Skip to main content

The yammering in Brussels is getting close to epic proportions

With attempts in Athens to form a government after last week's election looking increasingly doomed, European leaders abandoned their taboo on talking about the possibility that Greece might have to leave the euro
Without political integration into a federal single Union the Euro was pretty much doomed to fail. National governments and their people flinched at forming a single entity, my opinion is still that if they couldn't form a single entity then having a single currency was pointless. Instead of the Euro there was the option of a controlled currency exchange rate to prevent speculation.

What we have now instead of a democratic union is an autocratic one, democracy is being trampled as the financial giants try to save their metaphorical bacon.

The reality is that if you couldn't form a single political entity democratically then you really couldn't form a union monetarily either something was bound to give. The fact of the matter is that the financial crisis stress tested the Euro, and it broke, there is no point in trying to bandage it by trampling democracy into the dust.

What we have now is both political and economic fragility and the more that democracy is kicked to the curb, the worse it will get. We have seen the rise of extreme nationalist parties because of this, they in turn blame the easiest targets of all the immigrants. It is not the immigrants that have caused any of the problems, it is not even the fault of individual countries. The fact of the matter is that people feel powerless to change their fate and are prevented from doing so by the plutocrats. Sacrificing whole nations and their people on the alter of market stability can only incubate resentment.

It started with the holy grail of "Austerity" without incentive, it has moved on to anti democratic strategies, it will all end in tears. There are voices being raised that stimulus is required and in France we voted one of those into power, however as things stand now, it will be too little too late. It is now time to to organize the break up of the Eurozone and to try and avoid total chaos.

The Euro was a financial pact rather than a democratic one, and this was always its fundamental and in the end fatal flaw.

Krugman's projections [I link this article rather than his NYT post for obvious pay-wall reasons]

. [First, we see a] Greek euro exit, very possibly next month.

2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.

3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.

3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing.

4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or:

4b. End of the euro.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar. Let this be a lesson to the GOP that (26+ / 0-)

    Austerity is a killer.

    "Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing." Arundhati Roy

    by LaFeminista on Mon May 14, 2012 at 11:34:39 PM PDT

    •  They won't listen... They never will until it (3+ / 0-)
      Recommended by:
      LaFeminista, linkage, a2nite

      finally hit's them square in the face.  And only then if they get hit with giving up their wealth.

      "Death is the winner in any war." - Nightwish/Imaginareum/Song of myself.

      by doingbusinessas on Mon May 14, 2012 at 11:44:23 PM PDT

      [ Parent ]

    •  You are applying our values to Republicans (5+ / 0-)

      They actually want a collapse. They want low wages. They want people to die broke. They want power.

      Well, I been around the world, and I've been in the Washington Zoo. And in all my travels, as the facts unravel, I've found this to be true.... ...they don't give a f^ck about anybody else

      by Zwoof on Tue May 15, 2012 at 05:06:19 AM PDT

      [ Parent ]

      •  This. Exactly this. This is what they WANT. (2+ / 0-)
        Recommended by:
        Zwoof, a2nite

        And their sheeple will happily vote for it, and still vote for it, even though and ESPECIALLY when they start to get squeezed.  They are so blind they will willfully ignore what Republicans are doing to them and blame everyone else.

        "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

        by zenbassoon on Tue May 15, 2012 at 05:11:00 AM PDT

        [ Parent ]

        •  You know how they use controlled demolition (4+ / 0-)

          to implode a building?

          This is what the right is doing. They mistakenly think they can blow out the bottom of the building and the penthouse will somehow remain floating in thin air.

          Well, I been around the world, and I've been in the Washington Zoo. And in all my travels, as the facts unravel, I've found this to be true.... ...they don't give a f^ck about anybody else

          by Zwoof on Tue May 15, 2012 at 05:22:04 AM PDT

          [ Parent ]

      •  Right, because there is someone else 2 blame (0+ / 0-)

        The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

        by a2nite on Tue May 15, 2012 at 06:16:57 AM PDT

        [ Parent ]

    •  Do you hear yourself? (0+ / 0-)

      "a lesson to the GOP"? Ha!

