The Euro: A bail out for Greece?
Greece will not ask for a bail-out. It can't do that, an economic adviser close to the Greek Prime Minister told me today, because such a request would undermine the credibility of its plan to reduce its deficit.
However, key advisers in Athens believe that you can't buck the markets, and that Greece needs to show it is backed up by a pool of money.
The markets are already factoring in that there will be a bail-out or rescue.
Intense discussions are going on involving European officials. They include Jean-Claude Juncker, the head of the Euro Group and Jean-Claude Trichet, the President of the European Central Bank. European finance ministers were holding emergency talks.
However, there have been conflicting voices during the day. German officials were quoted as saying there was no urgent need for a bail-out and 'no decision on such help' is imminent. What is being looked at is whether Greece could have access to a line of funding that would reassure the markets.
The head of the National Assembly in France said 'the issue is not to let Greece go bankrupt.'
There are divisions between officials and countries on whether the International Monetary Fund is better placed to rescue Greece. Some European officials believe such an intervention would wound European pride.
Treasury officials in the UK say they do not expect Britain to contribute to any bail-out package. It is a matter for the eurozone, and not the UK.
However, Britain is willing to put up a large sum to support the IMF with its fund to help struggling economies.
What officials in Athens fear is that if there is now a delay in announcing a bail-out, the markets will turn once again on Greece.
I'm 
~RS~q~RS~~RS~z~RS~46~RS~)
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"However, Britain is willing to put up a large sum to support the IMF with its fund to help struggling economies."
What, struggling economies like ours?
There has to be a line drawn at some point; UK taxpayers have a right, in my view, to expect the taxes they pay to be used in their best interest. In so far as helping struggling countries is beneficial to our economy as well, I'm happy for us to undertake this course of action.
Care must be taken, however, that we do not go so far down this road that we start using money that we desperately need ourselves to support these economies. At the moment, with significant job cuts and service cuts expected in almost all areas of the public sector, it may be worth re-visiting the concept of how much money we are realistically able to contribute, without harming the interests of those who contributed the money in the first place.
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My understanding is that the US is against an IMF loan. However, French sources say that IMF advice and guidance would be welcome. Those same sources indicate that the UK has shown unwilling to support an EU-wide backing of Greece. Who/what to believe?
Let's get this straight, though. This is all about US hedge funds trying to destabilise the Euro; using Greece's frailty as their entry point. The news is, they've now taken their loss and departed the market, realising that the Eurozone countries just won't give in so easily.
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I think it's like a company about to go bankrupt. You look for some other company willing to purchase it, assuming its customers and its debts as well. The new board of directors is going to impose a CEO with methods which may not fit the culture of the company, but hopefully he/she will be able to put it back on the way to prosperity.
In the case of Greece, the possibilities of finding a buyer are limited. There are 26 other countries in Europe, but only a few have the means to carry that purchase. Maybe a new conglomerate (England, France and Germany together for example), could consider it. In all cases the new CEO will have to come from them.
As long as the corrupt and incompetent Greek government stays in place, nothing will work.
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Britain has enough financial problems of it's own without even considering aid to Greece or anyone else. Charity begins at home, Labour's ideal may be world socialism, but surely somewhere in the Labour party there is someone who will put the people of Britain first. The Euro zone got itself into trouble, so it is up to them to dig themselves out. The Greek people like the British are badly led and thus open to the influence of the EU which cares little for anything except it's Federal agenda.
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I see no evidence to suggest that being in the "EU" has helped the UK or Greece.
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"The markets are already factoring in that there will be a bail-out or rescue."
The lesson governments got from the failure to bail out Lehman Brothers a year and a half ago is clear. If and when the time comes for the bailout and push comes to shove, if the bailout isn't there, the market will collapse suddenly, severely, and in this case irreversibly. On the other hand, if Greece is bailed out, markets will expect the same from all of the other Eurozone economies as well. The magnitude of it will severely impact the financial recovery in the stronger EU economies. This is the chickens coming home to roost, the damned if you do, damned if you don't dilemma Europe has created for itself. Any way you slice it, the consequence of a fundimentally unsound structure of enormous size bode ill for the day when its underpinnings give way to one unsustainable stress or another.
MariaTee;
"I think it's like a company about to go bankrupt. You look for some other company willing to purchase it, assuming its customers and its debts as well."
First of all it must have some assets worth acquiring as a reason for someone with money to want it even at a loss. This at least holds out hope that one day there will be profit in it. Secondly, those acquiring a bankrupt organization must find in it a willingness to submit to different management that will not merely continue the failed policies that led to bankruptcy in the first place. In the case of Greece, it meets neither criteria.
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I read elesewhere and today that as part of the Greek austerity package includes an increase of the universal age of retirement for public pension to be raised 61 to the dizzy ceiling of 63.
It certainly goes to show that life in Greece was tough and going to get tougher for Greek pensioners! No wonder that Greek pensioners are on the frontline in public sector worker marches that took place today in Athens and elswhere in Greece .... having to get really, really old to collect your pension must be really, really hard to take.
Having to retire at 61 must be one of those much sought after EU-wide benefits of membership of the EU that (previous/current) UK governments (and the EU) forgot to impose on the British.
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In fact, if the British people are really, really kind then we could have a nation-wide charity drive and drum up some more money for the IMF to donate to Greece.
That way the Greek government could reduce the impact of the austerity package on Greek pensioners and lower the retirement age of the Greeks to 60 - that would be the kind of British thing to do!
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I think the British should have a national BBC-led "Greek Pensioners in Need" program designed to raise the British National Insurance Stamp rates and Taxes.... we could have the Greeks back to being able to retire at 61 in no time flat - if the will was there!
I am sure Richard Curtis could help organise something along those lines and Bill Nighy is old enough to look like a Greek pensioner to front the television adverts to promote the cause!
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Frenchderick 2
In my opinion your second paragraph is exactly right.
This is all about financial power.
The Hedge Funds and their friends woke up to the fact that they were facing a power struggle on two fronts. The White House and the European Community which were going to act in coordination.
They launched a concerted attack on what they saw as the weakest point (Greece) of the weaker power (the Eurozone).
It looks as if they struck too late - but only just!
The headline in today in the Spanish newspaper 'El País' reads:
"The EU prepares the rescue of Greece
The countries of the euro zone are moving for the first time in its history to save one of its members".
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As a footnote.
The paper states quite clearly that the members of the Euro zone are in favour of an Euro solution while the British Government is in favour of IMF intervention. Apparently the American Administration are not in favour of an IMF solution.
[Unsuitable/Broken URL removed by Moderator]El País Newspaper (in Spanish)
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Marcus the A has declared that the world was saved by taking money from the public sector and giving it to the private sector (banks) to be supported by future taxes. That is an interesting conservative view, but conservative now means supporting the corporate state and any list of prejudices one may have..
