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Haven't a Greece thread lately...

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Greenman

Lifer
Oct 15, 1999
17,458
2,666
126
Greece isn't like Ireland where the government took on the debts of the banks. The Greek debt was run up over 20 years and used to pay the salaries of civil servants, build infrastructure, provide education and social services, and all the other normal functions of government. The fact that it wasn't spend wisely is not the creditors' faults. Given that, there is not a credible moral argument for default.

The only role international finance played was that they helped Greece hide the extent of its deficits, they did not directly benefit from the spending that caused them.
They do benefit from lending Greece money, those loans aren't free. Though I have to wonder at the logic of lending money when there is so little chance of it being repaid.
 

Doppel

Lifer
Feb 5, 2011
13,306
2
0

nine9s

Senior member
May 24, 2010
334
0
71
Germany is perhaps realizing that it is pointing a gun at its own head. Rumors out of Germany is that Germany will sign-off on a 2+ trillion Euro stabilizing fund. http://www.telegraph.co.uk/finance/financialcrisis/9330398/Debt-crisis-Germany-signals-shift-on-2.3-trillion-redemption-fund-for-Europe.html

Germany is likely being pragmatic instead of its usually dogmatic self. Most of Germany's exports are to other European countries, many southern ones. If one of those countries exited the Euro, others would probably follow (Greece, then Italian/Spain etc.) If that happened those countries would go to their own currencies, which would then give them control over their finances (they would be like USA, UK, Japan and other nations that spend in their own controlled currencies, in which case they can never be insolvent - in other words, Greece is like a state in the USA now, it is a currency user of the Euro, whereas if it became like the USA, Japan Uk etc. it would be a currency issuer and no more solvency problem.) But back to Germany. If those countries exited the Euro and became currency issuers, and their currencies freely floated, initially and for a while, until their economies produced what used to be bought from Germany (i.e employment would increase), their currencies would fall, making German goods much more expensive. At first this would be painful, less consumption, but it would mean those nations would start making those goods, which means more jobs etc. Germany's economy would then suffer as its exports shrank. So basically, employment would move from Germany to those other nations, Germany's economy would wane as the other s expanded. Basically, right now, it is Germany getting a free ride by using the same currency as its customers. Germany is likely realizing this and that is reason for the move in its position. I say free riding because if those so-called "lazy" countries used their own currencies, they would have adjusted years ago, and Germany's export business would be nothing like it is now. So Germany benefitted greatly from this arrangement, instead of being a victim like popular press makes them to be.
 

Doppel

Lifer
Feb 5, 2011
13,306
2
0
Germany is perhaps realizing that it is pointing a gun at its own head. Rumors out of Germany is that Germany will sign-off on a 2+ trillion Euro stabilizing fund. http://www.telegraph.co.uk/finance/financialcrisis/9330398/Debt-crisis-Germany-signals-shift-on-2.3-trillion-redemption-fund-for-Europe.html

Germany is likely being pragmatic instead of its usually dogmatic self. Most of Germany's exports are to other European countries, many southern ones. If one of those countries exited the Euro, others would probably follow (Greece, then Italian/Spain etc.) If that happened those countries would go to their own currencies, which would then give them control over their finances (they would be like USA, UK, Japan and other nations that spend in their own controlled currencies, in which case they can never be insolvent - in other words, Greece is like a state in the USA now, it is a currency user of the Euro, whereas if it became like the USA, Japan Uk etc. it would be a currency issuer and no more solvency problem.) But back to Germany. If those countries exited the Euro and became currency issuers, and their currencies freely floated, initially and for a while, until their economies produced what used to be bought from Germany (i.e employment would increase), their currencies would fall, making German goods much more expensive. At first this would be painful, less consumption, but it would mean those nations would start making those goods, which means more jobs etc. Germany's economy would then suffer as its exports shrank. So basically, employment would move from Germany to those other nations, Germany's economy would wane as the other s expanded. Basically, right now, it is Germany getting a free ride by using the same currency as its customers. Germany is likely realizing this and that is reason for the move in its position. I say free riding because if those so-called "lazy" countries used their own currencies, they would have adjusted years ago, and Germany's export business would be nothing like it is now. So Germany benefitted greatly from this arrangement, instead of being a victim like popular press makes them to be.
The idea is to treat the first decade of monetary union as a learning experience -- with mistakes made all round -- and allow a fresh start. The excess debt would be paid down over twenty years.What a fairytale.
 

