The Wobbling Euro

Europe puts on a grand farce for the rest of the world to watch and wonder at.

The “Greece scuppers the euro” soap opera is steaming along at top speed and the iceberg ahead is more than big enough to sink the Euro, the flagship of those seeking a United States of Europe.

The Euro coin

Several very interesting things are becoming clearer about all this:

A) Greece (and for that matter some other countries) was NOT “ready” for the straitjacket of a single currency in the same bed as Germany, Holland and other serious (well, sort of ) countries, particularly in the North ….

B) The EU hierarchy set some stiff rules for entry to the Euro, which Greece LIED about to gain entry.

C) I firmly believe the EU leaders KNEW that Greece’s figures were the delusional fruits of fraudulent pretention, but they PRESSED ON regardless.

The question is, WHY did they let Greece in? And the reason was – I maintain – their GREED. Not directly for money (though that is ever in the background) but for POWER. The more countries in the Euro the bigger the organism and all organisms seek to grow to their maximum.

The bigger the Eurozone the more unstoppable the momentum would appear (and “appear” is certainly the right word) and the more power would accrue to Brussels and Frankfurt. POLITICAL GREED overcame economic and financial logic.

But the chickens always come home to roost and the result could now be the OPPOSITE of what they wanted to achieve.

Coming back to the roost

Instead of a tight core of financially-stable and righteous Eurocountries that could have thrived as a model for others to emulate and join, Euroland has become a haphazard bodge of totally-disparate economies that has every chance of unravelling in chaos.

I have no desire to see the Greeks or anyone else in economic trouble, but we cannot build a new Europe – let alone world – on lies and a lack of realism. A touch of hubris is direly needed. More practically, we need more long-term planning and less short-term political greed and cowardice.

If this Greek crisis had happened when the EU was flush with funds then it could perhaps – temporarily – have been bodged over as usual. Now we are still on a financial knife edge, and it could go either way. There is some talk that this crisis could accelerate political and monetary union, but I can’t see individual countries giving up their financial independence to Frankfurt and Brussels …. what is true is that we are in dangerous waters out of control and maybe heading towards the rapids … (or the iceberg …) Most EU countries are already in serious trouble; the last thing they need is a further drain on scarce resources. The Greek patient could well bring down the German doctor …….

One of the funniest things (if you like black humour) was soon after the EU bigwigs fixed a ceiling of 3% above GDP for countries’ budget deficits. In other words, countries joining the Euro had to guarantee to take steps to ensure this ceiling would not be breached, and this in the interests of Euroland as a whole; a sort of collective responsibility.

Yet as soon as FRANCE found it could not apply the self-discipline to keep to this promise (do promises matter at all in politics?) then some French government spokesperson said when challenged on this that “the rule could not be applied to big countries.

You couldn’t make it up!!!

By Chris Snuggs

6 thoughts on “The Wobbling Euro

  1. Well, at least this essay is slightly less offensive than the similar one written by Krugman (Pity Be Upon Him!) in the New York Times today. I was writing a scathing answer to the europhobic Krugie boy, but I got interrupted by unrelated events.

    The Americans are green with fury, now that Europe has taken refuge behind Athena (which happens to be my daughter’s name).

    The Americans had a plot. It was simple: we are worthless, so our currency ought to be worthless. But then China said; very well, let’s peg our currency to yours, because we are also worthless too.

    The infuriated Americans have been insisting, ever since, that they were much less worthy than the Chinese, but to no avail.

    Now here is Europe, and Europe says: Greece, and Spain, and Portugal, and Ireland, are all pretty worthless.

    Cute.

    So far, carried by hubris, the Americans have been singing on all rooftops, that it was incredibly nice to learn that Europe is worthless too.

    Speak about silly. Europe has learned its lesson well.

    BTW, to brandish the Netherlands as a paragon of northern sobriety is misinformed: their debt, per person, is very high. Government debt is one thing, and can be fixed by high taxes, if the population has saved (as is the case in France). But it cannot be fixed if the population is over indebted (case of Netherlands, or the USA).

    The euro is a French idea which is doing fine, except for its over-evaluation, I reckon… The fun is just starting…
    PA

    Like

  2. As I will explain on my site, and as I tried to explain to Krugman (he half understood it), the inflation target of the ECB is too low. It ought to be higher than 2% (say it ought to be twice that)… Thus, so should be the 3% ceiling on government debt. It ought to be 6%. Everybody is well above that this year, and especially the USA. Inflation absorbs debt.

    Greece lied thanks to Goldman Sachs (as I explained in http://patriceayme.wordpress.com/2010/02/13/publicly-funded-plutocracy/).

    PA

    Like

  3. Government debt is one thing, and can be fixed by high taxes,

    AND BOY, AREN’T THEY GOOD AT PUTTING TAXES UP.

    All is OK then? We shall be saved by higher taxes ….. I can’t see it, Patrice.

    Oh, INFLATION will save us? GREAT! That always hits the poorest hardest …… and of course those who cannot negotiatye payrises to keep up. Welcome to banana-republic land.

    Governments (I think this word is a bit over-inflated to describe most of the bunch of fools in power) will save themselves by ramping up inflation, for which they will blame someone else.

    You couldn’t make it up.

    Like

  4. PAtrice – interesting comments as ever, but you don’t comment on the central point of my last post, namely that the EU allowed Greece in for the WRONG (and stupid) reasons.

    Commonsense was tossed out of the window for political reasons, and BAD ones at that.

    What about THAT point?

    Like

  5. Greece has been asked to tighten that belt. In other words, cut spending, rise taxes. I am not judging, just observing.

    BTW, same in the USA: either keep on plotting with China to buy the USA, or rise taxes, and/or cut the Pentagon.

    Greeks can be whipped into shape. Fascist, US propped regimes used to reign in Greece, Spain, Portugal (and the Catholics in Ireland!) A lot of ground has been covered, this is just an adjustment. Greece has a great naval industry, fantastic tourism. The problems of Greek spending are so outrageous, they are actually easy to fix.

    The plan, and pain, is mostly for Germany and France to fork the money over, directly, with chains attached.

    As I said before, many fanatical Europeans such as yours truly are delighted with the Greek hitting the fan. This is the pretext we were looking for to deepen the European Imperium. Next we will kolonize an haggard Britain with the forces of Koln und Frank-Fort.

    Greece is our symbol, it belongs. Simply we like Greeks so much, we want them to work more than 15 years before they retire.

    PA

    Like

  6. Hello Patrice

    I am a bit puzzled as to what this has to do with the USA? It is a European problem, created in and developed by Europe. Greece was allowed into the euro by a LIE and is now in terrible trouble through its OVERSPENDING and CORRUPTION. Frankly, I am sick and tired of all three of these. Everyone must live within his or her own means. This is the lessons that the recent past teaches us. I am not prepared to pay to help Greece learn this lesson; it must learn it for itself.

    The Yanks may have a point of view but its relevance is of surpassing insignificance in this case.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.