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Old 11-10-2011, 11:59 AM   #16
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There is those who have no idea whatsoever what is going on, why it is like it is and who source most of their information from Bild and other tabloids which are running campaigns against those countries now in trouble and the Euro. They are being told that, indeed, the Greek are lazy, unproductive and earned more and more while working less and less while at the same time avoid paying taxes. That's the populist gut reaction from the ignorant who still believes this shit, and our government, of course, likes to tell it this way as well as it suits their interests. Naturally, if you are asked to give a lot of money you are open to any voice telling you why you shouldn't.
Then there's those who are opposed to the bailouts and the other policies currently being enacted because they know that this will go nowhere, and that there's but little hope for Greece to find a way out without a massive haircut (of which no one is able to exactly tell what the consequences will be).
At the moment it's a blame game from all sides when in fact it was a fuck-up from all sides. Pointing fingers is not getting us anywhere, but none of the politicians is willing or daring to take on the underlying system.

You are right, for the citizens it's also very hard to see why they have to suffer and the banks and large corporations get away with it. As I said before, for the past 15 years real wages in Germany have declined in order to keep us as competitive as possible against low-wage countries. Workers have excepted these cuts, as well as massive cuts in the social systems, with the promise that this will eventually make us all better of. And now they are told that the future will even be more bleak, and that they have to give money to countries where wages have greatly increased while productivity has remained stagnant. And if no one tells you that both developments are linked, i.e. the Greek were to earn more in order to buy our stuff, and that their economy were to remain uncompetitive in order for us to remain the largest exporting nation, of course you will feel that this is all unwarranted.
What's your personal take on it?

I've been trying to think of what should be done, but can't really come up with an answer other than the idea that the Eurozone should just be finished off, which for many will be severe economic hardship and turmoil, but I can't shake the feeling the rubble needs to be cleared for everything to start afresh.

Some talk seems to be about France and Germany now going there own way, which I guess would be the break up of the Eurozone and maybe the break up of the EU altogether. (I've also read that this could all actually even lead to the break up of Italy, maybe a bit farfetched, but then it really hasn't been a unified country for that long).
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Old 11-10-2011, 08:51 PM   #17
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But, unless the Merkozy Franco-German axis raises up protectionist measures against the PIIGS... How can they survive alone?
I think that these countries, more than selfish, they're being suicidal.
Yeah, China and the US are now big export (and import) markets for Germany and France. But have they forgot that their main and biggest market still is something called Europe? I don't get this... Have France realised that after Spain (that will "fall" soon as well, it's guaranteed) France is "falling" too and that there's no "pseudo-help" for them? China and Brazil warned that they don't intend to invest in countries from Europe that have no idea what to do of how to behave...
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Old 11-11-2011, 07:28 AM   #18
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What's your personal take on it?

I've been trying to think of what should be done, but can't really come up with an answer other than the idea that the Eurozone should just be finished off, which for many will be severe economic hardship and turmoil, but I can't shake the feeling the rubble needs to be cleared for everything to start afresh.

Some talk seems to be about France and Germany now going there own way, which I guess would be the break up of the Eurozone and maybe the break up of the EU altogether. (I've also read that this could all actually even lead to the break up of Italy, maybe a bit farfetched, but then it really hasn't been a unified country for that long).
I guess we are now haunted by the inconsequence of the past. We formed a monetary union, created some "stability criteria", ignored them and thought this could be sufficient. Of course, if it weren't for the financial crisis the problems in Greece and other countries wouldn't have gotten so troublesome. Yet. Because eventually, something would've triggered it, and no country showed any intentions on changing the tracks they were in before their weaknesses were exposed.
Now politicians try to still keep focussing on their national as well as personal interests (I don't see any of these politicians showing any willingness to do what's right even at the expense of their own position. Quite on the contrary), and they want to somehow make the Euro survive without hurting anyone too bad. Except for, well, the people in the countries which are now forced to make unprecedented cuts. And where will these cuts lead? Not out of debt, but into more debt. It's a vicious cycle, especially for Greece.

