dunedin via an EU or whatever they care to call it, is the determining factor and object of globalisation.
Re, "..the other alternative as our grandparents and great-grandparents found out at the end of the first period of 'globalisation'... 2 world wars..":
So, that is the only choice available! Peace or War? Unification or unbridled aggression!?
It doesn't get any starker than than that! PHEW!!! I'm joining the EU bandwagon today.
Then again, just for the sake of it, to be devil's advocate: What if this 'globalisation' thingy isn't all its cracked up to be?
I mean, to query these high priests of Economic-Political-Philosophy claims to know all the answers to every question of Human existence (and who all have such a marvellously proven track record, haven't they!?) there may be what some might consider a sort of Galileo-moment:
The World isn't flat and isn't circled by the Sun!
Globalisation isn't essential and isn't even effective!
Alright, alright, calm down - - put the thumbscrews away - - though I'm not about to recant such heresy, I am however, looking at the preached 'globalised' facts-analysis and 3 things strike me:
1) How far the World has come in Economic terms since post-WW2 and that was achieved without Nation States having to surrender sovereignty - - for all the shocking famines etc. the World Population is very largely fed, clothed, housed and predominantly educated to at least primary level - - in Economic Terms the Income Per Capita of the World Population has risen beyond all recognition from what it was in 1946, as has the Population numbers though this has been with a marked decrease in the overall size of Family units in most regions of the World.
2) How much of the World in Financial terms since post-WW2 has become inter-dependent - - the '1st' World Nation States have flourished, however, it is the '3rd' World Nation States that originally fell into disarray and Debt at the hands of the 1st World, have had their '3rd' World Debt written off, and some are booming economies - - remarkably these negative and positive evolutions came about from the initiative and instigation of independent Nations working (not joining/unifying) together when the need arose and not from some master-centralised-plan.
Every Nation that tried the 'centralised-command economy' political-economic approach has failed (Soviet Union, N.Korea, Cuba, East Germany, China etc.): All the relevant Economic indicators are that the EEC brought about peace, progression and prosperity, however, once the centralising EU became a factor the European Economies began to struggle and show signs of stagnation only relieved by the 'expansion' to East Europe.
3) How the argument for a 'globalised economy' is most exposed comes ironically with truly 'Global-Planet Earth' issues that lay ahead of Europeans etc. in the 21st Century.
To engage the millions of Citizens in actively supporting anti-Global Warming policies requires a 'political-economic' approach to the Individual Citizen that a supra-National entity can never expect to achieve any sort of success. E.g. when the Nazi hordes invaded the USSR the magnificent, sacrificial efforts of countless millions was not inspired by appeals to their 'loyalty' to the 'Party' or 'Chairman Stalin' (though for the apparatchiks it helped), however, it was appeals to the personal heart and mind to 'save Mother Russia' and to 'victory in the Patriotic War' that were the decisive propaganda-initiatives.
Similarly, any appeal to put your waste in separate coloured bins to help Brussels 'save the Climate' has very little chance of succeeding.
Basically, the appeal of 'Global' loyalty stops at most people's front-door. A Nation is much better suited to installing the National Citizen effort and commitment than some unapproachable, unrepresentative pan-national organisation (though it is perfectly feasible for it to act as a conduit for individual National policy - - as the EEC functioned).
Re, "..don't hear Americans complaining..": Unsure as to what you meant by that in #111? Suffice to say Obama and Palin are 2 ends of a very long and arduous political-economic-philosophical US text - - those USA Citizens who are 'educated' and 'uncomplaining' are not all Obama fans are they or agree with your perspective on the condition of the USA - - and equally, it is unlikely isn't it, all the 'educated' as well as those you slightly disparage ('working class': Since when did the democratic process not enable them a possibly decisive say?) European Citizens are deceived by the miracle cure of a 'one-size-fits-all' Currency when the evidence before them is that nothing of the sort is the reality?
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Re: 130 & 143 : Just do not say to any Greek that Spain complains about the 2 to 4 million illegal/legal immigrants that come mainly from generally Spanish-friendly South America in a population of what, 40 or 50 million Spanish? Greeks have 2 million and-ever-increasing in a population of 10 million within a country that back in the 70s had the 1/10th of the productioon base of Spain and which today has the 1/3rd of its own production base in the 1970s .... when it was still exporting workers... so you can imagine the bomb... oh... and just note that the bomb is not at all financial... you just have to see what we have received as present by "what else" George's guys. In fact Greeks would be very much willing exchange this 2 million South Americans even if they would have them to pay to sit down rather than having this 2 million we have today.
Financial issues are nothing in front of the risk of ""social"" hell that hangs ominus over Greece and which I am not sure how will we avoid. Make Greece 2 and 3 times more poor if you wish to spare it from such troubles. Anytime.
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145 cool-brush yes. it was "don't dare black wings fly over Motherland" and "stand-up, country, stand and face your deadly fight for motherland"
call (hymn of the patriotic war, that became hymn, but was performed by authors at Belorussian rw station in Moscow in Sep 1941, initially, from where VOLUNTEERS trains were leaving to the front line. Not a word of Stalin or Kremlin or communism in the whole song. Not time for fooling around :o)
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"Let our fury noble boil up - up - up raise
Like an ocean roller
Fascism, here goes at you peoples' war - sacred war".
____________
Nik, Greece should develop a second leg in Crimea which you used to have before. On two legs it is safer to stand :o)))
An Italian leg is also missing there, for a longish time :o))) Genua in particular.
Used to be such international island, the most international place in the Russian Empire. Open, nearly independent, a free thinking own metropolis, how to say. Exactly because it was one big New York LOL in terms off a mixture of folks. No wonder they called themselves not "semi-island Krym" but "Island Krym". Any next day ready to drift away :o))))
There you stumble over your columns marble and amforas everywhere. Coffee is Greek way, and surnames like Kistovraki? Zaturos? still many.
We'd only keep the Navy there :o) But the museums in Sebastopol - which are Greek columns and statues and whole towns un-digged all over anyway -you can run. Sebastopol and Pheodosia - that's where you walk on amforas all over, nobody even collects those orange/brick colour pot peieces - all have enough.
Khersones and
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@ CBW
Let me just comment on this:
"It does have these problems: Every Nation that adopted the EUro has experienced a massive Manufacturing, Transport and Retail Price Rise, and in the last 2 years Unemployment within the EUro-zone has skyrocketed whilst Inflation has eaten into Pensions and Savings and National Government Spending; Greece, Spain being prime examples of these experiences.
To pretend otherwise is the 'pro-EU' once more re-writing the reality to fit the preferred scenario. "
1. I note that you simply postulate these things, without giving references or linking to economic data.
2. The introduction of the EURO did not lead to massive inflation, contrary to what you state (without giving economic data ofcourse, because that data would contradict you). Here is a link to inflation since 1998 of the EU member states: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=tsieb060&tableSelection=1&footnotes=yes&labeling=labels&plugin=1
You'll see the inflation is 'normal'.
3. Unemployment indeed has risen. But you consciously present it as if this is due to the Eurozone, by saying "Unemployment within the EUro-zone has skyrocketed". The truth is, unemployment has risen across the entire European continent and you could even say in the industrialized world (because even Japan and USA suffer from historical high unemployment). But not by coincidence you chose to only mention risen unemployment in the EUROZONE. Intellectual honesty anyone?
4. If you would take a second look at the EUROSTAT file, you would again note that inflation was 'normal' and even negative or below average in the last year. This leaves us wondering how you can possible speak of "Inflation has eaten into Pensions and Savings and National Government Spending".
You see? This is debating, arguing based on facts, figures, reasoning. Not just simply postulating stuff and ending your paragraph with "To pretend otherwise is the 'pro-EU' once more re-writing the reality to fit the preferred scenario". It leaves one wondering who the person is that thinks he alone knows the truth and is the single authority? ;)
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116. At 05:39am on 09 Feb 2010, MarcusAureliusII wrote:
...The French are jealous as hell of us...
France is the world's number 1 vacation spot...