This will all work out, because there is no other option. The bankers are just waiting for the right interest rate to be accepted and they will have another another client state that will look the other way while they create new schemes to defraud the depositors and taxpayers.
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The countries of the Euro zone will have to react on the Greece crisis. Maybe GB will have to react too. However, any outside support get rid of to the Greek deficit will come with a list of economic and political demands. - So the German media ARD tonight with a most likely analysis.
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ghost of a szechuan chicken;
"Marcus the A has declared that the world was saved by taking money from the public sector and giving it to the private sector (banks) to be supported by future taxes."
Marcus said no such thing. In fact quite the opposite. Marcus said that the US government should have gone into the banking business itself competing with private banks to make loans available to businesses that merited them at slightly higher rates than commercial banks would have loaned when private banks wouldn't or couldn't provide loans to other industries. Marcus was opposed to the bank bailout and felt that the banks that made bad investments should have been allowed to go bankrupt, the US government remaining in the banking business until new banks without "toxic assets" could be chartered at which point the government would have withdrawn from that industry returning it to private hands. Marcus was opposed to the bailout of AIG. AIG's demise would have crushed Europe which is why European governments begged President Bush to save it. So far that policy just saving AIG has cost American taxpayers nearly 200 billion dollars. Allowing the banks to sink or swim on their own would have put all of the pain where it belonged, in the hands of the shareholders of the mismanaged banks and newly unemployed reckless bankers. Marcus now feels that the only way out of the current situation is for the US government to print massive amounts of money to pay off both its own and other American old debt both public and private and to keep that money inside the US with very high protectoinist tarrifs. That should not happen until America's European competitors are totally bankrupt and effectiely out of business. That may not be far off in the future considering the financial condition of the European Union. RIP Europe.
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The EU fanatics in Brussels and National Governments can dress it up anyway they like, but a few things are becoming obvious about this Greek fiasco:
1) Greece, a member of the much vaunted 'strength in unity'/'cooperation-coordination is the key'/'one-size-fits-all' EUro-zone is an economic basket-case in dire need of a Financial transplant.
2) France, the leading EUro-zone promoter along with almost all the rest of the 'zone16' is in such economic difficulty it cannot help Greece which leaves the mighty Germany to pick up the tab if it is to be a strictly EUro-zone rescue-package.
3) The despots in Brussels would like the additional funding for Greece to come from all 27 so as to ease and share the burden despite the fact EU Nations outside the EUro-zone have the same economic difficulties as France etc.
3) It is as plain as the sun in the sky in or out the EUro-zone the Nations of the EU are going to be obliged to contribute - - the UK, almost on its financial knees is suggesting it will donate to an IMF bail-out package for Greece - - thus ending any doubt at all the UK Government has sold the Nation to the European Union and part of the knock-down price is it is able to use the fig-leaf of the IMF to cover up for its fawning attachment to Brussels.
Gordon Brown - - economic mastermind and Prime Minister - - more like an EU satrap conniving at his next honorarium from Brussels!
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GOS, Marcus does have a point. I've been following his more lucid views, and I believe his position is reasonably well expressed in his last post. Has has maintained his principled stand against bailing out failed businesses with future taxes.
Now his answer is to simply print money (as the UK is doing), and indeed that is precisely what greece should be doing. Who does that hurt? The creditors. And why is that just and proper? Because the creditors should have been careful about who they lent to in the first place. Why is that important? Because if creditors know they will be bailed out by future taxes from working people, they have no reason whatsoever to check the integrity of the people (governments) to whom they are lending money.
I think everyone need to stand back from the jargon here and take a cold, simple view of what is being proposed for Greece, by the EU.
Greece can't pay its debts. The creditors do not want to lose their PROFITS from money lent to this bad debtor. And so the creditors are going to the people of Europe and saying "You should pay us our PROFITS."
And there is nothing the people of Europe can do, because the governments are controlled by the creditors.
That is the situation. Either the taxpayer loses, or the creditors lose their profits. Just as in america, the creditors are holding the taxpayers to ransom and threatening doom and financial meltdown and the end of the world if they do not get their profits.
What we need now is some real leadership, and some leaders who will show the creditors what happens when you terrorize and threaten the taxpayer for financial gain.
Not only should all the creditors be made to face up to their poor lending policies, they should be stripped of their wealth and titles, and possibly incarcerated, for having the audacity to hold the taxpayer to ransom.
What other choice is there?
If we continue to allow the creditors to plunder the taxpayer, pretty soon the workers in Europe and the USA will face a situation exactly similar to that faced by workers in the stagnant and putrid soviet union.
Why work, when there is no benefit to you for working? When the state takes everything from you, what reason is their to work hard?
the plunder of the people by bankers is no better than the plunder of the people by the communist party. Both the bankers and the communists control the market and fleece the workers by using taxation as a weapon of robbery.
Sooner or later, we all need to start treating bankers as conspirators in a criminal and treasonous enterprise against the people. We must, one way or another, dislodge them from control over the political process.
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DemocThreat
Re #16
Literally, right on the money with that one!
Truly remarkable exposure of how little has changed after Centuries: Despite all the so-called progress the exploitation of the Citizen goes on and the EU is just one more in a long, long, long line of 'Big-Business/Big-Government' to pass responsibility for their mistakes to the Citizens.
Here in the 21st Century the poor, straightforward, ordinary worker is still being told they 'must pay' for the inefficiency and dubious practises of supposed Financial/Economic 'experts'.
Mind you, to some extent the Citizens have only themselves to blame as they have had that same very long time to learn their lesson and should know 'big-Business/big-Government' (e.g. from a Roman Empire to the EU) is never, ever a good idea or to be trusted to act in the real interests of ordinary Citizens.
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"I see no evidence to suggest that being in the "EU" has helped the UK or Greece. "
I see no evidence to suggest that the lack of evidence suggests evidence
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Thank u Menedemus for all your comments
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CBW
"Greece, a member of the much vaunted 'strength in unity'/'cooperation-coordination is the key'/'one-size-fits-all' EUro-zone is an economic basket-case in dire need of a Financial transplant...
..and share the burden despite the fact EU Nations outside the EUro-zone have the same economic difficulties as France etc."
So you're saying that regardless of eurozone membership, the problems are the same? So the euro is not really to blame, is it?
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dt
"Now his answer is to simply print money (as the UK is doing), and indeed that is precisely what greece should be doing. Who does that hurt? The creditors. And why is that just and proper?"
And you know who this hurts even more? - The population of that country. It makes a whole nation comparatively poorer. The British pound lost more than 20% against the euro. No recession could destroy value at such pace.
P.s. Most creditors of a developed nation are its own citizens.
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dt;
When the UK prints pounds, that's called monetary policy.