I would like if the populism were finally thrown overboard, the tabloid newspapers set on fire or whatever helps, and people in Greece, Germany, Ireland, Italy, France, Spain etc. realised that it's not the other country that is to blame, but everyone shoulders part of it. I don't see the unity of the people. They are getting riled up so easily, and old prejudices come to the fore so easily. That is quite frightening.

Personally, I very much like the Euro. I love to be able to cross the boarder and pay with the same currency. And I don't think it's inevitable for such a currency to fail. You just need to overcome your national focus and create a real monetary union. Maybe this will break apart, but at the moment no one can really say for sure. I don't think this will end in the collapse of the EU. The EMU was never made up of the entire EU, and it's not a necessity of the EU. Also, it wouldn't serve the interest of any of the member countries. If the EU collapses, then because we let the wrong parties into power. And if we do that, we shouldn't worry about the union as much as about our lives.

Even Belgium seems to be forming a new government now, after a record-long 16 months without one. Italy is pretty much divided economically, and people from the south and north don't really mix, but breaking apart into two countries? Well, never say never, but I don't see that, yet. Unfortunately, I don't think there's an active poster in this forum who is from Italy, as it would be interesting to hear from someone closer about such rumours.
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Old 11-11-2011, 10:01 AM   #19
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I guess we are now haunted by the inconsequence of the past. We formed a monetary union, created some "stability criteria", ignored them and thought this could be sufficient. Of course, if it weren't for the financial crisis the problems in Greece and other countries wouldn't have gotten so troublesome. Yet. Because eventually, something would've triggered it, and no country showed any intentions on changing the tracks they were in before their weaknesses were exposed.
Now politicians try to still keep focussing on their national as well as personal interests (I don't see any of these politicians showing any willingness to do what's right even at the expense of their own position. Quite on the contrary), and they want to somehow make the Euro survive without hurting anyone too bad. Except for, well, the people in the countries which are now forced to make unprecedented cuts. And where will these cuts lead? Not out of debt, but into more debt. It's a vicious cycle, especially for Greece.

I would like if the populism were finally thrown overboard, the tabloid newspapers set on fire or whatever helps, and people in Greece, Germany, Ireland, Italy, France, Spain etc. realised that it's not the other country that is to blame, but everyone shoulders part of it. I don't see the unity of the people. They are getting riled up so easily, and old prejudices come to the fore so easily. That is quite frightening.

Personally, I very much like the Euro. I love to be able to cross the boarder and pay with the same currency. And I don't think it's inevitable for such a currency to fail. You just need to overcome your national focus and create a real monetary union. Maybe this will break apart, but at the moment no one can really say for sure. I don't think this will end in the collapse of the EU. The EMU was never made up of the entire EU, and it's not a necessity of the EU. Also, it wouldn't serve the interest of any of the member countries. If the EU collapses, then because we let the wrong parties into power. And if we do that, we shouldn't worry about the union as much as about our lives.

Even Belgium seems to be forming a new government now, after a record-long 16 months without one. Italy is pretty much divided economically, and people from the south and north don't really mix, but breaking apart into two countries? Well, never say never, but I don't see that, yet. Unfortunately, I don't think there's an active poster in this forum who is from Italy, as it would be interesting to hear from someone closer about such rumours.
Let's watch it by another prisma.
The Euro was imagined because many leaders thought that the only way to mantain the EU - specially after the german reunification - was to create a single monetary space. It was an exigence of countries like France.
I don't know if you remember but France and Germany were reticent to join it because they had such strong currencies. And Germany, at that time, refused joining a common currency because the Mark was already strong enough. So, Germany's demand to join the Euro was «we'll only join it if the Euro is as strong as our Mark is».

This was the problem #1. 17 countries joining a currency that doesn't match the average of the weight of the economies of the 17 countries and, instead, having a currency that values much more than their economy does? No way, for example, the Euro was equivalent to 200 Escudos (old portuguese currency)?!
And since countries like the PIIGS cannot devalue the Euro artificially (that's what all economies do/did historically when they're in trouble, so exportations are privileged) the alternative is... Devalue the purchasing power and, most important, devalue the costs of labour! And Governemts take advantage of this situation and implement their own agenda, like the portuguese governement: "to waste" the Welfare State and the Health System the more they can, so people move to the private services and then you have, for instance, Health for rich and Health for poor. Join it, selling all public services (that MUST be public) electricity (and its network), the water company, collective transport companies, and others... And give it by a very low price to private hands.