Not the USA or China. Figure that out. jealous? ha ha.
Noone is jealous of the USA's rampantly dysfunctional society.
And really all that success as you describe it (ahem! noone is fooled by the economic bla bla of USA anymore by the way) why no national health system? A psychotic society is not attractive. Business finds a good infrastucture attractive. You can keep your grand canyons and rocky mountains because the place is fouled by ignoramuses and bigots who just don't know how to relax into a congenial society.
It is mostly the USAmericans who travel extensively know who the difference and many settle in Europe for good reason. Not least financial stability. All that European money invested in USA and China helps to keep you funny old sausages afloat. I shouldn't let the arrogance of empire make you look too silly if I were you. You haven't identified in your figures how much is actually owned by USAmericans. China, Japan, and Europe, and a few other places might just cut their losses if the USA gets too silly with its "foreign policy".
All the major capital industries are coming up for rethink of techniques and technology. Who needs all that "old think"?
Some places in the disUnitedSTATESofAmerica are still stuck in the nineteenfifties.
I have seen documentary of aid flights being flown into the USA interior to provide orthodontial and basic ophthalmic care for people while some were preaching national flag awareness and were basically spitting on their own people.
A British guy was the pilot and he put ALL his money into those aid flights for the USAmerican poor.
You have an ongoing disaster in the USA.
Want some links to some web sites describing the cities that are dying?
I'll have a look for some... I have them somewhere...
Some pictures look like Haiti on a bad day.
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Nik 136
" I only need to mention that the US, preacher of the free markets, somehow had forgotten AT&T for more than 80 years as an absolute monopoly all over the US. Amazing? Where was the famous monopoly law? Finally in the 80s they decided to act and break it... why in the 80s? "
At that time , America had the best telephone system in the world -probably still does. Technology didn't exist so that two or more companies could work without causing chaos. When it was shown that the technology had finally been developed, AT&T had to give up its throne. Of course, AT&T having had a monopoly for so long didn't want to give it up and fought like hell to keep it. The rest is history.
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Re 136: @Lochraven I have to say I am not very convinced by that. There were no major technical issues between international lines operated by rigid national telecommunication companies in some countries often linked with the military and there were technical issues among private companies? Private companies could as well form an institute of normalisation to handle the issues of connectivity of networks - from there is it all about laying cable and having subscribers.
The only technical issue is that had there been a privitisation (cocs AT&T was public service in all but the name), much of the rural America would not have coverage simply because the cost of laying the lines would not have a quick breakeven period.
Anyway, my main point is that:
...economy is no dogma, whatever works should be left, the rest should go - and whetever worked somewhere will not necessarily be the case elsewhere, and whetever was rejected somewhere could be the solution elsewhere.
Back to our issue on Greece I would say that the whole case is not about the "cook and the oven" (financial numbers) but about the "roasted meat" (economic activity as related to geopolitics in the region).
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eif;
"France is the world's number 1 vacation spot..."
I know. 5 to 7 weeks of paid vacation a year. 35 hours work weeks. And even when they are there...... Do they still take those three hour lunch breaks they did when I lived there? Where did they think they were, in Mexico with sombreros and serapes taking a siesta? And then in August, it becomes official. The entire country shuts down for a month. If I ever saw a Frenchman work, I think I'd go into cardiac arrest from the shock of it. Good thing medical care there is free :-)
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"... We know the UK citizens as sensible people, therefore we may assume that before casting their vote in the 1975 referendum on EC membership, they had read the treaty founding the EC, thereby agreeing to an ever closer union." (Jean Luc, 132)
I think that would in fact be a rash assumption to make. Most people don't tend to have the time to read treaties. And from what I recall of the campaign, the "ever closer union" theme didn't feature strongly, if at all, in the discussion. Perhaps my memories are incomplete (I'm marginally too young to have voted in the referendum), but many other people have said the same thing, and have spoken of a feeling of being deceived.
And why NOT include a reference to "ever closer union" on the ballot paper? If it was such a key component of what we in Britain were agreeing to, wouldn't it have been better to mention it on the ballot paper, for the benefit of those who (for whatever reason) hadn't read it in the treaty or heard it discussed during the campaign?
I think that what all this boils down to is: did our politicians - in the 1975 referendum and subsequently - genuinely seek the British public's fully informed consent to UK participation in the European project, with all that entailed? Or were they merely after a formal "Yes", in the same way that a shady insurance salesman might seek a customer's signature on the dotted line, regardless of whether the customer was fully aware of the terms of the contract or would benefit from them? There's strong evidence - exemplified by the fact that we haven't had an EU referendum since 1975 - that it was the latter.
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@154. At 10:17pm on 09 Feb 2010, CornwallCoastPath
If the UK citizens voted on the referendum on EC membership, without reading the Treaty, that is their fault. It would be serious carelesness on their part. A bit (make that 'completely') like signing a contract without reading it.
The decision on which question would be asked on the ballot paper is a completely internal national affair, therefore if you have complaints about it, you can only address them to your national government (of that time).
This goes as well for your question about other referendums on EU membership post 1975. But it seems you are completely aware of that. That's refreshing.
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Jean Luc (155) - thanks for your speedy response to my comment at 154.
However I don't think you've really addressed the central point I was making - apologies if I didn't express it clearly enough. It wasn't so much about carelessness (I agree with you that people should take the time to read treaties or contracts before committing themselves) but whether there was a genuine attempt to seek the British people's informed consent. If there wasn't, and if, partly as a consequence, the British people's 1975 Yes was perhaps partly based on a misunderstanding, then that has serious implications. It's bad for democracy, because it undermines the principle of honest debate that is a key element of the democratic process. And it's bad for the EU, because it means that the population of one of the EU's largest countries will always tend to have a negative view of the EU - something that people in other EU countries are often complaining about.
For the EU to work and be successful, it needs to have the informed consent and commitment of its people. Any shady dealings, or apparent tolerance of shady dealings (in 155 you acknowledge that the British 1975 Yes might have been partly based on a misunderstanding, but you don't propose anything to remedy this, such as a further referendum) will only lead in the opposite direction.
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Looks like someone didn't like my explanation of why France is the number one vacation spot in the world. eif, was it you?
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Nr. 145, cool_brush_work.
I think that in some ways you are reading too much in what I wrote. I've tried to present some history of political economy and some economic theory in a way that is easy to read here. That inevitably means that I cannot delve too deeply into many subjects. So yes, you are correct to imply that my post Nr. 111 is superficial. Quite honestly, if you want a thorough scientific analysis, you should read books on political economy. Writing such a work here was not my aim and indeed impossible and so you'll have to appreciate that it's an overview. That's also the way I like to look at things, looking at the bigger picture and painting the bigger picture.
Apart from that I sense a feeling of cynicism in your post. I will not call it unfair, because I think cynicism is often justified when it comes to politics and that's what this is ultimately all about. I regularly find myself becoming cynical about things in society. However, I always arrive at the view that though I can be cynical about it and feel bad, that doesn't change the way things are. Cynicism gets me nowhere. Instead, hope does. And so ultimately my conclusion on politics is always: well it is bad in some ways, perhaps in almost any way, but there is hope for a better future, even if it is with falling down and climbing up again.
I could feel bad about people dying in Africa and the immense suffering that some people have to endure while others live the life of gods on Earth. If I would care about all that was bad, I'd become depressed. Yet I don't, not because I don't care enough, but because I choose to look at the positive things and realise that though slowly and imperfectly, things are getting better.
A thing we could get frustrated about to no end is democracy. It is no secret to you, but the world is not democratic. In fact, in a way, nothing is democratic. The world is made up of states who play a game of who is most powerful and has the most powerful friends and thus gets to rule the rest. Capitalism is essentially the same, but then in the economy. From the biggest multinational company to the individual citizen who has to make ends meet, it's undemocratic. What is left of democracy then? The national democracy, where you elect politicians who sell you lies in the election campaigns and turn their backs on you when they're elected. And once elections are nearing again, they do a few popular tricks and all the people around you and you yourself too are stupid enough to be fooled once again. Is that democracy? We're talking here about national parliaments, provincial and munincipal councils. We're talking about governments nationally and locally. This is what the UK is like; whether under Brown or Cameron, it makes no difference. And what the US is like, Bush or Obama, Republican or Democrat, it doesn't matter. Is that then really democracy? Or is it just what we make ourselves believe it is?
