Euro Area

[Louis VI the Fat]

It is telling that Euro media is not even putting it out,our financial minister Jutta Urpilainen put it out on tuesday like i di..The question is why is this not in bbc or deutchewelle, nor le monde

I'm sure the Finnish-Greek deal will receive due attention in Le Monde once it has explained to its readers what a Finland is.




Louis - almost an anagram of Suomi

[Fragony]

When you divide between North and South, where do you put France?

Somehere safe hopefully

@ teh paddie, what if we keep the euro as a coin to pay for a bread, and reintroduce the Deutsche Mark or the Dutch guilder for business in the Northen regions. Either would be solid trustwise, euro would probably drop, making export from the south worth the trouble again. We'll have a north and south without anyone getting all that hurt no?

disclaimer: I am economically challenged. or generally really

[Furunculus]

There may well be an optimum tax level per country, but it would vary according to the specifics of each economy.

Putting it at 37% is fetishism.

Very much agreed.

No, having taxation at a level no higher than 37% of GDP when the economy is at the top of the cycle is what I demand and expect my political representatives to implement, because I do not hold to notions prevalent in other societies that encourage a greater personal sacrifice for the community good. There is nothing wrong with a society taking that view, but it ain't mine and it ain't British. We have never been a social-democracy in the continental sense, and much as some people in Britain might wish it otherwise there have never been enough of them to change society as a whole. As i noted back on page 16:

the laffer curve is as relevant today as the day it was invented, but importantly, it is merely a bell-curve and not a cliff-edge and therefore it is up to society to determine at which point along the bell-curve they want to sit, with all the attendant benefits and problems that brings.

p.s. i ran the graph from the eighteenth because they 'cunningly' announced the stress tests after the markets closed on the 15th.............. a friday.

[Sarmatian]

Somehere safe hopefully

@ teh paddie, what if we keep the euro as a coin to pay for a bread, and reintroduce the Deutsche Mark or the Dutch guilder for business in the Northen regions. Either would be solid trustwise, euro would probably drop, making export from the south worth the trouble again. We'll have a north and south without anyone getting all that hurt no?

disclaimer: I am economically challenged. or generally really

Unfortunately, this crisis isn't about the euro and it wouldn't simply disappear even if manage to magically make an instant and perfect transition to old national currencies.

Let's say Greece reintroduces the drachma, what would happen? Total economic collapse. Greece isn't an exporting nation and cheaper Greek products abroad wouldn't help Greek economy to balance it out. At the same time, rampant inflation would make it impossible to make any long-term plans. Who would invest drachmas in Greek bonds with drachmas losing worth daily? You bought bonds worth a 1000 euros and two weeks later your bonds are worth 200 euros.

Also, the notion that crisis in the southern Europe wouldn't affect northern Europe if national currencies still existed runs contrary to logic. European economies are so interconnected that slowing down of Italian and Spanish economies would certainly be felt, pesetas and liras or euros.

Another thing thrown around here is that you can not have single currency if you don't have same level of development -> bollox. Do you think that GDP of American states are equal? California 2 trillion and Wyoming 38 billion. GDP per capita varies between around 70.000 (Delaware) and 35.000 (South Carolina), if we discount District of Columbia which has 170.000. Tax levels are also not the same across the United States. By contrast, difference for GDP per capita between EU states is 32.000 (Netherlands) and 11.000 (Romania (which isn't even in the EMU)), if we discount Luxembourg which has 70.000. Not such a big difference compared to US, is it? And if use only EMU countries, the difference is even smaller.

So, Euro is not the problem and it never was. The story is used now by Eurosceptics looking for a cheap argument because it's easier to blame the Euro than to explain what's happening to the electorate. Why should Germans and French spend their money to bail out Greece? Because it is their investment. They hold most of the debt - if Greece defaults, that deficit moves from Greek to their economies.

