Is the end nigh for the Euro? [vol. 3]

[AstonZagato]

Ozzie Osmond said:

I believe a substantial proportion would be perfectly comfortable in a federal arrangement.

The trouble with the EU is that non-one has ever really asked that question and won a popular mandate to pursue it. To the extent that referenda have been held, it has been about entry/exit, treaty change, constitution. The technocrats have never dared ask the question, en-masse and never will.

When the the masses have voted the "wrong" way, they are told to go back and do it again or they find a way around the popular vote. If the concept of an "ever-closer" European Union is ever to succeed, they need to persuade people that it is a good idea and win popular support for the idea.

Delors will admit that they created the Euro knowing that it could NOT work. A currency union cannot succeed without fiscal union. Fiscal union can only happen with political union. The Euro was designed knowing it would create a crisis that would in turn force fiscal union and, as a consequence, political union. Show me where anyone has explicitly voted for that.

I am not necessarily against the idea of a Federal Europe. I lived for a few years in Germany and much of my business today is in Europe. However, I hate the disingenuous methods that the political elite are employing to achieve their aims over the electorates wishes.

[Digga]

AstonZagato said:

I am not necessarily against the idea of a Federal Europe. I lived for a few years in Germany and much of my business today is in Europe. However, I hate the disingenuous methods that the political elite are employing to achieve their aims over the electorates wishes.

It is the waste, the cronyism and bureaucracy (self-serving, since ridiculous rules create non-jobs) that is endemic in the system. It is bad enough in governments with elected politicians, but when the whole lot is a big free-for-all bing on other people's money, it becomes grotesque. As I've said before, look no further than Baroness Ashont for an example of how wrong the whole edifice is.

[DJRC]

Andy Zarse said:

Ozzie Osmond said:

I believe a substantial proportion would be perfectly comfortable in a federal arrangement.

I think you are probably right on that. The problem is persuading Dem Deutche Volk to pay for it all. Personally I think it's only fair they should, after all Germany gains a massive competitive advantage from the fixed rate currency union. You can't destroy the economies of other countries and not expect to pay for it.

45% tax currently. The German electorate is well and truely determined they are not paying out anymore for anybody else.

[Huntsman]

http://uk.finance.yahoo.com/news/exclusive-greece-...

Could the next few days be a tipping point for the euro?

[AstonZagato]

Digga said:

AstonZagato said:

I am not necessarily against the idea of a Federal Europe. I lived for a few years in Germany and much of my business today is in Europe. However, I hate the disingenuous methods that the political elite are employing to achieve their aims over the electorates wishes.

It is the waste, the cronyism and bureaucracy (self-serving, since ridiculous rules create non-jobs) that is endemic in the system. It is bad enough in governments with elected politicians, but when the whole lot is a big free-for-all bing on other people's money, it becomes grotesque. As I've said before, look no further than Baroness Ashont for an example of how wrong the whole edifice is.

Oh, don't get me wrong. The current EU bureaucracy is a clusterfk of epic proportions. That aspect of it needs tearing down and (if there is a desire to proceed) reconstructing on a totally different model. However, I was speaking about the general concept of a Federal Europe.

[Andy Zarse]

Art0ir said:

Blib said:

Ozzie Osmond said:

Gargamel said:

Oz, do you really believe the people of the countries are ready for or desirous of a Federal Europe?

Remember there are now 28 EU states. I believe a substantial proportion would be perfectly comfortable in a federal arrangement. It's not as if everyone will be forced to wear lederhosen, eat cheese and drink sangria.

In the modern world sovereignty is IMO only an illusion.

Yes. Croatia, the first time in history that a country jumped aboard a sinking ship.

I imagine they think they can do as well as Poland et al have done in the Eurozone. Whether they're too late to join the party or not remains to be seen I guess.

Handy blog here in the WSJ by Alan Matich who is an actual Croat. Summarises things nicely

http://blogs.wsj.com/moneybeat/2013/07/02/croatia-...

[Gary11]

Given the dire figures why would you join now? Best some one checks the small print for bailout criteria!

[Gargamel]

Huntsman said:

http://uk.finance.yahoo.com/news/exclusive-greece-...

Could the next few days be a tipping point for the euro?

Looks like standard brinksmanship, I think they have been here before.

[Ozzie Osmond]

Gary11 said:

Given the dire figures why would you join now? Best some one checks the small print for bailout criteria!

No need. A new joiner hasn't yet had the opportunity to "overspend" so won't be "over borrowed" and won't need bailing out.

[Digga]

Gargamel said:

Huntsman said:

http://uk.finance.yahoo.com/news/exclusive-greece-...

Could the next few days be a tipping point for the euro?

Looks like standard brinksmanship, I think they have been here before.

I think the iminions enjoy lobbing a few spanners into the works just when the fatcats think they're safe to head off to enjoy a few weeks in the villa/on the yatcht of, the latest capitalist vulture they've helped.

