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Rather strange that such an inferior and very uninteresting little spot on the world map is attracting such an extreme kind of interest of foreigners.
Germany is half as big as Mali and less important than Mali at all.
So let Germany alone ad let it go into its strict neutrality by withdrawing from all international treaty organisations as well as from the UN.
A neutral Germany in Europe with very strict borders of course will be politically and economically as thrilling and interesting as Switzerland.
Those foreigners we like, we let come for visit and all the others we keep strictly out of our borders- just alike Switzerland.
Those who dislike and feel uncomfortable in Germany we help and give them a ticket home to their country where they enjoy a better life.
Big politics can make all the others in Europe.
Hollande, Cameron and many others are predestinated for the big politics and the world's stage while Germany can withdraw itself just like in a cosy shell on itself.
Germany must abstain from any kind of an international involvement and reduce its part on the part of a content spectator without any obligations to anybody.
It is the turn of the super-powers in Europe which is France and Great Britain. They won the war and for winning the war they have now the responsibility to overtake unlimited responsibility.
I am sure in the next few years Germany will be more neutral as Switzerland:)
Then the Europeans and Western hatemongers will have to look for a new scapegoat for their own failure:)
I could agree that Germany is not so important as some try to tell us but on the other side, sorry, but there is to much illusion in your text.
Not to be blamed or preventing to be a scapegoat is not enough to turn ones back to Europe.
Is there a majority in Germany for this step? I don't think so.
All those countries in Europe want to see how the economical leader of the continent (together with France, Italy, Spain, GB...) is acting if he is blamed and under pressure. Take it like it is in the German saying of the German oak and the wild boar.
The economic competitors are in Asia and America and not in Europe. To prevail Europe and Germany too must work together. I think many people in Europe is aware of that. What Europe is awaiting from Germany ist to take its role and lead (together with others) to a bright future. I think the perspectives are not so bad.
What has to be fixed: To much corruption, some coutries must become more competitive, drying out tax havens, a fair taxing with no exceptions, investing money into new ideas, products, start-ups (the youth and future of Europe)...
But what a leader when times are critical and he leaves the team?
"Is there a majority in Germany for this step? I don't think so."
I think it is completely out of any interest what the Germans ever might think. The important fact is what the rest of Europe thinks and they are for 99 % strictly anti-German in a militant way as we know.
So I never could understand German politics offering itself in an extremely humiliating manner to countries where Germany has been and will be regarded as their arch-enemy.
It is not the choice of Germany but it was the choice of the rest of Europe and the rest of Europe had decided since ever strictly against Germany and today we see the results all over Europe.
So the opinion of Germany will stay inferior and out of any interest.
And your bright future you are talking of, the rest of Europe definitively wants to have without Germany because Germany has nothing to do in the European Union except pay for the rest.
Let the rest of Europe compete with Asia and USA - Europe does not need the Germans for this competition.
After 70 years since WW II we can see the striking result that cooperation between former enemies will stay impossible for ever:)
69% of the Germans want to keep the €:
10 years ago Germany was called the weak man of Europe. Today Germany is in the midst of the continent undoubtedly the strongest economy in Europe.
But competing with the USA, China, Russia ... it's better to have partners at your side.
My experience is that the people in outher European contries blaming Germans, Germany, German politicians are a small minority wanted by the international media to play a blame game with the old but well know nationalist biases (bad news sells better than good news especially if emontions are within).
It's not always so simply like media want make us believe (i.e. here the hardworking German there the lazy Greek, here the heartless German just demanding austerity there the wasteful Southerner just throwing money out of the window)!
A majority in those countries don't only admire German cars like BMW or Audi or Volkswagen they also admire German welfare, jurisdication, vocational training ...
The problem they have is:
To many corrupt politicans, corrupt government and lawmakers and a corrupted society (not all are corrupt, but there is too much corruption!). All those person don't want a change because they would loose their profit!
Why not helping the good will people there to bring those criminals to justice (Papandreou, Samaras, Venizelos, Onassis, Niarchos - just look how many millions or billions they have stolen and put in deposits in Switzerland).
The people is waiting for help to establish a system without corruption and they are looking for help to do that. And so they are looking for Germany.
70 years after WW II and two decades after reunification Germany has a unique chance to show and proof that it is a grown-up, mature und and rigtheous leader.
Well, perhaps Kohl should have thought of that before repeating Bismark's leap of faith into temporary international stardom. Sorry, do we now consider Bismark to br Polish, by way of geography, or German because politically he was never Austrian?
"Why not helping the good will people there to bring those criminals to justice (Papandreou, Samaras, Venizelos, Onassis, Niarchos - just look how many millions or billions they have stolen and put in deposits in Switzerland).
The people is waiting for help to establish a system without corruption and they are looking for help to do that. And so they are looking for Germany.
70 years after WW II and two decades after reunification Germany has a unique chance to show and proof that it is a grown-up, mature und and rigtheous leader."
I even would think that a very wide majority of the todays-Germans would be willing to do.
The widest majority of the gErmans of today is open-minded and with a lot of good-will.
But how can Germany change anything in Europe with its historic background?
Whenever Germany tried to initiate anything the whole of the Western world was falling over Germany like a wild bunch of wolves over their prey.
So Germans have learned staying modest and staying always in the 3rd or 4th line behind the rest of all others.
You are right that it is extremely easy to stop any conversation with a German if you pull out the big club of nazi-crimes. For me like any other German a discussion has ended instantly and forever and I am used to stand up an d to leave.
All possibilities of any further discussion has ended for ever and even for the future.
And the Europeans know that very well and therefore they love to swing the Nazi-Club because it it the most effective weapon as we see actually in Greece.
My parents definitively never had anything to do with Nazi-Crimes because they were born in a place which belongs to Russia as well as me.
I think the Germans of today have given up to show anything to anybody and a very wide majority is only fed up with the blames and therefore a wide majority is completely fed up with this kind of Europe.
So I think the rest of Europe and the Western world can count on anybody but never on the Germans of today.
Good will of Germans is not wanted in Europe and the Western world and so the Germans better stay for themselves.
I think this is the price the Germans will have to pay for ever and for the next hundred centuries for the crimes that happened 70 years
And so my intention is strict neutrality and the strictest kind of ignorance to anything that happens outside of Germany.
Germany never can be again a normal nation as many others and so it has to abstain from all foreign affairs.
I do not care at all if you are regarding Bismarck as Polish or not.
Regard him as just as you like.
Bismarck can not give any to the extremely desolate situation of Germany today.
The Germans of today have to look forward without Bismarck.
And the solutions today and tomorrow are completely different to the times of Bismarck.
For surviving in this actual European situation Germany has the only chance by becoming extremely neutral and closed to the rest of Europe and the rest of the world.
The Swiss have been demonstrating how it really works.
I agree with you that many Germans are willing to do the best for Europe and that nobody can change the past. And I also agree with you that especially a short time after WW II Germans independently of what they did during the war had to stand behind.
I can understand that you with your parents coming from Russia are fed up with the blames. Me too.
But I don't want that thoses stupid and hicky people triumph over the honest and the brave.
I don't want that they determine what Germans should do or not do. Those who are just blaming have lost the right to build the future.
If the Germans join with the willing people in Europe and work together for a good future and a common good we will also bring the blamers to the point that they can't refute that Germany has completly changed and their blaming will fall upon themselves.
If Germans draw back they leave the impression that they can easily repressed and forced back only with (bad) words.
The majority of Europe needs a strong and acting Germany for common good now.
Perhaps if you ask the man in the street in different countries they might agree with your idea.
Most foreigners here in Germany enjoy that most things run quickly and easy.
But the elites in the Southern countries would have to fear their privileges and therefore they brought up the notion of a Germanisation of Europe.
Mr. Grillo looks at Germany as a positive example and you can see actually how hard the elites of Italy are defending their privileges against their voters and citizens.
Poland was overtaking many German systems and adopting to their own national use because they have been open-minded and eager to get their country forward. I remember how many Poles came over to Germany after 1990 in order to learn how things do work in Germany and the best things they found, they overtook.
Today Poland is a success.
But I have my deepest doubts if France, Greece or Italy ever will be really interested having a real change of their administration and their public system.
So I think Europe will fail because too many different systems are not compatible.
Too many people who are actually having extreme profit by those public systems fear that they could lose privileges.
And in order to avoid comparison you see that in Italy and much more in France the public press is reporting extremely little about Germany. In the French medias Germany does almost not even exist and so people in France know extremely little about Germany.
So bias, stereotypes and prejudices are growing.
It is a matter of public mentality and information if the public medias want to inform their people in an unbiased and open-mined way or not.
And you see the best results in regard of the British where the Germans since ever have been presented to the British public over more than 100 years with an extreme hateful and extreme negative touch, so that it is quite normal that an overwhelming majority of the British have nothing but an extremely bad opinion about Germany.
And British politics has been supporting anti-German resentments since ever by interior political reasons as well as the political class in other countries does in order to put the blame for their own failure on Germany.
So I have my utmost doubts if you can create this way a united Europe.
Before you can start a unification you people have to change their mind by giving up old stereotypes, bias and even hatred.
Until today I believe that the rifts were growing and the contrasts between the nations have been increasing.
So not a good basics for a common Europe if you always pull out the old bias and stereotypes.
In Russia I never heard any bad word about the Germans although just the Russians would have more than one reason for that.
I can agree with almost 100% of your writing. But my conclusion is a bit different. I have relatives and friends in Switzerland. Since many years they were saying again and again that they want to stay out of the Euro. Last year they change up their mind because of 2 reasons:
1) Switzerland was under huge pressure of the USA to lift the privacy of deposits of US citizens; they had to give in and they see "one hole in their wall". Now they fear that the euro zone is setting them under such pressure that their business model of strong privacy is destroyed. Today they try to get agreements with every single state of the euro zone because they estimate they can have a better result than dealing with the euro zone as a whole.
2) The Swiss Franken got so strong that the Swiss National Bank had to back their currency and sell or print new money (to devaluate) and save their exports.
Now they told me that the Swiss start discussing a kind of integration into the euro zone.
They could see how hard it can be to withstand very strong powers. The Swiss tax haven is now in trouble.
My conclusion for Germany and many countries in Europe therefore is: Alone and isolated every country can get in severe troubles. Every single country of Europe has to be or become competitive according to the world market. Corruption everywhere has to be stopped. Business and political criminals (also those in Brussels) have to be handed over to justice. Innovations and innovators must be promoted, start-ups supported, vocational training introduced, a fair (common) taxation implemented...
If Europeans were successful with big European enterprises like ESA or Airbus in the past why should it be impossible today?
Regardless of the study by Rogoff, that debt from 90% of GDP slow growth, debts at this level are dangerous, as seen in Italy oder in Japan, where a vicious circle between banks and government exists. On the other hand, austerity does not necessarily means to reduce deficits with a blow. But if you have already about 80% of GDP debt, austerity means 1) no debt increase. If someone makes further debt with 80% GDP debt, he will certainly be downgraded or or makes himself dependent on the banks, as in Japan. Perhaps that is what the Keynesians want? 2) The state should cut unsustainable spending. The money saved should be reinvested for sustainable stuff or returned as tax cuts to the citizens. The debt to GDP will remain stable. Of course, if you only have 35% debt/GDP as Sweden, then you can enjoy a Keynesian fun (for example, to save idiotic banks). This is not the case in the majority of European countries. Another problem in Europe is that there are countries where a hiring freeze for civil servants is already called austerity.
If debt levels > 90% are dangerous (and I think to much debt is really dangerous) how can the US national debt pass 107% and the USA have no risk to be downgraded or having high inerest rates?
The €-Zone had a debt level of about 90% end of 2012.
Why are credit rating agencies warning the Zone or the ECB to be downgraded?
Current US debt:
€-Zone debt:
Agreed, the dangerous debt limit varies from country to country.
In Japan, the line is long past. In Japan, only the central bank or Japanese banks buy Japanese government bonds. I think the rule is probably the weaker the economy (Argentina, Greece, etc.), the faster the dangerous debt ceiling is reached. In Italy today a small political message is capable to rise the interest rates of borrowing. The Keynesians and the irresponsible economists have said to the Italians for decades: "Debt is not a problem!" Today they have to pay for it...Debts above 30%/GNP are a) unnecessary b) it is also important for what the debts are made. For investments in the future, ok. But debts to save banks or to finance public servants?