So what is democracy? A referendum that is only used by those in power to get backing for a No vote? Afterall, only those who oppose certain policy call for referendums and only when it suits them. Once a popular majority is in favor of something the referendum is suddenly not a good way to decide things (and vice versa). Is that democracy then?
Pretty crappy system huh? But it's what we got and it's better than what we used to have before we got democracy. As a scholar put it after 9/11, "we're crawling towards civilization". Now we can be fed up about it, but that doesn't change anything. We can also cherish what's good about it and live with the hope that it might get better, fairer some day and that until then we're not that bad off. Indeed we can try to make it better ourselves, like our ancestors did too. Fortunately, unlike them, we don't have to starve or die for that.
Yes, you complain that my picture of globalisation or world war is not very pleasant and ignores other options. Could you tell me what those other options are? I'm afraid there aren't any, at least if we may believe our history. Life in this world sadly has only two flavours. Progress or destruction. Conserving and maintaining what is or returning to what once was might seem an option, but if others modernize and develop while you comfort yourself in conservationism, you will one day be conquered. China and Japan hoped that by outlawing innovation, by outlawing guns and by conserving their medieval societies they could avoid the pains development brings. Japan was rudely awakened by the US in the second half of the 19th century when it bombarded Tokyo (then called Edo). Japan realised it had to modernize or the developed powers would colonize it. And develop it did. The contrast with China could not be bigger. China was defacto turned into a European protectorate under the last empress, Xi. Only when Chiang Kai Shek did a coup and seized power in the new Republic of China did China truly wake up. By then it was too late: Japan was on it's doorstep. Let me also remind you of all the peoples that were conquered, killed, enslaved, tortured by the Europeans, the British leading. Did they ask for such a fate?
So what alternative is there to progress or destruction? Does progress have to imply globalisation? Yes. That's what our leaders chose it to be like in the 19th century, that's what they did in the 20th century and that's what they do in the 21st century. That's also what the British government always did. At some point our leaders probably get trapped into some nasty international competition for power and revert back to war again, just as they did in the rest of history. Until then it will be globalization. People who want it otherwise get subjected some day. The choice for globalisation is also not necessarily because our leaders choose to, but also because they're in a collective action game that could be compared with a highway. If everybody else drives in the same direction, you can't go in another direction without suffering serious pain or even death. There's a price to pay to divert from the general stream.
What is that price? Ask the people in North Korea who suffer from starvation, torture and death, or the Cubans. Ask the people in Sudan, in Birma and whatever other country that doesn't go with the flow. The price is high. You won't believe me if I tell you that Her Majesty's Great Britain could also be one of those. But the Chinese and Japansese know it and so do all the people (and their kin and their decendants) that were killed, enslaved, tortured by Britain and the other colonial powers in order to conquer the world. And within the UK, the history of the Scottish, the Welsh and the Irish is one of suppression by English overlords. Remember that Cromwell wanted to exterminate both the Scottish and the Irish for being inferior beings.
And now against this background you're lamenting about how the EU is stealing your cultural identity and how you can't be British, or English, Scottish, Welsh, Northern Irish anymore? Yet you are free, living in peace and safety, wealthy enough to afford an internet connection, you can probably afford decent food and a decent education. There are people who have complained or even rioted for less, even in your own country. Shall we put a few things in perspective here and in proportion to the grim general picture of our world? And tell me: what is that cultural identity anyway? Examples please, of British cultural things and especially those under serious threat by the EU.
Now don't get me wrong. I get upset too when my country has to give up yet another policy area in which she determined her own policy, or rather pretended to do, because in practice she was just following other countries. I hate it too that the level of decision-making is moving up and I feel even less relation to the new people that take the decisions than to the old people in my country's government did. But I know one thing for sure and that is that this is a little sacrifice that everay one of us must make, that individual countries may become weaker, but together we will be stronger. And in a harsh world, where people profit from the suffering of others, where real human beings are treated as mere numbers, statistics and traded for power and glory, in that world, I find it a comforting thought to be part of a strong bastion of power that more or less does what is good for me and even provides me with an opportunity now an then to allow me to voice my opinion.
That is what European Union is about, was about and will ever be about.
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Nik #89
I have read your lengthy assessment of the situation in Greece , relative to the EU . I am not fully conversant with Greek affairs ; but I have lived in Italy for a while and I recognise the same situations there .
The EU lays itself open to abuses and so do member states that take advantage of the EUs invitation to have money for every conceivable improvement in their home country .
Friends of mine were going to buy a Villa to create a country house hotel . They soon discovered that they could have a substantial grant from the EU , for developing tourism . The approach road to my local town was quite small , but was already flanked by half built factories surrounded by weeds as nobody wanted them . I have no doubt built by the local Commune with EU money .
Other friends who farmed in Umbria ; discovered at a late stage that their local Commune had announced intention to compulsorily purchase 20 hectares of their land . The Commune simply posted a notice in their offices ; there was no thought to even write to or telephone the owners . Elections were coming up ; the communist Commune thought to create a new industrial estate , of course with money from the EU . The small rural town already had an industrial estate , that was little used . The Commune intended to purchase the land as agricultural and then sell on sites at an industrial price . I pressed my friends to get the best lawyer in the area to fight the Commune . They did , eventually they agreed to sell the land for an industrial price , but the Commune did not then have access to enough money to pay them all at once , so they had to accept payment over several years .
This may be seen as an example of where the EU offers money for upgrading every facility in member states , it is so open to abuse .
Poorer countries like Greece and former eastern block countries are at the most risk . I have friends in the Czech Republic . I have been so worried for them . When I last visited before their joining the EU , their cost of living was so low . Huge tracts of beautiful and I believe fertile land were in little use or harvests not carried . My friend Yaroslav liked a beer , so we lunched together in one or another of Prague's many pubs . He told me that most of the other people were young men , who had come to the city to find work , as yet without success .
Yaroslav said that people were in two minds about joining the EU .
They were afraid that having just gained indepenence from soviet rule , they were now in danger of similarly losing it to the EU . They were afraid their cost of living would go up overnight beyond their means to survive .
I cannot see any easy way out for Greece or other EU countries who have got themselves into serious debt . The Greeks will not change themselves ; if they are bailed out they will only do the same all over again .
I believe that part of the reason for the Euro was to keep all EU countries in line with one another financially and economically .
Germany was willing to give up the Mark and adopt the Euro so that she could not get away ahead of the others economically . Strong Economy means power and gives the potential for war . As it is Germany still has one of the stronest economies in the world .
Germany has sacrificed it't strength and potential to keep in line with the EU ; I do not see why Germany should be asked or expected to bail out Greece .
The EUs idea of taking in every lame duck country that wants to join will be its undoing . I bake some delicious fruit buns putting balls of mixture on a baking tray . When I put the tray in the oven the heat makes the mixure spread , so all the buns are joined together . If when ready I turned them over onto a cooling wire , they would all fall apart . That is how I see the EU and the Euro was a huge mistake , its potential workings not properly thought through .
WebAliceinwonderland
If we didn't live such a long distance apart , I would invite you to tea , to taste some of my delicious buns and enjoy an animated conversation together .
Last weekend my wife insisted on us having satalite for TV , assuring me that I would be able to watch the BBC news . In fact , we have a beautiful big disk on the roof and excellent TV reception but no BBC , for which we would have an expensive monthly payment . We have about 150 channels covering Asia ; but the saving grace is Russian TV News , seemingly based on the BBC style of presentation and in English language and very interesting worldwide subject matter .
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This comment was removed because the moderators found it broke the House Rules.
Jean Luc
I have been following your discussion with CornwallCoastPath regarding Britains 1975 referendum on whether to stay in or leave the EEC . I voted to leave . I suspect many readers and contributors here were not yet adult in 1975 .