nine9s

Senior member
May 24, 2010
334
0
71
The idea is to treat the first decade of monetary union as a learning experience -- with mistakes made all round -- and allow a fresh start. The excess debt would be paid down over twenty years.What a fairytale.
That is the situation in Europe. Monetarily, European countries are like states in the USA - they are currency users, not currency issuers. In the US, the federal government is the currency issuer and it is not revenue constrained because of that (taxes do not fund it expenditures) and the states are currency users (are revenue constrained.) The Euro union made the countries in Europe revert from issuers to users. Yet they do not have a strong central bank to manage it nor legal agreements to enforce it. That latter part should have been done before a unified currency was used. But it is what it was, but over the last few months, signs are showing that Europe is moving in that direction (ECB is gaining power to be a true lender of last resort, as a central bank should be for its banking system) and the nations are learning that are not truly nations anymore - they are states of Europe. So, they are moving toward a true monetary union like the USA and is states are.

As usual, a crisis was needed to make people be pragmatic and move toward a solution (truly unified European zone in this case.) I am starting to become bullish on Europe, as this unfolds, especially from a contrarian point (crisis is making markets move from European investments right at the point it is getting worked out.) Masses are generally wrong, that is what makes points like so profitable in investments.
 
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Doppel

Lifer
Feb 5, 2011
13,306
2
0
That is the situation in Europe. Monetarily, European countries are like states in the USA - they are currency users, not currency issuers. In the US, the federal government is the currency issuer and it is not revenue constrained because of that (taxes do not fund it expenditures) and the states are currency users (are revenue constrained.) The Euro union made the countries in Europe revert from issuers to users. Yet they do not have a strong central bank to manage it nor legal agreements to enforce it. That latter part should have been done before a unified currency was used. But it is what it was, but over the last few months, signs are showing that Europe is moving in that direction (ECB is gaining power to be a true lender of last resort, as a central bank should be for its banking system) and the nations are learning that are not truly nations anymore - they are states of Europe. So, they are moving toward a true monetary union like the USA and is states are.

As usual, a crisis was needed to make people be pragmatic and move toward a solution (truly unified European zone in this case.) I am starting to become bullish on Europe, as this unfolds, especially from a contrarian point (crisis is making markets move from European investments right at the point it is getting worked out.) Masses are generally wrong, that is what makes points like so profitable in investments.
But nations engaged in this are ceding sovereignty, just as states in the US cede it to the federal government. It could make sense for the profligate ones who are otherwise totally screwed to take part in this, such as Greece, but would France? Germans may because they'll wield lots of power.
 

0roo0roo

No Lifer
Sep 21, 2002
64,864
83
91
cept they aren't like american states...american states are practically homogenous relatively compared to europe. it would be like if america tried to share a currency with mexico...
 

amyklai

Senior member
Nov 11, 2008
262
8
81
cept they aren't like american states...american states are practically homogenous relatively compared to europe. it would be like if america tried to share a currency with mexico...
Except that's not true.

For reference: Mexicos's GDP per capita is around $10,150.

Look at this:
http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP

Puerto Rico: 23.400 per capita
Mississippi: 33.000
Idaho: 34.250
West Virginia: 35.050
South Carolina: 35.700
California: 52.000
New York: 57.500


and this:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Portugal: 22.413 per capita
Greece: 27.000
Spain: 30,600
Italy: 36,700
Germany: 43.700
France: 44,008


As far as GDP homgenity is concerned, the Euro zone looks pretty similar to the US.