I think that's right: Every country has its own debt limit.
For me the question is: Is there a big difference between foreign and non-foreign debt.
I.e. if a Swiss Investment Fund buys US bonds is this "debt" anyhow "easier" for the borrower than if an US Investment Fund would buy the same bonds?
Could a foreign investor be treated different?
Theoretically, I think, a state can borrow cheaply and without limit from the own central bank or from the domestic banks if they agree (as in Japan). South American countries have done it in the past. Japan has been doing this for decades. I think it should make us think that the South Americans no longer believe in the cheap money multiplication by its own central bank or by dependent domestic banks… Foreign debt holders could suffer devaluation. Domestic bond holders could make capital flight, as is observed in Japan today. If the experiment does not work in Japan, interest rates need to rise in Japan and the result would be more expensive debt for Japan… Linera, the ex-guerrilla and now Vice President of Bolivia, says: "To make foreign debt means to become dependent and to sell yourself to imperialism. Excessive domestic debt by domestic banks or the central bank means to put at risk the financial wealth of the citizens." Bolivia has been recently upgraded.
I for myself believe, however, that now (in the crisis) is not the time to reduce the debt. It would be a success if the debt do not continue to rise. What saves the state through reforms should be reinvested or the taxes should remain stable. Greece needs a further cancellation of the debt and the countries most affected by the crisis need some economic stimulus.
"Excessive" debt was not a "problem" for Italy when the Treasury and Bank of Italy could partially monetise the debt. From the moment Italy signed Maastricht and was threby committed to a low inflation policy, it was absolutely necessary to reduce the debt to more manageable means.
Romano Prodi's Centre-Left, with the help of some technicians (like BoI executives Carlo Azeglio Ciampi and Lamberto Dini) put Italy on the right course back in the 90's - but those efforts were derailed by Silvio Berlusconi's governments of the past decade. In particular the return of Silvio to power in 2008 was the harbinger of doom for the country's finances.
A pity certain leaders of the Centre-Left like Walter Veltroni were so economically illiterate and thereby did not recognise the inherent danger of their political strategies in 2007-2008.
ThecAmericans have now reduced he Rogoff issue to whether an increase in indebtedness can be repaid by way of an increase in economic activity. In other words effective or ineffective leverage. They don't confuse debt with guilt, as the Germaan language is still apparently to find a different word to distinguish the two. Makes mathematical discussion difficult, if not impossible, as the Eastern European Catholic emotional make-up tends to go berserk.
"They don't confuse debt with guilt, as the Germaan language is still apparently to find a different word to distinguish the two. Makes mathematical discussion difficult, if not impossible"
Seems like you're an expert on the German language, aren't you? *lol*
It seems that the Austerity model used by the Germans to break the remainder of the Eurozone is based on a US Excel spreadsheet analysis with errors in it. Puts the German trolls in their place. How to b***er a continent without even trying! See the Telegraph article on Cyprus for the IMF's confirmation.
Rogoff and Reinhart's theories have been discredited for errors. The ECB appears to have been working on these. The German delusion is about to crash, their banking system will to take the shock, and I don't think that their stubborn insistence on their austerity policies coupled with their now evident abuse of the ECB to prove themselves right has made them any friends.
I thought that the so called Troika (EU commission, ECB, IMF) worked out austerity measures for countries like Ireland, Greek, Cyprus.
If the USA were the model for fixing the problems I had expected that the ECB would print the needed money and bail out those countries (like the FED).
How is Germany putting austerity on those countries?
It's, of course, biased nonsense what poster Jean Steed lets loose here.
Naturally, nobody likes to cut back on spending, neither within a family nor within a nation. If my (otherwise very likable) under-aged teenage children would have been given my credit card without spending limit, then, of course, I would have been bankrupted in less than a year.
Since none of the now distressed countries had shown fiscal or supervisory responsibility before, there is absolutely no reason why one should assume that they will handle unlimited credit any better now than they did before 2010. By all logic, exactly the opposite must rather be assumed, because common experience of mankind taught us that "if wishes were horses, beggars would ride".
This is why there is actually no alternative to radical "spending adjustment to their means" for those virtually insolvent eurozone countries . . . other than returning to the erstwhile national currencies.
Who else will fulfill those countries' unlimited spending wishes? Germany single-handedly?
This country's taxpayers committed themselves already in the ballpark of EUR 700 billion toward the insolvent peripherals. This is, btw, unparalleled more than any US state committed its taxpayers singly toward other states debts within the Union. This is also why Jean Steed's mentioning the US in this context is totally flawed.
This would be somewhat different if spending in Euroland would be done by a USA-like central government with the capability to tax eurozone-wide and, thus, being able to provide collateral in form of future euro-wide tax income. But this is not the case in a Eurozone, where each and every country jealously guards its budget- and taxation sovereignty.
This is why the Euro is -and will actually stay- a kind of "foreign currency" to all its member-states.
According to your very own parameters of analyses, Germany is also insolvent.
It's time to stop, La V, nobody's stupid enough to know what truly happened. It's not the countries which were insolvent, it were the banks. All banks, including German banks, and 'peripherals' as you put it.
If Germany were to be downgraded to Ba1 she would also be insolvent (high yields = inability to tap market).
So everything is falling apart:
-the rating agencies clearly discriminated against certain countries and not others
-the austerity without measure for growth is ridiculous
-the 'North' of Europe doesn't exist.
And bam! The sad dellusional demimonde created by certain media, lobbies, politicians and financiers collaps , crumbles, ... And Somewhere Joe wakes up in fright, but realises it was only a nightmare , goes into the kitchen and drinks a glass of water. Outside he can see the lillies in the fields, the birds in the sky, and the sun shining on the statue of a Man with His arms wide open, redeeming everyone from themselves.
And realises that nightmares end, but life goes on.
After tha, He goes into the bathroom, grabs a bottle from the sink, and empties the snake-oil in it down the drain, which some stupid 'doctor' had prescribed to him, realising that it was that 'product' which was giving him the nightmares.
Of course, everybody should spend his own money at his leisure!
But it all becomes quite different if he needs the allegedly "deep" pockets of others to do so.
The very same is true for the Germans: Who do you think is going to bail out Germany if they can't borrow anymore? Portugal? Greece?
I'll tell you what's going to happen then: The Germans will dig in and adjust and reform, as they did after reunification, when nobody stood up and helped them pay for it . . . Nobody, pedrolx.
By controlling the ECB. It's in Frankfurt. Don't forget either that the German Bundesbank has quietly, been issuing paper through Soffin to cover its export surpluses arising from the euro discount it has in relation to the real value of its exports. Without that fake paper, there would be no exports of BMWs or German product to the EU periphery. It is a tragedy hat this is not dealt with by the ECB, as the whole business would be more transparent. You can't extract blood from a hinterland in chains, as they are finding out to their cost.
The Germans are not very good at seeing the consequences of what they do in other economies, and have to stick their own modelling on it.
Sorry, that is a falsehood, they did as they usually do, exported the resulting recession. They used inflation in post WW1, when they couldn't export as no one could afford their product to pay back Versailles. Remember, he remainder of the planet was in recession thanks to the Austrians starting WW1 with an assassination? Had they done it sensibly, over a five year period rather than Kohl's rush job, the not only would it have been easier for hem, but they would not have transferred the effective cost to the remainder of the planet. You have really no idea of international currency flows and values. You confuse paper with value of currency and exchange. Get your mind straight and then write.
The financial markets have already bailed Germany out. (and other nations)
Even the world 'bail-out' is erroneous.
It's over.
Look at the lillies in the fields, and the fowl in the sky.
What many people in the West don't realize: The West is experiencing now the slow death of a model, which dominated the world for a 1000 years, the model of everlasting Western expansion and growth.
Those who were the West's global inferior 'juniors' (to term it mildly) are grown-ups now, they are young and full of energy, equipped with a better "eye-sight" and better motivity. These are the ones the West has to compete with in future.
Those who can't compete will fail and fall . . . will go the way all great civilizations went in human history. We, the West, surely aren't the first ones.
And: Yes, there will be some solidarity support; "hilfe zur selbsthilfe" as the Germans call it (help to self-help). This is what happens now. But it surely won't and can't end up in continuous alimentation, since those still-somewhat-sound countries can't afford to be dragged into the abyss by those who can't hold their ground.
Globalization is, in reality, the meanest capitalist development for the masses since the invention of Manchester capitalism. It's about a nation's global survival in a "world of the fittest". And since it's "global", there's no place left anymore to sidestep and rest.
Sorry, but you must be a total economic illiterate, confusing the simplest terms, such as SoFFin with Target2. ... And an history illiterate, to top it all off.
The "Austrians starting WW1 with an assassination" ???? LOL.
It was the Austrian head of state, Archduke Franz Ferdinand, who was assassinated by secret agents of the Serbian state, not the other way around, dimwit!
I won't waste my time with such a subliterate. Wonder what a guy like you is doing here on a, basically, intelligent blog.
This is why this euro-farce must come to an end . . . soon. Only then the blame-game will come to an end also.
"Only then the blame-game will come to an end ..."
Somehow I doubt that ...
Don't put your money on that.
Again - Look at the lillies of the fields. Really.
I have public ally supported some of the measurements the German government proposed along the crisis.
I do not understand how a man, who is apparently rational as you are, pretend to pretend that Germany is some sort of immacculate virgin.
I am so sorry to disappoint you. There is only one immaculate virgin, and She is in heaven, full of Grace.
This is not about some "immaculate virgins". It's about the essential incompatibility of national concerns which are -currently- forced upon the respective other.
It can't be good for the long-term relationship between peoples if the interests of one are subdued to those of the other, which are both in diametrical opposition. As simple as that.
As a matter of fact, the remaining handful of countries who are meanwhile 'guaranteeing' for the rest were becoming the proverbial 'straw' that the others, instead of using their own swimming devises, are clutching onto . . . and we all know what happens to the straw.
This is why logic tells us that all must use their own swimming devises now.
Once again, I admire your patience with this fellow, LV.
Super-troll Pedro has been telling us for years that his country, Portugal, is in no worse shape than those countries on whose life support it solely depends for avoiding default, its euro zone partners.
Debtors are creditors, night is day and pigs can fly, I guess.
I always thought that these petty nationalists parading around aus "super Europeans" when in fact the only thing they care about is there little selves are Europe's and the euro's worst enemies.
Let's just not mistake this mindset of denial for the opinions of "the Portuguese", however - the ones I know are quite different. Less parochial and more open to self-criticism.
Pedro, I don't think that you are just another troll, as Josh says. You sure love your country and you cling to a dream. I fully understand this.
Where we differ is in the analysis of the problem . . . and the solution.
Josh is correct in his assertion that too many of those who pretend in Europe to be "super Europeans" in reality care only about themselves and their national interest. This is the main reason why the Eurozone, IMO, will fail.
It's a fact, from a neutral viewpoint, that the only ones that have so far shown willingness to sacrifice personally and nationally for "Europe" are the taxpayers of those still solvent eurozone countries who took on the burden of fellow EZ-countries' debts . . . and surely not the other way around.
National austerity is no "sacrifice for Europe"; it's a general human virtue and in these current cases rather a necessity. To live within one's means should always be the normality . . . and not the exception.
The cry "No More Austerity" in the eurozone is therefore merely the Orwellian metaphor for "Eh, someone must pay for my (unsustainable) lifestyle!"
This is not how this world works, Pedro. If people don't think that this Euro is good for them, they should simply reintroduction their own currency again . . . or introduce temporarily a domestic legal tender and keep the Euro for a while as a mere accounting unit - similar to as the ECU accounting unit was in its days.
What will not function in the long view is that national courts rule over other countries assets - as the Portuguese Constitutional Court was trying to do, along the lines of "WE Portuguese want to keep our privileges and YOU Germans, Finns and Dutch must pay for it". This is not how democracy works, Pedro.
Americans show great togetherness and their best common capabilities in times when the nation is under threat. The reactions to the Boston assault were just another proof for that. But Americans react almost allergic to imposed 'solidarity', which is seen as a threat to the country's individual freedoms. It would simply be impossible in the USA that one state keeps spending as it pleases or passes laws that rule out entitlements cuts, but expects other states to pay for it.
