Germany is not entirely the figure of blameless hard-working rectitude that it claims, set against the feckless southern Europeans.
In the 1990s, Germany was faced with a huge bill for reunification with the East. The boom of the later boosted their high-tech export economy greatly, helping them pay for it. Then came the collapse of the stock market, and in the early 2000s Germany was in trouble, with high labour costs, too-strict regulations and an overburdened welfare state, with stories about ‘the sick man of Europe’ circulating (especially compared to the French, which was particularly irritating).
The Germans responded with fred smith’s beloved Hartz reforms, in which everybody pulled in their belts, though the biggest hit went to the poor and marginally employed outside the big union/company bargaining units. However, they were also helped out by the European Central Bank, basically under German control, which pushed down interest rates. This helped ease the pain for Germany, but was bad for the southern European countries which were doing quite well at the time.
Loose money in a time when resources are fully employed led to inflationary expansion (out of the control of the governments) which served the double advantage of pushing up German exports while making the Southern Tier’s products more expensive. Thus German austerity was partly paid for at the expense of Greece, Italy, Spain and Portugal.
[quote] Great note from Nomura’s Richard Koo, looking at the so-called “competitiveness problem” of the Southern European nations.
Rather than some inherent problem found there, Koo says that what happened is that after the 2000 tech bubble collapsed (a bubble which Germany shared heavily in) the ECB used exceptionally loose monetary policy to stimulate the economy, so that Germany wouldn’t have to revive its economy via fiscal policy.
This didn’t do much domestically in Germany (which was suffering from a balance sheet recession) but did really rev up the bubbles in the periphery, causing the boom in imports from Germany, thus putting the periphery in debt, and boosting Germany’s export sector, rescuing it from the post-tech-bubble funk.
UKIP is Nigel Farage and friends. He’s been sticking it to the EU parliament for over ten years. Calling them out on their BS in spectacular style. He was a virtual pariah within Brussells but is becoming increasingly popular at home. Threatens to dent the two major parties in the next election despite the best smearing efforts of the controlled press.
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He’s like screwing his boss while picking his pockets!
Yeah, will survive. It’s no wonder we don’t get to see the Greek reform suggestion paper. I can guess what services the good looking Greek dudes offered German chancellor Merkel. Come on. Nice suits, open shirt, no money. But lots of style…
Surplus? Defecit? This is all so confusing… which itself is a big red flag. Where there’s smoke, there’s a smokescreen. Whatever’s really going on has got to be absolutely awful.
[quote=“Taiwanguy”][quote=“rowland”]I never get bored of being out of the mainstream and ahead of the curve.
[/quote]
Is this guy claiming that Fox New is “out of the mainstream and ahead of the curve?”[/quote]
Well, mainstream opinion does seem to be catching up with Fox. But not long ago, they were very much out in front. There was a time when one could dismiss Fox News as the lunatic fringe and not be laughed at.
MSNBC by contrast is on the opposite trajectory. They leaned too far forward and have fallen face down.
[quote] Greece will be unable to find the €1.6bn (£1.1bn) sum it is due to hand the International Monetary Fund (IMF) next month, one of the country’s ministers has admitted.
Nikos Voutsis, the Greek minister of the interior, said that “this money will not be given and is not there to be given”, speaking on Mega TV. The Greek state is due to hand over the money in four installments in June, as part of its obligations for its 2011 bail-out.
Mr Voutsis’ comments came as Yanis Varoufakis, the Greek finance minister, told The Andrew Marr Show that if progress was not made, it would be the beginning of the end for the euro project. [/quote]
Well, I guess it is all up to the French, if the EU survives or not. Marine Le Pen as French President in 2017 sounds like the death of EU and Euro, non?
If the UK is any indication, people will act as if they’re going to vote for the far right and then vote for the center-right instead. Although Labour in the UK did terribly (which seemed obvious to me but apparently not to some people) a lot of the Tory’s gains were from retaking UKIP votes as well as from disenchanted Labour votes.