When the US prints dollars, that' also clled monetary policy.
When Greece prints Euros....that's called forgery.
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spot on MAII
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dt #16;
"Sooner or later, we all need to start treating bankers as conspirators in a criminal and treasonous enterprise against the people. We must, one way or another, dislodge them from control over the political process."
I agree. Let's start with the ones in Switzerland. You know, the ones who launder drug money, shelter money stolen by despots, fund illegal arms sales, steal money from victims of genocide when surviving relatives can't prove the money deposited with them by the victims is rightfully theirs. What should the punishment be for such criminals in their conspiratorial treasonous enterprise?
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From BBC;
"Greek Prime Minister George Papandreou has said he will "take any necessary measures" to reduce Greece's deficit."
http://news.bbc.co.uk/2/hi/europe/8509058.stm
Will Papandreou have the political will and power to impliment a plan? Will he get the support he needs? Will the plan work? It all looks very dubious to me.
BBC describes Greece as having a "Soviet style economy."
http://news.bbc.co.uk/today/hi/today/newsid_8507000/8507597.stm
This is what the EU took on as an acceptable price for the hope of political power. Now it will have to live with the consequences. If you are an EU citizen and don't like it, complain to the architects of this mess. Don't say I didn't tell you this would happen.
Greek deficit is 12.7% of GDP, debt is $419 billion. Gross National Income (GNI) is $121 billion.
http://www.nationmaster.com/graph/eco_gro_nat_inc-economy-gross-national-income
It looks hopeless.
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As of yesterday Germany lost its premier position as the global leader in export manufacturing to which lofty role China has now ascended.
If Germany does adopt a plan to bolster the Euro (it being the only EU nation with sufficient economy to have the financial muscle to do so) then it actually will prove to the German people (the majority of whom did NOT want to give up the Reichsmark!) that their politicians made a big mistake in supporting the Euro adoption against their wishes.
Furthermore, the other problem that has to be addressed sooner or later by the Eurozone nations is that, in their rush to adopt the Euro as a common currency the wealthy nations forgot to impose requirement on the smaller uneconomic nations to adopt economic chnages to bring their economies into line with that of Germany - rather than do that the smaller nations simply spent their new found wealth on home comforts, hedonistic fripperies and increased public spending..... the consequence of that failure in forward-thinking might mean that Germany will act now to protect the Euro (not to protect Greece per se) this time around but, unless Greece, Spain, Portugal and Ireland introduce steep decrease in their spending on uneconomic liberal-socialist public services and thus squander what little benefit they get from having a shared currency then there will be another future collapse of the Euro (sometime in the next 10 years I envisage)and, the next time around, the Eurozone nations may find Germany is unable to - let alone unwilling - to commit to further financial support for the Euro.
The Eurozone nations might do better to consider a two-tier European currency trading standard - having two currencies as it were - a premier league currency and and also-rans league currency for the woeful economies that benefit from EU and Euro membership but do not actually contribute wealth to Europe but merely suck other wealthier european nations dry through EU funding and tax-funded subsidies - Greece always having been such a basket case with its net income reliant on tourism and EU funding and it outgoings spent on a expensive welfare system and bloated public service system.
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@26. Menedemus wrote:
it actually will prove to the German people (the majority of whom did NOT want to give up the Reichsmark!)
The Reichsmark disappeared defacto in May 1945. The bundesmark (D-mark) appeared in June 1948 and in the following decades DDR also had its own mark. There is of course no majority in the Federal Republic for a Reichsmark.
The Federal republic is not interested in having Greece as a colony. However, the Greeks can expect some hard political claims in connection with the rescuing operation.
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@25 MarcusAureliusII
Not that it makes much difference however Greek GNI shown on the BBC is something like $320 billion still less than $400 billion debt but more than $120 you mention.
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DTHREAT AND MA,
You are right..long term..but you can't in a democracy let people suffer..greatly and cause a national depression..panic then spreads again
The US of A needs to support Greece this time..and ..THEN prepare a Nasty realistic solution on these govts. oops I mean corps.
But the US may have fatigue after Haiti..poor Haiti..uhhh ohhhh 4 Greece if EU Slacks off
The accounting needs to happen , yes, but look at sanction's effects..only the lower paid people are punished ...
lesding to
HUGO CHAVEZ eeeeeeeeeeeeeeeeeeeeekkkkkkkkkkkkkkkkkk
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Gheruando
Re #20
I agree, No, it is not the 'fault' of the 'EUro' that a ridiculously overhyped 'zone' of togetherness was supposed to boost economies, save on costs, revamp financial systems and offer a previously unattainable stability that would buck the 'Markets'!
No, it is the fault of the 'one-size-fits-all' EU enthusiasts in Brussels: Regardless of the reality of how World Currency Markets operate and the diverse levels of European National Economies within the EU27 they thought they could just 'club' together (because according to the mantra 'unity-is-good' - 'individuality-is-bad') a bunch of volunteer Nations!
Thus the checks on entry were limited and the chances of the few wealthy Nations finding themselves responsible for the majority less well-off and less efficient National Economies was always a possibility if/when a cyclical Economic downturn/recession inevitably came along.
I do not 'blame' the EUro for the faults of Greece's Government anymore than for the problems of the UK:
However, the idea the UK or any other non-EUro-zone member should contribute to a 'bail-out' of a EUro-zone member Nation is just another example of 1) very poor Economic-Fiscal policy by the EUrocrats, and 2) an unrealistic but typical EU acquisition of decision-making that is rightly the responsibility of National Government.
Why would the UK outside and British Public who had no say on the EUro-zone policies be made to fork out for the misjudgements of those inside?
The idea is a ridiculous attempt to suggest "1 for all and all for 1" among the EU27 is paramount when the EUro-zone certainly does not operate in that manner.
Let me put it this way: If Germany-France etc. (though in France's case it is far more likely to need a 'bail-out'!) expect other non-zone to step up and assist then why not the reverse? Why not Germany-France stepping up to assist the non-zone UK, Eire etc.?
Afterall, is it 'all for 1' or not?
Actually since Maastricht etc. makes the 'bail-out' illegal (see Stability & Growth Pact), and, as per usual the axis-of-ill-intent, Paris-Berlin-Brussels will cobble together a 'cheat-compromise' to save Greece and the 'zone' from the debacle.
Only one problem there is the 'Markets' do not take kindly to such dodgy Financial manoeuvres!
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Frenchderek
Re #2
"...news is, they've (US Hedge-Funds) taken their loss and departed the markets... the EUrozone countries just wont give in so easy.."
Hmm, if a 'week is a long time in politics' for a politician then with today's technology a second or 2 is a 'lifetime' of lost 'value' for a Currency that has no Economic-base!