IMO, the differences between the Euro zone and the US are
a) Greece is a very special case as far as political culture, evading taxes, bribery culture and cooking the books is concerned and probably doesn't have a US counterpart
b) European states offer more social security, which means that during a crisis the strain on state finances is bigger than in the US with its more minimalist welfare system
c) QE has been able to cover some of the US's problems. But QE is easier for the US because of the Dollar's status as global reserve currency (which means that the money pool they're diluting is much larger than it is for any other currency)
d) The US hasn't come under the same type of scrutiny by the markets yet.
 
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werepossum

Elite Member
Jul 10, 2006
29,873
460
126
Except that's not true.

For reference: Mexicos's GDP per capita is around $10,150.

Look at this:
http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP

Puerto Rico: 23.400 per capita
Mississippi: 33.000
Idaho: 34.250
West Virginia: 35.050
South Carolina: 35.700
California: 52.000
New York: 57.500


and this:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Portugal: 22.413 per capita
Greece: 27.000
Spain: 30,600
Italy: 36,700
Germany: 43.700
France: 44,008


As far as GDP homgenity is concerned, the Euro zone looks pretty similar to the US.


IMO, the differences between the Euro zone and the US are
a) Greece is a very special case as far as political culture, evading taxes, bribery culture and cooking the books is concerned and probably doesn't have a US counterpart
b) European states offer more social security, which means that during a crisis the strain on state finances is bigger than in the US with its more minimalist welfare system
c) QE has been able to cover some of the US's problems. But QE is easier for the US because of the Dollar's status as global reserve currency (which means that the money pool they're diluting is much larger than it is for any other currency)
d) The US hasn't come under the same type of scrutiny by the markets yet.
Interesting post, good data and good points on both sides. Thanks!

The idea that Germany has benefited and thus needs to spend its rewards on those nations who have not benefited seem to me to be the typical proggie trait of judging fairness by results and ignoring the process by which those results were realized, such as German workers working more than a decade longer than Greek workers. It might be to Germany's advantage to bail out PIIGS and/or to more tightly integrate the EU, but I don't think there is any moral need for them to do so.

Nonetheless, congrats to the Greeks for voting for responsibility. I would have bet money that Greece would have either voluntarily withdrawn from or been kicked out of the EU by summer's end; looks like I was totally wrong.
 

amyklai

Senior member
Nov 11, 2008
262
8
81
The idea that Germany has benefited and thus needs to spend its rewards on those nations who have not benefited seem to me to be the typical proggie trait of judging fairness by results and ignoring the process by which those results were realized, such as German workers working more than a decade longer than Greek workers. It might be to Germany's advantage to bail out PIIGS and/or to more tightly integrate the EU, but I don't think there is any moral need for them to do so.
The funny thing about the "Germany's strong because of a relatively weak euro"-argument is that Germany was in trouble in the early 2000s when the Euro was somewhat undervalued (around 1:1.0-1.2 vs the dollar) and has been doing well since 2006/07 when the Euro's value was higher (1:1.25-1.55). Germany has historically coped just fine with a strong currency, just look at the time before the Euro. The Germans never wanted a weak currency, they wanted a stable currency. It's always been Latin Europe that favored money printing and devaluation tactics over stability.

Nonetheless, congrats to the Greeks for voting for responsibility. I would have bet money that Greece would have either voluntarily withdrawn from or been kicked out of the EU by summer's end; looks like I was totally wrong.
I see it differently. We're now back to the pre-Papademos phase, just with reversed roles. Instead of Papandreou trying to implement savings measures and Samaras leading a strong opposition that was telling the people there's no need for spending cuts its now Samaras who's trying to get the budget deficit under Control and Tsipras is the guy with the strong opposition party who's telling the Greeks that budget cuts and other unpopular measures are unneccessary.