Problem #2 was the Stability Criteria you reffered. Remember who were the first countries violationg the rules of the Stability and Growth Program (SGP)? I do and Kohl remembered it too a few months ago: it was France and Germany.
I'm not saying that the rules are not necessary, they are. The problem is that they're not rational. They're HIGHLY IRREALISTIC, totally forgetting that economy is not an exact science.
I remember when someone said, 10 years ago, that the Euro would not survive its first crises. Now I understand why. Because it was poorly designed, with unrealistic rules, it didn't preview scenaries of crisis (what country is gonna accomplish the "<60% of public debt" and the "<3% budget deficit" in times like this, for Christ's sake?!)...
Plus, do you remember what the European Comission (commanded by that portuguese a$$hole) and, specially, the ECB said when Lehman Bros went bankrupt and they understood a crisis was coming? Remember? I do.
They told the European States (specially those in the Euro) «Waste the money, run into debt the way you want, save your banks with that debt and don't let it fall, because the ECB will be there to crushion the fall». Remember these kind of affirmations back in 2008? I do. and now I know that it means. Now I know that the ECB is no Central Bank like the others are.

I start not to call "lunatic" to those who say that little by little (but quickly) Europe runs the danger to enter a new conflict again. Something that the EU was designed to avoid. Isn't it ironic?

To me, Europe has only two options.
1) The EU is desintegrated and countries get back to their own corners and wait until a conflict between some starts again;
2) EU countries have the balls to admit that they'll have to lose all soveraignty and start a process of a (without bullshit and national/umbilicus interests) real federalism.

I prefer option #2. The problem is: are countries really available to lose all soveraignty? Is the Netherlands, for example, willing to lose things that define its national identity? Other example: if there's a conflict or and invasion to Greece, or Slovenia, or Estonia... Does the finish, or the austrian or the spanish army feel they have to defend their own european compariots? Do they feel european enough to defend them? Do they feel they belong to the same federation? Since Europe's history proves that european people don't want to abdicate on their own national identities, my answer is "no, they're not will to do that".

And it is solidary.. My ass!
The Lisbon Treaty is a fraud because of all this.
So, the treaty doesn't preview the exit of a country from the Euro? Is this a prison? You can enter but you can't leave?!

Then, it comes option #3. Keep things as they are. To achieve successive Merkozy Franco-German summit put the other 25 countries aside their decisions, to keep on driving the whole Europe together, happily hand in hand, to the abyss, under egoistic/hurried/inconsequent policies.
Unfortunately, I think leaders are choosing option #3.

Above all this, I ask: what's the ECB for? What's the ECB for if the ECB is not allowed to borrow to the States, but it is allowed to inject money to the banks at the rate of 1% (now 1,25%) and only then the banks can borrow to the States with the criminal rates we all know?
Is it worth to have a common currency without a Central Bank with proper powers (as the Chinese Central, as the FED, as the English Central Bank), without real and official political union, withouth a real unique Government (not something commanded by the Merkozy Franco-German axis, not something as the pathetic European Comission)?
What's the Euro for if there's no common debt issuance (which is the euro-bonds that Germany runs from as if it was fire or a bomb)? It's ridiculous sharing a currency and not having common debt issuance!

Now it's Italy [I personally always thought that Spain would "go" before Italy... I was wrong, but it won't be long too]...
...How long until it's France to "fall"? Because that's the only way to end with this dictatorship of having countries commanded by the remote control of Central Europe.
How long until countries like France and Germany understand that, it doesn't matter if China and the US are now big markets for them, when Europe (still) is their biggest market by far and that they depend on european countries for import and export products?

How long until Europe realizes that the way we're going, not only we won't be able to compete with China/India, or with Brazil, or with the US, but we'll be easily surpassed by these potencies?
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Old 11-11-2011, 11:07 AM   #20
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I was born in '85, so yes, I know a little bit about the debates, but I cannot really say I remember them.
You shouldn't confuse the Euro with the EU, though. The Euro failing is not the same as the EU failing. We can all go back to our former currencies and still be the EU. The EMU is a part of the EU, but it's not the basis of the EU, nor the foundation.

