Euro Area

[Kralizec]

No, because of precedent. Both Germany and France ignored the Stability and Growth Pact and got away with it. Now everybody else ignores it and gets away with it.

The Pact wasn't tenable anyway, given both its anticyclical nature and the divergence of the economies concerned. But heaping lawlessnes upon stupidity hasn't exactly produced superior results, has it? And I refuse to accept your logic that we can resolve this mess by adding blindness to the equation.

AII

The criteria themselves (3% deficit and 60% government debt) are somewhat arbitrary, and usually exceeded anyway in a period of recession when governments resort to deficit spending (what's wrong with anticyclical spending anyway?)
These criteria have however, never been intended as an instant justification for sanctions but as a prerequisite, as evidenced by the fact that the council can, but doesn't have to impose sanctions in the case of a breech. Wich brings me to the second point...

Germany and France getting away with their budgetary vices is a symptom of the toothlessness of the pact, not the cause of it. Even if they had behaved themselves on those occasions it's extremely questionable wether anybody else would have been punished for infractions. It was decided in the early days that the ability to impose sanctions should lie with the council (i.e. the national leaders and potential culprits) instead of a supranational body like the European Commission, or some other EU institution. The reason? The fear of losing sovereignty, or the appearance of giving away sovereignty in front of voters.

Explain Ireland so???? we never broke the GDP debt ratio till the banks went under.

PVC is right

I stand corrected, in regards to Ireland. What I said still stands for Greece, Italy and some others though.
I still haven't seen anybody put forward a coherent argument why overarching taxes are necessary for a monetary union.

But a long term transfer union is likely. In a healthy one the net recipients change from time to time as the economy fluctuates, where the money is then used to get out of the net recipient bracket and into the net payer one (which is preferable on the whole, because it implies a far healthier economy). The challenge for these countries is to expand their service sector beyond their internal markets. Portugal and Spain have some success with that in terms of IT & health care.

I don't have much agains the system you describe if it's meant for emergencies or unusual situations. As a general procedure, it smells of moral hazard.

[Philippus Flavius Homovallumus]

The criteria themselves (3% deficit and 60% government debt) are somewhat arbitrary, and usually exceeded anyway in a period of recession when governments resort to deficit spending (what's wrong with anticyclical spending anyway?)
These criteria have however, never been intended as an instant justification for sanctions but as a prerequisite, as evidenced by the fact that the council can, but doesn't have to impose sanctions in the case of a breech. Wich brings me to the second point...

Germany and France getting away with their budgetary vices is a symptom of the toothlessness of the pact, not the cause of it. Even if they had behaved themselves on those occasions it's extremely questionable wether anybody else would have been punished for infractions. It was decided in the early days that the ability to impose sanctions should lie with the council (i.e. the national leaders and potential culprits) instead of a supranational body like the European Commission, or some other EU institution. The reason? The fear of losing sovereignty, or the appearance of giving away sovereignty in front of voters.



I stand corrected, in regards to Ireland. What I said still stands for Greece, Italy and some others though.
I still haven't seen anybody put forward a coherent argument why overarching taxes are necessary for a monetary union.



I don't have much agains the system you describe if it's meant for emergencies or unusual situations. As a general procedure, it smells of moral hazard.

You sound like the German politics student I lived with. It's simple:

Try to "dicipline" Greece after the recession and they will give you the finger, because the Greek government is elected by the Greeks and you cannot make demands of a soverign country. If you have a mechanism for successfully diciplining Greece then you will have persuaded her, and the rest of the Eurozone to surrender fiscal soverignty.

That. won't. happen.

Such a change MUST be approved by plebicite, unless you want to trigger serious civil unrest, the sort of thing that makes the recent Greek protests look like mild complaint.

Fiscal diciple takes you down the same road as a transfer union, and that is Political Union.

The failure to accept these basic facts is what got you lot into this mess, burying your head in the sand at this point is not only irresponsible, it is bordering on insane. Either bit the bullet or bite the head of the Hydra.

[Kralizec]

Try to "dicipline" Greece after the recession and they will give you the finger, because the Greek government is elected by the Greeks and you cannot make demands of a soverign country. If you have a mechanism for successfully diciplining Greece then you will have persuaded her, and the rest of the Eurozone to surrender fiscal soverignty.

It has been realized from the beginning, allthough some seem to have forgotten meanwhile, that a common currency required certain norms regarding government debts and deficit spending. The Stability & Growth pact, as flawed as it was, could have been enough if the Council had ever acted on it to punish the worst offenders.
More realistic criteria is required, as well as the will to act upon them - by a supranational body if necessary, because an intergovernmental body like the Council has so far proven to be useless in this capacity. Sadly I don't expect anything of the sort will happen, and I don't think that the French-German proposal to enshrine debt limits in national constitutions will be uniformly applied either (Spain has apparently agreed, but I fear that Italian and Greek politicians won't have the courage to defend austerity to their electorates)

If there's to be a plebscite, it would have to be between:
A) a EU budget authority, or some other mechanism to effectively name&shame or fine the drunken spenders.
B) leaving the monetary union for that respective country.