You may be right, but I suspect the 'Markets' are taking a cool look at what is done for Greece before they again pile in and the rest is just not so easy to predict...
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@30 CBW,
I agree with you this time the UK should stay out of the Greek rescue "thing" it is a eurozone issue, it should be solved by eurozone members. If one day "god willing" we join the euro, then we can be expected to both have a say in it and also benefit from it and help others if needed.
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Despite my typographic error in naming the German currency, I still contend that the majority of German citizens were against giving up the DM for the Euro at the time of adopting the ECU. They would have n o doubt thought it stupid to give up a strong recognised currency for the Euro but I do accept that Germans are, almost by nature, very pro-EU and without that support the EU would never have come about. However, as a separate matter, the Euro was a political adventure for Germany and it is my contention that the majority of Germans were not to keen on the adventure of joining the ECU at the time that the matter was up for consideration in Germany.
Now that the Euro crunch has arrived, the financila clout of Germany is now being demanded and the question must be asked as to whether the Germans actually wish to spend their wealth on supporting the Euro as one thing and then ALSO see their own quality of life diminish subsidising Greek and their unsustainable social and welfare systems - indefinitely - is another thing altogether.
It is reported today that the Spanish economy shrank by 0.1% in the last three months of 2009, making it the last major EU economy still in recession. At the same time pressure on the Portuguese economy continues as that national economy is seen as the next wak link in the overall strength of the Euro currency.
Do the Germans really want to then have to also support the Portuguese, Spanish, Irish and then, perhaps, Italian economies as those economies are going to come under sustained pressure. I suspect the Germans will not be too happy seeing their wuality of life reduced as German wealth is set asside to guarantee the debts of nations that have used the benefits of EU subsuidies and the adoption of the Euro to sustain over-bloated social welfare systems and bureacratic public services instead of deploying the additional funds into developing stronger and more viable manufacturing and productive economies which would have prevented the present events confronting the Eurozone politicians and financial experts.
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It is my personal view that the Euro was always a far better project for all Europeans to engage in than political union through the EU. However, it my conviction that that Euro came into existence without sufficient regard to the diverse nature of the various national economies and the fact that some of those national economies were too weak to be allowed to be part of the Eurozone.
Unfortunately for the Euro, the politicians wanted the unity that Euro membership brought so the project went aheaad regardless of the risks and the current events became almost inevitable as anything that politicians think of as being a good thing inevitably turns out poisonous to the supposed beneficiaries.
One must always be fearful of politicians and their grand designs - they are like wolves in sheep's clothing.
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Gheryando wrote:
"dt
"Now his answer is to simply print money (as the UK is doing), and indeed that is precisely what greece should be doing. Who does that hurt? The creditors. And why is that just and proper?"
And you know who this hurts even more? - The population of that country. It makes a whole nation comparatively poorer. The British pound lost more than 20% against the euro. No recession could destroy value at such pace.
P.s. Most creditors of a developed nation are its own citizens."
You know, those two claims are simply is not true.
1. When the currency drops in value, exports become more attractive to overseas buyers, leading to a revival of industrial work in the export sector. Imports become more expensive, leading to a revival of domestic activity where local goods and services can then compete. And in any case, the population have a choice between ever higher taxes and more expensive imports. I know which one I would take, every time.
2. Most creditors of a developed nation are large institutional investors. And in any case it MUST be the creditors who suffer when loans go bad. There is really no choice on this issue. Eliot Spitzer says it best when he states that nobody ever washed a rental car.
That is the fundamental issue. If creditors can keep going to the taxpayer when loans go bad, they will have no incentive to stop making bad loans.
In a very significant way, the entire credit crisis that has just transpired in the USA was brought about by behaviour that was reckless enough to suggest open fraud. You had banks insuring each others debts in order to repackage them and then sell them to the market as A grade derivatives. They were A grade because they insured by banks, but they were insured by banks because banks were trying to sell them off. And it was also the banks who were making the loans to people who couldn't afford to repay them. And then repackaging them and selling them to a market duped by the insurance deal.
If you and I did that sort of thing, we'd be in jail for fraud. Conspiracy to defraud is a crime, for real people. But when aristocrats do it, it isn't even an actionable civil wrong. They get their money back from the taxpayer when it all unwinds.
And so.... it will happen again. And again. And again. It is the system, it is what the system does.
That is why the creditors must pay, in the final analysis, and it is why they must pay with everything they have in the material world. If their is no cost to these sorts of behaviour, and only benefits, of course it will keep happening.
Again, it is worth listening to Eliot Spitzer about the absurdity of the recent political noise about the need for "regulation". We already have all the regulation we need. It just doesn't get applied.
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@Menedemus,
without any doubt the answers are yes to all those questions you asked. Yes it does benefit Germany and the UK and everyone else for that matter if the countries you mentioned as well as the countries of eastern Europe get help and investment to improve their living standards and become consumers of our products. If you think about them as people that more or less have the same desires as ours then it stands to reason that they will want to buy the same things we do and then our companies sell them things we make here. That is the idea behind it. It appears that you hold one view of how the world should be and you can't make the leap forwards to see what the world is going to be.
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Lets suppose Greece defaults on its debts - it will not be the first country to do so, the world did not stop turning on its economic axis when other countries defaulted. Greece (and indeed Portugal and Ireland) are small economies, a default by them could easily be absorbed without much hardship for the rest of the world.
The problem is really about two things:
1) Euro loses credibility - I do not buy this argument. What it means is that lenders should look more carefully at which countries are issuing Euro debt, as they would do so with companies.
2) Italy and Spain follow. This is the real problem. Spain is a decent mid sized economy and Italy is one of the big boys. If they default everyone has big problems. If I were the EU I would make it clear to the market that Italy and to a lesser extent Spain would be supported (as would France and Germany) but every other economy in EU is on its own. Technically UK should be lumped in with France Germany Italy and Spain but given we are not in the Euro I see no reason why they would support us and we do not need it as we can simply print more pounds.
Greece is a classic example of a "olive state" socialism. They have spent decades expanding their public sector without ever considering how to pay for it. Subject to one point, I have no sympathy for them and have no problems with them having to be subject to years even decades of austerity and even poverty to pay for their binge. My one area of sympathy is the EU social chapter - Greece must be allowed to cut its social costs to match its ability to pay.
I do not subscribe to the notion that the olive states lack the work ethic of the protestant north. I have not done business in Greece or Portugal so cannot comment but I have done a lot of business in Spain and Italy and the level of professionalism and hard work is just as high as in the UK - at least in my experience.
I must compare Ireland and Greece. Ireland got themselves into trouble, have not whinged about it or asked for EU rescues, but got on with taking the measures necessary to get themselves out of the hole. They are far more deserving of a helping hand than Greece where the population seem to believe that they are owed a, very generous, living by the rest of the EU
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It is hardly surprising that the United States would like some say in how the IMF uses its money, it's by far the biggest contributor.