I’m sure Sarkozy or whatever his name is did a little dance when Cameron won a majority. The far right will come back to Europe some day I think since many Muslims can’t assimilate effectively into European culture but I don’t think we’re there yet.
[quote=“Il Ðoge”]
I’m sure Sarkozy or whatever his name is did a little dance when Cameron won a majority. The far right will come back to Europe some day I think since many Muslims can’t assimilate effectively into European culture but I don’t think we’re there yet.[/quote]
I’ve questioned the very existence of the “far right” since researching the origins of Fascism and discovering that it was a branch of leftist ideology. That said, the existence of unassimilable populations critiques multiculturalist happy talk in a way that will prove tragically fatal. The only question is: will anyone learn anything?
The EU might have worked if they’d been more selective. When they let these dodgy Mediterranean societies into the monetary union, things started to go south in a hurry.
Cultural conditioning matters. Select individuals can rise above their origins but entire populations cannot, at least not on the time scale needed to make the expanded EU work.
[quote=“rowland”][quote=“Il Ðoge”]
I’m sure Sarkozy or whatever his name is did a little dance when Cameron won a majority. The far right will come back to Europe some day I think since many Muslims can’t assimilate effectively into European culture but I don’t think we’re there yet.[/quote]
I’ve questioned the very existence of the “far right” since researching the origins of Fascism and discovering that it was a branch of leftist ideology. .[/quote]
Jonah Goldberg’s “Liberal Fascism” ?
Actually Spain and Italy were doing fine- fiscally responsible etc. - till the collapse and the decision to impose austerian policies. But Greece, definitely- should never have been let in and would have done much better without joining the Euro at least.
[quote] “Everything I know about the Iranians I learned in the pool room,” Graham said, during a video address to the Southern Republican Leadership Conference, referencing his time working in a bar.
“I ran the pool room when I was a kid and I met a lot of liars, and I know the Iranians are liars,” he added.[/quote]
Republican Presidential candidate Sen.Lindsay Graham talkingpointsmemo.com/livewire/l … -are-liars
[quote]So firm is Merkel’s line on austerity that on Tuesday she appeared to turn down a last-minute counterproposal by Tsipras for a whole new bailout, arguing that it was no use discussing a fresh deal until after the results of Sunday’s vote. Her tough response came as European finance ministers also rejected a Hail Mary request by Greece to extend its existing bailout, and as Athens missed a 1.5 billion euro ($1.67 billion) payment to the International Monetary Fund — officially becoming the first developed country in the history of the institution to default on a rescue loan.
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Merkel is the grownup in the room, and she seems firmly in charge for now. If Greece exits, what’s left of the EU has a better chance of survival for two reasons:
A gangrenous limb will have been amputated.
A stern but sensible precedent will be set.
Best case scenario: a smaller but stronger – and much wiser – EU emerges from this mess.
Greece will probably end up as a client state of the Russian Empire. They’ll get a pipeline, and they’ll get to keep their cherished illusions a while longer. As for democracy and self-determination, well… they’re not ready.
It should never have been admitted in the first place- everybody knew it didn’t meet the criteria, but it was a political decision.
Given the way we’ve seen the Euro operate, they never should have wanted to join anyway, and their best option now is to bite the bullet and quit.
The Eurozone economy is 13-14 trillion euros/16- 17 trillion US$. The economy of Greece is roughly 1.5-2% of that.
The US economy is about 18 trillion dollars. In comparison, Greece would be roughly the equivalent of Alabama or Oregon.
[quote]So yes, Greece was overspending, but not by all that much. It was over indebted, but again not by all that much. How did this turn into a catastrophe that among other things saw debt soar to 170 percent of GDP despite savage austerity?
The euro straitjacket, plus inadequately expansionary monetary policy within the eurozone, are the obvious culprits. But that, surely, is the deep question here. If Europe as currently organized can turn medium-sized fiscal failings into this kind of nightmare, the system is fundamentally unworkable.[/quote]