      They will simply perform Luntzian ju-jitsu on it to make it mean the opposite. Hence, the lesson becomes that austerity has, so far, been impure, corrupted by remnants of socialism, and that's why it keeps failing. Nope, for it to work it must be pure, no social support por nada, and the people must suffer absolutely in order to be purged and purified. What's that I see in the distance? Well, I do declare, it's the promised land!

      "The pump don't work 'cause the vandals took the handles." Subterranean Homesick Blues, Bob Dylan

      by psnyder on Tue May 15, 2012 at 08:39:32 AM PDT

      [ Parent ]

  •  I agree with much of what you say (3+ / 0-)
    Recommended by:
    FG, LaFeminista, Mariken

    but I disagree with your view on the outcome. Nevertheless, it will be a wild ride until it is all said and done.

    •  I am a long way from being sure of the actual (2+ / 0-)
      Recommended by:
      basquebob, Hey338Too

      outcome, but at some point democracy has to win.

      "Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing." Arundhati Roy

      by LaFeminista on Tue May 15, 2012 at 12:07:43 AM PDT

      [ Parent ]

      •  I agree. (3+ / 0-)
        Recommended by:
        Pluto, mookins, letsgetreal

        BTW, I read the Guardian article you linked and it is slanted towards the Anglo view, not surprising. It quotes mostly Osborne, Cameron's Chancellor of the Exchequer who is a devout neoliberal and a pawn of the City, and a lot of conjecture. I have seen the folks over at eurotrib complaining about the Guardian lately. Apparently the Guardian was favoring Sarkozy over Hollande.

        •  Ah Boy George, the part-time Chancellor! (3+ / 0-)
          Recommended by:
          some other george, mookins, basquebob

          No formal economic training, neo-liberal True Believer, predicted a surge in business investment that never materialised, is constantly having to revise his forecasts downwards, and produced an omnishambles Budget because he only devotes half his time to the job because he spends half his time as the chief Tory strategist.

          Nice to know we're in safe hands, innit?

      •  It would be pretty to think so (4+ / 0-)

        Humans have been recording history for more than 5000 years, and democracy and freedom comes and goes.

        You may well be right about the role of corporate power and economic aristocracy in the whole mess in Europe, but I think you're understating the role of pure, bloody minded stupidity here:  the rich, by pushing their own interests beyond any reason or sense, are about to bring down the system that's been so very, very good for them.

        The Euro could survive if the Germans weren't being so damn idiotic about this.  Economics is not a morality play.  And even if it were, most of the countries on the periphery (excepting perhaps, ironically, Greece) weren't being "immoral", if by being "immoral" you meant that people were "living beyond their means".  A bit of inflation in Germany would have saved the Euro.  But folks like Merkel are too enamored of the Confidence Fairy to see reality.

        The Single Currency was driven by politics more than economics, and it was easier to get a single currency than it was to created a United States of Europe.  It was a bad idea done for mostly out of good intentions.

        But we should worry about the political future of Europe.  Most of Western Europe has been at peace for as long as they've been since Rome fell.  Let's hope that idiot leaders like Cameron and Merkel don't succeed in bringing that long peace to an end.

        Mitt Romney is a T-1000 sent back from the Future as a harbinger of the upcoming Robot Apocolypse.

        by mbayrob on Tue May 15, 2012 at 12:22:24 AM PDT

        [ Parent ]

  •  Not necessarily. It was always a gamble that they (3+ / 0-)
    Recommended by:
    LaFeminista, BentLiberal, Iberian

    will manage to harmonize fiscal policy before a major crisis hits. It's too late now but they can probably muddle thru. Greece is likely a goner though.

    •  I don't think Greece will be on its own (1+ / 0-)
      Recommended by:
      BentLiberal

      There is deep political dissatisfaction right across Europe.

      Unemployment of those below 30 is running at great depression levels.

      "Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing." Arundhati Roy

      by LaFeminista on Tue May 15, 2012 at 12:15:46 AM PDT

      [ Parent ]

      •  Breaking euro up is not likely to help with that. (1+ / 0-)
        Recommended by:
        Iberian
        •  But increased stimulus may, right? (1+ / 0-)
          Recommended by:
          AaronInSanDiego

          So if I'm reading this right, if Greece or other countries have greater freedom to stimulate their economies if they're not using the Euro as currency, then "breaking up" could conceivably help, couldn't it?