My conclusion is that Samaras will be about as successful as Papandreou, so things are still looking pretty hopeless.
 
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werepossum

Elite Member
Jul 10, 2006
29,873
460
126
The funny thing about the "Germany's strong because of a relatively weak euro"-argument is that Germany was in trouble in the early 2000s when the Euro was somewhat undervalued (around 1:1.0-1.2 vs the dollar) and has been doing well since 2006/07 when the Euro's value was higher (1:1.25-1.55). Germany has historically coped just fine with a strong currency, just look at the time before the Euro. The Germans never wanted a weak currency, they wanted a stable currency. It's always been Latin Europe that favored money printing and devaluation tactics over stability.


I see it differently. We're now back to the pre-Papademos phase, just with reversed roles. Instead of Papandreou trying to implement savings measures and Samaras leading a strong opposition that was telling the people there's no need for spending cuts its now Samaras who's trying to get the budget deficit under Control and Tsipras is the guy with the strong opposition party who's telling the Greeks that budget cuts and other unpopular measures are unneccessary.

My conclusion is that Samaras will be about as successful as Papandreou, so things are still looking pretty hopeless.
Good points. You're probably right about Greece's outlook - we Americans haven't been so successful at fiscal responsibility either - but I'm glad to see Greece at least reject the ultra-nationalists. If Greece can make enough changes to hang on until the world economy improves - assuming the world economy will materially improve - then its problems would become easier to solve. They'll still have to address their fundamental inequities in trying to compete with other, more industrialized nations that work harder and longer, but at least tourism to the seat of democracy and one of the seats of civilization would be up. Sometimes buying time is the best you can do.
 

KAZANI

Senior member
Sep 10, 2006
527
0
0
The idea that Germany has benefited and thus needs to spend its rewards on those nations who have not benefited seem to me to be the typical proggie trait of judging fairness by results and ignoring the process by which those results were realized, such as German workers working more than a decade longer than Greek workers.
Why do you people insist on bringing up those bogus facts?
Average effective age of retirement versus the official age in 2009 in OECD countries

It might be to Germany's advantage to bail out PIIGS and/or to more tightly integrate the EU, but I don't think there is any moral need for them to do so.
I like how you are trying to present this as Germany doing a favour to others, because THEY DON'T! They don't own the EU nor do they fork out free meals to anyone. Keep in mind those bailouts are not free money, they're expensive loans and come pack & parcel with inane austerity from which the German economy benefits considerably.

Nonetheless, congrats to the Greeks for voting for responsibility.
AHAHAHAHA! THAT WAS A GOOD ONE! The two parties that are forming the pro-bailout government are the same that since 1974 (the fall of the junta) have created the corruption that they're ostensibly called upon to purge today. You're basically expecting from criminals to turn themselves in and go to jail voluntarily! The leading party just a year ago accused the government of blackmailing the public into accepting more bailout/austerity with the false threat of leaving the euro, now they get elected by pulling the exact same trick, FFS! :rolleyes: (the video has no subs, but if you are in doubt ask any Greek - bonus laughs if that's a ND voter :biggrin:)

I would have bet money that Greece would have either voluntarily withdrawn from or been kicked out of the EU by summer's end; looks like I was totally wrong.
There is no clause for "ejecting" a eurozone member. As for the "voluntary" part, it wouldn't be the first time the Troika would have backed down from it's empty threats. We've already had this whole blackmail charade play out a few times before, during the past 2½ years of the crisis. Everytime the savage austerity packages received public backlash all the tough talk evaporated in an instance and refinancing (...or restructuring...or haircut) of the debt proceeded.
 

amyklai

Senior member
Nov 11, 2008
262
8
81
I like how you are trying to present this as Germany doing a favour to others, because THEY DON'T! They don't own the EU nor do they fork out free meals to anyone. Keep in mind those bailouts are not free money, they're expensive loans
They are loans which are given at a fraction of the interest rate (2% or so) that the markets would demand (probably something closer to 25% at this point). And of which nobody really expects that all of them will be repaid in full.

and come pack & parcel with inane austerity from which the German economy benefits considerably.
They come with reform demands because the last time Greece got cheap money (from the banks, after they joined the Euro), they just spent it for consumption and didn't adress their comeptitiveness issue, and relied on borrowing more and more money instead. Which brought us to the point where we are now. So your solution is that Eurpean taxpayers step in instead of the banks and give cheap loans with no strings attached to keep Greece's debt train rolling ad infinitum?
 