I generally agree with your economic reasoning. I guess the only not so hypothetical scenario would be a conflict between Greece and Turkey over Cyprus (which, at least for the moment, also doesn't seem urgent), and that'd be a case where the rest of the EU would have to show face. Overall, the original idea was that over time we would grow more united, but for the first couple decades (not to say, centuries) no one expected people to give up their national feelings. However, you do not need to give up your sovereignty 100 percent. But a unified fiscal and economic policy would help heaps to stabilise the monetary union. This cannot be achieved by simply trying to keep inflation at a certain level and a few other odd criteria (one was even immediately dropped, where M2 (definition of money which includes cash and regular bank accounts as well as other form of bank accounts with short-term supply of liquidity) was only allowed to grow by a certain maximum rate.
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Old 11-11-2011, 12:01 PM   #21
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I was born in '85, so yes, I know a little bit about the debates, but I cannot really say I remember them.
You shouldn't confuse the Euro with the EU, though. The Euro failing is not the same as the EU failing. We can all go back to our former currencies and still be the EU. The EMU is a part of the EU, but it's not the basis of the EU, nor the foundation.

I generally agree with your economic reasoning. I guess the only not so hypothetical scenario would be a conflict between Greece and Turkey over Cyprus (which, at least for the moment, also doesn't seem urgent), and that'd be a case where the rest of the EU would have to show face. Overall, the original idea was that over time we would grow more united, but for the first couple decades (not to say, centuries) no one expected people to give up their national feelings. However, you do not need to give up your sovereignty 100 percent. But a unified fiscal and economic policy would help heaps to stabilise the monetary union. This cannot be achieved by simply trying to keep inflation at a certain level and a few other odd criteria (one was even immediately dropped, where M2 (definition of money which includes cash and regular bank accounts as well as other form of bank accounts with short-term supply of liquidity) was only allowed to grow by a certain maximum rate.
Exactly! I forgot to mention fiscal union... And why not the same to income? I'm not sure that a czech or hungarian worker/company (czechs and hungarians will have the Euro since January 2012) wants to pay the same taxes that a french or spanish worker/company does, knowing that their incomes and purchasing power is much inferior to these last ones.
If we have to go into federalism, let's go seriously without bullshit. It'll be the same for everyone. The good and the bad. No country has the right to only want the commercial and economic benefits of sharing a currency.

I was not confounding Euro Zone (countries that have the Euro) with the European Union.
But if you recall, the mentors of the european construction already dreamt of a common currency. In the 1970/80's (even in the 1960's...) some of the great stadists (whether we like them or not, whether we agreed with their local policies or not) that were mentors of a solidary and truly fraternal Europe already said that there's no such thing as European Union without all the countries sharing all the instruments for a real communion.
I start to doubt of the durability of the Euro, but if the Euro survives this crisis, the other european countries will have to accept and be accepted in the Euro (and countries like Germany have to accept that we cannot have a currency even stronger than the Mark was, if there are countries with weak economies in there - it is not sustainable for no one). It'll be the only way for this project to succeed.

One thing I can tell you. If the Euro fails, the whole european construction (including the EU) will collapse in the same moment too. Now there's no EU without Euro. There'll be no EU with single currencies again, combinated with proteccionist measures against each other (since the new singular currencies will be devalued A LOT and proteccionism will be forced).

P.S.: About the conflict that Greece still has with Turkey (which explains why Greece has one of the biggest budget for defense)... Do you know what country the biggest seller/provider of weapons to Greece (it was re-reffered just two weeks ago)? Germany.
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Old 11-12-2011, 06:48 PM   #22
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Clearly Greece's problems are the result of the Corporatocracy/Illuminati/Area 51 trinity.
Incidentally, Indy, the new prime minister of Italy is European Chairman of the Trilateral Commission, a leading member of the Bilderberg Group and international adviser to Goldman Sachs and The Coca-Cola Company.