When the General de Gaulle asked the Americans to remove their military personnel from France the Americans replied 'do you mean the dead ones as well'? President Sarkozy profoundly appreciates the 'dette éternelle' owed to the UK.
The United States is far too patient with our continental European friends.
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I agree Gavin that Greece cannot ask for a bail out. This would lead to a situation where financial markets would be in disarray. I have been reading http://notayesmanseconomics.wordpress.com this morning and like his suggestions for a way out of this mess.He too feels that political dithering would be bad but also feels that much more fundamental reform is required for both Greece and the Euro zone as sooner or later problems inevitably surface.
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ChrisArta
Re #32
Just so long as 'we', i.e. the UK/England Citizens have a real democratic 'say' in whether or not the EU and/or EUro(zone) are what they wish for their Nation/s then I agree wholeheartedly with the premise.
In all honesty I do not think the 'anti-EU'/'EUro' vote is anywhere near as strong in the UK/England when the full, dispassionate view of benefits v losses are put to the Citizens.
IMO, it is the shere hypocritical-effrontery and bloody-minded undemocratic manoeuvres of successive Conservative & NuLab Governments since Maastricht that has done most of the damage to the image of the European Union in the UK/England Public's mind.
Couple that with the colossal nerve of the likes of Barroso and von Rompuy pontificating on what is the "only way forward for EUrope" as if they are anything more than hired factotums and the British Public not surprisingly smell a very venal, overweening, centralising ambition that does not sit well with these Islands' historical-cultural evolution.
The EUro as a European Currency may well prove to be a better outlet as Menedemus has suggested - - than the anti-democratic Brussels based political set-up - - which ('East' referendums to join, not withstanding - - and how many of those have had a change of heart judging from EP Turnout!?) no reference to any pan-European Citizens' Vote since Maastricht shows any genuine appetite to go forward with at any level.
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@Justin150
Well said!
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16. "Democracythreat."
Well said.
They should already be hanging from their yardarms in Monaco and the Caymans.
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Lets put in the discussion some more points:
BACKGROUND FACTS:
1) Georgios Papandreou, Andreas Papandreou, Giorgakis (little George) Papandreou... a family that was establised in post-WWII by British bringing them from Egypt that "was destined by God" to rule either as a government or in the 1st-line opposition for half a century. Giorgakis is in politics since mid-80s and was considered even by party-members close to his father as "incompetent" and "without a touch with reality" and "uninterested in Greece's affairs" till 2-3 years ago. PASOK part as usual (all parties do it, PASOK are the champions) got votes mainly via door-to-door favour selling (offering "pull-some-strings" services) and thanx to the largely inncapable ND government that had a frail majority in the parliament and saw huge opposition in every move (even so, still largely incapable).
2) Papandreou or not, the socialist PASOK party rulled most of time in the post-dictatorship Greece. Even in opposition, PASOK still controlled most of the public sector and famously could fight-off any measures taken by the (anyway largely incompetend and corrupt right wing) ND party and then 1 year later take the same (and even more!) measures without a single man going down to demonstrate.
3) In terms of corruption PASOK holds the championship. In terms of "numbers cooking" PASOK is the first who taught the practice. ND is a big contester too, nontheless. PASOK is universally accepted as the party that instilled the omnipresence of corruption in all levels of governship of the country.
4) Funnily enough, since the early 90s and after the 80s rhetorics of as-if anti-american Andreas Papandreou (yet a US citizen! - one wonders why did he have that rhetoric that acted directly against Greece), PASOK a socialist part became increasingly a pro-american party and incredibly the right wing ND party approached the... Russians! One has thus to the earlier anti-american stance of PASOK in the same light (was it asked by the US itself maybe? I ask: maybe?). Such things happen!
DETAILS:
5) It is under the PASOK governemnt that the Aggelopoulos industrialist family won the bid to organise the Olympics in 2004. Nice, but who was going to pay? Was Greece in need of fiestas? Or of state of the art swimming installations? Not to mention that the Olympics passed 3 times (3 times!!!!) their original budget mainly due to - what else! - security issues, in a post-2001 era!
6) The PASOK governemnt led by Kostas Simitis was in parallel involved into the huge scum of the stock market that with the aid of the government rose alongside a deliberate lowering of 0 of the traditionally high banking rates (thus inciting people to make the move to the unknown), then in 2000 in a matter of days suddenly a large percentage of Greeks saw themselves being downgraded by 1 financial/social category, often by 2 or more!
7) Throughout the period of 1997-2001 the PASOK govenrment was cooking numbers so as to get in the "Euro" (but why the EU had not seen this back then?).
8) As an opposition the PASOK party, then led by actual PM Papandreou, went on to oppose every single measure proposed by the ND party including very reasonable measures such as the unification of social security institutions (in Greece every little professional category has its own social security - a kind of mafia-like protectorate that hinders any control and management of the whole).
9) The previous - largely incompetent - ND governement saw opposition in every move and with a frail majority they did even worse. However they managed to sign some HUGE agreements with Chinese and Russians.
a) The Chinese project is all about Chinese buying the operations of main Greek ports, restructuring them and making them a main door entrance of Chinese products in Europe. Such a project has the potential to render Greece a central point of the Eurasian commerce - a huge upgrading of the economic and geostrategic position of Greece not only in Europe but in the greater region. PASOK was of course - what else - supporting the demands of the Port Union workers to cancel the agreement (why? Chinese are socialists too isn't it?), in other words it wants to cancel the agreement.
b) The Russian project is about the realisation of a big gaz pipeline connecting directly Russian Black Sea shores to Bulgaria (EU country) and from there on to Greece which can easily pass it on to Italy and the rest of EU. It is a project of monumental importance for Greece in both financial and geostrategic terms. PASOK reaction was more or less a direct opposition of the projet if we take into account that Papandreou even refered to "environmental reasons" (really, that is a black humour joke now!). Note that in parallel the then Bulgarian opposition (now in government) spoke similarly. Note that both Greece and Bulgaria saw paralell grave troubles in December 2008 (but only Greece was shown on media across Europe), not to mention the similarity of the inflamming reason (but that is another deep discussion...).
CURRENT FACTS:
10) So the ND government by summer 2009 not able to work anymore quit. And here comes Mr. Papandreou (note a parallel change of leadership in Bulgaria (partner to the pipeline project).
12) Suspends the works of the Russian-Bulgarian-Greek pipeline project
13) Suspends the works of the Chinese involvement in Greece's ports
14) Re-corrects the Greek deficit to 12,5% : BUT HOW? Among others by doing the international oddity of deciding to pay loan interests (for old loans this is a hige sum of money) in 2009 for 2010 when all other countries would wish to pay these interests a year later not a year earlier! Why? Cos the (mainly US)p investors asked for it.