[CommanderJameson]

You should treat any newspaper story that has part of its headline capitalised for dramatic effect with a certain amount of circumspection.

[Andy Zarse]

CommanderJameson said:

You should treat any newspaper story that has part of its headline capitalised for dramatic effect with a certain amount of circumspection.

So you're saying the portugese govt isn't close to collapse? Or that it can meet the terms of the bailout?

[Gargamel]

CommanderJameson said:

You should treat any newspaper story that has part of its headline capitalised for dramatic effect with a certain amount of circumspection.

Are you suggesting that key figures (including the finance minister) haven't walked out, or that bond yields are above 7% or that unemployment is 18% or that stock prices are down 6%

Which bit are you sceptical about ?


We are back where we left of, the fundamentals of the economies are pulling any rescue deal back to reality.

They cannot beat the fundamentals and no amount of financial chicanery can change that in the short run.

[Mermaid]

Guam said:

http://www.dailymail.co.uk/news/article-2354671/Po...

Tomorrow's Draghi "we will do whatever" anniversary talk will be good to hear.

[Andy Zarse]

Mermaid said:

Guam said:

http://www.dailymail.co.uk/news/article-2354671/Po...

Tomorrow's Draghi "we will do whatever" anniversary talk will be good to hear.

To my mind the Mario magic is starting to wear a bit thin. He might soon need to start ponying up, with portugese bonds @+8%.

[Mermaid]

Andy Zarse said:

Mermaid said:

Guam said:

http://www.dailymail.co.uk/news/article-2354671/Po...

Tomorrow's Draghi "we will do whatever" anniversary talk will be good to hear.

To my mind the Mario magic is starting to wear a bit thin. He might soon need to start ponying up, with portugese bonds @+8%.

Since his speech, the Euro has appreciated by 10% against the £, and bit over 8% against the US $.

I am sure the EU exporters and the tourist industry appreciate that.

US equities up by 21% in that same period, against 17% for the DAX.

[Steffan]

Andy Zarse said:

Mermaid said:

Guam said:

http://www.dailymail.co.uk/news/article-2354671/Po...

Tomorrow's Draghi "we will do whatever" anniversary talk will be good to hear.

To my mind the Mario magic is starting to wear a bit thin. He might soon need to start ponying up, with portugese bonds @+8%.

I agree with both Mermaid and Andy Zarse and indeed with the comments of Gargamel and others on this. The fact is that the failing states cannot improve their economies by wishing it were true. "If Dreams came true we would all be Kings" to quote the well known proverb. 42 years in Accountancy confirmed irrevocably to me personally that they do not. Immediate direct action that actually addresses the fundamental problems within these states is what is required and absolutely essential if this mess is to be resolved. Instead the EU are playing make believe with printed money.

These states in their current woeful economic state of collapse have such inherent weaknesses economically that they cannot possibly afford to remain within the Euro for a day longer unless the EU continues to pay out billions more Euro's weekly to these states which is then added to the total insolvency of the states receiving the money and therefore must continue to massively increase the overall insolvency of every state in receipt of the subsidy.

That is why these states must inevitably slide further and further into insolvency and reveals the absolute hopelessness of the matter. Mr Draghi may have the power to prolong the collapse but he has no means of addressing the economic failure of the states concerned. The EU are running a classic Ponzi scheme with this nonsense and a very large failure of a significant number of states currently within the EU can be the only long term result.

There is no real mechanism for recovery for any of these failing states with the current EU "Solution". All this is intended to do is to buy time for the EU. Since none of the states that are failing are actually able to address their economic failure whilst locked into a currency they cannot afford, there can be no recovery for these states within the Euro. That is the reality which the EU would rather not face. But in time, that will be the reality that the EU has to face.

[Mermaid]

Steffan said:

Mr Draghi may have the power to prolong the collapse but he has no means of addressing the economic failure of the states concerned. The EU are running a classic Ponzi scheme with this nonsense and a very large failure of a significant number of states currently within the EU can be the only long term result.

There is no real mechanism for recovery for any of these failing states with the current EU "Solution". All this is intended to do is to buy time for the EU. Since none of the states that are failing are actually able to address their economic failure whilst locked into a currency they cannot afford, there can be no recovery for these states within the Euro. That is the reality which the EU would rather not face. But in time, that will be the reality that the EU has to face.

That's the reality faced by those on the front line within those embattled states.

[Norfolkit]

I'm sure the unemployed in Greece, Spain, Portugal et al will take heart that we're all in it together.
http://www.dailymail.co.uk/news/article-2354152/Ba...

[anonymous-user]

Norfolkit said:

I'm sure the unemployed in Greece, Spain, Portugal et al will take heart that we're all in it together.
http://www.dailymail.co.uk/news/article-2354152/Ba...

trougher in chief. is it any wonder our non-entity politicians (not that that ashton was ever elected to anything) are so enamoured with the job opportunities, sorry i mean eu.

http://www.telegraph.co.uk/news/worldnews/europe/e...

Edited by fbrs on Wednesday 3rd July 21:54