So, you may have a point in ascribing some recent developments in Europe to globalists, although your implication of Area 51 aliens in the whole shebang is perhaps slightly over the top.
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Old 11-12-2011, 06:56 PM   #23
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Exactly! I forgot to mention fiscal union... And why not the same to income? I'm not sure that a czech or hungarian worker/company (czechs and hungarians will have the Euro since January 2012) wants to pay the same taxes that a french or spanish worker/company does, knowing that their incomes and purchasing power is much inferior to these last ones.
If we have to go into federalism, let's go seriously without bullshit. It'll be the same for everyone. The good and the bad. No country has the right to only want the commercial and economic benefits of sharing a currency.

I was not confounding Euro Zone (countries that have the Euro) with the European Union.
But if you recall, the mentors of the european construction already dreamt of a common currency. In the 1970/80's (even in the 1960's...) some of the great stadists (whether we like them or not, whether we agreed with their local policies or not) that were mentors of a solidary and truly fraternal Europe already said that there's no such thing as European Union without all the countries sharing all the instruments for a real communion.
I start to doubt of the durability of the Euro, but if the Euro survives this crisis, the other european countries will have to accept and be accepted in the Euro (and countries like Germany have to accept that we cannot have a currency even stronger than the Mark was, if there are countries with weak economies in there - it is not sustainable for no one). It'll be the only way for this project to succeed.

One thing I can tell you. If the Euro fails, the whole european construction (including the EU) will collapse in the same moment too. Now there's no EU without Euro. There'll be no EU with single currencies again, combinated with proteccionist measures against each other (since the new singular currencies will be devalued A LOT and proteccionism will be forced).

P.S.: About the conflict that Greece still has with Turkey (which explains why Greece has one of the biggest budget for defense)... Do you know what country the biggest seller/provider of weapons to Greece (it was re-reffered just two weeks ago)? Germany.
Interesting post which deals with a lot of areas.

For us in Ireland, the European project was not sold or presented to us on the basis of a fiscal or even economic, still less a political union. As I recall it, the EEC (as it was called back then) was proposed orginally as a free trade area and that was all. Indeed, we in Ireland voted for it as such, back in the 1970s.

Subsequently, the opportunity to join with other countries in a common currency area was presented, and our citizens (in my opinion, rather foolishly) voted by a large majority in favour.

I have to say, I don't agree at all with your point that there is no EU without Euro. In fact, there are EU member countries that never joined the eurozone in the first place, so there seems to me to be no reason why, in theory at least, the Eurozone could not split with the EU still remaining. I think that the EEC, or Common Market as it used to be called, functioned quite well before all the talk of currency and political union came on the scene. My personal opinion is that the currency and political union benefits the politicians and bureaucrats, but not the ordinary citizens.
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Old 11-13-2011, 12:20 AM   #24
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Interesting post which deals with a lot of areas.

For us in Ireland, the European project was not sold or presented to us on the basis of a fiscal or even economic, still less a political union. As I recall it, the EEC (as it was called back then) was proposed orginally as a free trade area and that was all. Indeed, we in Ireland voted for it as such, back in the 1970s.

Subsequently, the opportunity to join with other countries in a common currency area was presented, and our citizens (in my opinion, rather foolishly) voted by a large majority in favour.

I have to say, I don't agree at all with your point that there is no EU without Euro. In fact, there are EU member countries that never joined the eurozone in the first place, so there seems to me to be no reason why, in theory at least, the Eurozone could not split with the EU still remaining. I think that the EEC, or Common Market as it used to be called, functioned quite well before all the talk of currency and political union came on the scene. My personal opinion is that the currency and political union benefits the politicians and bureaucrats, but not the ordinary citizens.
If a country decides to leave the Euro without "control" it means default, it means severe poverty for several years, like in Argentina a decade ago. And if one country decides to leave the Euro, there's no sustainability for the currency. Every country will go down after it, just like a house of cards. Many people have been descriing this for years and years. It's all happening step by step and even faster than they predicted.

If Greece or Portugal, for example, decide to leave the Euro, does it really have a chance to keep itself up and stable? I highly doubt. Italy's already "gone" too. Spain will suceed within very few months (the dependency between Portugal and Spain, both ways, is huge).