I do not even need to tell you that right now the current government is ready to take grave measures, as-if "social measures" that will just have the direct opposite effect on the Greek economy.
My opinion is that the 100% of the measures "for the economy and against the society" and the measures "for the society against the economy" that Mr. Papandreou aims to take are actually serving only the US, not Greece and not the EU. It is simply another way to attack Greece and all the links (the EU) behind it in place of having to send Turkey to a military attack like in 1996, in 1987, in 1974 and in 1966 (various events of different background of course...).
Make out your own opinion on all that.
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When a nation gives up control over its currency and its borders, it has in large measure lost its sovereignty.
menedemus;
"Furthermore, the other problem that has to be addressed sooner or later by the Eurozone nations is that, in their rush to adopt the Euro as a common currency the wealthy nations forgot to impose requirement on the smaller uneconomic nations to adopt economic chnages to bring their economies into line with that of Germany"
Greece, Portugal, and the other weak economies will not come up to the level of Germany, Germany and ultimately France, even possibly the UK will descend to a level much closer to Greece. That is because this money is not being used for new investment in production of wealth that will compete openly on a world market but to subsidize failed socialist systems where the privileges and luxuries of wealth are considered a birthright but the responsibility to produce that wealth to pay for it doesn't exist. In fact not only is that culturally incompatible with these countries but they do not have the infrastructure for it and place low priority on creating it. As China and India have worked themselves up out of poverty through productivity, the EU by and large when taken as a whole has relaxed its way down from a position of wealth and will continue into decent into poverty. One by one the social safety net will disintegrate with serious political consequences and social instability. The process of redistribution from the more successful countries especially Germany to the poorer ones like Greece has entered a new and more massive phase. Out of necessity to support the Euro in a time of crisis from the perspective of markets, the process will of necessity have to be rather rapid. From each according to his ability to produce wealth to each according to his need to meet the political demand to consume it.
"It is my personal view that the Euro was always a far better project for all Europeans to engage in than political union through the EU."
Creating a single currency without a single political entity which has sovereignty over it has produced the chaos that now exists. Greeks will fight to keep control over their living standards and maintain them at the unrealistic level their productivity doesn't support. The difference including the deficit it already incurs will be absorbed by Germany just as it absorbed the economic burden of East Germany when it reunited. This would be unbearable at the best of times and were it only one country it has to effectively subsidize but in the dire stratits the world is in, the inability to impose protectionist tarrifs without retaliation by its major trading partners beyond the EU (that would be a disaster for an export driven economy) the burden of the other PIGS will just prove too much. Germans will have to tighten their belts, pay higher taxes, higher prices, lower their own standard of living. You have to wonder how far it will go before they tell their own government they've had enough of the EU and the Euro and want out. So far you hardly hear a peep out of them. The pain just isn't great enough yet but it will be. At that point with the prospect of the final collapse of the EU and the Euro, we will see if ultimately they will not be allowed to regain control over their nation, their currency, their lives, and the political structure will prove it really is the EUSSR it appears to be. One welded and wedded united superstate living in impovrished tyranny forever.
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@ 40 Cool Brush Work
"no reference to any pan-European Citizens' Vote since Maastricht shows any genuine appetite to go forward with at any level."
What about Spains and Lexembourg's votes on the Constitution?
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Unfortunately, socialists have a rose-tinted view that the common good of all is well served by the spreading of wealth, This is typical of socialists who always have grandiose schemes about how other people's money should be spent and only run out of idealistic dreams when the money runs out and they have to start borrowing and creating enormous debt and inflation.
In the United Kingdom, we have just seen a perfectly profitable UK company, Cadbury, taken over by an American company, Kraft. As is common with such a takeover, it was immediatley declared that job losses would be inevitable. Strangely enough the profitable company, Cadbury, already had plans to close a manufacturing plant at Britol in the UK and move manufacturing to Poland where manufacturing would be cheaper and they could do so legitimately under the auspices of the EU regulations. Kraft will simply take over the profitable company and have already accepted that the pre-existing transfer of manufacturing would go ahead.
Such transfers of employment are seens as a benefit of the UK and Poland being in the EU. What a joke that is!
The British worker loses his/her job/income and a Pole will get a job/income at a lower rate than paid in the UK. Cadbury will still make wealth for the financiers, the shareholders and the UK government (and for the EU) but it is quid pro quo for the employment levels - for every worker shafted in the UK there is someone who benefits in Poland but that is not really wealth redistribution just employment redistribution!
Wealth does not grow on trees as Socialists believe but it does grow out of investment by shareholders and investors. Companies which create wealth will move manufacturing from one country to another not to benefit anyone other than the investors.
If Greece benefits from investment and employment is transferred from Germany - it will be at the expense of German workers jobs. When that happens, the individual German will want to blame someone for the loss of their job to a Greek(or a Pole, or a Spaniard, or even a Chinese) and they will want to blame the rose-tinted spectacled socialists of the EU and their ilk - all of whom have an idealistic utopian view that all is right with the world if you throw enough of other people's money at it.
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Justin150 wrote:
"Greece is a classic example of a "olive state" socialism. They have spent decades expanding their public sector without ever considering how to pay for it. Subject to one point, I have no sympathy for them and have no problems with them having to be subject to years even decades of austerity and even poverty to pay for their binge."
Yes, that is true. Greece has been very badly lead by its elite political class. And now let us move one step further in our analysis.
Who else is to blame in this scenario?
After all, which reckless creditor lent the money to these reckless spenders?
Who was is that failed to check the credit worthiness of the Greek politicians?
Who was it that put so much public money at risk by lending it to corrupt and misguided politicians in Greece?
It was Brussels. The wise men and women of the EU elite.
And they did not just fail to due their due diligence in Greece. They failed in Latvia. They failed in lithuania. They failed in Portugal. They failed in Spain. They failed in Italy. They failed in Ireland. They failed in Poland. They failed in France.
The failure of the Greek government is limited to Greece, but the failure of the ECB and the Brussels self appointed elite is spread wide and far across the whole of Europe.
I knew this four years ago, after witnessing the corruption first hand in Lithuania. Walking around public development project and talking to regional government leaders, it became obvious that the corruption associated with EU money was so big it had become the norm.
The EU has been handing out public money to the friends and confidants of its own elite families for decades. It is utterly, utterly corrupt.
And now the ECB and the EU elite have gone running to their pet political leaders in the member states, clamouring for more money to keep their crooked game going a while longer.
Sure, let us blame olive branch socialism for the failures of the greek government. That is one half of the problem.
But it takes two parties to make a bad contract, and the scale of the failure by the brussels elite is matched only by their hubris and lack of accountability before those who must pay for their lavish privileges.