"Fiscal sovereignty", as the fetishists call it, isn't completely lost under option A. Member states are still largely free in how they tax and how they spend; they're just not free to accumulate debt until a point where it threatens the larger EMU economy.
Despite the increased euroscepticism these past years, I would be surprised if option B would prevail in multiple countries. Bashing the Euro was very popular in Italy a couple of years back; now they crave the stability that it provides.

[Adrian II]

I fear that Italian and Greek politicians won't have the courage to defend austerity to their electorates

My friend, have you been to Greece recently? Have you any idea of the level of austerity that has already been imposed by its government? It seems to me that you are disconnected from reality, living in a cocoon of illusions and bureaucratic language that has no relation to facts of any sort.

Greek leaders should finally have the nerve to call it a day, leave the eurozone and restructure their debt to a sustainable level in view of the fact that that their economy is shrinking this year. That is the only reasonable course for Greece.

[Husar]

Greek leaders should finally have the balls to call it a day, leave the eurozone and restructure their debt to a sustainable level in view of the fact that that their economy is shrinking this year. That is the only reasonable course for Greece.

This.
And I wish german and french leaders had the fortitude to tell them that instead of sinking even more money or guarantees(also money in the end) into the mess...

[Kralizec]

Never been to Greece. Maybe what you say is inevitable for Greece, but don't expect me to be impressed by their "austerity".

So they stopped the practice of letting droves of people retire in their early 50'ies. They froze public service salaries, after they'd already risen by over 30% since 2006. I could go on, but you get the idea.
If the Greek government decides to leave the EMU, fine by me, but it won't be because of their testicular fortitude- something that Greek politicians have consistently lacked. Greece prides itself on having invented "democracy", yet is incapable of electing goverments that will do the right thing. Till now, instead of having leaders that take tough decisions and defend these measures in front of their voters, they had politicians that live in perpetual fear of riots and civil disobedience- and I'm not talking about the last 2 years alone.

[Beskar]

Greece is pretty backwards compared to Western standards and they have a big distrust of banks. This was evident when they went to change currency into the Euro and millions of people came into the banks with suitcases full of money to get it changed. They pay for everything in case so they can evade taxes and they were happy in their own little world doing whatever.

When the Euro came, it changed everything for the Greeks. They were no longer some random small corner and felt the need to improve themselves and they were brought dragging and kicking into the 20th Century from like the 18th overnight and they need lots of work doing still today.

[Sarmatian]

Never been to Greece. Maybe what you say is inevitable for Greece, but don't expect me to be impressed by their "austerity".

So they stopped the practice of letting droves of people retire in their early 50'ies. They froze public service salaries, after they'd already risen by over 30% since 2006. I could go on, but you get the idea.

Exactly. Severe austerity measures in Greece are five workdays in Germany.

Leaving the eurozone is not the solution. Being in EMU is what keeps Greek economy together at the moment. I'm really fascinated with the idea of Greece leaving euro and defaulting. It's basically saying, hey, have your economy crush and burn, let your GDP drop three times, have growth after ten years and proclaim victory but don't tell anyone that you need another 30 years of that growth to reach 2010 level of GDP. Brilliant indeed. In the meantime, enjoy being kicked out from just about any international financial institution and good luck with lawsuits.

Meanwhile, in the north, Germans are still angry because they still have to cover that loss. Even more French understand them completely.

[Kagemusha]

Exactly. Severe austerity measures in Greece are five workdays in Germany.

Leaving the eurozone is not the solution. Being in EMU is what keeps Greek economy together at the moment. I'm really fascinated with the idea of Greece leaving euro and defaulting. It's basically saying, hey, have your economy crush and burn, let your GDP drop three times, have growth after ten years and proclaim victory but don't tell anyone that you need another 30 years of that growth to reach 2010 level of GDP. Brilliant indeed. In the meantime, enjoy being kicked out from just about any international financial institution and good luck with lawsuits.

Meanwhile, in the north, Germans are still angry because they still have to cover that loss. Even more French understand them completely.

So essentially you are saying that these are not even protective measures towards Greek economy, but the rest of the EU is somehow entitled to essentially providing for Greece. Why next to Spain and then for Italy. I am starting to feel like that the Central and Northern Europe is somehow a slot machine for Southern Europe. The difference being that you get a prize each time from this one.

[Adrian II]

Never been to Greece. Maybe what you say is inevitable for Greece, but don't expect me to be impressed by their "austerity".