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werepossum

Elite Member
Jul 10, 2006
29,873
460
126
Why do you people insist on bringing up those bogus facts?
Average effective age of retirement versus the official age in 2009 in OECD countries



I like how you are trying to present this as Germany doing a favour to others, because THEY DON'T! They don't own the EU nor do they fork out free meals to anyone. Keep in mind those bailouts are not free money, they're expensive loans and come pack & parcel with inane austerity from which the German economy benefits considerably.



AHAHAHAHA! THAT WAS A GOOD ONE! The two parties that are forming the pro-bailout government are the same that since 1974 (the fall of the junta) have created the corruption that they're ostensibly called upon to purge today. You're basically expecting from criminals to turn themselves in and go to jail voluntarily! The leading party just a year ago accused the government of blackmailing the public into accepting more bailout/austerity with the false threat of leaving the euro, now they get elected by pulling the exact same trick, FFS! :rolleyes: (the video has no subs, but if you are in doubt ask any Greek - bonus laughs if that's a ND voter :biggrin:)



There is no clause for "ejecting" a eurozone member. As for the "voluntary" part, it wouldn't be the first time the Troika would have backed down from it's empty threats. We've already had this whole blackmail charade play out a few times before, during the past 2½ years of the crisis. Everytime the savage austerity packages received public backlash all the tough talk evaporated in an instance and refinancing (...or restructuring...or haircut) of the debt proceeded.
So your opinion is that Germany et al should just keep shoveling money into Greece with little expectation of ever being repaid to avoid Greece having to make any cuts in government bennies? From where exactly do you get your huge sense of entitlement? Right now creditors are the ONLY thing keeping Greece afloat, and we're seeing not only a continuing sense of entitlement but an ever-growing demand for more. Personally I don't care if Greece stays in or leaves the EU, but if Greece goes their own way then they are either totally unable to even service their debt or would have to pay in back in their new currency, rapidly forcing it into very high inflation spiraling toward worthlessness. Greece simply has an unsustainable number of people drawing from the government compared to the number of people working in the private sector, and no amount of far-left progressive dogma can turn that into prosperity.

From your own link on retirement ages:
For Belgium and France, workers can retire at age 60 with 40 years of contributions; for Greece, at age 58 with 35 years of contributions; and for Italy, at 57 (56 for manual workers) with 35 years of contributions.
That German workers have the same effective retirement age due to personal savings and strong union pensions does not change the fact that Greek workers can retire at age 58 on the government dime whereas German workers must labor to age 68 to retire on the government dime. And quoting hours worked for Greece doesn't carry much weight when the world agrees that corruption in reporting such numbers is rampant in Greece.
 

amyklai

Senior member
Nov 11, 2008
262
8
81
There is no clause for "ejecting" a eurozone member. As for the "voluntary" part, it wouldn't be the first time the Troika would have backed down from it's empty threats. We've already had this whole blackmail charade play out a few times before, during the past 2½ years of the crisis. Everytime the savage austerity packages received public backlash all the tough talk evaporated in an instance and refinancing (...or restructuring...or haircut) of the debt proceeded.
Forcing Greece out of the Euro zone would be as simple as stopping the payments. Within a few weeks, the Greek government wouldn't be able to pay its employees and other bills any more. Which would force Greece to reintroduce its own currency, of which it could print as much as needed...
 

amyklai

Senior member
Nov 11, 2008
262
8
81
It's pretty irrelevant how much or how little Greek people work, as long as they can finance themselves.