[Furunculus]

Another thing thrown around here is that you can not have single currency if you don't have same level of development -> bollox. Do you think that GDP of American states are equal? California 2 trillion and Wyoming 38 billion. GDP per capita varies between around 70.000 (Delaware) and 35.000 (South Carolina), if we discount District of Columbia which has 170.000. Tax levels are also not the same across the United States. By contrast, difference for GDP per capita between EU states is 32.000 (Netherlands) and 11.000 (Romania (which isn't even in the EMU)), if we discount Luxembourg which has 70.000. Not such a big difference compared to US, is it? And if use only EMU countries, the difference is even smaller.

you rather miss the point re the disparity in development/wealth.

of course you can have different levels, but only provided you increase the wealth transfer from rich to poor in an attempt to iron out the inequalities in relative wealth. this novel concept is called a transfer-union, and is the fundamental characteristic of every responsible nation-state in existence today; the rich helping to advance the condition of the poor.

now, there is no reason why the EU could not be the same as part of a grand federal union............................ but you do have to be pretty sure that one 'region' has a sufficiently close sense of familial kinship with another 'region' that subsidizing their lifestyle on an ongoing basis is acceptable.

if it isn't, then you will be marching towards exactly the kind of the civic strife that the EU was supposed to banish.

the german's know all about the principle of openly and visibly subsidizing a group of people on an enduring basis, because ever since reunification west germans have paid 10 billion euros's a year in a solidarity tax to speed the development of the former GDR. but that is ok, they are germans so all is good in the world.

where things get a little sticky is when it come to the eurozone crisis however.

one way out of the crisis is eurobonds, however a german economic think-tank has calculated that german government borrowing will cost up to 40 billion euro's a year more under this regime because euro-bonds mean accepting the default risk of southern europe averaged out against that of out thrifty teutons, and that is four times the amount of the solidarity tax, every year, indefinitely.

now my question is this; just how close a sense of familial kinship does Herman Von-Deepockets feel with Miguel Loadzawonga?

If there isn't enough, then you can't have your economic and political union............... at least not in a representative democracy.

Is is that simple!

[gaelic cowboy]

Unfortunately, this crisis isn't about the euro and it wouldn't simply disappear even if manage to magically make an instant and perfect transition to old national currencies.

Actually it is about the Euro, just listen to the Europhiles like Trichet et al from a distance "We will defend the Euro" "Contagion must be stopped" and on and on and on.

Let's say Greece reintroduces the drachma, what would happen? Total economic collapse. Greece isn't an exporting nation and cheaper Greek products abroad wouldn't help Greek economy to balance it out. At the same time, rampant inflation would make it impossible to make any long-term plans. Who would invest drachmas in Greek bonds with drachmas losing worth daily? You bought bonds worth a 1000 euros and two weeks later your bonds are worth 200 euros.

It is not a given that inflation is bad for a country just because Germany had a spot of hyperinflation, that episode didn't even keep Germany down in the end did it. Inflation is a favorite of central bankers chiefly due to it's affect on asset values (generally held by other bankers) effectively it is an attempt to ensure your investment s value into the future.

In fact many people believe that obsession with inflation has led to more economic problems not less.

Also, the notion that crisis in the southern Europe wouldn't affect northern Europe if national currencies still existed runs contrary to logic. European economies are so interconnected that slowing down of Italian and Spanish economies would certainly be felt, pesetas and liras or euros.

This ignores the fact that the essential problem was an interbank problem caused by the Euro, sure it would still have happened but the solution to the problem is not doable under the present Euro. (nor the one France and Germany are talking of now)

Another thing thrown around here is that you can not have single currency if you don't have same level of development -> bollox. Do you think that GDP of American states are equal? California 2 trillion and Wyoming 38 billion. GDP per capita varies between around 70.000 (Delaware) and 35.000 (South Carolina), if we discount District of Columbia which has 170.000. Tax levels are also not the same across the United States. By contrast, difference for GDP per capita between EU states is 32.000 (Netherlands) and 11.000 (Romania (which isn't even in the EMU)), if we discount Luxembourg which has 70.000. Not such a big difference compared to US, is it? And if use only EMU countries, the difference is even smaller.