Britain had already been taken into the EEC by former Prime Minister Ted Heath , then defeated in a general election by Labour under Harold Wilson .
The British people had deliberately been kept in the dark as to the further implications of joining the EEC . We knew nothing of the " Ever Closer Union ". It was deliberately kept from us by our politicians , because they knew the British public would not support " Ever Closer Union " .
Before the 1975 Referendum there was a very heated televised debate from the Oxford Union . Even the most strongly against arguments from Anthony Wedgewood-Benn made no mention of it .
At the referendum friends of mine voted to stay in ; believing that now we were in we could not come out . Subsequently , they have said to me that if they had known they were committing themselves to the eventual European Union , they would have voted NO , meaning to leave the EEC .
The British people have never knowingly consented to being members of the Europan Union . British politicians one after another have taken us forward without popular consent . That is why the British People are SO Unswervingly Eurosceptic . It has nothing to do with being little Englanders or hating foreigners ; even if we pointedly do not buy any French goods .
British people are blind to any benefits of EU membership and given a referendum , to stay in or come out ; I think there would be a majority vote to come out . Why should Britain contribute to the CAP to keep French farmers in business , when they dump their tasteless Golden Delicious apples on Britain , milk and eggs .
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Nik wrote:
"I need not say a lot on this, I only need to mention that the US, preacher of the free markets, somehow had forgotten AT&T for more than 80 years as an absolute monopoly all over the US. Amazing? Where was the famous monopoly law?"
Which law are you referring to because in America it isn't against the law to have a monopoly on some product or service.
You sure you want to talk about something you obviously know little about?
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@AllenT2: Yes, I have never claimed to be an economist and I have repeatedly stated that in no way am I specialist in politics/finance/geopolitics. I am an engineer by profession. However, seeing people talking about the financial issues of EU and remaining to that level when much bigger games are at stake is quite like seeing professors in literature professors trying to count how many letters are in the Latin Alphabet so they avoid dealing with their issue.
To answer your question the US law on monopolies is the well known "US Antitrust Law" under which the good-old "Standard-Oil" had been divided back in the early 20th century creating the well known later US oil groups and it was the very same law (not aware of any ammendements - small letters of course) that divided the AT&T into the 9 baby-Bells as they were known but only about 80 years later. Both Standard-oil and AT&T were monopolies. Clearly double standards. As I said, it is what works that counts. Had AT&T been broken in the 1910s, the development of telephony would take considerably longer. In other countries (not to say in the vast majority) without the public sector, telephony might had remained a thing for a few privileged throughout the 20th century.
Back to our discussion I have to state that throughout the 2nd half of the 20th century western Europe had some short of priviledge to be left geopolitcally free to develop under the umbrella of the protection and often ample support from the US. Today that is no more the case. US of 2000 and of course 2010 is not the US of the 1960s and of 1940s when it was a country that produced. Today the US imports. To maintain its power it will have to manipulate. It is quite some time now that the US umbrella over Europe does not protect Europeans from the rain but actually hides the sunshine. There are no magic solutions and nobody said about a total collapse of European-US links. But at some point Europe has to clearly position itself in the changing world and come up with a coherent geopolitical plan. Saying "let US go forward and we follow more or less" is no geopolitical plan.
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Doctuer_Eiffel wrote:
"France is the world's number 1 vacation spot...
Not the USA or China. Figure that out. jealous? ha ha."
I would say it has more to do with France's central location within continental Europe than anything else. In other words, a good starting point from which to see other countries.
It is also one of a handful of European cities where it costs less to fly in to. Those are the reasons I often recommend France, Paris specifically, to my fellow Americans for the start of a trip to Europe.
"Noone is jealous of the USA's rampantly dysfunctional society.
And really all that success as you describe it (ahem! noone is fooled by the economic bla bla of USA anymore by the way) why no national health system?"
There is nothing wrong with America's health care system outside of issues like coverage for preexisting conditions and not enough competition.
I was able to afford to pay my own health insurance as an American teenager with an average job. I simply placed health care coverage as a priority as opposed to other people that would spend their money on needless things.
Most Americans without health insurance in America do not have it because they choose not to have it, even though they can afford it. Some of the numbers of uninsured thrown around also include illegal immigrants that shouldn't be in the country in the first place.
People in European countries with so much anti-Americanism and with their leftist media rarely get all the facts on such stories where it is in their interest to attack and put America down.
"A psychotic society is not attractive. Business finds a good infrastucture attractive. You can keep your grand canyons and rocky mountains because the place is fouled by ignoramuses and bigots who just don't know how to relax into a congenial society."
I'm not calling you a bigot but many of the comments you are making would comfortably fall under the definition of what a bigot is.
"It is mostly the USAmericans who travel extensively know who the difference and many settle in Europe for good reason. Not least financial stability."
People that I run into that refer to Americans as "USAmericans" are those that in every case are the most anti-American you could ever meet. It certainly isn't an attempt to include the official name of the country.
Would you also refer to Mexicans as USMexicans? No? After all, the official first part of the name of the country is the same as America's, the United States of Mexico.
Whether you like it or not there is only one nation in the world with the nationality American. The people from Mexico are also quite happy being called Mexicans, just in case you make it to this part of the world.
As for traveling in Europe, this American lived there for a number of years and maybe even traveled throughout Europe more than you have and as much as I enjoyed my time there I have zero desire to live there again. Does that make me an "ignoramus?"
"All that European money invested in USA and China helps to keep you funny old sausages afloat. I shouldn't let the arrogance of empire make you look too silly if I were you."
It always interesting to see that only America's enemies refer to it as an "empire."
Put aside your bitterness and hatred for a moment and ask yourself why there is European money invested in America.
"You haven't identified in your figures how much is actually owned by USAmericans. China, Japan, and Europe, and a few other places might just cut their losses if the USA gets too silly with its "foreign policy"."
America would survive just fine, as it did in the past when it was much more isolationist.
We also have close relations with Japan and their defense depends upon America.
As for China, the West never should have done business with a country that persecutes, imprisons and murders its own people for simply expressing an opinion. If America never did any business with China that would be wonderful. America thrived just fine without it before.
As for Europe, first off, Europe is not a country. If European countries no longer wish to do business with America then that's fine also. After all, much of Europe has always been historically anti-American anyway. It comes mainly from the resentment and jealousy over America's place in the world and its successes compared to European countries, many of which had so-called empires in the past.
It is the reason why you see so many negative or derogatory comparisons being made to America when any so-called European project is proposed or developed, such as the EU.
"All the major capital industries are coming up for rethink of techniques and technology. Who needs all that "old think"?
Some places in the disUnitedSTATESofAmerica are still stuck in the nineteenfifties."
Right, is that why most of the world's advanced technologies still come from America, including that computer you are typing on?
"I have seen documentary of aid flights being flown into the USA interior to provide orthodontial and basic ophthalmic care for people while some were preaching national flag awareness and were basically spitting on their own people."
Should I be surprised that you are exposed to constant anti-American propaganda in your country?
"A British guy was the pilot and he put ALL his money into those aid flights for the USAmerican poor."
Funny stuff.
Maybe he just wanted to desperately be an American, like many of the wannabe Americans from your part of the world. :)
"You have an ongoing disaster in the USA.
Want some links to some web sites describing the cities that are dying?"
Of course, because you as a foreigner would certainly know more about America than the actual people from there.
"I'll have a look for some... I have them somewhere...
Some pictures look like Haiti on a bad day."
To make such a ridiculous remark like that only goes to show that you have obviously never done much traveling in either country.
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Nik wrote:
"To answer your question the US law on monopolies is the well known "US Antitrust Law" under which the good-old "Standard-Oil" had been divided back in the early 20th century creating the well known later US oil groups and it was the very same law (not aware of any ammendements - small letters of course) that divided the AT&T into the 9 baby-Bells as they were known but only about 80 years later. Both Standard-oil and AT&T were monopolies.
Clearly double standards."