If the greeks are guilty of olive branch socialism, the brussels is guilty of old school theocratic feudalism, and the grinding poverty and darkness that brings upon the lower orders of humanity.
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Europe LISTEN
Don't get into the trap
Greek goverment is enemy to both Greek people and EU.
Don't give them any help that will help them increase their undemocratic power on Greek people.
The Greek regime -all parties, mass media etc participate in this- is controled by Russian and China agents that destroy on purpose the Greek economy.
It sounds crazy but this is the case.
The reason is to undermine EU, and control Greece geopolitically as base for economic (see Pireus port given to China, pippelines etc) and military invasion.
Only agents of those two countries can have safe bussines activity in Greece.
Kokkalis for excample an ex Stazy agent according to East German files is the favourite of all parties, and no one bothers with the fact that is given Billions of Euros of public money with scandal agreements.
The puppets of China and Russia destroy economy on purpose, so blame EU to naive Greek people and present China and Russia as ''savors''.
To do so they break the economic and cultural connnections with Europe in every way they can find.
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Giorgos, listen. How is it we (Russia) break Greek economy and economic and cultural connections with Europe in every way we can find?
?
Never heard (here) of any such intentions, and overall we don't hear much about Greece. Turkey, Sothern Asia states, Cyprus - are often in Russian blogs, news, but of Greece we like, as well as forgot - alas.
Do you mean the tube we want via Greece? It's not focused on Greece at all, simply a planned route that involves many countries on the go, to end up in Italy, with who Russia is friends. How will our tube hurt you. Economically it definitely won't. It won't quarrel Greece with the EU either, because it'll supply many EU countries, and the more choice of tubes and gas to Europe, from all ways possible - Nabukko included - the better. It's long been forecasted that Europe will swallow whole Northern stream gas, and whole Southern stream gas, and whole Nabukko gas, and still there will be place for additional demand.
Unless of course all energy consumption in Europe gets very very much economical and modernised a decrease several times.
Russia does not plan to re-locate you LOL out of Europe or the EU in particular elsewhere :o)))
I am sure and mainland Greece and your 2,000 islands will stay where they are, and, how to say, very good and all.
Why aren't Germany and Italy scared of our tubes? Serbia isn't either, though much smaller than you are.
On behalf of China can't say nil. No idea what their interests are in your area. Must be also, to sell something. We are interested to sell gas, China apparently is also iinterested to sell something. They make it all, what not, can be searching for ports for partners indeed. It is not enough to be making something, one also has to deliver it somehow.
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WA;
"I am sure and mainland Greece and your 2,000 islands will stay where they are"
Really? I heard that with global warming melting the polar icecaps and sea level rising Greece will float away :-)
China sees Europe as a large market for it inexpensive manufactured goods. Europe cannot compete with China. Just look at how cheap labor is in China and how few regulations there are. China can manufacture shoes, appliances, clothing, electronics and sell them in Europe far more cheaply than Europe can manufacture them for itself. If other things don't bankrupt Europe, China surely will. Someone has to pay for those 5 to 7 week a year paid vacations and 35 hour workweeks French workers enjoy. Unemployment insurance for life at full pay Germans enjoy.
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Benefactor
Re #45
Spain and Luxembourg did Vote positively for the EU: It was indeed for the 'EU Constitution'.
Now, if you can point me in the direction of the 2nd Referendum held in those Nations on that 'constitution', or indeed following the 'negative'
referenda results in France & the Netherlands, as the Citizens of Eire were obliged to do over the Lisbon Treaty I will concede the EU/Brussels does follow some 'democratic' processes in equal measure with EVERY EU Member Nation?
You see, rather like the fault-line running through the principle of the EUro-zone in which a Member of the zone makes mistakes and ALL 27 are asked to pick up the bill - - there should not be differing rules and divisions: Either a Referendum result stands or it does not, or alternatively it is understood by everyone that when a 'result' suits the EU-Brussels it will be accepted and when a result does not suit EU-Brussels it will be deferred.
How is it Spain & Luxembourg's votes were nullified by France & Netherlands' votes?
Could it be the EU rules insisted EVERY Nation had to ratify or the 'constitution' would not be introduced - - well, that's what EU-Brussels would like its Citizens to believe - - however, as any Citizen who cares to consider it for a moment soon realises, the reality was France & Netherlands as very large, important 'founders' of the EU (Lux with less than 350,000 voters simply is not on the horizon except as the seat for the ECJ) had a lot more clout than relative newcomer Spain. A similar story with Eire: It wan't a new member, but its Citizens are NOT from the elite inner-circle and therefore subject to any political ploy the EU-Brussels cares to throw up in order to enforce EU-Brussels' demands... in Eire's case the Lisbon Treaty.
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MA, with this global warming as it goes, one would think that the steam behind many engines that ? drive? development of CO2-free energy makingg will expire. I mean the interest will be smaller.
And only economic reasons will stay, behind the new means' of obtaining energy development.
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#33. At 10:22am on 11 Feb 2010, Menedemus
It was only in September that a majority of appr. 90% of the German voters confirmed the German EU politics, membership, Euro, Lisbon treaty and the rest of the arrangement.
Do not get fooled by the debate on this blog. The Federal Republic is a representative democracy with a quite constant political landscape and the EU policy is so far unquestioned.
Coming to realities: It is now clear that France and Germany is prepared to defend the Euro, also if it includes the support of Greece (however it is coming with political demands). There will be pubs in Germany, where it will be less popular, but the parliament will endorse this step.
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Mathiasen and Menedemus:
Re #53 & Re #33
"..September.. 90% of voters confirmed German EU politics.."
Hmm, that must be some sort of National myopic record!
Only 2 months earlier in July 2009, 43.3% of eligible German Citizens took part in the only genuine Elections referring to the European Union - - the EP Parliament.
Strange how you can , "..get fooled by the debate on this blog.." If you do not look up the "...realities.." and rely on the wishful thinking of the 'pro-EU' lobbyist!
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#54. cool_brush_work
Not that I think it will make a difference, but your audience are the British voters. Within few months they will have the chance to vote against the British membership of the EU.
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Mathiasen
Re #55
No, my 'audience' is those who read these BBC Blogs which includes Danes who live in Germany.
Though firmly 'anti-EU' myself I do not think it will have much input to the upcoming UK General Election, and, this may surprise you, nor do I think there is much, if any 'majority' of British Public opinion in favour of withdrawal from the EU.
I suspect most British Citizens share much the same view as Germans and millions of other Europeans on the EU: It is not the 'EU' they actually envisaged and for so long as National & EU leadership go on largely ignoring the Citizens' views it will not have the support it needs for it to become the democratic, validated, mandated supra-National entity it once claimed as its intent.