If 35 years of work is enough to finance the Greek pension system, do it, fine.

But if the way Greece is going about things means that taxpayers from other countries have to finance Greece, then don't act surprised if people start questioning what you're doing and demand that you deregulate / work more / earn less / tax more / do whatever is necessary to get your finances in order.
 

KAZANI

Senior member
Sep 10, 2006
527
0
0
Greece simply has an unsustainable number of people drawing from the government compared to the number of people working in the private sector, and no amount of far-left progressive dogma can turn that into prosperity.
It's unsustainable because the revenue is not there due to tax evasion, not because of the public/private sector ratios. Greece's public sector is well below the EU average, yet the austerity keeps applying the same flawed neoliberal logic of further cutting its size (till what, it dissapears? LOL).

That German workers have the same effective retirement age due to personal savings and strong union pensions does not change the fact that Greek workers can retire at age 58 on the government dime whereas German workers must labor to age 68 to retire on the government dime.
*facepalm*
The whole idea of that particular statistic is to compare NOT the theoretical retirement ages (which in every country include special provisions for certain occupations/population groups and is hard to compare directly), but the actual averages. There's not much difference there and it's certainly not the deal-breaker that the austerity policy makers are making it to be.

And quoting hours worked for Greece doesn't carry much weight when the world agrees that corruption in reporting such numbers is rampant in Greece.
"The world agrees"? You mean that's the unsubstantiated claim that you have decided is plausible enough to function as your Greece-bashing platform.
 

KAZANI

Senior member
Sep 10, 2006
527
0
0
They are loans which are given at a fraction of the interest rate (2% or so) that the markets would demand (probably something closer to 25% at this point). And of which nobody really expects that all of them will be repaid in full.
This only applies post-haircut, don't forget the huge spread at the begining of the Greek debt saga. BTW, it's not 2% and, without getting too technical, on it's current structure there is general consensus that it's still unsustainable, hence the "allmighty markets" still attacking the EZ. Funny that you should mention the repayment ability too, because the Troika have been acting as if this is even humanely possible, even after the first haircut.

So your solution is that Eurpean taxpayers step in instead of the banks and give cheap loans with no strings attached to keep Greece's debt train rolling ad infinitum?
I don't see how on earth you can deduce this from what I've written. Anyway, to reverse the question: do you find the endless cycles of adding more debt in exchange for setting unrealistic budgetary goals which need to be revised every couple of months IS the solution?


Forcing Greece out of the Euro zone would be as simple as stopping the payments.
I already said this isn't the first time this threat has been used to pressure the public and retracted silently just before it blew up in anyone's face. If there was a plan to unravel the EU by letting Greece leave the EZ, there wouldn't be much use in going through the hassle of a blackmail.
 

amyklai

Senior member
Nov 11, 2008
262
8
81
This only applies post-haircut, don't forget the huge spread at the begining of the Greek debt saga. BTW, it's not 2% and,
Each of the loans was significantly cheaper than what the markets wanted. Otherwise Greece would've just taken the loans from the markets with no political strings attached.

Just because you think that Greece deserves even better conditions doesn't change the fact that that what Greece already gets is already much better than what the markets seem to consider fair for a country like Greece.




I don't see how on earth you can deduce this from what I've written. Anyway, to reverse the question: do you find the endless cycles of adding more debt in exchange for setting unrealistic budgetary goals which need to be revised every couple of months IS the solution?
Because what you seem to consider the solution (the rest of Europe just pays off your debt and gives you a fresh credit card via Eurobonds and you go on with business as usual) is politically unpalatable in the countries that would have to cover the payment.
Hell, Greece is rioting and electing extremist parties while it's getting money. Just imagine how politically difficult this must be for the countries who have to give the money.