This fact is one of the reasons why this nation is still here today after 237 years . . . and why the United States is so dear to me.
To la.výritý on his post on Pedro being a troll as Josh says
Although I'm trying hard to be off these blogs, the deterioration of which is very worrying, I keep reading the Economist and can't help shout "Hear, Hear!" to everything you wrote.
With a further comment and an unimportant proviso.
If your countenance and gentlemanly behaviour were followed by a number of "holier than thou"'s posters here and real trolls or, at least, not really sane people, the whole argument would have won a long time ago.
Those who point fingers at others when their roofs have quite a number of fissures, always create the resistance that eventually will lead to some sort of disaster. You know enough history to be aware of this almost never failing rule.
An unimportant proviso: as you, I've always loved the USA with her 237 years including her not many warts. But there are countries 900 years old with maybe even less warts. As for instance, Denmark and Portugal.
I'm sure you will not mind if I don't make any further comments.
All I wanted to say was really "Hear, Hear!"
"Globalization is, in reality, the meanest capitalist development for the masses since the invention of Manchester capitalism".
Not true at all, La Virity. Most countries have made a success of globalisation which has seen unprecedented growth in the rise in living standards of most people on this planet. I am of course referring chiefly to Africa, Asia and Latin America.
The fact that Europe is bucking the trend with its insane austerity policies, declining percentage of world trade, intolerable unemployment rates and no growth prospects, doesn't make this any less true.
"This is the main reason why the Eurozone, IMO, will fail".
Dead right, La Virity, but am I right in saying this has become obvious to you only since the disparities between EZ member countries have become glaring, resulting in the severe deterioration in intra EZ relatons? I don't remember you expressing this view when we first started blogging here. You were very much in the 'Euro promotion' camp then.
What kept you? Is the rise in euro-scepticism in Germany (AfD...etc) having its effect? The ongoing blame game? The shoddy, piss poor management of the endless euro crises, finally making people wonder what the € is really for?
Your remark about Boston and US solidarity is a good one, the solidarity of a country united in its identity as a nation. Europe can never hope for anything like that. Quite the contrary. I could name one or two people who would jump for joy at the news of a bomb attack in certain 'neighbouring' European countries.
BTW, La Virity, you notice that Romania has now postponed indefinitely its date for joining the €.
I think Romanians are setting a trend: "Join the €? Yes,...er, I'll tell you what. Don't ring us, we'll ring you."
"Globalization", as used in financial terminology, is ruthless "financial imperialism" in its most aggressive form. It has absolutely nothing to do with the intention to improve the living standards of most people on this planet; as a matter of fact, it impoverishes many, especially those in economies that can't compete.
The most 'successful' economies, in terms of the steepest GDP growth rates (Brazil, Russia, China, India), are those who've banned the shady fortune hunters of 'Western' financial globalization.
And: please tell me, what does 'your socialism', the artificial abolition of 'austerity' through bailouts and unlimited government spending, has to do with true market economy and entrepreneurial freedom?
Are you a crypto-commie, Junoir?
I was never enthusiastic about the Euro, but I thought that a common currency on the basis of the Maastricht criteria can succeed (and I still think so). But meanwhile the Euro got hijacked by euro-Socialists. This a a bad thing.
The attempts since 2010 to 'socialize' the euro fiscal policies led to the elimination of self-responsibility and national accountability, "resulting in the severe deterioration in intra EZ relations" (Junoir).
Since then I'm successively correcting my view on the euro currency. "Only idiots refuse to change their mind"; whoever said this before me was surely not an idiot.
A common currency on the basis of the Maastricht criteria could never succeed since these criteria were ignored by too many countries to name, especially the 'convergence' requirements to qualify for € membership? What's more, there were no enforcement mechanisms. So the whole thing was a non-starter.
"But meanwhile the Euro got hijacked by euro-Socialists. This a bad thing.".
Well, of course it got hi-jacked by euro- socialists. Haven't they always made it clear that it was to be a political union at all costs with little consideration for political/economic realism or the suitability of members? And what is the social engineering of societies, EU style, but 'socialism'?
As for 'only idiots refusing to change their minds', we're going to find a lot more geniuses very quickly changing their minds over the next year or so, especially in Germany.
Of course there was "no intention to improve the living standards of most people on this planet", but you can't deny this globalisation has had this effect, taking the world population as a whole.
"My" socialism, La Virity? When have I advocated the abolition of austerity through bailouts or unlimited government spending?
It all comes back to the euro. If Greece, Portugal...etc had never joined in the first place there would be no austerity today in these countries, would there? The whole € project was founded on broken treaties and laws, and today we have the result.
I'm not against open world trade. But there are winners and losers of this 'globalization'; and this has absolutely nothing to do which currency a country is using. I can't see how the typical American has benefited from globalization. As a matter of fact, citizens of most developed countries belong rather to the 'loser groups'.
For the typical American, the past decade has been economically terrible: inflation-adjusted incomes declined the first time since the 1930s. By 2012, real median household income had fallen to $48,367, compared with $53,164 in 2000. While there are many culprits, such as the subprime mortgage crash and the changing mix of needed skills, globalization has had the greatest impact in the economy's decline. I guess similar holds true for the U.K. as well.
While it's a fact that without such diametrically opposed societies as Greece and Finland sharing one currency there wouldn't be reason for them to be at each other's throat, it's also a fact that having a domestic currency certainly doesn't prevent uncompetitive countries from having to practice austerity or becoming poorer.
The "austerity" the Hungarian, Bulgarian or Romanian governments are currently imposing on their citizens is doubtlessly a notch tighter than Greece's, Portugal's or Cyprus'.
German members in the ECB - president is M. Draghi(Italy):
1 in the 6-member executive board
1 in the 17-member governing council from the national banks.
German capital key about 19% of the ECB.
With these numbers how can Germany control the ECB?
Soffin was for recapitalising German banks after 2008. I never heard that Soffin had to support German exports; i know that Hermes bank hast to do with German exports.
Less than 9.5% of total German exports in 2012 were to countries called called PIIGS + Cyprus + Malta.
That's why i think Europe needs Germany and Germany needs Europe.
Your analysis of Portugal's constitucional court is erroneous. Please read my posts in relation to that.
We've been hearing that it will fail for years now.
I don't think the problem is to do with 'nations' and 'cultures' but with the financial system itself. It's broken. (and rigged) It's obviously got repercussions in countries policies and politics, but at the end of the day the problem was, is , and will be a financial one.
And yes some populist groups, especially in certain countries, are taking advantage of this crisis to 'sell' a racist agenda. I can see it and so can you.
My solution is - sort the financial system. I've been saying that from the start.
And yes you do have a tendency at times to turn Germany into some kind of innocent little braided hair girl walking about being cheated by others. All nations protect their interests. But the financial markets are at the service of nations, not the other way around.
And Germany HAS been helped, as Portugal has. As Britain has, as France has.
Thank God that nations help each other.
I don't know why you pick Germany as the "bad girl". German taxpayers are the ones who are carrying by far the biggest load in this never-ending bailout scheme. To be exact: €677 billion of the €1,201 billion that are paid-out to date or 56.36 percent of the total (as of January 2013).
However, this is not the major problem here. The major problem is that people and politicians in those help-receiving countries - this includes Portugal - continue to run sizable budget deficits. Portugal's budget deficit last year narrowed to 5.6 percent (bloomberg), which compares positive with a deficit of 6.7 percent in 2011, but still means that it is short of €12.6 billion.
Who is going to pay for Portugal's fiscal shortfalls? And the answer is . . . The German Taxpayer.
If the ongoing financial support would only be demanded by Portugal, it could be managed quite easily, but it's now demanded by all members of the now so-called GIPSIC group who keep meanwhile their 'hungry' beaks open for ever more financial "food".
In order to gain an edge over their fellow beak-opening peers, they're becoming ever nastier toward the beak "that feeds them" by picturing the Germans as Nazis for not bringing in more financial "foodstuff".
This is, by all standards, so ridiculous (if not disgusting) and resembles indeed more a nest full of terrorizing little baby hatchlings than "mature" European countries that were once believed to be mature enough to join this common currency with countries like Germany. Yes, compared to these irresponsible hatchlings Germany, indeed, appears as responsible country "being cheated by others".
At least when the terrorizing little baby birds open their beaks, their parental supporters know that they'll stop this nasty attitude as soon as they fledge, while in the case of the eurozone the recipients of the financial support seem to have turned the beak-opening attitude into a never ending and ever expanding endeavor.
The by-light-years biggest provider for these bailout-packages, Germany, which provided since 2010 already €677 billion in direct and indirect eurozone-aid, feels (at least up to this point) responsible for the whole hatch, not just for the hatchling Portugal or just for Cyprus, while each single GIPSIC country is, naturally, only interested in its individual well-being . . . just like those beak-opening little birdies.
Portugal receives currently its support via EFSM, EFSF and IMF, but, as we all know, that's not the only aid-seeker. There are Spain (monies from ESM), Ireland (EFSM, EFSF and IMF), Greece (direct from EZ countries, ESFS and IMF) and Italy which receives massive financial relief via the ECB's bond purchasing program and bond purchases by non-GIPSIC NCB's. And, as the newest addition, Eurozone finance ministers just gave political backing to €10 billion bank-bailout for Cyprus, of which Germany's Parliament has given the go-ahead for its share of approx €2.5 billion.
All this can work out only if, in the short term, all so-called GIPSIC countries either increase their tax revenues without increasing their budgets or lower their budgets significantly - and thus also those entitlements the Portuguese Constitutional Court ruled against.
If neither happens, the remaining non-GIPSIC countries must, out of sheer self-interestedness, freeze any further expansion of the bailout packages with an even greater bluster from the GIPSICs . . . but, of course, then totally futile.
This is why I'm convinced that Germany and like-minded eurozone countries should introduce a new common currency as soon as possible; but this time with those countries only that proved in the past that they are able to deal with the challenges of a hard currency.
"Your analysis of Portugal's constitucional court is erroneous. Please read my posts in relation to that."
I only can comment on what was said and written about the court ruling in sources I have access to. Among these sources was also the Economist.
Of course, the Constitutional Court's rule must be respected. But here's the catch: The ruling must be respected only by Portugal's lawmakers, not by the Troika and not by the German lawmakers.
Two years ago the EU and the IMF provided Portugal with emergency-aid of EUR 78 billion in order to save it from bankruptcy. In return Portugal has pledged to implement reforms to bring the budget deficit down in the short term to 5.5 percent (which is, btw, still not a sustainable figure).
However, last year the budget gap that couldn't be closed stood at 6.4 percent, despite the received 78 billion euros in emergency aid.
If Portugal doesn't manage to close this gap soon (in full), its debt will increase further. Already now Portugal is in a worse position that it was prior to the bailout.
If this deficit spending is continued untamed, it will be only a question of time when Portugal –as well as Greece- has to default and return to the Escudo. Because if Portugal keeps the Euro, it will not be able to borrow from the markets after default (unless the Portuguese use their lush savings en masse to keep the country afloat).
In any case, if the budget is not adjusted now, debt will rise and Portugal's problems will pile up further.
Your "solution", to "sort the financial system", is way too wishy-washy to do anything positive for Portugal's current incapability to finance its spending-desires in its own right. -- Or do you want to force people to buy Portuguese public bonds?
Not true Lav.
Gavrilo Princip had applied to the secret services of the Serbian state and been rejected. They considered him "mentally unstable". So he went off on his own accord to prove what he could do.
The Serbian state would not have attempted assassination of the heir, as it was obviously too destabilising - and Austria-Hungary was a much bigger empire than Serbia.