Furunculus has answered this one perfectly

So, Euro is not the problem and it never was. The story is used now by Eurosceptics looking for a cheap argument because it's easier to blame the Euro than to explain what's happening to the electorate. Why should Germans and French spend their money to bail out Greece? Because it is their investment. They hold most of the debt - if Greece defaults, that deficit moves from Greek to their economies.

It is the problem because it is not fit for it's present purpose, hence the championing of Eurobonds, deeper economic governance or talk of Germany seceding.

Of course Germany and France hold the debt and they will continue to champion (secretly of course)any move to bailout Ireland, Portugal and Greece to get there money back.(hoping it frightens Spain and Italy enough)

The problem is bankers are not popular anywhere right now eh, France and Germany will have a tough time convincing people to continue secretly bailing out busted banks.

[Fragony]

@Samartatarian, not talkinig about Greeks returning to the drachme, let the north give up the euro so it will be the next drachme.Right now we let the banks steal their country it's not right, it's plundering

[Adrian II]

It is telling that Euro media is not even putting it out,our financial minister Jutta Urpilainen put it out on tuesday like i di..The question is why is this not in bbc or deutchewelle, nor le monde

It was too late for me yesterday to call a Helsinki spokesperson, but a Dutch parliamentarian has spoken to a Finnish government minister and the minister confirmed that Finland has indeed signed the deal with Greece.

Like I said, our PM and Finance Minister have **** for brains. They have another parliamentary debate coming and I wouldn't be surprised if it proved to be their undoing. About time.

AII

[Fragony]

It was too late for me yesterday to call a Helsinki spokesperson, but a Dutch parliamentarian has spoken to a Finnish government minister and the minister confirmed that Finland has indeed signed the deal with Greece.

Like I said, our PM and Finance Minister have **** for brains. They have another parliamentary debate coming and I wouldn't be surprised if it proved to be their undoing. About time.

AII

ouch, but what then. We are soooooooo low on capable people in the country of reversed gravity they all fall up and stay there. It's ok that JK la B came out but he's supposed the one who gets it ad rectum not me

[Brenus]

“The problem is bankers are not popular anywhere right now eh, France and Germany will have a tough time convincing people to continue secretly bailing out busted banks.”
Yeap, especially when all the alleged solutions are failing. Greece is worse now than before after the IMF ECB and EU “bail out”. The debts increase because the politicians allowed the banskers to plunder the country.
But now, unlike when it was Argentina, it is known that these “solutions” don’t work. Well, easy enough to understand: You fire a lot of people hence you cut the activity so the taxes don’t come in the state’s coffers. So the banksters, the same that imposed to you the cut, declare that because you have less incomes, you are a risk, so they increase the rate of your interests, So when you have sold every things, that you population is massively unemployed and the rate of poverty drastically increase, you realise that the country is near to unrest and riots.
But for ideological reasons, the Triad can’t change politic. So the Triumvirate now try to avoid a total collapse in breaking the same treaty it imposed on the European Populations in issuing Eurobonds and allowing countries to borrow money at the same rates than the banksters. That would have halted all attacks on Greece if it would have been done before. But the fraudsters can’t do it openly as they only protection against jail and to get their bonuses is to pretend to still stick to the Lisbon Treaty.
The Rich are now facing a dilemma: To be taxed or to lose everything in next crash. But, we have people who explained as that to tax the Rich is not the solution…
What to do, what to do?

Tax the capital at the same rate than the work? The Rich will go somewhere else, we were told… So have a good journey…

“Que se vayan todos”

[Fragony]

'Yeap, especially when all the alleged solutions are failing. Greece is worse now than before after the IMF ECB and EU ?bail out?. The debts increase because the politicians allowed the banskers to plunder the country.'