I'm just back from a week in Athens and believe me, people there are totally desperate. While I was there yet another new property tax was introduced, plus a ruling that families with a yearly income of 5000 euro or above should pay additional income tax as well. Some shop owner or enterpreneur is committing suicide every week because he lost the family business. I had a restaurant owner in Thessaloniki crying at my table because he couldn't afford any staff anymore and had to cook, serve and clean his establishment of 16 tables all by himself every day of the week. Whole streets in Athens that used to be hubs of entertainment only a couple of years ago are now deserted, the shops and restaurants closed, the shutters down for good, many buildings battened down with a few planks and strokes of cardboard, angry graffiti all over the centre of town, beggars and cranks of all descriptions roaming the streets at night. Pretty soon all of Athens is going to look like Omonia. Man, what a way to run a country.

AII

[phonicsmonkey]

Man, what a way to run a country.

AII

The IMF are really good at doing this to countries.

[Adrian II]

(what's wrong with anticyclical spending anyway?)

Oh snap!

Fortunately you already knew what was meant: the pact discourages meaningful anticyclical policies.

P.S. Oh dear, Furunculus is doing a Farrage.

[Philippus Flavius Homovallumus]

Oh snap!

Fortunately you already knew what was meant: the pact discourages meaningful anticyclical policies.

P.S. Oh dear, Furunculus is doing a Farrage.

Yeah? Did you not see the video I posted earlier, Farragw was the prophet of the Eurozone crisis.

[Adrian II]

Yeah? Did you not see the video I posted earlier, Farragw was the prophet of the Eurozone crisis.

I know. Furunculus just compared the EU to the USSR just like Farrage did.

Hence my remark that he was doing a Farrage.

AII

[Papewaio]

So if the ability to move around the EU zone both people and capital already exist... Why not evolve into a Federation with the ability to vote at local council, state and EU level?

What is lost if Joe Citizen can have the same mobility of self as C-level executives?

It seems to me that the most adaptable wins. At the moment corporations trump the nations in the EU because the corps and their key staff are already supranational.

You've gone from cities, to city states to nations. Why not create a federated model?

[Furunculus]

So if the ability to move around the EU zone both people and capital already exist... Why not evolve into a Federation with the ability to vote at local council, state and EU level?

What is lost if Joe Citizen can have the same mobility of self as C-level executives?

It seems to me that the most adaptable wins. At the moment corporations trump the nations in the EU because the corps and their key staff are already supranational.

You've gone from cities, to city states to nations. Why not create a federated model?

we already have a free movement of labour, which is great, but as noted previously:

because i don't recognise 'europe' to be a valid demos whereby i can have a reasonable amount of confidence that a broad majority view shares my aims and expectations, thus reassuring me that when bad things happen that the response will be predictable and conform to my desires.

for example, as a person that gets his kicks out of geopolitics i am quite content that my nation should retain nukes (and nuclear) alongside a (sensibly) interventionist foreign policy. i do not recognise as valid or legitimate german decisions to dodge afghanistan and libya or to reject nuclear and nukes, but that is fine because they are a different demos that is free to do their own thing, so the idea that britain might constrain its ambitions to fit the consensus of our continental cousins is absurd.

the answer is obvious; the european economic area, or EEC, where sovereign nation states of europe cooperate and collaborate on shared interests.

why seek more when it will only lead to the very strife that our federasts believe they are helping us to avoid?

[Papewaio]

So can Britain then fully devolve into the UUK... The Un-United Kingdoms of England, Northern Island, Scotland, Wales & The Manx.

Surely given your argument it would be best if Leeds and Manchestor form their own city states to look after their own demo...

[Vladimir]

Oh snap!

Fortunately you already knew what was meant: the pact discourages meaningful anticyclical policies.

P.S. Oh dear, Furunculus is doing a Farrage.

Do you mean the Furunculus Maneuver?

[Furunculus]

P.S. Oh dear, Furunculus is doing a Farrage.

what's a "farage"

You know I am pro-representation and you know my views on what a Federal Europe should become. In the same breath, you don't want my vision of Europe to ever occur because full well your arguments of "no representation" "lack of democracy" "stupid bureaucracy" would no longer be valid, so the world you have shaped in your vision would be ney impossible to create.

that's because i don't recognise 'europe' to be a valid demos whereby i can have a reasonable amount of confidence that a broad majority view shares my aims and expectations, thus reassuring me that when bad things happen that the response will be predictable and conform to my desires.

I know. Furunculus just compared the EU to the USSR just like Farrage did.
Hence my remark that he was doing a Farrage.
AII

aha, i understand, but presuming you are referring to the soviet-elections hyperlink that was predicated on the EU creating this transfer union without the a mandate from its 'people', which would be an excellent parallel to the old soviet lark of giving everyone a vote which makes no tangible difference to their governance.

There are a great many people advocating for reform, to usher in a era of a stable and democratic Europe

i'm one of them, i want to return europe to a solid principle of intergovernmental rule whereby sovereign nations beholden to their electorates via legitimate ties founded in representation and accountability.