I already said this isn't the first time this threat has been used to pressure the public and retracted silently just before it blew up in anyone's face. If there was a plan to unravel the EU by letting Greece leave the EZ, there wouldn't be much use in going through the hassle of a blackmail.
Don't think so. Greece leaving the Euro zone would be bad. But setting a precedent that a bankrupt country can blackmail the entire Euro zone by threatening to leave would be even worse.
 
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werepossum

Elite Member
Jul 10, 2006
29,873
460
126
It's unsustainable because the revenue is not there due to tax evasion, not because of the public/private sector ratios. Greece's public sector is well below the EU average, yet the austerity keeps applying the same flawed neoliberal logic of further cutting its size (till what, it dissapears? LOL).



*facepalm*
The whole idea of that particular statistic is to compare NOT the theoretical retirement ages (which in every country include special provisions for certain occupations/population groups and is hard to compare directly), but the actual averages. There's not much difference there and it's certainly not the deal-breaker that the austerity policy makers are making it to be.



"The world agrees"? You mean that's the unsubstantiated claim that you have decided is plausible enough to function as your Greece-bashing platform.
Hey, if the Greek people want to chase prosperity by further squeezing the turnip, be my guests. The world can always use more bad examples of what doesn't work; certainly the US can, as we seem to bent on emulating the Greek model that the problem is never spending, it's always lack of taxes. It would seem however that a bare minimum of Greeks disagree with you at the moment.

And I'm not bashing Greece, simply acknowledging (along with the rest of the world) Greece's spectacular socialist failure and pointing out (again, along with the rest of the world) that successful countries' continually pumping money into failed countries is not a path to maintaining that success. To paraphrase Ronald Reagan, the Greeks have run out of other people's money.
 

0roo0roo

No Lifer
Sep 21, 2002
64,864
83
91
Except that's not true.

For reference: Mexicos's GDP per capita is around $10,150.

Look at this:
http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP

Puerto Rico: 23.400 per capita
Mississippi: 33.000
Idaho: 34.250
West Virginia: 35.050
South Carolina: 35.700
California: 52.000
New York: 57.500


and this:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Portugal: 22.413 per capita
Greece: 27.000
Spain: 30,600
Italy: 36,700
Germany: 43.700
France: 44,008


As far as GDP homgenity is concerned, the Euro zone looks pretty similar to the US.


IMO, the differences between the Euro zone and the US are
a) Greece is a very special case as far as political culture, evading taxes, bribery culture and cooking the books is concerned and probably doesn't have a US counterpart
b) European states offer more social security, which means that during a crisis the strain on state finances is bigger than in the US with its more minimalist welfare system
c) QE has been able to cover some of the US's problems. But QE is easier for the US because of the Dollar's status as global reserve currency (which means that the money pool they're diluting is much larger than it is for any other currency)
d) The US hasn't come under the same type of scrutiny by the markets yet.
You left out romania 12,476GDP


And you are ignoring the very glaring differences in language and culture. The US and uk are far more similar than the eu states are to one another, and even there, there is no case for union. this is about democratic legitimacy for political union, which is required for legitimacy of economic union, you can't have one without the other as we've learned, and the eu simply doesn't have the ingredients for a democratic union that is worth anything. maybe if they all decide to adopt english it might work;)

over their dead bodies..and u know it!
 

amyklai

Senior member
Nov 11, 2008
262
8
81
You left out romania 12,476GDP
Romania isn't in the Euro zone at the moment, they're not causing any current problem of the ez.


