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Old 11-11-2011, 12:01 PM   #21
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Originally Posted by Vincent Vega View Post
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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Originally Posted by INDY500
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!
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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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Old 11-15-2011, 12:19 PM   #31
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Austria Goes for Debt Brake as Spreads Over Bunds Hit Record

After Greece, Ireland, Portugal, Italy, Spain, Slovenia, France and Belgium [and I've heard about Cyprus too], now, the God called "Market" has a new victim: Austria.

It's getting closer and closer and closer to the "hot spot" of Europe.

Meanwhile we have a completely undaunted and serene ECB commanded by one or two economies scared to death by the ghost of the 1920's inflation. Awesome!
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Old 11-15-2011, 09:22 PM   #32
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*elevation
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Old 11-16-2011, 06:28 AM   #33
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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!
yeah, i think a lot of it is scaremongering and the big-wigs protecting their own interests...

didn't Argentina survive a similar situation?? i think it worked out well when it was able to sort out its own currency... that's the example i keep hearing about lately anyway...
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Old 11-16-2011, 07:37 AM   #34
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it's not like countries like Greece, Portugal, Ireland etc have that much produce they can export to other countries (esp compared to the amount they need to import)
so, at the moment, the increase in export will be limited
however, the major consequence a devaluation of their currencies will have is that it will become even harder for them to pay of their debts and more expensive to import
as a result, unless they are willing to go bankrupt (which would probably result in a situation where it will become impossible for them to borrow any money again the next decade or so at least), it would do infinitely more harm than good

Italy might benefit in export because of a devalued currency
but as their debt is already enormous, they will really be in trouble

the only country that might benefit is Spain
but only if they would be able to transform their massive unemployment rate into a productive workforce

I think the Euro will survive because no one has a clue what the consequences will be of any of the alternatives
at the same time, no amount of budget cuts will transform the performances of Greece etc into good performing economies unless they are able to increase their income through increased productivity somehow

I hope this will finally result in unified fiscal and economic European approach
perhaps some good might come of it then in the long run
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Old 11-16-2011, 07:48 AM   #35
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i guess Greece and Portugal would absolutely rake in tourism though, in that case, which is a massive part of their economy, no?
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Old 11-16-2011, 08:00 AM   #36
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their tourist sector will probably pick up as a result after a couple of years
(I expect a short term decrease in tourism from Euro countries to new non-Euro countries)

but I very much doubt this increased income will even remotely make up for exploding debts
besides, I always thought the tourist industry served as a very nice bit of extra income
not as the main driver of your economy
(which is why esp Greece already is in the state it is in right now)
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Old 11-16-2011, 10:27 AM   #37
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it's not like countries like Greece, Portugal, Ireland etc have that much produce they can export to other countries (esp compared to the amount they need to import)
so, at the moment, the increase in export will be limited
however, the major consequence a devaluation of their currencies will have is that it will become even harder for them to pay of their debts and more expensive to import
as a result, unless they are willing to go bankrupt (which would probably result in a situation where it will become impossible for them to borrow any money again the next decade or so at least), it would do infinitely more harm than good

Italy might benefit in export because of a devalued currency
but as their debt is already enormous, they will really be in trouble

the only country that might benefit is Spain
but only if they would be able to transform their massive unemployment rate into a productive workforce

I think the Euro will survive because no one has a clue what the consequences will be of any of the alternatives
at the same time, no amount of budget cuts will transform the performances of Greece etc into good performing economies unless they are able to increase their income through increased productivity somehow

I hope this will finally result in unified fiscal and economic European approach
perhaps some good might come of it then in the long run
I don't think it's fair to put Ireland in the same bag of Greece and Portugal. Ireland has a way different economical structure, it has a very different taxes policy and a very different way to treat companies and enterprises. IMO, that's the main reason why I think Ireland was the so-called miracle and why it's gonna recover much faster than other countries.

The problem with Spain is definitely that. Spain did one thing well: Spain said "screw you" to the Common Agriculturak and Industrial Policy that benefited other countries (that had been literally paying to other economies to shut their productive sectors down). I think Spain has a huge unemployment rate because of bizarre labourist policies such as the wage and the complex hiring policies.