          •  The only way for them to stimulate their (0+ / 0-)

            economies is to devalue the currency. Which is a form of stimulus as it kills imports and promotes internal manufacturing and exports. But it makes lives of people there worse due to loss of income. This, of course, applies only to countries like Greece or Portugal assuming they leave euro. EU as a whole can do stimulus without breaking euro but Germany would have to agree to that.

            •  The eurozone could invest (2+ / 0-)
              Recommended by:
              FG, Iberian

              Issue eurobonds

              There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

              by upstate NY on Tue May 15, 2012 at 06:28:16 AM PDT

              [ Parent ]

            •  Isn't Greece's economy mostly tourist related? (0+ / 0-)

              Wouldn't that blunt the impact of any "Euro trauma" because people are still going to want to visit Greece (and create an influx of stable currencies which the country can use for international trade), especially if their prices are lower than competing travel destinations?

              I haven't been here long enough to be considered a Kossack, does that mean that I'm just a sack?

              by Hey338Too on Tue May 15, 2012 at 08:08:00 AM PDT

              [ Parent ]

  •  was just talking to a friend who said something (1+ / 0-)
    Recommended by:
    LaFeminista

    very similar. She believes the euro was basically a scheme by the Germans to exploit countries like Greece and Spain, if I understood her correctly.

    "Okay, until next time. Keep sending me your questions, and I will make fun of you... I mean, answer them." - Strong Bad

    by AaronInSanDiego on Tue May 15, 2012 at 12:49:18 AM PDT

    •  I don't know if that was overt strategy (1+ / 0-)
      Recommended by:
      Iberian

      I think they benefit from it and thus tend not to try stopping the flow of those benefits. I think this is about German ideology more than anything. Because their decisions are irrational. The whole crisis could have been nipped in the bud for 1/10th of the cost if they had allowed the ECB to purchase bonds in the secondary market 2 years ago. Indeed, the ECB would have made a killing. But the sorts of things that other central banks are allowed to do, even the US Fed, are prohibited by ideology in Europe.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Tue May 15, 2012 at 06:48:13 AM PDT

      [ Parent ]

    •  Absurd (1+ / 0-)
      Recommended by:
      AaronInSanDiego

      Greece and Spain and many others couldn't wait to get into the Euro. Germany n the other hand was quite reluctant.  In fact part of the problem here is that Greece cooked their books to get into the Euro. They should've never have been let in in the economic conditions they were.

    •  The history of the EU (1+ / 0-)
      Recommended by:
      AaronInSanDiego

      is that it first formed in the Core countries, i.e. Germany, France, Belgium, Netherlands, and Luxembourg.  That took a while to negotiate and then to iron out all the difficulties and make work.  After that it's incremental expansions and every expansion having its particular kinds of difficulties and fairly enormous costs.

      The Core countries in fact pay a lot in the process- they're the wealthy countries, the countries coming in are invariably relatively poor and have long histories of inadequate government, impoverishment, nationalism, etc.  The Core countries inevitably have the upper hand at the start.  But the benefits of the new arrangement seem to outweigh the old by a lot.

      Then there's always a middle period where recently joining countries ally against the Core countries as the happy liberalism about membership exhausts and the conservatism and nationalism of their populations kicks in.  Commonly around the time that EU subsidies drop off and Brussels starts to push hard for the social and economic liberalization measures agreed upon.  In the early 2000s the right wing elected governments of Spain and Poland, opportunistically aided by Italy/Berlusconi iirc, formed a kind of blocking alliance and mutual cover against Germany and France in Brussels and pushed a kind of reactionary agenda.   Poland 's representatives notably tried to get Christianity written into any prospective EU constitution as the official religion.  

      Basically, countries and peoples go back and forth on their feelings about the EU.  One day it's their empire, the next it's a conspiracy against their rights and pocketbooks and right to be selfindulgent idiots.  Which says that Brussels is in fact doing its job of negotiating Europe' problems.

      What keeps the EU together is that while conforming to other people's rules is unbearable at times, being a small or poor country on its own entails dependency and vulnerability and coercion and dysfunction that most people find worse.