The silliness of the empire and its justification of the assassination of one royal as a reason to throw all of Europe into the holocaust of WWI is demonstrated by the titles of Emperor Franz Joseph:
"By the grace of God Emperor of Austria; King of Jerusalem, Hungary, Bohemia, Dalmatia, Croatia, Slavonia, Galicia and Lodomeria; Archduke of Austria; Duke of Lorraine, Salzburg, Würzburg, Franconia, Styria, Carinthia, and Carniola; Grand Duke of Cracow; Grand Prince of Transylvania; Margrave of Moravia; Duke of Sandomir, Masovia, Lublin, Upper and Lower Silesia, Auschwitz and Zator, Teschen, and Friule; Prince of Berchtesgaden and Mergentheim; Princely Count of Habsburg, Gorizia, and Gradisca and of the Tyrol; and Margrave of Upper and Lower Lusatia and Istria"
Surely it will not escape your attention that this was too much administrative power to concentrate in the hands of one medieval aristocrat and his heir in the modern age? That was the biggest "original sin" of Austria behind WWI.
Can you imagine of Obama was today, "President of the United States, Governor of Guam and Micronesia, Governor of Illinois, Mayor of Baltimore, President of Alexandria County, Orange County and Westchester, etc. etc.
It would be a bit ridiculous, wouldn't it?
The constitutional court was a merely awake up call for the government. Instead of making budgets which are clearly unconstitutional cut on the spending and deal with the pension system.
It was a wise decision.
Portugal never needed the bailout the current government wanted it so so they deal with it.
The problem isn't spending which has in fact been falling but the revenues in the stupid tax increase which they inflicted upon people not only did they kill thousands of sme as they've reached the limit for taxation. Not to mention the migration of some of Portugal's biggest companies HQ to the NL ... Which is ridiculous to say the least.
As to deficits etc let's see how Portugal fairs with the rest of Europe before you pint your flashlights at it.
There's no gipsi countries. That's a media invention. All countries spended more than they had.
On the other hand there is your bias towards Germany. Or did not the German banks spend (or lent) more than they had? Are German families not indebted? ( I happen to know a few...) doesn't make sense to point fingers. And two wrongs don't make a right,
The current system must fall. I suggest a reset of the world's entire debt to zero. Let the financial system learn that they are not above nations, and definitely not above the people. Money is not worth more than people.
I know that this may be hard for a financier such as yourself to understand. But the financial system needs to be accountable for their mistakes, lavish spending, and manipulation of what should be a free market. In fact the German finance minister seems to agree with me.
Wrong, Gavrilo Princip was a 'soldier' of the 'Black Hand' (Crna ruka), which was organized at the grassroots level in 3- to 5-member cells, supervised by district committees and by a Central committee in Belgrade whose ten-member Executive Committee was led, more or less, by Serbian Colonel Dragutin Dimitrijević.
Wikipedia: "Ranking Serbian ministers, officials and generals . . . founded a semi-secret society—Narodna Odbrana (National Defense) which gave the Greater Serbia idea a focus and an organization.
The purpose of the group was to liberate Serbs under the control of Austria-Hungary. They also undertook anti-Austrian propaganda and organized spies and saboteurs to operate within the empire's provinces. Satellite groups were formed in Slovenia, Bosnia, Herzegovina and Istria.
The Bosnian group went under the name Mlada Bosna (Young Bosnia). In 1909, Austria pressured the Serbian government to put a stop to their anti-Austrian insurrection. Russia was not ready then to stand fully behind Serbia should hostilities escalate, so Belgrade was grudgingly forced to comply.
By 1914, there were several hundred members, perhaps as many as 2500. Many members were Serbian army officers. The professed goal of the group was the creation of a Greater Serbia through a take-over Bosnia-Hercegovina and Croatia by use of violence, if necessary.
The Black Hand trained guerillas and saboteurs and planned political murders. The Black Hand was organized at the grassroots level in 3- to 5-member cells, supervised by district committees and by a Central committee in Belgrade whose ten-member Executive Committee was led, more or less, by Serbian Colonel Dragutin Dimitrijević (also known as Apis)". (End Qote)
"Portugal never needed the bailout the current government wanted it so they deal with it".
This is your version. What the world knows is that Portuguese Prime Minister Jose Socrates said in a televised address to the nation, April 6, 2011:
"I want to inform the Portuguese that the government decided today to ask ... for financial help, to ensure financing for our country, for our financial system and for our economy".
At that time PM Jose Socrates was cornered by Portugal's mounting financial difficulties, after a yearlong battle to avoid asking for a bailout from its Eurozone partners and after the failure to borrow from Brazil and even China for reasonable terms.
Socrates then: "This is an especially grave moment for our country ... and things will only get worse if nothing's done," adding that a bailout was "the last resort."
It seems that you know more than your government about the issue.
But then tell me, why, if the bailout is not needed, doesn't Portugal's government balance its budget . . . instead of trying to find constitutional loopholes on how to finance its budget deficit and its growing sovereign debt?
You seem to ignore what was the court's decision. The budget must be in agreement with the constitution. It isn't 'Portugal' trying to find loopholes to balance its budget. It's making the system work whereby the court is telling the government, blinded by a bad policy, that you cannot make measures which discriminate citizens.
In fact the measure optimises the budget balance as it will force the government to cut and implemented the 'right' measures as opposed to the wrong measures.
The party now in power failed to pass an important measure in parliament two days before the bail-out. Or whatever you want to call it. By doing that they new the rating agencies, already discriminative of Portugal would downgrade it by more than one notch, proving their utter disrespect for Portugal's democratic institutions. This par wanted to declare the end of 'socialsim' instead it implemented the wrong measures from the start, departing from the wrong premise that the Portuguese state 'over-spent', or it's people. No they didn't. The financial system collapsed and the government was advised by the very same institutions which now constitute the troika to provide bank guarantees, save banks, and others. That's where Portugal's public debt is. The German tax layer should welcome Portugal court decision because what we need is fiscal consolidation done in the right way, which happens to be the constitutional way. If you actually understood Portuguese and read their decision you'd notice that it is wise and points the government in the right direction.
S please end this accusation because even if not Ill-meant, it's erroneous and not indicative of what rely happened.
Portugal's troubles stem from a decade of measly economic performance during which it amassed huge debts to finance a western European lifestyle. This is why Portugal's Maastricht violations throughout the decade, after the country had joined the euro, were not comparable with Germany's negligible harmless overdrawing after 2004.
When the global financial crisis hit, Portugal had already gradually lost the trust of its creditors, and investors had demanded increasingly high returns for loans to Portugal that were viewed as 'risky'.
The yield on Portugal's 10-year bonds, which stood at 8.54 percent a week before its government applied for the bailout, had reached an intolerable level, especially for a country which was predicted to enter a double-dip recession that year.
And to the Constitutional Court's ruling: Although public sector pay has fallen somewhat during Portugal's economic crisis, "state workers in Portugal still earn on average double the wages of the private sector" (euronews 4/2013). Isn't that also "measures which discriminate citizens"?
Please la v, we're both grown ups and intelligent. They put insignificant Portugal on the spot light with ppl shorting our debt to bits (you could even watch it live on Bloomberg ticks). The downgrades further provoked a diminishing of the prices of Portugal's bonds in the secondary market (and please DO look who actually owns our debt!) . It was rigged, a fake, and ridiculous. I haven't changed my opinion and you can read it.
Portugal's debt to GDP was within eurozone average till 2009. The problem has always been one of trade balance.
As to wages you certainly do not expect the country to start controlling the wages in private companies or do up? I believe there is a word for that - communism.
Wages are not double, they are indeed higher on average because public servants are doctors, nurses, researchers, teachers, professors, etc. how could they not be higher? The rest of Portugal's workforce is to as educated.
From your point of ire wages in the bank sector are 100x higher. Perhaps we should nationalise everything and become the People's Republic of Portugal.
You know I am right, this government needs to tackle expenses not flood the Portuguese with useless taxation which serves no purpose but to decrease revenue, create stronger recession and alas, how hard could it be , widen the budget deficit.
I don't know how many times Germany broke Maastricht, but she is at this very moment in breach of Maastricht. Public debt above 60%.
Just arrived from Rio am knackered. Will explain to you the big mistakes of the current government.
A last note : a public servant who made a net wage of 1500 euro / month has lost 30% of his or her PP. part of it was nominal with cuts reaching as far as 10% of annual wage. Prices have begun to drop. I myself have renegotiated many of the deals I had with electricity, Internet, gym etc. restaurants are cheaper. Internal devaluation is a reality. It hasn't changed much because what we need is growth and an increase in state revenue wich can only stem from growth and job creation. Where is that?
Pedro: "Where is the growth?"
The world is in recession. Where should growth come from? The world as a whole is growing, but growth only happens in countries that were lagging behind in GDP-per-capita for the last century or so ... or in countries which deal with the former (as, e.g. Germany does).
In the UK, despite of massive QE, households feel even worse off now than last month, a new survey suggests.
(Quote): "Ahead of official figures on Thursday that will show whether the UK has slipped into a triple-dip recession comes a downbeat report into consumers' finances. British households felt worse off in April as they continued to struggle with rising prices and meagre pay, suggests a survey out on Monday from the financial information services company 'Markit'. . . The 'Markit' household finance index slid lower this month, signalling that household finances were deteriorating faster than in March. The firm said the result largely reflected the combined effect of lower income and higher living costs for households." (http://www.guardian.co.uk/business/2013/apr/22/uk-household-feel-worse-off)
Similar is true for the US, (Quote): "Bleak jobs report confirms U.S. Stuck in slow-growth environment" . . . "The gloomy March payroll report released Friday morning delivered the clearest evidence yet that the U.S. economy still hasn't reached escape velocity. . . . The weakest jobs report since June 2012 also deals a blow to talk of an early exit by the Federal Reserve, which appears poised to keep its foot firmly planted on the easy-money gas pedal". . . . "We've seen this time and time again in this recovery. We've seen stronger data and then a softening. The economy has yet to shift into a higher gear and stay there," said Josh Feinman, global chief economist at Deutsche Bank's DB Advisors.
Portugal should try to benefit from Brazil's and Angola's growth (more though than Germany) to which it is tied via a common language and culture.
Not the breach of Maastricht is currently important (the Commission decides on a case-by-case basis anyway), but the sustainability of a countries spending ... And Portugal's spending is obviously not sustainable, never was since it adopted the euro.
So the Truth is out, LAV has had to agree with the much maligned George Soros that the only way to acheive growth out of a handcuff currency such as the Euro is by exporting in currency freedom. Can he now kindly explain how the remainder of the Eurozone is to alleviate their position without detaching their currency from the € DM zone and issuing Eurobonds to the extent necessary? He appears to have agreed that WWI was started off by Serbian resistance to Austrian bullying, so perhaps he can now consider the present pressure on the remainder of Europe from Germany? Doing only enough to keep the Euro going, to their own advantage is just not enough. Just because Soros can add up, does not mean that his thoughts are invalid!
Where did I say that the 'losers' of the Eurozone shouldn't alleviate their austerity-position by reintroducing their domestic currencies? I said the opposite, because this is exactly what they should do: Leaving the Euro and reintroducing their own currencies.
But I also said, "it's also a fact that having a domestic currency certainly doesn't prevent uncompetitive countries from having to practice austerity or becoming poorer" (thus saying: not the kind of currency, rather competitiveness with sought-after goods and services is the key).
Soros wants the opposite. His two suggestions are aimed toward an uncontrolled devaluation of the Euro: Germany assuming the debt of the whole eurozone via eurobonds would bring Germany's creditworthiness and, thus, the value of the Euro-currency down . . . or Germany leaving the euro currency, which would have a similar effect, and would additionally rob future German Riester-rente pensioners of their old-age reserves. (Riester retirement plan is a common grant-aided privately funded pension scheme in Germany).
This is why all insurable employments within the scope of the Riester retirement plan will vehemently fight against Germany letting the Euro go in the crapper. Especially when knowing that then they must survive in a super-high-cost environment with a worthless Euro as retirement-backup.
This is why I wrote earlier:
(Quote): "... having a domestic currency certainly doesn't prevent uncompetitive countries from having to practice austerity or becoming poorer. The 'austerity' the Hungarian, Bulgarian or Romanian governments are currently imposing on their citizens is doubtlessly a notch tighter than Greece's, Portugal's or Cyprus' 'high-income-austerity'." (End-quote)
Be careful all of you who are commenting that Europe should go back to it's old ways of staying apart and dumping the euro and going back to their old ways. You will be rewriting history of how WW-ll started from the very beginning before Hitler. I was still a young man and I remember it well. All of the winners of WW-l were forcing the Germans to pay them money and the German's were running out of money.
