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View Diary: Cyprus: "We have never seen this" (167 comments)

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  •  one currency works fine for one nation (11+ / 0-)

    one currency for many nations, not so great.

    The end of the euro means the end of the EU. That means several dozen smaller nations, all governed by isolationist, Euroskeptic governments, trying to run their own economic policies on their own currencies, trying desperately to maintain the standard of living to which their populace is accustomed, competing with each other in trade wars.

    It will mean chaos and immiseration, because none of them will be able to increase economic growth on their own. Autarky means austerity, on a scale that will dwarf the current austerity being imposed by the EU.

    It also means that predators are going to swoop in and buy up the assets of those countries at fire-sale prices. The Russian move on Cyprus--buying their natural gas in exchange for a bailout--will be repeated all across Europe.

    The libertarian dreams of privately-owned city-states might yet come true. All Goldman Sachs has to do is buy up, say, Bulgaria, once the eurozone implodes. I'm sure they've already planned for this contingency.

    The only problem is that I don't see a way out of this besides the dissolution of the eurozone. As currently constituted, it's completely unsustainable and no one is going to fix it while it's still standing.

    "In America, the law is king." --Thomas Paine

    by limpidglass on Thu Mar 21, 2013 at 09:02:45 AM PDT

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    •  why? (11+ / 0-)

      there are 27 nations in the EU of which only 17 use the euro.  The EU has nothing to do with the euro so I don't understand why it would be the end of the EU

      Don't be a dick, be a Democrat! Oppose CPI cuts! Support Social Security and Veteran Benefits!

      by Jeffersonian Democrat on Thu Mar 21, 2013 at 10:47:14 AM PDT

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      •  I don't see the EU going anywhere. (8+ / 0-)

        People saying that Europeans are going to give up on their best chance for peace in modern history because of the euro must not live here.

      •  Seriously (3+ / 0-)

        These grand pronouncements seem to come from people who once went on spring break to London or something.

        •  I really was asking (1+ / 0-)
          Recommended by:
          theran

          for the reasoning because I can't see it, perhaps limpid had some grounds, because I've seen such opinions before.

          However, if it is just a confusion over the EU and EMU, then that's understandable and I'm beginning to have my doubts as well as to if the euro zone will survive - we'll see

          But I was taking limpid at his word and was curious as to why he thought so

          Don't be a dick, be a Democrat! Oppose CPI cuts! Support Social Security and Veteran Benefits!

          by Jeffersonian Democrat on Thu Mar 21, 2013 at 01:16:53 PM PDT

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      •  with the euro gone, we'll see just how committed (0+ / 0-)

        the EU members are to the union, once the richer ones can no longer enjoy the economic advantages conferred by the euro.

        The end of the euro probably means a global economic crisis. In the absence of the euro, you think the richer nations--France, Germany, UK--will step up and try to ensure that everyone in Europe gets through this with the minimum amount of pain?

        Or are they going to go nationalist, shut their borders, and try to isolate themselves from the fallout, while blaming the other nations of Europe? It's not like there's no historical precedent for that--it's what happened after WWI. And we all know where that led.

        The EU is not a real nation. There's a "parliament" which can't agree to tie their shoes, let alone do anything constructive, and which anyhow doesn't have much real power. If it did have real power the Troika wouldn't be on its rampage across Europe.

        A nation could survive a massive economic crisis. A collection of nations calling themselves a "union" is going to have more trouble.

        Fascism is growing in Europe again. It's a response to austerity and the inequality created by the eurozone.

        If there is a crisis, it could ignite again, and that would be dangerous for everyone.

        "In America, the law is king." --Thomas Paine

        by limpidglass on Thu Mar 21, 2013 at 02:46:35 PM PDT

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    •  I do wonder (2+ / 0-)
      Recommended by:
      statsone, theran

      if the Germans are really thinking this thing through properly.  They've created a totally unnecessary (Cyprus's entire GDP and deficit are minute in terms of German wealth) crisis and a direct face-off with Russia.  Do they want to return to the days of constant brinksmanship there?  With a still-nuclear power?  With the main supplier for most of Western Europe's winter heating gas, after a run of really BAD winters caused by global climate change?  Did they mean to give Russia the opportunity to come in and play white knight, and maybe acquire gas leases and a naval base on EU territory?

      I'm afraid they're being terribly short-sighted, possibly because the endless bailouts of southern client-states (that IS what the EU is all about) has angered voters who are threatening the current government's hold on power.  So we could once again have an international crisis/geopolitical strategic realignment occurring because somebody's afraid to face provincial voters who haven't the faintest notion of the issues involved.

    •  The predators are already here (1+ / 0-)
      Recommended by:
      terabytes

      so staying in the Euro won't keep them out.

      ¡Cállate o despertarás la izquierda! - protest sign in Spain

      by gjohnsit on Thu Mar 21, 2013 at 03:24:58 PM PDT

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