And you are ignoring the very glaring differences in language and culture. The US and uk are far more similar than the eu states are to one another, and even there, there is no case for union.
Europe doesn't need to look further than Switzerland to see an example of a multilingual demcracy (German, French, Italian, Romansh) that has been functioning very well for quite some time now.
Apart from that, most people under 50 in most EU countries speaks at least some English, so communication isn't the big problem it used to be a few decades ago.

this is about democratic legitimacy for political union, which is required for legitimacy of economic union, you can't have one without the other as we've learned, and the eu simply doesn't have the ingredients for a democratic union that is worth anything. maybe if they all decide to adopt english it might work;)
This is the main question for the long term survival of the Euro and the main reason why the current crisis hasn't been resolved yet. Either the member states are willing to transfer significant power to the EU, or the Euro will never work in the long term. We'll see in 9 days how courageous the current crop of EU leaders are in this respect (because that's part of what's on the agenda for the next summit), and we'll see the public response to this in the current monts.
Switzerland actually would be a really interesting model for Europe - they leave significant competences at the member states (Kantons) and allow public referendums over lots of topics which would help a lot in avoiding the current feeling that Brussels is a place far away where people who nobody has control over decide things that affect us (to be fair: this sentiment has largely been brought about by pouplists who use "Brussels" as the scapegoat for anything that goes wrong, especially if they created the mess themselves).
Unfortunately, since the Swiss model takes considerable power out of the politicians' hands and gives it directly to the people, I don't think that's what our politicians will propose on the 28th, they'll probably come up with a great alternative that they think is just sufficient to soothe the markets for a few hours like, wait for it, a Banking Union!

over their dead bodies..and u know it!
That's not necessarily the case. You know, the time when national states were all the rage is somewhat running out in a time when corporations and markets are practically global and play cat and mouse with national governments. Yeah, I know it gives a lot of people a warm and fuzzy feeling to stand by their flag and sing their anthem and cheer for their national team, but nobody needs to take away that kind of feel good national identity fluff to make the Euro work. Breaking it all apart for the sake of "independence" (whatever that means for not too big states in a globalized world, just look at how many far-reaching treaties even a fiercely independent country like Switzerland has to make with the EU just to be able to do business and how they have to bind the value of their otherwise stable currency to the Euro to be able to keep their exporting industry and tourism running etc etc.) would be disastrous though, and singing the national anthem with an empty stomach is only half as much fun.
 
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0roo0roo

No Lifer
Sep 21, 2002
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romania isn't using the money yet...but the plan was always to include them eventually, they are not opting out, and no one told them to opt out. but that isn't exactly the point. they are in the union and the range of difference is pretty drastic regardless.

it doesn't matter if some of the population speak english, over all the differences over that large area are just not conducive to having any national discussion, whats the point if you have to hope someone is talking in english or hope it gets tranlsated by some 3rd party into english, your experience is thus limited to whatever is officially noticed or whatever. switzerland isn't much of an example of anything they are a tiny country, they can't be all that separate within that country, anyways belgium is the opposite example, its tiny and barely holding together, two different peoples, two languages, and they pretty much want a divorce.

its not about the corporations and the rest, what defines a people still matters, just as it matters what defines your family and that defines how you will treat them. its not about the sake of independence but understanding why things work and why things don't work, the eu is a concept from the past when the blank slate was in vogue, human nature was entirely denied, the soviets thought they could create a perfect citizen, the feminists and the hippies had their communes and rejection of gender norms and the rest, this all fell apart as they denied what made people people, and in the case of the soviets, it required brutal force to keep their broken theory of humanity in place. the eu was no different, it was a denial of what culture and language are to people, and nationhood. they thought they could retrain people to ignore all that, but its clear it just doesn't work that way. what you propose is to continue this broken theory of how people are by forcing them even further into the binds of a broken system that will take away even more autonomy, it will just make the trap permanent...or until it really falls apart in a bad way down the line. you can try to force people together that shouldn't be, yugoslavia is a lesson in how it can go very badly wrong in the end.

its not about fuzzy feelings and flags. this is how people work. in the 60s they thought they could take children with ambiguous genitilia, chop it off, convert them to girls by default, raise them as girls, and have them become girls by nurture, and in many cases this led to tragedy down the line as reality doesn't fit this simplistic theory of denial, that was the era this type of ridiculous and naive blank slate thinking was in vogue.
 
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