Surley Europe can find a way to use the same money in all of Europe with each one responsible for the way they use the money and Germany not respondsible for every bodies money especially like shown in the picture over the posting of what the German's have to do. You must be careful for what you write that will destroy Germany and the rest of Europe will suffer too as a bunch of little countries who can't work together, will put Germany in charge, and here we go again.
One of the main problem with lawmakers of these indebted countries i.e. Greek, Cyprus is their behaviour.
Partaking in curruption, pretending everlasting prosperity and small effort, having the benefits of being member of the €-Zone (i.e. low interest rates) without burdens (i.e. taxation).
They knew that this path was unsustainable and tried to pull out as much profit as possible for themselves and find someone (Europe, Fins, Germans...) to blame for what they had done wrong.
You can search the internet and you will find how much money the have stored in deposits in tax havens while looting their own country. Shame on them.
Their people should bring them to justice and not believe in their lies.
This would bring peace and freedom for all Europeans.
Thank you. What I don't like is who they blame it on and they can up-set particaly the German's with the pictures at the top of this article. You can't fight back but I can. I love Europe and I am trying to get some work done there.
As my friends in Germany told me there is a majority of Germans that want to stay in Europe.
I think that many countries in Europe want to see how the economical leader of the continent (together with France, Italy, Spain, GB...) is acting if he is blamed and under pressure.
But who if not Germany is able to do the hard things (dry out tax havens, bring down corruption, speed up competitiveness...) not because they are easy but because they have to be done.
I told my German friends that blaming them for Nazis is for one reason because se it's so easy and you can't defend yourself or you can't fight back.
But to become a leader you must proof yourself in such circumstances and do those difficult things.
I still believe to be a member of Europe and have one currency is a win-win situation.
Europe has to clean up the mess and support new ideas, new products, new start-ups ...
There is so much good in Europe let's find it, develope it and use it for us and our children.
How the economic-political elites design the new dark ages
A scenario-nightmare for the future of Europe
(Thatcher's legacy)
Funny how everyone keeps talking about the moral hazard of countries that spend too much and are bailed, but nobody seems to care about the true moral hazard that materialized and caused the whole mess in the first place, namely traditional banks which jumped head-first into the murky waters of derivatives and other volatile financial instruments.
Derivatives are essential to funfair transnational and tabs currency flows, otherwise, how does the supplier guarantee at he will be paid after deliver, and how can a buyer satisfy the seller and he intervening banking systems hat he can pay. Don't please reply, "bring back gold" that merely encourages cut purses and bullion transfer which the banking sector was meant to remove. The issue was the fact the the Amercians managed to write off heir defaulting paper against everyone else's currencies, and still haven't equated collateral to repayment, perhaps a sense of guilt rather than issuing gilts is not a bad thing.
There is talk of Germany being downgraded... the euro rot spreads!
Of course! As of December 31, 2012, the Target2 claims by the Bundesbank against other eurozone central banks stood at €718bn ($940.58bn)!
Through its Target2 credits, the German Bundesbank is actually financing German export and current account surpluses within the eurozone because most southern European countries have never had the money to import German goods on such a scale in the first place.
The Bundesbank's Target2 credits amount to about two thirds of its entire balance sheet. And: They are entirely unsecured.
This is the main reason why all payments, credit and guarantees combined which the German taxpayer granted toward his Euro partners amount now to €1.611 trillion (or $2.110 trillion).
This is also why trade with virtually insolvent Euro countries via the TARGET-system is in reality a ticking time-bomb for the German taxpayers, which they're now finally realizing.
EU decisions are being made based on German domestic political considerations: Portugal, Cyprus and Slovenia could be given more time to untangle their affairs, but Merkel has an election to win and looking strong will appeal to the German electorate.
Yet Germany must continue to subsidize its export market or German job losses will cost Merkel votes as well. Given this less than unheroic display of European leadership how can a political chimera so debased as the EU continue to pretend that it has a future beyond the oncoming freight train of defaults?
At least this time a Europe woven together by deception and la-la land incredibilities will be shredded by the premature birth of the euro and not by war- at least not so far.
I hope that Germany will soon be downgraded. On the day when the German politicians have no more easy money, I'll open a bottle of champagne. Maybe we could then terminate the pension privileges of politicians and public servants. Maybe that's a difference: In German is called austerity "Sparpolitik = policy of saving", which sounds good for the citizens, but terrible for the political class. Austerity in English and in the Romance languages sounds like desert and water shortage. Sparpolitik (policy of saving) sounds in the ears of German citizens like heaven trumpets. But seriously. Today, we can can not drastically cut spending. What is saved should be reinvested. But in the long term is Sparpolitik alternativlos.
Target 2 is an accounting convention that describes REAL monies flowing from Spain and Italy to Germany - not the other way around. Do you really think Germany merits selling its debt for free when Germans are the biggest petrol guzzlers in the world after the Americans? Wasteful, wasteful, wasteful. FIAT runs the cleanest, least-polluting fleet of cars on the road, anywhere in the world, but somehow Italians are "profligate".
Target 2 imbalances are not the reason why the German auto market has dropped 13% in the first quarter - if anything, they are the reason why German consumers were previously able to purchase so many cars during this crisis at cheap interest rates.
What can be "saved" when a country runs sovereign debt of above 80% of GDP? It has to be brought down as quickly as possible. If Germany is downgraded because its liabilities toward the periphery become unbearable and the country becomes another Italy, asked to pay 5% interest and above on that debt sum of EUR2,121 billion, then "good bye" to the tiny safety-net which is still remaining that keeps Germany's poor households from collapsing totally.
"Target 2 is an accounting convention . . . ".
True, every time money flows from the banks of one euro member country to the banks of another, it does so through the Target system ... unless cash amounts march 'cross border on foot.
However, the Target system is a mere 'accounting convention' as long as the accounts are balanced sporadically. This is not the case with most peripheral TARGET2 accounts versus the Bundesbank.
This is how the system works: Let's assume a Spanish company orders 50 diesel engines from a German manufacturer. Once the German exporter has delivered the engines, the Spanish importer will advise his bank to transfer the agreed purchase price. The Spanish bank will initiate the transfer through the Spanish central bank, which will credit, ie enter a liability on its accounts in favour of, the German Bundesbank, which in turn credits the sum to the bank of the German exporter. The Spanish importer gets his machines, the German exporter receives his money, but – and here's the twist – the money never leaves Spain and it never enters Germany. Instead, the Bundesbank receives a Target2 "claim" against the Bank of Spain.
Some commenters, like yourself, have argued that these are merely accounting numbers in a settlement system and that within the eurozone, it all balances out to zero. No need to lose sleep over it.
This is, to say the least, disingenuous. Let's assume you lend $100 to your brother, who is having "balance of payments" difficulties. Within the family we have +$100 for one of the members, and -$100 for another. Nets out to zero "within the family". But that this shouldn't make the German taxpayers sleep any better, since the Eurozone is not 'a family' and doesn't live on a "common budget".
What if your brother (or the Euro member with a minus-account) cannot or will not surmount his balance of payments difficulties - as Mr Berlusconi postulates - or simply defaults on paying you back?
No, my friend Joe, in this moment the Target accounts become "real debt".
"Germans are the biggest petrol guzzlers in the world after the Americans"
Think you have to get your stats right.
Petrol consumption in 2010 in million tons:
1. USA 833 2. China 428 3. Japan 203 4.India 155 5. Russia 147 6. Brasil 116 7. Saudi Arabia 112 8. GERMANY 105
They were warned and ignored it.
Who was warned about what?
Oh, our relevant Pole dancer again, sorry, or was it Cypriot? The Germans were warned that the trade imbalances they were creating could not be contained within the Euro, as the importing EU states could not compensate. They responded with SOFFIN. The Germans were therefore able to export with the added advantage of a currency discount, which meant that they were artificially but falsely competitive. That actually explains why a Spanish or Italian worker had to work longer hours than his subsidised German counterpart. Geddit? So, now their taxes will go up, and they will become less Turbo, less Ignition, just diesel. Didn't want you to miss that one, now you have bought a map!
Currently the Germans run the most sustainable economy in the Western world. Before the introduction of the Euro they controlled the world's hardest currency, which was emulated by the rest of the EU countries in form of the Deutschmark-snake and, later, with the ECU.
Therefore, the political and economical leaders in contemporary Germany surely don't need 'warnings' from those loser-economies who fell over their own networks of bunga-bunga, corruption and nepotism.
And: SoFFin is Germany's early bank-bailout-fund, which will be similarly required from all eurozone countries in case the banking-union becomes reality.
The SoFFin fund is actually the model for the newly to-be-established European banking union scheme and has absolutely nothing to do with Germany's exports into the eurozone, nor with "currency discount" or with "artificially but falsely created competitiveness".
God Steed, you're so stupid.
Why do you think at the warning came from Italy, your arrogance is limitless. The warning came from economists who had understood the hard way hat you can't have growth through austerity measures whilst handcuffed to a currency which was incapable of adjustment, given, as you so elegantly put it the hard DM zone, which remains so long as the Bundesbank is in charge of that currency area.
Watching you assume that the French are worthy of little short of ignorant ridicule, led you into the trap of effectively admitting that he Balkan issue in WWI was due to the Austrian overbearing tactics on the area, to which the Serbian anarchists responded. That was no more than the realisation of the general flow of power which Otto von Bismarck, a Prussian jünker, had the foresight. If you haven't yet got the message, preaching Germanic purity of economic purpose, to a set of countries which are bound into a handcuff system such as the Euro may not wash politically. Particularly, when they can't depreciate their currency to remain competitive. As I pointed out, if the DM not the € was the German exporting currency, then their artificial currency discount would be lost, and the correct values assigned to that cross-currency transactions. Merely trotting out artificial "productivity" and "competitive" comparisons based on an incomplete economic modelling, spawned in an ex communist system is insufficient. Likewise uncoroborrated allegations of corruption in Greece. How do you propose to remedy that issue of the € discount to the German DM, without literally strangling the remainder of the Eurozone on which it depends as its economic hinterland? You have more thinking to do. Spain and Portugal had clean economies before the liquidity crisis, with Spanish banks better provisioned than their German counterparts. Sovreign default within the Eurozone is a possibility, so long as the € is effectively a foreign currency for each of its members. Resolve that issue before it is too late. Then start preaching to the converted.
"uncoroborrated allegations of corruption in Greece"
Click here: http://www.transparency.org/cpi2012/results
You will find Greece ranked 94th, between Djibouti and India.
The warnings to let uncompetitive economies, who financed their lack of tax-income with debt and budget deficits, came first from the German Bundesbank. Romano Prodi, on the contrary, defended Italy's (and, thus, similar indebted countries') membership tooth and nail.
Here are excerpts from a concept paper about Italy's Admission to the Third Stage of the European Monetary Union, provided by Princeton University Press and Educational Studies, January 21, 2003. Author was at the time the associate at Princeton University's Woodrow Wilson School of Public and International Affairs, Mauro Battocchi (now Consul General of Italy in San Francisco).
Quote: "In a speech, Chirac questioned Italy's ability to rein in its deficit and qualify for the EMU. He also attacked lira devaluations, described as unfair competition against French manufacturers. The President of the Bundesbank, Hans Tietmeyer, warned about the dangers that unspecified countries posed through 'creative accounting' (Italy and Greece). In the meetings with his colleagues, Prodi demanded that Italy should be given at least a fair hearing and not be judged on past failings. Another blow to Italy's position came from the European Commission at the beginning of November 1997: its report on convergence predicted a budget deficit for Italy at 3.3 percent in 1997, despite the proposed budget package. Prodi reacted furiously, but obtained from Brussels only an ex-post statement, clarifying that the forecast did not prejudice the Commission's final evaluation. The negative reactions to Italy's policy from EU partners and institutions did not shake Prodi's determination to bring the lira back into the ERM. ECOFIN made the
decision on 24 November 1996, after a two-day negotiating marathon on the value of the central parity. The German delegation was the most tenacious opponent at the negotiating table, asking for a considerable revaluation of the lira. All this did not prejudice the final verdict on Italy's bid for the EMU, which Romano Prodi forced through against the concerns of the Bundesbank" (End-quote).