  •  The dollar is probably doomed too (2+ / 0-)
    Recommended by:
    Pluto, LaFeminista

    Because the U.S. no longer has a political union between Wall Street and the rest of America.

  •  I'm not an economist and frankly... (5+ / 0-)

    ...not only don't I really understand economists, but I've had for some time now the feeling that (i) a lot of the traditional economic indicators (such as GDP) are increasingly distorted/worthless and (ii) what we read about France in the UK/US press contains a lot of conscious/unconscious bias/propagandist bullshit.

    That said, I think France -- the real France, not that of banks and politicians -- is actually doing quite well, if one looks at a different set of criteria.

    I'll throw a bunch of thoughts on the table and you can tell me if I'm completely off-base:

    1) French consumption doesn't seem to be hugely impacted by la crise; I don't see the sharp increase in pauperization that is reported elsewhere, esp. in the US. Maybe the french weren't doing as great before, but they don't seem to be much worse off now.

    2) French demographics is on the rise, unlike most other European countries, which must be a good thing, surely. And it's not due to immigration either.

    3) For all the complaints about the weight of the French government on the French economy, it sure helps as an invisible hand protecting its inhabitants from the worst consequences of the crise and keeping its investment in infrastructure, etc. Yes there is waste, but there's a lot of stabilizing too.

    4) The French people are like ants, not grasshoppers. People here still save and there's little or no mortgage or credit card or student loan debt crisis -- on top of that when they borrow it's fixed rates, not weirdo variable rates like in the US and UK. And when they save, it's not in exotic instruments but reliable risk-free stuff.

    5) The French aren't that industrialized compared to their neighbors, they don't rely as much on exports, and the consume of a lot of what they make and they don't have "bubbles" -- so yes they're not Germany or the UK, but conversely they're a lot safer. Forget about GDP growth, look at the soundness & balance of the economy.

    Again, I'm no expert, but I can tell when I read gloom & doom articles about France in the US/UK press that they simply bear little relevance to my experience on the ground here. I tried to figure out why and this (above) is what I came up with. Maybe I'm wrong, I don't know.

    OVER HERE: AN AMERICAN EXPAT IN THE SOUTH OF FRANCE, is now available on Amazon US

    by Lupin on Tue May 15, 2012 at 01:40:06 AM PDT

    •  I agree about GDP (1+ / 0-)
      Recommended by:
      LaFeminista

      We should focus on how growth is distributed, not how much growth there is.

      It does bollock all good to have GDP growth if it all goes to the 1% in the form of million pound/dollar salaries, bonuses for failure, stock options etc.

      The wage-productivity gap hasn't been as severe in Britain as in the US, however in recent years it has been increasing all the time. Wages once accounted for about 60% of GDP, now the figure is only about 52%. If it were still about 60%, the average British worker would get paid about £3,000 (about $5,000) more than they currently do.

    •  it is fine here in Bretagne being, the real (2+ / 0-)
      Recommended by:
      nancat357, Liberal Of Limeyland

      problem is youth unemployment. property off the coast is still affordable, and agriculture.agribusiness and fishing/aquaculture are doing OK.

      France internally is a well balanced economy the Euro has however deformed the internal market heavily favoring Germany. The Euro is too rigid a structure for such varying internal markets and has greatly affected my business since most of it is carried on outside of the Eurozone in India [where the chemical plants are].

      "Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing." Arundhati Roy

      by LaFeminista on Tue May 15, 2012 at 03:59:34 AM PDT

      [ Parent ]

      •  Youth unemployment (0+ / 0-)

        has always been quite high in Europe. If you have an economy that is growing little, protectionist labor laws (in general good laws), it's still in the traditions of many countries that twentysomethings live with their parents and higher education is quite affordable .....

    •  yup (0+ / 0-)

      Coverage of all things Continental European is distorted by the anti-EU Tory press in UK, which American media trust too far and whose opinions they generally copy.  Thanks be to Murdoch.

  •  Did It Ever Exist? (1+ / 0-)
    Recommended by:
    LaFeminista

    Right now it just looks like the Deutsche Mark, adopted by many countries who foolishly believed that they would be able to influence the policy behind a foreign currency.