Yeah it's not right, I got enough already I don't need anything from the Greeks. I am really sorry for them it wasn't me. I think I'm turning into a born-again leftie. Banks are rotten they destroy

[Adrian II]

Daniel Cohn-Bendit put it well in Le Monde yesterday: 'The real problem of the eurozone is that the word of its leaders has triple Zero rating. Merkel and Sarkozy refuse to bail out Greece and then they go and bail her out anyway. They want to stimulate growth but they preach austerity. They want to have their cake and eat it. The markets sense this and speculate on their next mistakes.'

AII

[Fragony]

Daniel Cohn-Bendit put it well in Le Monde yesterday: 'The real problem of the eurozone is that the word of its leaders has triple Zero rating. Merkel and Sarkozy refuse to bail out Greece and then they go and bail her out anyway. They want to stimulate growth but they preach austerity. They want to have their cake and eat it. The markets sense this and speculate on their next mistakes.'

AII

The market just reacts, that is just what it does. I think we should invest in cloning the Finish, starting with Kamagusha

[Kralizec]

Unfortunately, this crisis isn't about the euro and it wouldn't simply disappear even if manage to magically make an instant and perfect transition to old national currencies.

Let's say Greece reintroduces the drachma, what would happen? Total economic collapse. Greece isn't an exporting nation and cheaper Greek products abroad wouldn't help Greek economy to balance it out. At the same time, rampant inflation would make it impossible to make any long-term plans. Who would invest drachmas in Greek bonds with drachmas losing worth daily? You bought bonds worth a 1000 euros and two weeks later your bonds are worth 200 euros.

Also, the notion that crisis in the southern Europe wouldn't affect northern Europe if national currencies still existed runs contrary to logic. European economies are so interconnected that slowing down of Italian and Spanish economies would certainly be felt, pesetas and liras or euros.

Another thing thrown around here is that you can not have single currency if you don't have same level of development -> bollox. Do you think that GDP of American states are equal? California 2 trillion and Wyoming 38 billion. GDP per capita varies between around 70.000 (Delaware) and 35.000 (South Carolina), if we discount District of Columbia which has 170.000. Tax levels are also not the same across the United States. By contrast, difference for GDP per capita between EU states is 32.000 (Netherlands) and 11.000 (Romania (which isn't even in the EMU)), if we discount Luxembourg which has 70.000. Not such a big difference compared to US, is it? And if use only EMU countries, the difference is even smaller.

So, Euro is not the problem and it never was. The story is used now by Eurosceptics looking for a cheap argument because it's easier to blame the Euro than to explain what's happening to the electorate. Why should Germans and French spend their money to bail out Greece? Because it is their investment. They hold most of the debt - if Greece defaults, that deficit moves from Greek to their economies.

Also even if Greece reverts to the drachme, their creditors for existing debts will still demand payment in Euro currency. It's true that Greece suffers from the inability to devaluate their own debt through devaluation (bond buyers wouldn't appreciate that, as you noted) but introducing their own currency at this point is useless. It would make an unilateral default on the bulk of their debt inevitable.

I take the blame-the-euro noise here on the forum with a grain of salt, most of it is given in by Schadenfreude and "told you so" euphoria, coupled with the usual EU = USSR comparisons.

[Sarmatian]

It is not a given that inflation is bad for a country just because Germany had a spot of hyperinflation, that episode didn't even keep Germany down in the end did it. Inflation is a favorite of central bankers chiefly due to it's affect on asset values (generally held by other bankers) effectively it is an attempt to ensure your investment s value into the future.

In fact many people believe that obsession with inflation has led to more economic problems not less.

At the same time, Germany was receiving billions in investments, credits and help, not a good example. Yugoslavian hyperinflation was worse than German one. Receiving your salary every day at three o'clock and having to exchange it for hard currency (usually German mark) by 4h because at 5h isn't worth squat isn't good for the economy, period. Greek inflation would be much more akin to that than 20% a year. Argentinian hyperinflation also wasn't particularly fun. It leads to companies of 10,000 employes being closed overnight.

Yes, inflation is good, if were talking about few percents a year, but that's not the deal here.