"Supercountries of the future" and 'dwarfs'
I don't really believe in them, except for China.
Brazil, India, Russia, South Africa have severe issues to address. We will talk again when you handled your crime rates, extreme poverty, corruption, literacy, education, science, infrastructure, overpopulation, pollution etc.
Size and overpopulation doesnt necessarily mean success.
la vyrity
I agree, the Greek default debacle began with the purchase of CDS from then-Goldman Sachs co-chairman Mario Draghi, the same Mario Draghi who is now chairman of the ECB.
So do you really expect us to believe that the rest of the ECB didn't know about this and admit Greece to the EZ anyhow?
The reason my last post 'didn't apply' as you put it is because I attempted to at least partially address the moral aspects of a situation in which the primary actors are behaving in essentially amoral ways; I refer to the bankers and politicians involved of course.
And Germany has the undisputed strong hand where they are concerned.
So if you choose for Germany to go off in the spirit of strict self-interest, rather than one of European solidarity, more power to you.
Next you can tell the Cypriot merchants and traders and soon the Slovenians and Spaniards that they just don't have enough friends.
Such high-handed tactics will earn the EU its just demise. And Germany, by not reining in the worst excesses of its bankers and politicians, will have demonstrated its inability to perform equitably and wisely on the larger stage.
No one expected it would reach this point. It's always been a banking crisis that the b(w)ankers managed to transpose into a political crisis. and lobbies, financiers, and others with vested interests gathered togetehr and created the narrative of the lazy 'southerner' as a sad attempt at changing the geopolitics of today's world. Nothing more trivially boring. Thankfully it's nothing but a silly game. You know why? because our forefathers were clever enough when they created NATO (founding memmbers now). That is a button which can always be pressed to reset if need be.
never forget that, little viva (or who your true enemies are). Now go, fly away, be free. Truly free.
"And Germany, by not reining in the worst excesses of its bankers and politicians, will have demonstrated its inability to perform equitably and wisely on the larger stage."
You aren't up to date, viva. That happened in Germany more than 4 years ago and this is exactly what happened yesterday on EU level: Banks ability to lend has been reined in. The much higher amounts of capital that banks must hold as a lending-buffer have been approved by the European Parliament by a big majority yesterday, April 16, 2013. That package was also agreed with the 27 EU governments earlier and it is likely to take effect January 1, 2014.
However, Germany imposed a higher capital requirement and tougher rules for lending banks already in 2008 with the creation of SoFFin, enacted on October 20, 2008. http://en.wikipedia.org/wiki/SoFFin
Some consider its rules and lending conditions too harsh, this being one of the reasons that the troubled peripherals are unable to borrow cheaply from German and other countries' solvent banks. This is also why they fell prey to the market hyenas from London and Wall Street which are charging outrageous 'risks surcharges'.
SoFFin was created for Germany only
Of course it was created "for Germany only" since the German government can't exercise jurisdiction over France, Greece or Cyprus.
Draghi spent four years out of a lifetime in academia, at the Treasury and Bank of Italy. In those years he was assigned to private sector lending in London.
If he had been involved in Greek lending swaps he would not have been confirmed for the ECB position.
There is a Con Game that is called "Rescue". In this game there are three personae : The Attacker, The Victim, and The Rescuer. The game consist of a fake attack and a rescuer that will pay the attacker to let go of the Victim. The Hedge Funds played "The Attackers", Greece was a superb "Victim", and the Euro Zone paid and paid and paid,.. "Working Hard" is not a proof of smartness !
There is a Con Game that is called "Rescue". In this game there are three personae : The Attacker, The Victim, and The Rescuer. The game consist of a fake attack and a rescuer that will pay the attacker to let go of the Victim. The Hedge Funds played "The Attackers", Greece was a superb "Victim", and the Euro Zone paid and paid and paid,.. "Working Hard" is not a proof of smartness !
There is a Con Game that is called "Rescue". In this game there are three personae : The Attacker, The Victim, and The Rescuer. The game consist of a fake attack and a rescuer that will pay the attacker to let go of the Victim. The Hedge Funds played "The Attackers", Greece was a superb "Victim", and the Euro Zone paid and paid and paid,.. "Working Hard" is not a proof of smartness !
No, Draghi was confirmed for the ECB position BECAUSE he was promoted into the seat by Goldman Sachs.
You are right on the money
The German banking system is chronically undercapitalised and will collapse eventually under its own weight.
As long as they discontinue to take in foul assets they might be alright since they usually also administer fat deposit accounts. Previously 'toxic' US mortgages seem slowly to recover; even Fannie Mae and Freddie Mac are recovering.
No good deed goes unpunished.
So, to sum up, we have the German taxpayer who fears that they might have to bail the rest of Europe out, in the same way that hey currently bail out heir own Lander. Has anyone actually worked out how much the German taxpayer has actually paid into Greece so far? I mean actual payments, not paper. I suspect gat the actual amount might be a lot less than the domestic fear, but without figures, and Maths, who can tell if their politicians are telling them the truth. The truth is that their banking system is undercapitalised and can't take the heat.
exposure level:
As I wrote in an reply to leaveittoviva earlier on this thread, you also aren't up to date.
That correction happened in Germany more than 4 years ago with the creation of SoFFin, which imposed higher capital requirements and tougher lending rules for German banks. SoFFin was enacted October 20, 2008.
Some consider its rules and lending conditions too harsh, this being one of the reasons that the troubled peripherals were unable to borrow any longer cheaply from German and other countries' solvent banks. This is also why these peripheral borrowers fell prey to the market hyenas from London and Wall Street which are charging outrageous 'risks surcharges'. You just can't have both: Tougher rules AND cheap money for risky clients.
And this is exactly what happened yesterday on EU level as well: Banks ability to lend has been reined in. The much higher amounts of capital that banks must hold as a lending-buffer have been approved by the European Parliament by a big majority yesterday, April 16, 2013. That package was also agreed with the 27 EU governments earlier and it is likely to take EU-wide effect January 1, 2014.
Thanks for providing the data. However, in addition to this funding displayed in the graph, Target2 credit is being granted from the German Bundesbank through the ECB system.
As of December 31, 2012, the Target2 claims by the Bundesbank against other eurozone central banks stood at €718bn ($940.58bn)!
Through its Target2 credits, the German Bundesbank is actually financing German export and current account surpluses within the eurozone because most southern European countries have never had the money to import German goods on such a scale in the first place.
The Bundesbank's Target2 credits amount to about two thirds of its entire balance sheet. And: They are entirely unsecured.
So far all payments, credit and guarantees combined which the German taxpayer granted toward his Euro partners amount to €1.611 trillion (or $2.110 trillion).
This is also why trade with virtually insolvent Euro countries via the TARGET-system is in reality a ticking time-bomb for the German taxpayer.
That was the attempt to compensate for the German export surpluses subsidised by a weaker Euro than the Eurodm. It ain't working, and he German Banks are only propping themselves up by diverting loans elsewhere. I maintain hat he UK assessment is that the German banks, whether the lander or larger can't handle what is coming.
Yes, it's a result of current account surpluses, but it's still not wise to ship high tech goods there "for nothing".
This is why German firms are now advised from their chambers of commerce to be more export-reluctant with trade-deficit countries from the eurozone and, instead, expand in markets outside the EZ.
The result are declining German exports to the EZ periphery and increasing trade with overseas partners.
Good, we are on a similar wavelength. I just find that the Germans are not over aware of the damage that results from their actions.
Good, we are on a similar wavelength. I just find that the Germans are not over aware of the damage that results from their actions.
What "actions"? Or do you mean "inaction"?
The Economist is usually right but this is not the way to go about it. It not only gets nasty, it will bring on another war. People in Europe have to live together in this global world.
We Europeans in the United States have the same problems in this global world. We don't know what to do.
But war is not a possibilty here in the states anymore but that is the only way Europe seens to know in the history of Europe and not only in Germany. It is not a good idea to use the German wording for a leader because that is exactly what they will have to do. Don't push them by reminding them of the war that they lost as body wants war but they all want a united Europe and that is what the euro can provide and it will make Europe take it's historical place in the begining history.
I agree with you. Germany is grossly overestimated.
It is a projection of the past. Germany has no geopolitical weight, as well as other European countries today.Germany is a small country among other small countries in Europe... Europeans can together go better through the times. Of course we argue and everyone distrusts the other. Otherwise we would be not Europeans. A Florentine said earlier: No Pisan comes into my house (crosses my doorstep). Greece was conquered by Rome because Greece was not united. If Europe is not capable of unity, we will have no chance to face the Super Nations of tomorrow, China, USA, India, Brazil, etc. and we will be no able to defend legitimate interests, starting for example with the VISA regulations. The super nations of tomorrow will perhaps make this treaty with Austria, but not with France, etc. They could play with any European country. We, the Europeans, know that of course. ...... In my opinion, a kind of Switzerland should be the model for Europe. There are solidarity and also self-responsibility. Switzerland is a micro-Europe. Subsidiarity, deep federalism, much self-responsibility of the cantons, in short, a kind of cantonal system as in Switzerland, where 26 cantons are very independent, but united in diversity. Even in the U.S. some states require more autonomy. ... At European level, the structural funds may be increased and many things could be done together. Greece pays for example 8% of its GDP on the military. Countries who want should put its military into one, etc. The military headquarters should be in Mitilene, Lesvos: make love, not war.
'The super nations of tomorrow will perhaps make this treaty with Austria, but not with France, etc.'
What for? so Far France is a permanent member of the UN, not Austria...
are you kidding? Switzerland, who only gave women, after demonising half the population in a disgusting manner for centuries, in 1-9-7-1!!I'd vote for Ibiza first! Switzerland is in the dark ages.
The super nations are not what we are thinking about. Staying alive is. As everyone knows Europe is the greatist place to live when at peace and no wars are coming on. Sure each county has different ways of thinking and speak a diferent landuage, and even wear different cloths. So what? You can be who you want to be, and that is great if you are Europeans. Paradice is what you can call Europe.
It is those damm wars that makes it hell to go there. So how can we stop that? For one thing we must get off the Gernan's back. Keep kicking their ass and they will kick back. They not only lost the last two wars, they lost their country and what was in it. I was there and I saw what they did but what we did too, and it hurt me to see what we had done. For God's sake let's forget this war. Those of us who were there still have difcuity sleeping at night and the rest of you should think in terms of all being Europeans and find a way to live together in the future and if we can do it here, you can do it there. I would give my life to help but that is all I can do as I am nobody now.
"Germany is grossly overestimated."
If you say so, it must be true.
Germany, by virtue of its size and hard work, has made itself the arbiter of the EU. Congratulations. Couldn't happen to a nicer bunch of people.
Lately, however, Germans have taken to citing statistics that purport to show that Germans are less wealthy than their European peers.
Well, wonder of wonders, so the Germans have discovered that hegemony costs money. Let me wipe this tear out of my eye.
As an American taxpayer who helped fund the US global domination, I say 'welcome to the club'.
I am so broke I can't pay attention.
Germans. don't. want. hegemony. Period.
I think that, at this point it IS important to remember that it's not costing the German tax-payer a penny because they're loans and not direct transfers. The EFSF has made a profit. Moreover the rating agencies which clearly discriminate countries to which your sad narrative refers , clearly protected the interests of certain nations causing the yields in such countries to be incredibly low, thus bailing out (literally!!) these countries as they can quietly and easily roll over their own debt.
Jesus Christ sat at the table and ate with tax-payers and usurers. Jesus Christ also said that he who seeketh findeth.
Sorry I obviously meant taxmen
You don't want hegemony. But you have it.
Ride the tiger.
Dismounting. is. not. an. option.
No they don't. They are 'hegemon" . It's different from having hegemony. It is a Greek world after all.
Besides do they really? What do Germans truly control? They've proposed things as other countries have. Some things were accepted others weren't. The ones giving them too much attention are the media, for obvious reasons. They started all this by pitting 'North' vs 'South' (remember two years ago?) then this strategy wasn't working so they started pitting 'South' against 'North' then THIS wasn't working and here we are back in the good old' merry-go-round.