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CBW
"It is not the 'EU' they actually envisaged and for so long as National & EU leadership go on largely ignoring the Citizens' views it will not have the support it needs for it to become the democratic, validated, mandated supra-National entity it once claimed as its intent."
Where did it claim this is 'it's' intent? Source on that?
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Jean Luc @#57
Perhaps the authors of the ECC founding Treaty of Rome and the use of the particular phrase, "... Ever closer union...", as a declared intent within the treaty, envisaged that the proposed ECC (which later became the EU by amendation) be undemocratic, unvalidated, unmandated and not be a supra-National closer union?
I must admit, that if that were the case, then they have certainly got now what they envisaged with "ever closer union" back then! ;-)
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Mathiasen wrote:
"Coming to realities: It is now clear that France and Germany is prepared to defend the Euro, also if it includes the support of Greece (however it is coming with political demands)."
Yes, the Euro will be defended. But will it be saved?
The confidence of the pro EU brigade is touching. One likes to see that positive belief in the soldiers of the thousand year reich.
But will they win?
Confidence is one thing. Debt piled upon debt piled upon debt is another. It means taxes piled upon taxes piled upon taxes. So let us say the bailout saves Greece. Then what?
Spain needs a bail out too. And it knows how to get one: force the Eurocrats to choose between default of a member state debt and getting the german people to bail them out.
And after Spain, Portugal, Italy, Ireland and all the rest.
You see, the fundamental problem with the EU is that it doesn't work. It hasn't worked. It has failed, and now all that the market is waiting for is the timing of the last hurrah.
The entire edifice is based on the insane kenyesian dogma that you can defeat debt by creating more debt.
Now that can work in SOME circumstances, but it is not a universal truth. Spending debt to create growth only works where the proposed investment has the potential to create more growth than the investment requires in payback.
An simple example is useful: the nuclear power plant in Lithuania.
When it was built, the region badly needed electrical power if it was to develop its heavy industry and living standards. Now the cost of the nuclear plant was high, but the returns were higher still. The massively increased economic output of industry, combined with the longer working lives of the people, generated growth in the economy well in excess of the investment. Hence, kenyesian economics worked in that instance. Indeed, debt to build power plants in undeveloped regions generally works. Such is the potential of electricity.
Now consider the EU investment. They provided loans to SHUT DOWN this power plant. I'm not joking. That is a fact. The EU actually loaned money to lithuanians so that they could study (determine or invent) all the bad things about the existing power plant, with the view of shutting it down and building another french one in its place.
Not only did the EU wise men pay people to find reasons to shut down a power plant, they also made other funds conditional on the power pant being shut down.
Result? No power plant. Massive costs to the local economy, in addition to the costs of the debt.
That is just one of many, many examples of EU projects which were based not on investments to create growth, but rather spending to create politically correct activity. Or to create incomes for french and german companies who were owned by families involved in the political elite of the EU.
The ideological belief was that simply by spending money, the EU bankers would create economic growth.
In this respect, they understood less about real economics than Karl Marx, and therefore they often made far worse investment decisions that the communists in the former soviet union. Marx may have misjudged human nature profoundly, but he was not entirely reckless with investments of capital. He understood capital investment and return.
And so, in purely economic terms, the EU has failed.
Let me state that fact again, so those who still think has a chance understand. IT FAILED. Note the past tense.
The events we are discussing are not in the future, they are in the past. They happened over the past two decades, more or less. The EU elite created a whole heap of money, lent it out in order to create economic growth, and they failed. They did not create economic growth. What they created was huge governments full of corrupt and idiotic party members who thought spending money that belongs to common people was an unqualified good, regardless on what it got spent on.
The structural deficits of debt and massively bloated regimes in the EU are not "a problem" the EU faces now. They are very rightly described as the scorecard for the entire EU project itself. they are the consequence of the EU, not an obstacle for it to overcome. They are the fruit of the EU elite's grand plans, not an unforeseen and foreign difficulty.
Hence the cruel absurdity of the EU elite going on television and lecturing Greece, and of the utterly ridiculous spectacle of the member state politicians telling the market that everything will be alright.
It was the EU elite who created the modern Greek economy, and nobody else. And it is the market telling the member state politicians that nothing will be alright, because there is no more money left in the barrel and loans are due to be repaid.
The only way the EU can endure is to force taxation and labour upon the people in ways that resemble the former soviet union. Vast numbers of folks will need to be effectively slaves, so that the waste and ridiculous excesses of the superior party members can be sustained.
But then, what other sort of government has ever been the result of rule by elites, with no democratic accountability?
Feudalism in the age of the corporation is still feudalism, and rule by the aristocracy has always resulted in utterly grinding poverty for the masses, cruel taxation and forced labour.
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i think what is happening is speculation on the Euro,shorting on the Euro i.e. betting that it will go down in value by making the weakest economies appear weaker than they are.Greece at current debt levels was a prime target for this kind of behaviour.Greece is partly to blame,but,the EU should also take responsibility to make trade more favourable to all it's member states.The EU seems to have no plan to help develop it's member states along what the country is capable of doing.Besides,most of the EU states live on handouts from the USA,much as they might deny it.The EU should also be very careful,because should living conditions in Greece become so bad,that, there is no advantage to being in the EU,Greece can simply leave the EU.You can't introduce austerity measures that make the Greek people hungry peasants,civil unrest will happen,and,besides,the 25million Greeks in other parts of the world,would force her to leave the EU,than let her suffer.People forget,Greece does not rely on the EU,Greece has been around for over 5000 years,the EU will come and go,but,Greece will still exist,her people and culture are too hardy and resilient for it to be otherwise.
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Greece has not asked for financial injection, it has asked for fair lending rates that are of some respect to a country that holds the key to many things in the past and in the future to come.
As for the Germans making comments and criticizing Greece, I would suggest it looks at its own problems as we all know the real reason all this has occurred in the Eu is because The Germans underestimated the markets and thought it could have found itself ahead of the rest and that back fired.
I also would refer back to history and the NAZI reign and atrocities they committed in Greece and the stolen wealth they still posses from Greece, such as gold from the Greek banks.
Don not underestimate the mother of Greece and her vast history and powefull tolerance against intoreable acts towards its natural beauty and attemts to wane it.
You will never win or destroy such a naturally produced and gifted spirit that can only be found with in such a beast.
So to all the other countires in the EU that are hiding and taking cover.
Take a lesson from Greece and put your hands up be accountable and except what has happened and do somthing about it.
Again it is the home of civilization that needs to re create, introduce and inspire the world in a new more prosperous direction.
It is history repeating its self over and over again:)
Long live the greatness of Greece and the love for its neighbors and the rest of the world that surrounds it.
Good luck to the new Government and well done to the prime minister for getting up and speaking to the world in a dialogue understood by all.( this is is not bias comment towards any political party , far from it)
Thank you.
GT
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