This ignores the fact that the essential problem was an interbank problem caused by the Euro, sure it would still have happened but the solution to the problem is not doable under the present Euro. (nor the one France and Germany are talking of now)

It is very much doable. It involves severe measures, like increasing revenues and cutting expenses, financed by the taxpayers of course.

Furunculus has answered this one perfectly

If it would came that Texans had to give up a huge percent of their wealth to keep the revenues of people in Arkansas at the same level, you'd hear the same moaning like in Europe. Unlike in Europe, Americans pay federal tax already, so in a way, that decision isn't left to Texans but to federal government.

It is the problem because it is not fit for it's present purpose, hence the championing of Eurobonds, deeper economic governance or talk of Germany seceding.

Of course Germany and France hold the debt and they will continue to champion (secretly of course)any move to bailout Ireland, Portugal and Greece to get there money back.(hoping it frightens Spain and Italy enough)

The problem is bankers are not popular anywhere right now eh, France and Germany will have a tough time convincing people to continue secretly bailing out busted banks.

Tough time, maybe, but it's gonna happen. Alternatives are too scary to even contemplate. The problem isn't the euro, or the EU, it is the reluctance of the national governments to take hard steps that need to be taken. If anything, all this would be easier if EU was (more) federal.

[Furunculus]

If it would came that Texans had to give up a huge percent of their wealth to keep the revenues of people in Arkansas at the same level, you'd hear the same moaning like in Europe. Unlike in Europe, Americans pay federal tax already, so in a way, that decision isn't left to Texans but to federal government.

your answer is to create a european federal tax?

good luck with that.

[Sarmatian]

your answer is to create a european federal tax?

good luck with that.

It's not gonna happen anytime soon, naturally, but I believe it eventually will.

[Furunculus]

It's not gonna happen anytime soon, naturally, but I believe it eventually will.

it is possible i guess, but don't forget my question: "just how close a sense of familial kinship does Herman Von-Deepockets feel with Miguel Loadzawonga?"

[Adrian II]

it is possible i guess, but don't forget my question: "just how close a sense of familial kinship does Herman Von-Deepockets feel with Miguel Loadzawonga?"

Attachment to kinship caused two world wars, both starting in Europe. Thanks to European integration ze bomps are no longer flying and we can even support third world countries such as Malta and Britain.

AII

[Furunculus]

Attachment to kinship caused two world wars, both starting in Europe. Thanks to European integration ze bomps are no longer flying and we can even support third world countries such as Malta and Britain.
AII

i'm afraid that pretending people do not willingly associate and identify with others they deem compatible, because you deem it inherently evil, will not make it any more likely that old herman will be happy to subsidise Miguel.

if merkel thought she could swing eurobonds past her electorate she would have in a shot, but she can't.

[Papewaio]

Sure families are a vital building block within society. But most city states are far more diverse then any one family group. The variation within genes between ethnic groups is less then variation with a group. And the biggest variation between any two groups is not black, white, north, south, red head or brunette... it's man and woman. That little X vs Y is the biggest genetic variation.

So unless someone is adocating a lesbian colony of clones, we will have to put up with genetic variation.

Any state is formed from more then one family is going to be based on something beyond kinship. Tribes and clans only grow so far. It's the breaking of tribalism and the ability to form groups based on things like profession that have allowed cities to evolve.

#####

I remember standing outside a dressing room whilst my wife tried on garments. Two guys were sitting nearby, one a young skinny Indian in dress pants and shirt, the other a fat old ocker Aussie in sandels, shorts and singlet... both sitting looking bored, arms crossed, waiting for their wives to try on clothes... to me that summed up the difference ain't race it's men and women... personally I can put up with differences of that kind as they make life interesting.

[Sarmatian]

it is possible i guess, but don't forget my question: "just how close a sense of familial kinship does Herman Von-Deepockets feel with Miguel Loadzawonga?"

Ol' Herman was subsidizing signor Miguel well before Wilhelm decided that Tanganyika would be a good place for a sausage factory.

[InsaneApache]

So unless someone is advocating a lesbian colony of clones, we will have to put up with genetic variation.