Under anti-trust laws in America monopolies are not illegal. Abuse of that status to thwart competition is.
And unless you have deep knowledge over the differences between Standard Oil and AT&T, which I highly doubt, and considering your own admission of limited knowledge in such areas, I would say you are merely shooting in the dark to try and make a point.
"As I said, it is what works that counts. Had AT&T been broken in the 1910s, the development of telephony would take considerably longer. In other countries (not to say in the vast majority) without the public sector, telephony might had remained a thing for a few privileged throughout the 20th century."
How do you arrive at such a conclusion?
"Back to our discussion I have to state that throughout the 2nd half of the 20th century western Europe had some short of priviledge to be left geopolitcally free to develop under the umbrella of the protection and often ample support from the US."
Unfortunately. A big waste of money if you ask me.
"Today that is no more the case. US of 2000 and of course 2010 is not the US of the 1960s and of 1940s when it was a country that produced. Today the US imports. To maintain its power it will have to manipulate."
If need be it can produce all over again as it one of the very few countries in the world with huge amounts of resources.
"Manipulate?" That's a rather cynical way of looking at business and economics, especially considering that the countries that America does business with the most have only become more prosperous.
"It is quite some time now that the US umbrella over Europe does not protect Europeans from the rain but actually hides the sunshine."
What kind of nonsense is that?
Also, Europe isn't a country, at least not yet. The EU will have to "manipulate" the citizens and governments of European countries a bit longer before that becomes the case.
"There are no magic solutions and nobody said about a total collapse of European-US links. But at some point Europe has to clearly position itself in the changing world and come up with a coherent geopolitical plan. Saying "let US go forward and we follow more or less" is no geopolitical plan."
Those with so-called European or Euro-centric ambitions would do well to stop obsessing over what America does like little jealous and spiteful children.
You can't create something truly great and sustainable with that kind of motivation.
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Caspar Heetman
Re #158
True, I was a tad harsh on the assessment of your # and of course we can only write within limits on here: All the same, I thought the contrasts you led up to, 'Peace or War' and 'EU to match Globalisation' were just too dogmatic to let pass.
I was with you for almost every sentence (especially the cynacism on 'Politics' and 'undemocratic' world) until your argument began to vere into odd, inconsistency:
E.g. "..there is hope for the future. Even if it is with falling down and getting up again.." plus, ".. I choose to look at the positive things.."
Sentiments I wholly concur with and then you inexplicably repeat to paraphrase, '..no other options.. it is peace or war..'!
What happened?
Did the optimist fall down harder than expected!?
Alternatives?
Well, the Nation State is a good starting point - - the idea of binding 27 National Cultures into one centralised mixer where 'democracy' is often dismissed at the whim of 'political-business' leadership/executive and an overmighty, unresponsive EUrotocratic regime seems no optin at all in my mind - - let us not forget Brown, Sarkozy, Merkel etc. are there by the Citizens support for their Political Party and the Policies each Party has promoted, whereas, Msr Barroso and more-or-less insisting 'more EU centralisation', 'more EU oversight', 'more EU regulation', speaks with no authority at all to actually even comment on such matters!
Who is Barroso to pontificate on what is needed? Since when did this fat-cat, over-paid, over-indulged EUrocrat have the right to pronounce?
It is astonishing, they could only get the Lisbon Treaty enacted by the anti-deomocratic methods, duplicitous double-talk (e.g. 'it is not a constitution' by another name and 'no need for Citizen approval') and by the venally self-interested skin-of-Brussels-teeth and already this power-aggrandising, avaricious Brussels apparatchik is demanding more of the pie and the gravy from the EU27!
Alternatives!?
Well, one is to rid EUrope of Barroso and these would-be civil service petty dictators who care nothing for Citizens' Rights and Responsibilities and everything for the procurment by any means, fair or foul, of their own advancement.
A return to the EEC of commonly agreed pan-European Tariffs/Duties, Deregulated Transport movement/Communication systems, and yes, even a form of 'Open Borders' provided Security-Policing-Judiciary are left at National level with an agreed international infrastructure. Most certsainly let us abandon any thought of a European Defence Force: In return by all means have a Brussels based Foreign Affairs department, but responsible for EU Humanitarian Projects. Not another venal Brussels' jobsworth as yet another 'voice' for 27 Nations that gets no cudos from other independent States because the Baroness doesn't and could never represent anything or anyone! At least, not in any genuinely 'democracatic' entity.
Alternatives?
'North Korea' is what you believe could happen to Europeans! Well, of course, as you have previously alluded it did to some extent in the 20th Century. Nevertheless, I would put it to you that if the 450+ million alleged Citizens of the EU27 are denied their 'democratic' Rights & Responsibilities as has increasingly hapened since Maastricht, 1992, then what price 'freedom'? If our bellies are full, unlike the extremely unfortunate Koreans, but our minds and senses are deprived of the Right of Democratic Choice and the Responsibility of Democratic Change then is the European Citizen much different in totality? Are European Citizens held in any more esteem or permitted anymore of a Free-will life by their 'Political' and 'Business' masters as individuals if the EU of Brussels dismisses their participation in the 'democratic' process as a peripheral item!?
Don't write of Civilisation choosing 'Peace' or 'War' without also including Civilised Truths of 'Right' and 'Wrong' in the equation:
'Look how well I treat my Slaves,' said the Roman Consul.
'Look how well Slaves treat you,' replied the Overseer.
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RE 165 @AllenT2, thanks for the reply and comments.
You said on the case of Anti-trust laws that:
“Under anti-trust laws in America monopolies are not illegal. Abuse of that status to thwart competition is”
I say that:
If we talk about the industry for example of collection of fresh milk, pasterisation and commerc of fresh or canned milk, then you are probably right. If we talk about drilling and production of oil or telecommunications I am 100% on the spot. In the real world, there is absolutely no case of any telecommunication company or oil company having a monopoly would ever respect anti-trust laws. Arguments of the style “anti-trust” vs. “monopoly” are for the literature professors not for business analysts.
You asked:
“How do you arrive at the conclusion that telephony would had remained a priviledge for the few for long had it been established by a large number of companies?”
I say that:
“Being an engineer (not even in telecommunications – imagine that there is more!) I can already number a huge list of reasons why the cost of laying the network and implementing the telecommunication technologies by a large number of private companies would be so high that inevitably the market would merge into a monopoly albeit with a loss of time of several decades. One has only to see how costs sky-rocketed in all cases of privatisation of already existing and developed networks and that despite that the new companies had little design and cable work to do which is by far the most expensive part of the job. Imagining that private companies would fare better than AT&T trust is in the sphere of fantasy. US governments simply let AT&T purposefully remain a huge trust-style monopoly ignoring any free market “religion” they were preaching all over the world. We talk about pure pragmatism and good thing they did anyway.
You say on US post-WWII aid on Europe:
“Unfortunately. A big waste of money if you ask me.”
I say:
What money you mean? The dollars printed in the printers? There is absolutely no link of the US dollar to anything on earth, be it gold, oil or the US production base. The only thing that defines the US dollar is the capacity of US to sell it as a standard transaction means. To buy oil you have to buy first US dollars to do the transaction. Of course the US will not just give you “their dollars” but they will run to their printers and print in exactly the same way a fraudster would print money in his home printer. The US made the law in the western block till today and it was easy to do so since everybody accepted that fraud so as to be under the US umbrella. And being “printed money”, the US could just give any amount of money in the same way a fraudster can give any invalid cheque. It goes without saying that the game is more complicated but down to the basics it is up to that.
You said:
“If need be it can produce all over again as it one of the very few countries in the world with huge amounts of resources.”
I say:
Only that by returning to a production-based economy it will eventually (what eventually? In a matter of a few years…!!!) lose to countries with more resources and/or a larger productivity potential like Russia and China for simple geographical reasons. Once a super-power always a wannabe super-power till the very bitter end: the US is trapped in a way: it has absolutely no other alternative than continue to be a super-aggressive power whose aim is to destabilise a large part of the world so that all international trade passes via them, living directly from that parasitic relationship with the world. There is a 4-letter word which starts with P and ends in P and which describes accurately the position of the US in the world.