Most of the countries that still don't have the Euro are preparing to enter the common currency soon (Czech Republic and Hungary in January 2012). Can the European Union survive the colapse of one of its institucional pilars (the Euro)? Personally, I think it won't.
[Let's not put the UK case of not wanting the Euro - I think it's a side discussion]

The origins of the Euro are not as recent as many think. Some of the leaders of the - then - new EEC already planned and decided that the only way to keep Europe together, away from conflicts, was not only to share a market, having a free trade market, but also to share soveraignty: for example, having a unique currency. With some reasearch we'll find mentions to that in documents of the 1950's and the next 20 years.
And let's not forget that in the late 1970's EEC countries already had the ECU which was the foetus of the Euro, it was just not official, but theorically, the Euro was already there.
That's why I think there'll be no UE without the Euro.
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Old 11-13-2011, 08:29 PM   #25
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If a country decides to leave the Euro without "control" it means default, it means severe poverty for several years, like in Argentina a decade ago. And if one country decides to leave the Euro, there's no sustainability for the currency. Every country will go down after it, just like a house of cards. Many people have been descriing this for years and years. It's all happening step by step and even faster than they predicted.
An exchange rate is merely the price of one country's currency expressed in the denomination of another.

Talk of houses of cards collapsing, and severe poverty for years, TBH, in my opinion, is scaremongering bullshit. If anything, countries that leave will enrich themselves, in the medium term, as their exports of course become much cheaper practically overnight. If fhe current exchange rate is set inappropriately for some countries in the eurozone - as indeed it very obviously is - for various reasons, for countries such as Ireland, Portugal and Greece, then they should leave the eurozone. Simples!

In Greece, they already have severe poverty, oh, and they already defaulted on some of their debts. And they're still in the eurozone, because their political establishment demand it. What does that tell you?


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[Let's not put the UK case of not wanting the Euro - I think it's a side discussion]
I disagree - I think it is extremely important. For Ireland, certainly, it is important, as they are our main trading partner.

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The origins of the Euro are not as recent as many think. Some of the leaders of the - then - new EEC already planned and decided that the only way to keep Europe together, away from conflicts, was not only to share a market, having a free trade market, but also to share soveraignty: for example, having a unique currency. With some reasearch we'll find mentions to that in documents of the 1950's and the next 20 years.
And let's not forget that in the late 1970's EEC countries already had the ECU which was the foetus of the Euro, it was just not official, but theorically, the Euro was already there.
That's why I think there'll be no UE without the Euro.
It doesn't matter what some geriaratric bureaucrat like Delors came up with 50 years ago. Plans should be adjusted in the light of the changing situation.
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Old 11-13-2011, 08:58 PM   #26
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An exchange rate is merely the price of one country's currency expressed in the denomination of another.

Talk of houses of cards collapsing, and severe poverty for years, TBH, in my opinion, is scaremongering bullshit. If anything, countries that leave will enrich themselves, in the medium term, as their exports of course become much cheaper practically overnight. If fhe current exchange rate is set inappropriately for some countries in the eurozone - as indeed it very obviously is - for various reasons, for countries such as Ireland, Portugal and Greece, then they should leave the eurozone. Simples!

In Greece, they already have severe poverty, oh, and they already defaulted on some of their debts. And they're still in the eurozone, because their political establishment demand it. What does that tell you?




I disagree - I think it is extremely important. For Ireland, certainly, it is important, as they are our main trading partner.



It doesn't matter what some geriaratric bureaucrat like Delors came up with 50 years ago. Plans should be adjusted in the light of the changing situation.
The problem is not having the Euro. Is not having dreamt and thought about the Euro 50 years ago. The problem is the way that the whole thing was constructed, submitting economies to private and to specific interests of certain economies.
Spain said "screw you!" to the Common Agriculture Policy and to the common industrial policies that benefited certain economies. Yeah, they have 22% of unemployment due to bizarre labour policies, but they developped in 10/15 what Portugal or Greece did in 35/40 years, because they denied the to be subsidized for the closure of productive sectors, and thanks to that, they have a industrial cluster that guarantees the subsistance of the economy.
Did anyone really understood what the Masstricht Treaty was about in 1992? I don't think so. It didn't matter. What mattered is that peripheric economies were receiving tones of money called subsides and the central economies now had a big free circulation market to export their products.