Bring it on!

[Papewaio]

hmm well maybe we'll just make it a Club Med with web cams...

[Furunculus]

Sure families are a vital building block within society. But most city states are far more diverse then any one family group. The variation within genes between ethnic groups is less then variation with a group. And the biggest variation between any two groups is not black, white, north, south, red head or brunette... it's man and woman. That little X vs Y is the biggest genetic variation.

you a taking what i say too literally. :p

familial sentiment = social/group identity.

Ol' Herman was subsidizing signor Miguel well before Wilhelm decided that Tanganyika would be a good place for a sausage factory.

you say that, but the tortured grimace on Merkel's face tells an entirely different story.

-----------------------

perhaps there is a solution:

http://blogs.telegraph.co.uk/finance...-wrong-answer/

[Papewaio]

you a taking what i say too literally. :p

familial sentiment = social/group identity.

Hard not to in written word of the net, the tone is all lost and banter takes hours. Familial is normally used for family as in ones relations.

Familial level societies were generally hunter-gatherer bands. Once we got over that level we entered Tribal societies... which a lot of these gangs in one form or another are reverting back to the hunter-gatherer groups.

I think most people in a modern nation state can identify them as a member of a family and still have loyalty to a nation. It's pretty easy to look at a large nation and see groups within it that one readily identifies with and others one doesn't. A nation is a composite of many many groups, after all a modern nation relies on modern economics which includes specialisation... and lots of people hang out in groups of like specialists be it doctors, engineers or gamers online.

[Adrian II]

Buddy of mine has always been all-out against the euro, period. Over the years we had quite a few debates. I always thought that a limited euro for the fiscally disciplined, exporting economies like Germany and The Netherlands only (colloquially known as the 'deuro') would be viable. I was probably wrong.

Anyway, today he has a column out in which he calls the euro 'the EU's suicide pill' and advocates its dissolution. So here's what we are debating now: supposing that there would be enough political will to consciously dissolve the euro in a controlled manner, how do we go about it? What strategy would be best?

What do you guys think?

AII

[Furunculus]

I think most people in a modern nation state can identify them as a member of a family and still have loyalty to a nation. It's pretty easy to look at a large nation and see groups within it that one readily identifies with and others one doesn't.

that's kind of the point, there is a nation onto which the state can adhere, does that sentiment (familial i.e. my family) exist at a european level?

[Kralizec]

Buddy of mine has always been all-out against the euro, period. Over the years we had quite a few debates. I always thought that a limited euro for the fiscally disciplined, exporting economies like Germany and The Netherlands only (colloquially known as the 'deuro') would be viable. I was probably wrong.

Anyway, today he has a column out in which he calls the euro 'the EU's suicide pill' and advocates its dissolution. So here's what we are debating now: supposing that there would be enough political will to consciously dissolve the euro in a controlled manner, how do we go about it? What strategy would be best?

What do you guys think?

AII

I think it's ironic that he first compares the EU to Hitler, and then a few paragraphs later complains that you can't oppose centralisation without being called a populist or a nationalist. The article in NRC he refers to was infinetely better and more informative in every respect.

Anyway, I suppose the hypothetical return to national currencies (which I oppose) would be the mirror image of the introduction of the Euro: exchange rates for the nascent currencies are set, followed 1-2 years later by the introduction of actual printed money. Then a year or so where you can pay in both Euro's and the nations respective currency before the former is entirely abolished.
Next: the Netherlands pegs the guilder to the German mark, again waiving any pretentions of monetary policy, and a decade of whining of how Henk & Ingrid got financially screwed by the transition to the guilder.

[Beskar]

Why are they so bloody greedy? Europe is huge. If they want an successful integration.Why not start with smaller regional Unions? Such might actually get even some democratic support. The leaders are constantly trying to bite more they can chew and Louis fear of Chinese i doubt is enough to drive Europeans into integration frenzy.

Because of the current make-up of Europe where the elites have their own vested interests opposed to the vested interest of successful integration.