You said
“What kind of nonsense is that?” to my comment on Europeans under the US umbrella in the 1950s and in the 2010s.
And I reply:
I am afraid that if I take out the likes of UK and some desperate countries in the East who suffer post-communist hang-overs like Poland and Chech Republic, 95 out of 100 Europeans would say it even more bluntly than what I said. Philo-US Europeans in all the rest of the countries are most – if not always - those of the parasitic societal groups (e.g. a banker in Italy obviously adores US when their system enables the existence of fiscal paradises all over the world).
You said
"Manipulate?" That's a rather cynical way of looking at business and economics, especially considering that the countries that America does business with the most have only become more prosperous.”
I say:
AlletT… you have this pre-conceived notion that I (and others) are on pure anti-americanism just out of jealousy or something. I am coming from Greece, a very small country and not at all comparable to the US in any way and not from UK, France, Germany or India and China to be jealous of the US in the sense you think. What I simply say is that anyone is good or bad as much as his geostrategic plans permit him to be so. Right now US holds its ties with the world based on extortion, a very unhealthy relationship with the world when Russia and China are mostly intersted to develop their links mainly through commerce (their turn for extorting will come later). Out of the 3 Russians and Chinese are prefereable for the simple geographical reason that are on the same landmass as ourselves – especially Russians whose economy is directly bound to ours so if we do well they do well, if we do bad, they have also trouble. That is also reflect even in the military of these 3 nations: the only military that is designed to threaten and hit any random country in the world is the US. Russia and China have not shown interest in undertaking actively military operations far from their own borders. US aggression has moved as far as attacking almost directly Russia on 2 occasions (Tchetchenia and Georgia) and that means a lot for the (in)security of just any other country in the world.
And above all, all the above, after listing all the + and the - and making the additions and the subtractions, imply that European countries as it is now lose more than what what they gain out of remaining under the US umbrella.
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Alan T for 2;
All utilities are monopolies or have you forgotten that? It is not practical to have two cable television companies in your area, two water companies, two gas companies, two electric companies. Sooner or later one or the other would go out of business and then where would you be. But these monopolies are hardly unregulated. They are in a special category where government regulators control the prices they can charge, supervise how they spend their money on capital investment and maintenance, as well as salaries. It's a balancing act and they hold public hearings. They must assure that these companies remain financially viable without makeing excessive profits because it is in the public interest. When AT&T was a monopoly it provided the best telephone service in the world bar none. The phones themselves which were all owned by AT&T were nearly indestructable. You could drop an old AT&T dial up desk telephone off the roof of a building on to a concrete pavement and it would almost always continue to work perfectly. Much of the technology we have today came from its research arm, among the finest research laboratories that ever existed anywhere, The Bell Telephone Laboratories. The company was broken up on January 1, 1984 by mutual consent of the company and the federal court under a decision handed down by Judge Green because new emerging technoologies were going to make it possible for the first time to provide alternate systems of communications that could compete with the system that existed. Ultimately this served to drive advances in technology and its implimentation even at AT&T much harder. Today you can get all forms of communications modes from competing companies which not only use different technologies such as satellite, cable, copper, and fiber but whose networks are interconnected together and who both compete and cooperate with each other in very complex ways not obvious to the public. For example, several years ago I needed my land line phone provider AT&T to make a repair to my outside service beyond the N.I.D. (Network Interface Device) which was at their cost. Who arrived to do the work? Verizon, their supposed competitor. BTW, I worked in the telecom industry for 16 years both at AT&T and in the spinoff of Bell Labs that became the research arm of the RBOCs.
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157. At 00:33am on 10 Feb 2010, MarcusAureliusII wrote:
"Looks like someone didn't like my explanation of why France is the number one vacation spot in the world. eif, was it you?"
No perhaps it was a French person who you insulted?
Never judge a book by it's cover. You don't appear to have noticed my deliberate spelling mistake either.
In fact you are entirely predictable in all your responses.
Ridicule, insults, patronising "friendlyness", accusations of jealousy, and after that then what? threats of sanctions if I don't play your game? And then maybe a full military invasion to justify the military budget? Obviously you aren't guilty of all that but you get the jist of my jest about USAmerican "foreign policy" and USAmerican "diplomacy".
You regularly post here with the same thrust on every post and it is invariably the Euro blog. Vested interest? Work for a "think" tank?
(think tanks are as common and useful as website awards)
Jesting aside... really we don't need your military in Europe any longer so rest assured the economic dynamic of USAmerican military industrial influence WILL change. One trick ponies like the UK and the
USA WILL change because change is inevitable.
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Of course it IS only a coincidence that the entire civilian coms network in the USA is owned by a cabal of one particular minority religion. The same one which its members often confuse religion with nationality and others confuse religion with race. Yes absurd I know but how else can one describe these things without falling foul of some politically correct head+bucket+sand.
Who owns USAmerica? USAmericans?
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cool_brush_work
Re: 166
The point you're missing is that your alternatives do not provide us with the vital needs of political and economic security. Aside from that you're really doing no justice to the democratic developments in the EU. I will point out both.
I know that in the UK the belief that the nationstate can still solve their problems is still widely held, but it is a misconception. Being outside of the EU indeed doesn't mean you're automatically poor. And it doesn't automatically mean you're economically vulnerable. Indeed there are many countries that have remained fully sovereign. However, many of these countries have very competitive characteristics, are operating in an economic niche or they have a goose with golden eggs. Take South Korea: high-educated population, relatively low wages (compared to Europe or the US), strong, centralised government, to name a few. Definitly a competitive combination. Taiwan has the same characteristics. Both are also authoritarian democracies. Take Switzerland: Banking secret, politically neutral and with bilateral free-trade deals with the EU. Or Norway: huge oil and gas reserves and part of the European Economic Area. Dubai: Economy built on oil and exploiting niches, now an important financial hub centrally located in the Middle East.
You tell me where the United Kingdom fits in. Does it have niches to exploit? No. The strong point of the UK its the City of London one of the two biggest financial centres in the world. It's big, impressive, but that's about it. It's the cork on which the British economy floats. British industry is plainly uncompetitive, both in comparison with continental European industry and with Asian industry. That's partly due to high wages and partly due to the expensive Pound Sterling. As we've seen in this crisis, once the financial sector is torn down, the UK is in big trouble.
Politically the UK is not that strong anymore either. True, the Prime Minister still sits at the highest tables, but that's more a legacy of the past than current British strength. The Russian economy is already bigger than the British economy, so the UK is starting to lag behind the new great powers. The UK still holds on to its permanent Security Council Membership, but already faces increasing pressure there. If the SC is not reformed, we will see troubles happening there. Militarily the UK has also declined considerably and continues to decline further. In Europe the UK is the number 2, but internationally the UK doesn't have a lot of weight to throw around. The role of the UK in Iraq was clearly to assist. However, the UK is part of NATO isn't it? NATO, the alliance that can't make up it's mind, which has no unified armed force, suffers from an Atlantic division and which is still struggling to find ways to legitimate itself in the eyes of the Americans. But then I've still forgotten the cherished 'special relationship' with the US. Sadly, that's mosly special for British people, much less the other way around. If Britain wants to make a difference in foreign policy, it already can't act on its own, but must team up with France and Germany or jump on the American bandwagon, which is hardly what I'd call autonomy. That is unless you want to define autonomy as the freedom to decide on your own to do what others request you to do.
These are facts and they don't lie. Great Britian is not great anymore, it is increasingly becoming an ordinary state in Europe with the same vulnerabilities that plague every one of these states, the bigger and the smaller ones alike.
I could make such an analysis for France and Germany too and the outcome would be the same. They are losing to the rising powers. The small countries discussed above are all ultimately a plaything of the greatpowers. Taiwan will one day be 'change' in a deal between the US and China. That's cynical, but it's the truth. That's happened throughout all of history and there is no reason to believe it will be different in the 21st century.