    "I'll believe that corporations are people when I see Rick Perry execute one."

    by bink on Tue May 15, 2012 at 04:18:23 AM PDT

  •  Watch them do whatever it takes to prevent (1+ / 0-)
    Recommended by:
    LaFeminista

    Greece from making a recovery on its own.  They are TERRIFIED if Greece leaves the Eurozone and recovers.

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Tue May 15, 2012 at 05:12:43 AM PDT

    •  O_O (0+ / 0-)

      That is tin foil territory. Who is terrified? Everyone, the banks and the richest the most, will think it was awesome if Greece got out and boomed. How long do you think it will take a Greek government to ask back in?

  •  LaFem, I'm looking at Bloomberg's (2+ / 0-)
    Recommended by:
    a2nite, LaFeminista

    main page and it is oddly quiet on the subject of the Euro.  It's not that there is no news, but it is not at all excited.

    Why is that?  Is it just because the markets aren't open here yet?  I don't think so, but maybe the page will look differently an hour from now.  

    It does seem odd though, or is it just me?  Al Jazeera, on the other hand, which does not tend to be an alarmist site, imho, has a Eurozone Crisis liveblog going.
    http://blogs.aljazeera.net/...

    Bloomberg's front page usually gives you a sense of thngs when you look at it.  Three items in their headlines list right now.

    U.S. Stock Futures Rise as German Economy Spurs Optimism

    U.S. stock futures advanced, indicating the Standard & Poor’s 500 Index will rebound from the lowest level since February, as economic growth in Germany helped the euro area avoid its second recession in three years.

    [ ... ]

    Equity futures gained as Germany’s expansion is helping counter declining gross domestic product in the euro area’s peripheral economies. European governments hinted at giving Greece extra time to meet budget-cut targets, as long as the financially stricken country’s feuding politicians put together a ruling coalition committed to austerity.

    Greece Weighs $562 Million Default or Yield Choice

    “The political vacuum means it’s very difficult for the interim government to take what are essentially political decisions about burden-sharing,” said Myles Bradshaw at Pacific Investment Management Co. in London, manager of the world’s biggest fixed-income fund. “It would be very difficult for Greece to pay bondholders and then turn around and say they’re cutting pensions to pay the bonds.”

    Reuters reported today that the bond will be paid, citing an official it didn’t name. [ ... ]

    A default on the international bonds would be a step closer to a default on the nation’s new debt, which in turn would bring the country closer to leaving the euro, Vamvakidis at Bank of America said.

    Greece Gets Hint of Leeway From Euro Officials
    European governments hinted at giving Greece extra time to meet budget-cut targets, as long as the financially stricken country’s feuding politicians put together a ruling coalition committed to austerity.
    Calling talk of a Greek pullout from the euro “nonsense” and “propaganda,” Luxembourg Prime Minister Jean-Claude Juncker said only a “fully functioning” Greek government would be entitled to tinker with the conditions attached to 240 billion euros ($308 billion) of rescue aid.


    "Justice is a commodity"

    by joanneleon on Tue May 15, 2012 at 05:30:26 AM PDT

  •  Thanks 4 the info LaFem (1+ / 0-)
    Recommended by:
    LaFeminista

    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Tue May 15, 2012 at 06:24:48 AM PDT

  •  The EU has always been weak, (1+ / 0-)
    Recommended by:
    LaFeminista

    a creature of the European Council and the European Commission. If the European Parliament had had any actual governing authority, things might have been different. There would at least have been a viable democratic element and a legislative counterweight to executive authority. As it is and has been, it's an elite construct. Its inherent weaknesses are now looking more like fatal flaws.

    "The pump don't work 'cause the vandals took the handles." Subterranean Homesick Blues, Bob Dylan

    by psnyder on Tue May 15, 2012 at 08:46:10 AM PDT

  •  If you look at a chart of the euro/dollar (1+ / 0-)
    Recommended by:
    LaFeminista

    exchange rate over the last eightyears the euro currently is at about its average for that period.
    Strange that the euro exchange rate is not tanking with all this talk about its demise.
    Do the markets know something we don't?

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site