It's all rather silly really. Because first there is no 'North' of Europe, second because they keep saying silly things. At least we know that the poor spirited will inherit the Kingdom of Heaven. Sigh of relief for them, some of us have to fight harder!
Btw apparently there was a bomb attack in Boston? What happened? I'm a bit lost the news don't really say much? Terrorism again? Oh Lord. :-(
yes, but Merkel exerts it
"so the Germans have discovered that hegemony costs money."
Well, yes after 60 years of leeching on the US security umbrella which enabled Germany to have a defense budget as if it lived next door to Canada, it must indeed be a shock to get a taste of one's own medicine.
Remember after introducing the concept of punitive reparations with the Frankfurt treaty, they were shocked shocked that they ended up getting a taste of their own medicine with Versailles.
After scanning this blog today, I am in awe at how English has conquered the world.
Imagine even NPD members have became acquainted with the language of Shakespeare.
There was a mistake in this post.
I meant to say 'Jesus Christ sat at the table and ate with taxmen and usurers. Apparently he wanted to save them. Jesus Christ also said that he who seeketh findeth.'
Did you weep tears of joy? Long before the internet, capitalism (as we know it), and school dropouts - Portuguese was the lingua-Franca in most of Asia. Some dialects still exist today. thank the Jesuits for the first Portuguese to Japanese dictionary , for the first portuguese to vietnamese dictionary and all that jazzy stuff.
The Jesuits were cool people. Not allowed to enter Denmark (or was it Norway) all the way into the 70s. Weird wouldn't you say? I did think so myself.
No I weep no tears of joy.
The language of my ancestors was Gaelic now almost extinct thanks to English.
I am sure the Portuguese language ruled the world at one time, only to be replaced by French later on. English may be king now but it will eventually be replaced by another language.
That is how the world works.
hey Emma, old german-eating frump!
don't let the facts get in the way of your
absurd bias.....
US security umbrella is a huge business. It is a sure means to transfer US (and NATO) taxpayers' money to Boeing, Lockheed-Martin et al.
eh, this probably should go to twitter instead of this discussion
Nice try but the EU is the largest exporter of weapons, thanks to all those European weapons manufacturers.
No, Merkel just wanted Greek pain...
No, Merkel just wanted Greek pain...
"Nice try but the EU is the largest exporter of weapons"
Nice try but no true. http://en.wikipedia.org/wiki/List_of_countries_by_arms_exports
"it will eventually be replaced by another language"
GERMAN ... ehm wanted to say Chinese....
The more I learn about Alternative for Germany, the more their arguments seem sensible to me. Not only what they say, but also what politicians opposed to AfD say. Of course returning to the Deutsche Mark will to some extent hurt Germany's export industry, but isn't that part of the problem and one of the reasons for growing international resentment?
It really is this simple:
like in good old time when the Wehrmacht had to take its metamorphine pills
While I agree with Alternative for Germany that EZ should be broken up, Germany won't benefit from leaving.
The countries who will benefit from leaving is Southern Europe. Germany benefits from the low valued currency, much more than the cost of bailouts. Without that Germany will see its unemployment increase, and may risk a default from Southern Europe.
thats why the Greeks should legalize cannabis and offer "grass tourism" or "turbo surfing" .Get some tourist money quickly
hello emma, marie-claude, miss alldu(m)b e
tutti quanti.....
hello Josher
If you recognize him he will cover his face and run away.
Germany just finished the weekend resisting a centralized control over banks, and now we learn of some other interesting development
One jolly good reason NOT to have Germany in the driving seat of EU.
What is wrong with the notion that the super-rich in Greece or Spain must bail-out their own governments before the taxpayers in foreign countries are forced to do so - in very undemocratic procedures.
Here is the word-for-word quote: "The proposals, from members of Germany's council of economic experts, raise the prospect of taxes being imposed on property in a country like Spain if its government was forced to seek a bail-out" (meaning: before these bail-outs are forced upon foreign taxpayers).
Yes, we can all agree with the German council of experts: the super-rich goat cheese brokers and shoe traders of Cyprus must pay, lest Cyprus slip out of the golden euro lasso! There's democracy for you!
And Spanish grandees sitting in their sprawling two- and three-bedroom houses must pay!
This will deepen the tranquility of Europe at a nervous moment.
But whatever happens, please, please don't let the bankers hides be squeezed for the necessary lucre.
Who knows but the world might not end at the moment heaven hears a banker is in distress and must relinquish his booty.
Bankers are, as a rule, merely overpaid employees. The owners of banks are usually the bank's shareholders. Shareholders' inclusion, called 'bail-in', was given priority in Cyprus, together with deposits above EUR 100,000. So, what are you complaining about?
However, if banks' assets turn 'foul' in the ball park of Lehman, BlackRock or HRE, then also other bail-out sources have to be tapped. This was addressed by the members of Germany's council of economic experts: Before German taxpayers are forced to bail-out foreign countries or banks, those countries must tap first of all the available sources at home - if the bank is "too big to fail".
BTW, at a meeting of officials from the 27 EU countries with MEPs and the European commission was agreed to cap bankers' bonuses broadly at a year's salary, with the proviso that the bonus could be doubled subject to majority shareholder approval.
And: The decision to limit the annual bonuses that may be paid to bankers came despite "stiff British resistance" to the move. The City of London fears now that it certainly will have a strong impact on its "fat cat" culture.
Isn't this what you were promoting too?
It was the collapse of the value of Greek sovereign bonds that caused the Cypriot banks to collapse. If those bonds are worthless, then so are all the other Greek sovereign bonds.
Why isn't the ECB requiring the guarantors of those instruments to stand good for them as well? Maybe they have friends in high places. The Cypriot goat cheese farmer and shoe trader have none.
Why aren't the banks that insured these bonds with derivatives be made to pay out on them? Too many powerful friends?
It doesn't help to attempt to justify the confiscation of the weath of the small fry (as opposed to the 'super-rich' whom you you know quite well got off without a scratch) by invoking the EC and EP. The parliament of Cyprus was the sovereign body responsible for Laika and BOC and they voted against the confiscation.
So much for national sovereignty, so much for democracy in the EU.
One of the super-rich stockholders, the prime minister of Cyprus, got off without a scratch as well; along with his family, who are also in essence bank shareholders.
Why isn't the EC and the EP going after him and these other 'super-rich' shareholders you describe? Their money is back in Estonia, the City and Moscow and fifty other places by now, that's why. And they have friends.
SOOOOOOOO..... Time to break the backs of a few thousand honest Cypriot businessmen and retirees. Time to smear another nation with titles of 'parasitical tax havens'. This is the EU's notion of justice? Crush the ones that don't have friends.
The ECB bought the lousy bonds as well. Let the ECB stockholders pay. Who is that? Fifty percent of ECB debts are backed by GERMANY. Oops.
Instead the ECB sits on them, buying time by crushing the small-fry that made the SAME mistake.
Face it: there is no banking union and Germans don't want one. Who can blame them? It will only lead to fiscal union and we both know the Germans get tapped for that as well.
Germans are admirably sacrificing private wealth for the strength of their national economy. Too many other nations are sacrificing the strength of their national economies for their own private wealth.
At bottom, the abstract electronic impulses of the BANKERS and their owners are destroying societies in Europe one by one, because the euro will not allow them to devalue other than through an externally imposed austerity that is counterproductive. This is the EU's idea of economic, fiscal and financial prudence?
There can be no more union than an EEC between such partners. Time to unwind.
except that Merkel promised to the Germans that their savings wouldn't be hurted after that the german banks had been badly hit by the Lehman & Brother crash
you're futile to think that properties in Spain represent reality, it was all inflated by German banks (Dutch too), so, if Germany still want to apply this tax in Spain she will likely bankrupt german landbanken
"Before German taxpayers are forced to bail-out foreign countries or banks, those countries must tap first of all the available sources at home - if the bank is "too big to fail".
scuse me, but the German tax pyer still haven't experienced the pain, as the bailing out were loaned with interests, but they will when these bailed-out countries will choose to default rather than to protect German elders retirements wages, above all when these are hit by Alzheimer's disease
As long as the EU stays a conglomerate of "still distinct sovereign countries" (as a poster from a southern country wrote on another blog) nothing of what you're suggesting is applicable. Unwinding the EU? Why?
The Eurozone is not sustainable the way it is run. German voters will stop the current model in Sep. if the AfD gets more than 5% of the vote. Meanwhile (or after) any country can default without the threat of being "invaded by the Wehrmacht". LOL!
"except that Merkel promised to the Germans that their savings wouldn't be hurted after that the german banks had been badly hit by the Lehman & Brother crash".
Her government kept the promise. It initiated the creation of the SoFFin (the Special Financial Market Stabilization Funds). It was created in the middle of the Financial crisis of 2007–2010 on October 17, 2008 by the German Parliament and enacted on October 20, 2008. This enactment made, indeed, the savings secure, since the SoFFin may grant guarantees of up to 400bn euros if needed and recapitalize or purchase assets for an additional 400bn euros.
But tell me, what does your posting have to do with the price of tea in China?
Cyprus or Greece aren't Germany as you might know . . . so might this op-ed-joker Christoph Schwennicke, who wrote that euro-socialist propaganda piece you were referring to in Der Spiegel.
Why are only "the Germanz" retirement wages endangered by the euro-hoopla that was strong-armed by Frenchman Sarkozy onto reluctant eurozone countries in May 2010 . . . and not the French retirees? LOL!
Eeny, meeny, miny, moe,
Catch a tiger by the toe.
If he hollers, let him go,
Eeny, meeny, miny, moe.
LoveSharon wrote Apr 15th, 11.24:
"The whole 'Greek Default' thing started really with a Currency Swap Agreement between the Greek Government and a Big US Hedge Fund . . . The Government of the Huge Hedge Fund should have redeemed the Currency Swap Agreement. Not the Euro Group. Not Germany.
You see, there are various opinions about who should pay - Eeny, meeny, miny, moe . . .
hey, there's the german fan coming from his americn hole !
Der Spiegel, clearly, doesn't like Merkel's policy, me too, and we are about 300 millions people in Europe too, not counting the hundred millions in America, and the billions in China... thus China tea doesn't count as strawberries !
ah then it's Sarkozy's fault, since when the Germans complied to a french initiative? only when they are forced through gunfires !
as far as retirement in France, don't worry, the French reproduct !
Yes, I fight untruth, but Boston is certainly closer than Berlin.
However, your memory seems to be riddled with holes like the famous Alzheimer cheese. How people in the English speaking world remembers it is quite different from your French memory.
The Guardian, Friday 14 May 2010:
". . . French president Nicolas Sarkozy threatened to pull his country out of the single currency altogether to force Germany to agree to the rescue plan".
This is what most Americans remember, dear MC!
oh I regret that he didn't decide to make it, we won't be discussing of the euro crisis today !
"This is what most Americans remember"
NO, you, but your a German living in the US
Hey, don't knock Greek goat cheese. I can still afford it occasionally.
I have one side of my maternal family from southern Italy. In the 1970's they had a quite modest pastoral existence (not to say "poor") with their cows up in the mountains.
There was only one TV and one telephone in the village in 1970, but when we visited I always had to eat the most glorious fresh mozzarella, scamorza and caciocavallo cheese in super-abundance, made by mother's various aunts.
I went into a supermarket the other day and had a profound desire to eat a bit of caciocavallo - EUR 30 per kilo (about USD 18 per pound). Who can afford it? So, I'm stuck eating Dutch gouda at EUR 5 per kilo (USD 3 per pound). (Bleh! A good moment to work on reducing cholesterol - so, no more cheese.)
Something is terribly wrong with the global market when we cannot afford to buy our own products.
In the meantime, petrol, toll and/or train expenses have made it impossible to visit the old village for any less than USD 300 (return). From Trieste, I can get to Bratislava or Prague for that money. And anyway, in the village everyone now has a TV (to watch Berlusconi of course, even though nobody votes for him there). The old people have died off, fewer and fewer make cheese at home, and prices have risen there too.
I preferred the 70's. The world's best food at cheap prices, and no TV to interrupt dinner, table conversation, etc. No porn anywhere, but everyone was busy copulating in the hidden places of the mountains.