Can I prove my case with examples? Yes. The lack of a unified foreign policy is being exploited by foreign powers. The way Russia negotiates with the EU-countries about oil and gas: divide and rule. By clever Russian play, Germany was given the favour of a pipleline of its own, the rest was on its own and without Germany on board, there was no united EU position. Bad for Britain. Good for Germany? Maybe. Until Germany has grown dependent on Russian energy and finds itself being blackmailed by Gazprom and thus the Kremlin. There are many cases such as this one.
China is starting to revert to the same practices and the US has done so for a long time and still does it.
The power of the nationstate in Europe is in serious decline and nothing. Not because of bureaucrats in Brussels, but because the European nation states have become small and individually declined relative to the US, Japan, Russia, China, India and Brazil.
What about the legitimacy of the European nationstate then? In my previous post I pointed out how democracy on the national level is not as democratic as we'd like it to be. Let's compare the UK and the EU then. Take the Prime Minister for example. He was elected by his local constituency. Who is he to assume the leadership of all the UK? Afterall, he wasn't elected by the entire British electorate but only a small part of them. Intra-party politics determines who gets to have what position in the party and in the government. Now if the Prime Minister only held a primus inter paris role, things would be understandable, but he is a powerful figure who can just shuffle his cabinet whenever he wants. Pretty bold for someone with only a local mandate.
I'm steering into very dangerous waters there, however, because I have no expertise whatsoever with British politics. But the above is so obvious, even I can point out how there's a problem.
I'm more familiar with the majoritarian electoral system. In the UK not the popular vote determines the outcome of the national election, but the local outcomes. Suppose that in the upcoming election Labour loses as the forecasts tell us, but does better than expected. Suppose the popular vote for Labour becomes 40%. the Conservatives win the election with let's say 52% and the remaining 8% is for the LibDems. As a result of the district system, however, Labour doesn't get 40% of the seats in parliament, but less. The Conservatives instead get to dominate the parliament. It is even possible that a party that has no majority in the popular vote still wins a majority in parliament. There are numerous scientific studies that have tried to answer the question whether that is democratic. It certainly leads to easier decising-making, which could be good. But is it democratic?
Let's also approach this from a different angle: is it democratic to ignore large parts, sometimes nearly the majority of the electorate or even a majority and take decisions based on a majority in parliament alone? The majoritarian electoral system, one can show mathematically, structurally leaves major parts of the population 'voiceless'. Their votes are structurally lost in the local competitions and therefore they are never represented. It is not as bad as in the days before universal suffrage was applied, but still some people's votes do not count, while other people's votes do count. Is that democratic?
Now let's look at the European institutions Let us start with the European Parliament. It is elected based on proportional representation. In other words, every vote counts. The country-parliaments in the UK are also elected that way, I believe. Each memberstate has a number of seats allocated roughly based on its population size. The only major problem in the EP is that it has no European parties and no EU-wide elections. You're always voting for a national party that is part of a party-group in the EP. But you can't vote for a Belgian Liberal, to take an example, even if you favored him or her above your national representatives. On the other hand, at the European level, the party-groups do have their own party programs for the whole party-group. In the composition of it all parties that are part of it get to determine the content, so it's composition is ultimately fair. The national parties take the content down and turn it into their own party programs and defend this in EP elections nationally.
Whether you like it or not, it's more transparent than in the UK and most other countries in the EU, the proportional system is much fairer, and to get your fair share of the seats based on your contituency's (member state) population is way more democratic than the district system in the UK. That the majority of the electorate in the EU doesn't vote is their own choice. There is a right to vote, not a legal duty. And if Westminster politics received as much attention as EU politics, the turnout for the British national election probably wouldn't be very high either. That is ultimately a responsibility of the media. In this respect the BBC is one of the leaders, but we're still far from regular broadcasting of European politics.
Being elected fairly is one thing. Has the EP the powers we associate with a parliament? Traditionally this was not the case. The EP could first only voice an opinion. After 1987 it gained a veto over some legislation, but after 1992, it became a genuine co-legislator with the Council of Ministers. Today every political scientist acknowledges this. Since the Lisbon treaty the EP's mandate has been expanded to all policy except foreign and defense policy. A major step. Interesting are also the recent developments. Last summer we've witnessed the first lection campaign for the Commission president. Barosso had to genuinely campaign for his approval by the EP. It wouldn't surprise me if we'd see a real election campaign with more than one candidate next time, since last summer the leader of the Liberals in the EP, Guy Verhofstad, ex-prime minister of Belgium, was hinted as the opposition candidate and received support from many of the Socialists and Greens. Consider also that the EP has held hearings for every individual commissioner and has de facto obtained the right to sack individual commissioners. In addition to that, just this week I heard in a news report how the EP has effectively obtained also a right of ammendment. You won't find all this in the Treaties. That is not awkward, in most countries formal politics doesn't follow the constitution in many respects.
What the EP is developing is what we call a primacy of parliament. It is pulling power away from the Commission and the Council and placing it in the hands of directly and fairly elected representatives. This process is still going on as the development of this week indicates. If these things develop the way they do it will only be a matter of time before the EP also claims the right of initiative, which the treaties place in the hands of the Commission. Formally the Commission will retain such a right, but practically the Parliament will tell the Commission what to do. You could compare this political bending of the rules with the position of monarchs in several European kingdoms. Formally he or she decides on policy, in practice it's the parliament in this kingdom.
If the EP is exerting more and more control over the Commission, that also changes the way we may evaluate the Commission. Alright, it is not elected, but it is subject to democratic control. It's president, who may only be sacked by the EP and not the Council, must campaign for his vote of approval. Although the commissioners are appointed by member states, the EP votes them in individually. It is absolutely not perfectly democratic, but these are major improvements.
That leaves us with the Council, where national ministers engage in horse trading and diplomacy. The Council is not democratic. The ministers represent afterall their governments, not their electorate (unlike US senators, who represent their electorate and not the state government). The only positive element here is perhaps that the weighed voting will become fairer in the future as a result of the Lisbon Treaty. votes will be weighed by population and the criterion for a majority will be relaxed from 75% to about 50% of the vote, if I'm right. There is also a second treshold to prevent the Big 3 members states from being able to push through any legislation they jointly agree on. Still, it remains diplomacy and not real democracy.
Taking things together, however, with the EP becoming a real, fairly elected parliament with all the powers we associate with such a parliament, The Commission becoming subject to more control from the EP, the EU is much more democratic than most people say it is and it is still becoming more democratic. That's an immensely positive step in the right direction. Of course there will be decisions and legislation out of the EU which we hate. I hate the legislation completely banning the production and sale of incandecent lightbulbs, which I love to use in chandeliers, to name an example. But is was democratically passed. It was not a clean process, with powerful industrial and environmental lobby-groups operating side by side for once, but that would not have been 'fairer' or more democratic nationally.
There is progress. The EU makes us much stronger internationally and has in recent years become a lot more democratic and is still becoming more democratic. It is a new vehicle that will replace the outdated nationstate, which no longer lives up to the pretentions it has for its population. In addition, cultural identity is not preserved in nationstates, but by adequate subsidies for things that distinguish one culture from another. From monuments and cultural sites to traditions and festivities. That is still possible. I will remain critical of the EU, but I cherish the overall improvement it has brought and still brings.
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Monsieur le Docteur.....hahahahahahaha. So pompous, so French. They even had the perfectly named president, Monsieur Pompy-Poo. I saw his visit to China on French TV around 1973. He was at a banquet. I never thought about or realized how disgusting it can be to wactch people eating. That's what they had to show their audience, people eating.
"No perhaps it was a French person who you insulted?"
Em-poss-see-blah. Is it possible to insult a Frenchman?
"Never judge a book by it's cover. You don't appear to have noticed my deliberate spelling mistake either."
Sorry, I mistook it for illiteracy.
"In fact you are entirely predictable in all your responses.
Ridicule, insults,....... and after that then what? threats of sanctions if I don't play your game?"