In fact, all these countries have very different problems: Greece had budget deficit that evolved in a debt and structurak problem; Italy has mainly a public debt problem; Portugal has mainly a problem of competitiveness and economical sustainability; France has a welfare state which is beyond huge; etc. But together all these problems evolve into a stuctrural problem for every country.

Devaluation of the currency would be good for countries like Greece and Portugal. The problem is that the public and private debt (Greece has a "tolerable" private debt, but Portugal has a private debt which is the double of the public) would "cost" the double/triple/whatever.
Then, to increase exports and decrease the external dependancy... Since the european common market is now so dependant from each other and since most export markets of european countries are... other european markets... Would european countries allow the other to raise protectionist policies? Of course not.

There's no f***ing way countries like Greece and Portugal will rise up and transform their economies unless they're allowed to. No developped economy, specially in the european context, can survive with an agriculture that represents 2% of the economy and an industry that represents only 22% of the economy, because they were being payed for decades to shut it down. That does not exist, it's an utopia.

I try to read international european press and the stigma that some create about the "bad pupils of the south" (as mere example) is so dangerous, that it seems that Europe constantly forgets about its own history.

Unless that changes and unless Europe changes its leaders by someone with a vision, with the notion that we've been living in peace for 60 years but our "genesis", the national identities and the call for the abyss was never over, it only has been numb for 60 years and we have to put it numb again.

Unless it happens, I think that Europe is playing a very dangerous game again.
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Old 11-16-2011, 07:00 PM   #38
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it's not like countries like Greece, Portugal, Ireland etc have that much produce they can export to other countries (esp compared to the amount they need to import)
so, at the moment, the increase in export will be limited
however, the major consequence a devaluation of their currencies will have is that it will become even harder for them to pay of their debts and more expensive to import
as a result, unless they are willing to go bankrupt (which would probably result in a situation where it will become impossible for them to borrow any money again the next decade or so at least), it would do infinitely more harm than good
Obviously, in the event of default, these countries would not have to repay private bank debts. For Ireland at least, bank debt is an extremely significant part of the total debt, not sure about the others.

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I hope this will finally result in unified fiscal and economic European approach
perhaps some good might come of it then in the long run

When are you Eurofederalists going to learn that you cannot buck the market?
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Old 11-17-2011, 05:29 AM   #39
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When are you Eurofederalists going to learn that you cannot buck the market?
It's not about bucking the market, it's about getting balanced national budgets in the eurozone countries. You cannot magically increase a country's export, but with a tighter economic and fiscal integration you can pressure its government to take other steps (i.e. austerity measures) to ensure its public debt stays within limits. Right now, the EU does not have power over the national budgets of its member countries. If it had, the crises in Greece, Ireland and Portugal may have been averted. The reality at the moment, however, is that the EU only gets (indirect) influence on a country's national budget when it's already to late and budgetary measures are set as preconditions for a EU bailout.
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Old 11-18-2011, 10:28 AM   #40
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Originally Posted by WalkOn21 View Post
It's not about bucking the market, it's about getting balanced national budgets in the eurozone countries. You cannot magically increase a country's export, but with a tighter economic and fiscal integration you can pressure its government to take other steps (i.e. austerity measures) to ensure its public debt stays within limits. Right now, the EU does not have power over the national budgets of its member countries. If it had, the crises in Greece, Ireland and Portugal may have been averted. The reality at the moment, however, is that the EU only gets (indirect) influence on a country's national budget when it's already to late and budgetary measures are set as preconditions for a EU bailout.
The budgets crossed limits because the EU told the countries to do so. And it's not only in the PIIGS countries. I remember that when Lehman & Bros went bankrupt, and when it started to be clear that a crisis was coming, the first measure that the ECB and the European Comission shouted to the european leaders was: «Run into debt! Spend what you have and what you don't have, have big deficits and big debts that we [ECB] will take care of that later». That means that the ECB gave hope to the countries that it would behave as a "normal" central bank and then would hekp the countries. It's clearly not what has been happening.
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