The West took a bad turn somewhere. I think it all started when Reagan de-regulated the banks. Another pro-British friend insists the decline of civilisation began when the British navy abolished flogging. Yet another friend - a rock musician - insists MTV has destroyed western civilisation.
". . . we are about 300 millions people in Europe too, not counting the hundred millions in America, and the billions in China".
LOL. Germany's 26 million taxpayers are supposed to rescue the world from its own follies?
Eh daydreamer, not even if the German taxpayers were the mythological Titans they could muscle that.
That's why their answer must be: "Well then, if you are the Son of God, save yourself!"
Oh, the eurozone's paymasters already regret that the Germans gave in to the French in May 2010.
This was, as all wise people in Europe acknowledge meanwhile, the opening of the Pandora's box, which will destroy the Euro!
Not one of the still solvent countries is willing to ruin its own creditability for the likes of profligate French Socialists!
don't talk of the german taxpers, but of the german banks that made their risky plans for that the southeners buy "made in Germany", for that Germany exported inflation to the EZ countries...
"Oh, the eurozone's paymasters already regret that the Germans gave in to the French in May 2010"
NO, he doesn't regret it, the crisis brought severtal hundred billions euros into Germany, as interests on the loans, as foreign investors into Germany businesses, as bankruns depositsfrom the southern banks... Today there are more Germans pro euro than a couple of years before, 69% vs 43%, I read on papers
"This was, as all wise people in Europe acknowledge meanwhile, the opening of the Pandora's box, which will destroy the Euro!"
No the Pandora box was open with the Lehman é Brother crash, for a while Germany was on the verge to collapse under her banks bad deleveragings ... that she makes pay to the southeners today
Wait for Portugal chosing to default... rebelote panic on German banks again !!!
Last time I spoke to German taxpayers they all yearn for German banksters to be bailed out by their French peers . . . and French taxpayers believe steadfastly that the Greeks will bail 'em out in return.
Why not? - That's Hollande's banking union 'life'.
are you playing the Dummkopf part?
Please look farther up the thread for my continuation of our conversation.
Success breeds its own nemesis.
The American people were the primary guardians of the prostrate world emerging from WW II and continue to this day to fulfill that role. But we have drifted away from those virtues and principles that were the foundation for their greatness.
We have indulged in excessive materialism. Disintegration of our families, produced by governmental interference, sexual profligacy and drug addiction, made this transition permanent. Alienation wrought by technology and political cynicism furthered this trend. International overreach bedevils us.
Today, in some ways the US is a spent force.
But the exceptionalism of the American story, our still-vast wealth and power, our lack of natural or self-imposed limitations, our record of ever-new and auspicious beginnings, leaves the last chapter up for grabs.
Don't count us out.
Goat cheese and a good bottle of Greek wine? Yum!
Whoever said America was a spent force? More like a hobbled giant. Hobbled by the yoke of the corporations that have taken the Capital out of Capitalism and rendered it answerable to no law, authority or constitution.
If only the other Euro countries were as efficient as Germany!
The whole "Greek Default" thing started really with a Currency Swap Agreement between the Greek Government and a Big US Hedge Fund. The Euro Group did not need to redeem that Swap Agreement. Of Course the Huge Hedge Fund went laughing and singing to the bank.
Hard Work not always come with a geed brain. What a shame. What a waste.
The whole "Greek Default" thing started really with a Currency Swap Agreement between the Greek Government and a Big US Hedge Fund. The Euro Group did not need to redeem that Swap Agreement. Of Course the Huge Hedge Fund went laughing and singing to the bank.
Hard Work not always come with a geed brain. What a shame. What a waste.
The Government of the Huge Hedge Fund should have redeemed the Currency Swap Agreement. Not the Euro Group. Not Germany.
What a narrowminded perspective! I'm all for following the rules, as I'm all for justice. Fact: the rules were broken by the powerful ten years ago, and they used their power to avoid any consequences, thus rendering the very rules they had established irrelevant. And now every one is being called upon to play by the rules? Using further self-defeating rules? Granted, the system was not well designed, but instead of reforming it, let the Germans make no decision - is there any logic in that?
Also, no wonder an increasing proportion of the Germans want to stay in the Euro - they have benefitted enormously from it! The question of whether it is fair is not as central as the reality of it: think German interest at the moment. Think Siemens scandal: big German company paying off Greek officials for state contracts. Sure, they were corrupt Greek officials, but someone was making big money out of it, that is the reality. Pumping (then) cheap money in the hands of the corrupt Greek state so that a significant chunk of it can be spent on buying German products. For many, Greece is a bankrupt country - has anyone dared demand that expenditure on defence contracts shrink as it shrinks on various aspects of social provisions?
I don't know where you get you data from, but recent polls show that more and more Germans would like to return to their beloved DM.
While newly created Alternative fur Deutschland Party is gaining more and more members. Fast.
"...the Germans want to stay in the Euro - they have benefitted enormously from it!"
The average German did NOT benefit from the Euro.
Since 1999 wealth in Germany decreased whereas it increased in most other EZ countries.
How come the so-smart Germans were willing to pay the Greek Joke so many billions. Who was smart here, and who was the dumb kopf here ?
Will Germany and the "North" continue to pay to Griechenland ? Of Course ! Forever ? Of Course !
I probably don't have the full picture about German public sentiment towards the Euro, just based on this article's point on the recent survey.
Makes sense that the German public would like to go back to the DM and leave all the Euro problems and their responsibility to address them behind them, but what impact would that have on their exports in a strong currency towards the rest of Europe, which I am assuming would have a significantly weaker currency? Or would they turn to the emerging economies - which largely rely on Europe for their exports in turn?
Interesting side of the discussion, perhaps it could be said that the average German did not benefit from the Euro but at least thanks to prudent policies, is now in a much better position than the average Greek or the average Portuguese. Units of analysis are important - perhaps the individuals didn't gain as much, but as long as they are part of a well-functioning collective (with strict rules and less "fun" when compared to Southern Europeans who seem to have been living indeed way beyond their means and are now living in societies in crisis) At least there might be some justice in that.
What does wealth mean? Sure, the Greeks indulged themselves with real estate and cars, but they have been left with very poor public services.
yet Merkel and her friends german banksters and corporations did
if the average German lost anything in the dilemn, you'd better blame Schröder for it
since then, the balance of productivity vs wage was rotten
About 60% of German exports are to non-EU countries
About 60% of German exports are to non-EU countries
Question: How much profit does Germany make on THOSE sales and do those produce trade surpluses for Germany?
Not all customers are the same.
First a small correction:
61.15% of German exports in 2012 were to non-€ countries (total exports: 1,097,346,000 €; exports to €-countries: 426,351,000 €)
75.68% of those 426,351,000 € were to €-countries except PIIGS, Malta, Cyprus.
So less than 9.45% of total German exports were to those countries called the "South".
To give an serious answer to your question one first has to define exactly (economically) the words "profit", "sales", "Germany", maybe other intrinsic variables and also the time scale of observation.
It is curious how the wealthiest country in Europe is so protesting impoverishment that it is continuing to believe the remainder of the Eurozone can improve their balance of payments in a closed currency environment. Germany was able to generate wealth by diminishing imports and increasing exports with other countries in other currencies, not in the same one. The Austerity imposed by the German guilt complex or Schuld simply does not translate into other languages or currencies.
It is curious how the wealthiest country in Europe is so protesting impoverishment that it is continuing to believe the remainder of the Eurozone can improve their balance of payments in a closed currency environment. Germany was able to generate wealth by diminishing imports and increasing exports with other countries in other currencies, not in the same one. The Austerity imposed by the German guilt complex or Schuld simply does not translate into other languages or currencies.
"the wealthiest country in Europe"
What country are you referring to? Surely not Germany.
"Germany was able to generate wealth by diminishing imports and increasing exports with other countries in other currencies, not in the same one."
Exactly. That was before the Euro. Not possible within the Euro. This is why the single currency Euro did so much harm to Germany.
"The Austerity imposed..."
Yes, "Austerity" has to be imposed by the markets - not by foreign countries. Another reason why Germany should never have agreed to the Euro.
If you ask me, there a two parties to blame for the current situation in Europe. One is the US-politics of G.W.Bush and the other one the German conservatives. Why is that? The US government of the early 2000 systematically collected taxes at a rate well below it's expenses thus contributing to three major problems: 1) increasing public debts 2) forcing other countries to lower taxes or keeping them low and therefore causing them to build up excessive public debts 3) creating an excess supply of capital which could not find enough possibilities to be invested in the real economy thus causing y huge bubble which imploded in 2008.
The German conservatives are to blame because they insisted on an inflation goal for the Euro zone of 2% and they insisted on an ECB which is not allowed to lend money directly to EURO-Zone governments. What happened was, that whilst Germany's inflation almost always remained well below 2%, inflation of some southern European Countries was often above that goal. Even though it looked like the EURO-Zone hit the 2% goal every single year it's different economies drifted apart year by year. Due to low wages in Germany and thus increasing profits of Germany's international companies wealth within Europe shifted towards Germany but never actually reached the "hard working German workers". It went back to southern Europe as loans. What Mrs. Merkel has been doing since 2010 was NOT helping Greece, Spain or Portugal but helping German banks and insurance companies to protect their investments in those countries. Cyprus just had the wrong kind of money.
This makes it easy for me to understand the frustration of people living in south European countries but also the frustration of German workers who have the feeling that they were paying for the whole party since 2001 but never had the chance to actually take part in the celebration.
You are incorrect about the reason for US financial problems.
It's not that its taxes were too low, but that its expenses, especially unsustainable ENTITLEMENTS were way too high.
With nobody, until TEA Party appeared wanting to antagonize voters by curtailing those huge entitlements (SS, Medicare, Medicaid, etc.) which constitute roughly 2/3ds of the US federal budget.
Btw. Who has been printing extra dollars like mad endangering its status as global reserve currency?
Bush's Treasury, or Obama's Treasury?
P.S. How do you expect France to recover from its predicament with its insane Socialist tax code?
To me it makes no difference if one collects too little taxes or spends too much money. Bush has put a well balanced economy totally out of balance.
Money that you spend on Social Security at least creates jobs TO A CERTAIN EXTEND. Money given to people that don't actually need is basically lost for the real economy because it increases the savings rate.
Spending too much money increases deficits and national debts.
Increasing taxes (cf. France's 75% marginal rate) stifles economies.
Comrade Hollande has obviously not learnt that Friedmanian lesson yet and that's why he
insists on promulgating the discredited Keynesian model.
[welfare state concept is dead]
@YANKEEE DOODLE.The old french paid lies.Italy paid 42 billions to the german banks thanks to traitor and marionet gauleiter Monti,who wildly taxed us for this purpose.France is not a southern country(Italy and Spain are),is not a northern country(Grmany is),is not an atlantic country(Britain is) is not an eastern country.France has a big problem:to lead 9 millions inhabitants of the banlieues.The only leadership Paris can dream.
still drinking at your Berlus'bar?
Berlus again! Stirred but not shaken! ;-)
The euro is damned if Germany doesn't. The euro however is also dammed if Germany does.
There is no plan for the euro and there never was, just a dream.
The first euro survived the predictable Greek cheating (Greece was then kicked out). It was the discovery of massive Italian cheating that took the first euro down. (Google Latin Monetary Union) Italy and not Germany will end euro II.
France will lead the southern part of the old eurozone and Germany will be her rival while leading the northern half.
History tends to repeat itself.
And the North wins hands down. History repeating itself.:-)
But Germany wants to keep the euro, it's so good to have a DM with a lower rate
The Greeks didn't cheat more than the Germans who knew Greece'economy state that wasn't fitting Germany's most industrialised EU country, but Germans had interest to extend a zone for their manufacturers, who could sell their products at a affordable price
"France will lead the southern part of the old eurozone and Germany will be her rival while leading the northern half."
no, because if one EZ country decided to default on its debt, the whole EZ country will dismentle, that would leave Germany with big bank losses
Anyways, the Mediterranean Union is more coherent in matter of life style
It was not "Italian" cheating, it was the Vatican Treasury.
Get real. And get over your prejudices.
"It ain't over until it's over."
Let's see what happens now that the recession has finally arrived to Germany - while Japanese support for Spanish and Italian bonds is finally correcting the damage done to us by German banks dumping their holdings.
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