I have bad news. If Portugal (or Greece, or Spain, doesn't matter) leave the Euro... Okay, because the "new" currency will have a very low value, exports will be benefitted. But what about the power or purchasing? Remember that money will cost 3/4 times less, but debt will cost 3/4 times more. It's a hole with no end. Countries like Portugal or Greece desperately need to reenter, first, into heavy domestic production and, then, into domestic consumption. With the huge loss of purchasing power, none of these will succeed.
And then, portuguese won't be able, neither to acquire portuguese products, neither to acquire external-european products: it's bye-bye free european market dream...

We may blame geriaratric bureaucrats like Delors for many thing, but one thing they were sure of - their plan had only one purpose: there was no way Europe was going into a big war again.
Guess geriatric bureaucracy is a heavy cost to keep Europe away from war.

I really really hope that pessimistic opinion makers are wrong, but as their previsions are all happening even faster than they predicted, I'm starting to wonder that they're not pessimistic, but realistic.
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Old 11-13-2011, 09:07 PM   #27
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http://www.nytimes.com/2011/11/13/wo...-of-truth.html
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Old 11-13-2011, 10:45 PM   #28
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The problem is not having the Euro. Is not having dreamt and thought about the Euro 50 years ago. The problem is the way that the whole thing was constructed, submitting economies to private and to specific interests of certain economies.
Spain said "screw you!" to the Common Agriculture Policy and to the common industrial policies that benefited certain economies. Yeah, they have 22% of unemployment due to bizarre labour policies, but they developped in 10/15 what Portugal or Greece did in 35/40 years, because they denied the to be subsidized for the closure of productive sectors, and thanks to that, they have a industrial cluster that guarantees the subsistance of the economy.
Did anyone really understood what the Masstricht Treaty was about in 1992? I don't think so. It didn't matter. What mattered is that peripheric economies were receiving tones of money called subsides and the central economies now had a big free circulation market to export their products.

I have bad news. If Portugal (or Greece, or Spain, doesn't matter) leave the Euro... Okay, because the "new" currency will have a very low value, exports will be benefitted. But what about the power or purchasing? Remember that money will cost 3/4 times less, but debt will cost 3/4 times more. It's a hole with no end. Countries like Portugal or Greece desperately need to reenter, first, into heavy domestic production and, then, into domestic consumption. With the huge loss of purchasing power, none of these will succeed.
And then, portuguese won't be able, neither to acquire portuguese products, neither to acquire external-european products: it's [I]bye-bye free european market dream.

We may blame geriaratric bureaucrats like Delors for many thing, but one thing they were sure of - their plan had only one purpose: there was no way Europe was going into a big war again.
Guess geriatric bureaucracy is a heavy cost to keep Europe away from war.

I really really hope that pessimistic opinion makers are wrong, but as their previsions are all happening even faster than they predicted, I'm starting to wonder that they're not pessimistic, but realistic.
You miss the essential point. Exchange rates are determined by markets, and not the other way around.

And so I say, let the markets decide!
Thatcher: "No! No! No!" - YouTube
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Old 11-14-2011, 08:53 AM   #29
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Most of the countries that still don't have the Euro are preparing to enter the common currency soon (Czech Republic and Hungary in January 2012).
Actually Hungary will adopt the euro in 2020 at the earliest, according to its prime minister. Hungary isn't even part of ERMII yet, and a two years' membership of ERMII is a prerequisite for joining the euro.

The Czech Republic is in a similar situation, with a target date for joining the euro in 2017.
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Old 11-14-2011, 09:39 AM   #30
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Exchange rates are nothing if you ignore a whole strategy for the sustainability of your economy, whether domestic, whether communitary, and let external interests rule over it. That's what happened with several countries in Europe, that explains their situation now.

Wasn't Thatcher and Mitterand that used to say many times that it'd be a danger for Europe if a - then - hypothetical reunification of Germany was made without control?
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