Oh my, it occurred to me that if I do that I might be mistaken for being French myself. Horrors. You mean the way Chirac warned aspiring entrants to the EU that if they publically opposed France's position on the invasion of Iraq he would block their entrance to the EU? You mean like those threatened sanctions? Sacre Bleu!
"Jesting aside... really we don't need your military in Europe any longer so rest assured the economic dynamic of USAmerican military industrial influence WILL change."
Hey eif, were it up to me I'd have them all move out tomorrow. In fact had I been around and in charge, France would still be occupied by the Germans. Hopefully the US military will change for the better. I'm hoping the success of drone aircraft will lead to robotic soldiers so we can fight all our future ground wars with machines from the safety of our own territory. Bang! Bang! War reduced to a video game...but only on one side.
"USA WILL change because change is inevitable."
Everything changes. France will change too. Paris will become the capital of Eurabia. French people will learn to speak Arabic because that will become the national language. And all French women will be required to wear the hijab, the veil, the burkah. Let's see if they can make a fashion statement out of that.
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Everything you say confirms my thoughts. The French are my neighbours and I like the French. I personally don't care if you think of yourself as Israeli or USAmerican. Everything you say makes me like the French all the more.
I have German, French, English, USAmerican, Canadians, and Greeks in my family.
No Israelis.
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I think it would be a good idea if all corporal punishment were banned completely and made illegal in USAmerica. Child bashing is grotesque and the results are obvious.
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Nik wrote:
"If we talk about the industry for example of collection of fresh milk, pasterisation and commerc of fresh or canned milk, then you are probably right. If we talk about drilling and production of oil or telecommunications I am 100% on the spot. In the real world, there is absolutely no case of any telecommunication company or oil company having a monopoly would ever respect anti-trust laws. Arguments of the style “anti-trust” vs. “monopoly” are for the literature professors not for business analysts."
You have your opinion on how anti-trust laws *work in practice* in America but you are still not providing any detailed and factual information and history of the two companies you mentioned and how it supports your opinion.
Anti-trust laws regulate businesses, including monopolies. How you feel that is an area for "literature professors" instead of those in the field of business is beyond me.
"US governments simply let AT&T purposefully remain a huge trust-style monopoly ignoring any free market “religion” they were preaching all over the world. We talk about pure pragmatism and good thing they did anyway."
You may be an engineer but I don't see anything that you have written so far that makes me think you have a good handle on the subject to make the claims you have made.
"What money you mean? The dollars printed in the printers? There is absolutely no link of the US dollar to anything on earth, be it gold, oil or the US production base. The only thing that defines the US dollar is the capacity of US to sell it as a standard transaction means. To buy oil you have to buy first US dollars to do the transaction. Of course the US will not just give you “their dollars” but they will run to their printers and print in exactly the same way a fraudster would print money in his home printer. The US made the law in the western block till today and it was easy to do so since everybody accepted that fraud so as to be under the US umbrella. And being “printed money”, the US could just give any amount of money in the same way a fraudster can give any invalid cheque. It goes without saying that the game is more complicated but down to the basics it is up to that."
This kind of bizarre response, especially having nothing to do with my comment, is only showing that your remarks and opinions are supported and motivated by a huge chip on your shoulder regarding America, which doesn't take much to notice anyway.
"Only that by returning to a production-based economy it will eventually (what eventually? In a matter of a few years…!!!) lose to countries with more resources and/or a larger productivity potential like Russia and China for simple geographical reasons."
You obviously don't know much about geography or otherwise you would know that America very likely has the best combination of resources, fertile lands and weather to sustain itself better than any other single country in the world, especially considering her population. You would also know that China is just an insignificant hair bigger in land area than America. America is the world's thrird largest country.
"Once a super-power always a wannabe super-power till the very bitter end: the US is trapped in a way: it has absolutely no other alternative than continue to be a super-aggressive power whose aim is to destabilise a large part of the world so that all international trade passes via them, living directly from that parasitic relationship with the world."
I've have already said that the countries that America does the most business with have only thrived, including, I'm sure, yours. Where does your "destabilise" part come in?
"There is a 4-letter word which starts with P and ends in P and which describes accurately the position of the US in the world."
Sorry, I don't know it and nor do I care to know it going by how your remarks are are developing.
"I am afraid that if I take out the likes of UK and some desperate countries in the East who suffer post-communist hang-overs like Poland and Chech Republic, 95 out of 100 Europeans would say it even more bluntly than what I said. Philo-US Europeans in all the rest of the countries are most – if not always - those of the parasitic societal groups (e.g. a banker in Italy obviously adores US when their system enables the existence of fiscal paradises all over the world)."
Sorry, still nonsense.
"AlletT… you have this pre-conceived notion that I (and others) are on pure anti-americanism just out of jealousy or something. I am coming from Greece, a very small country and not at all comparable to the US in any way and not from UK, France, Germany or India and China to be jealous of the US in the sense you think."
Why would the fact that you are from Greece make you less anti-American or jealous? In fact, it would only increase the chances of that being the case as anti-Americanism in Greece is well known and quite common. I have many Greek friends here in America who would say the same thing.
"What I simply say is that anyone is good or bad as much as his geostrategic plans permit him to be so. Right now US holds its ties with the world based on extortion, a very unhealthy relationship with the world when Russia and China are mostly intersted to develop their links mainly through commerce (their turn for extorting will come later)."
How is it "extorting" all those countries that are thriving from doing business with America? You are not making sense.
"Out of the 3 Russians and Chinese are prefereable for the simple geographical reason that are on the same landmass as ourselves – especially Russians whose economy is directly bound to ours so if we do well they do well, if we do bad, they have also trouble."
If you'd prefer to have close ties to countries where people are persecuted, imprisoned and murdered for simply expressing their opinions then I feel sorry for you.
"That is also reflect even in the military of these 3 nations: the only military that is designed to threaten and hit any random country in the world is the US."
In the name of freedom and defense then I have no problem with that. Your freedom today to attack America is a direct result of America's willingness to fight for freedom.
"Russia and China have not shown interest in undertaking actively military operations far from their own borders. US aggression has moved as far as attacking almost directly Russia on 2 occasions (Tchetchenia and Georgia) and that means a lot for the (in)security of just any other country in the world."
The Soviet Union certainly did. Today's Russia is still very much of the same attitude as the Soviet Union but simply without the huge military capabilities it once had.
China, until fairly recently, didn't even have any kind of military that could support such excursions so no surprise there. Actually, it still doesn't have that capability.
Those are two parts of the world where millions of people were put in prison and murdered for simply expressing opinions regarding freedom and democracy. Yeah, those are the two countries you want to stay closest to. That makes a lot of sense.
"And above all, all the above, after listing all the + and the - and making the additions and the subtractions, imply that European countries as it is now lose more than what what they gain out of remaining under the US umbrella."
My opinion is simply that America wasted huge resources defending a part of the world, and still does, that in many ways is even more dangerous than the Soviet Union ever was. At least the Soviet Union never pretended to be our friends.
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MarcusAureliusII wrote:
"Alan T for 2;
All utilities are monopolies or have you forgotten that?"
My response on that subject was to someone else and to try and keep track of just that one response is hard enough so I'll pass on responding to your post too.
Also, why are you writing my name like that? Doesn't seem very friendly.
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Doctuer_Eiffel wrote:
"Who owns USAmerica? USAmericans?"
What is wrong with you?
The country is officially called the United States of America, or simply America. The people from that country are called Americans. Is that too difficult to grasp?
The least you could do is to properly address the country, and the people from that country, that you are trying your best to insult.
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177. At 10:43am on 11 Feb 2010, AllenT2
A nation noted for its stocks and shares owners is more likely insulted by an ignoramus who hasn't heard of stocks or shares.
Where do you think the stocks and shares owners live?
According to your naive response it would be appropriate to assume you think they are ALL USAmericans.
Who owns USAmerica? USAmericans?
How did you get to be so ill informed? Does it take a lot of practice to miss the point so blatantly? I do not insult USAmericans but I certainly pull the rug from under some USAmericans bigotry and ignorance in the same way I would for people of ANY nation.
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