Strange Famous

So, the contagion has now spread to Portugal.

I dont know as much about the situation as perhaps I should, but two things strike me.

Will Spain fail now? If Spain goes under can the Euro survive in its present single tier format?

__________________
"Do not tell lies, and do not do what you hate,
for all things are plain in the sight of Heaven. For nothing
hidden will not become manifest, and nothing covered will remain
without being uncovered."

The Gospel of Thomas

The_Dunedan

Spain is probably toast, then Italy. If one goes, the Eurozone might survive. It can in no way survive the loss of both. France and/or Germany would be next, after which the Euro (and thence the Dollar, in all likelihood) would collapse.

__________________
"I personally think that America's interests would be well served if after or at the time these clowns begin their revolting little hate crime the local police come in and cart them off on some trumped up charges or other. It is necessary in my opinion that America makes an example of them to the world."

--Strange Famous, advocating the use of falsified charges in order to shut people up.

Strange Famous

Surely the Germany economy is massively strong?

Doesnt it come down to how much the German people are willing to keep bailing out the Eurozone's weaker economies to maintain Germany's export markets?

Spain has shown some sign of strengthening its position, but there seems to be a kind of inevitably about the whole thing going from one country to the next... which is surely the risk when nations place their fate in the blind violence of the invisible hands and the spivs and speculators of international money markets?

I guess my own view is the Euro must fail of be split, because there is simply no political will for the richer nations to fund the poorer ones (in the same was as say London tax returns fund publis services in rural wales).., and because the poorer countries cant devalue their currency now there'sno way out for them.

If, as you suggest, Germany was literally to default... well I think enough other countries would have to default to get there, we would have seen the complete collapse of international capiltalism. I wonder how close we really were when RBS was on the brink two years ago... maybe there is still a chance?

Maybe thats what all those 2012 things refer to! The final collapse of capitalism!

__________________
"Do not tell lies, and do not do what you hate,
for all things are plain in the sight of Heaven. For nothing
hidden will not become manifest, and nothing covered will remain
without being uncovered."

The Gospel of Thomas

The_Dunedan

The problem is that Germany (and the German electorate) are neither willing nor able to continue propping up failed wealth-redistribution schema in other nations. Far from the collapse of Capitalism, what we are seeing with Germany/EU is that one of the few truly functional economies in Europe (and its' constituents) is finally reaching the limits of its' ability and willingness to bankroll other people's Socialism and the book-cooking it requires. This is also why non-Euro nations such as the Czech Republic are so leery of further involvement in the Eurozone. The German electorate has made it clear that they are not interested in propping up Leftist redistributionism in nations which cannot control their spending or their whiny public "service" unions. So far they've been asked/forced to bail out the entire nation of Greece (where grifting whingers immediately began burning things down when told they had to tighten their belts like adults), and large portions of the other PIIGS groups' banks and governments. They will not tolerate much more of the sight of their money being shoveled down bottomless pits of that kind, particularly when they are then treated to the sight of riots in the streets of those nations when the citizens thereof are informed that they must now learn to live within their means. Much more of that crap, and the German electorate may simply vote to leave the Euro in the dust, reconvert to the Deutchmark, and tell the PIIGS to sink or swim on their own.

__________________
"I personally think that America's interests would be well served if after or at the time these clowns begin their revolting little hate crime the local police come in and cart them off on some trumped up charges or other. It is necessary in my opinion that America makes an example of them to the world."

--Strange Famous, advocating the use of falsified charges in order to shut people up.

Baraka_Guru

I admit that I don't understand Germany. Their current government is the Christian Democratic Union, while the second largest party is a socialist party.

The CDU is essentially centre-right. While they're fiscal conservatives, they do have leanings towards a fully integrated mixed economy through social spending/programs and government intervention where necessary. They're driven by Catholic and protestant ethics. Wouldn't it be in their best interest to help other integrated economies stabilize?

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

The_Dunedan

Not if it destroys or hobbles their own economy to do so, and not if a pissed-off electorate, sick of subsidizing other peoples/country's profligate spending, bolts to a far-right party or coalition.

__________________
"I personally think that America's interests would be well served if after or at the time these clowns begin their revolting little hate crime the local police come in and cart them off on some trumped up charges or other. It is necessary in my opinion that America makes an example of them to the world."

--Strange Famous, advocating the use of falsified charges in order to shut people up.

ASU2003

I don't understand what is going on with the Euro as a currency. It is still very high against the dollar.

France/Germany won't collapse anytime soon.

Baraka_Guru

I don't see how this could even happen. German politics is dominated by the CDU, a centrist party, and the SDU, a social democratic party. The CDU needed to form a coalition with other smaller centrist parties to form a government lest the SDU form it with smaller left-leaning parties like the Green Party and the Left Party.

Sure there is a strong fiscal conservatism running in German politics, but their political environment is also decidedly social democratic. I don't think there really is room to move to the far right. I think you'll find the German people have an aversion to far-right politics, and rightly so.

So basically, you can expect the German government to ensure its own house is in order as it seeks to do what it can to help other economies it relies on to stabilize.

Can you point us to anything that would suggest the German public is against the idea of economic initiatives to stabilize other national partners within the EU?

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Strange Famous

But all the spending that these countries are running into debt over is on German exports, isnt it?

(I mean, not "all" obviously...)

Why else do you think Germany are propping up the Euro? To absolve themselves of the guilt of Nazi crimes still? That they really believe in unity?

My own feeling is that if you speak to ordinary working class German people, most of them wish they had the Deutschmark back, and half of them (in the West) dont think reunification was a good idea even...

But I think the far right is so tainted with the legacy of the war I cannot see how they could ever gain much ground politically even in the East. And they already have a centre right government.

_

My own view is that the contagion doesnt need to spread to Italy, if Spain needs to be bailed out the Euro probably fails there... although Im not an economist so its an uneducated opinion.

__________________
"Do not tell lies, and do not do what you hate,
for all things are plain in the sight of Heaven. For nothing
hidden will not become manifest, and nothing covered will remain
without being uncovered."

The Gospel of Thomas

The_Dunedan

Umm...no.

The problem is that various other nations in the EU, the PIIGS group being the worst of these, cooked the books in regards to their national debts, income/outlay ratios, and deficit spending: this in order to become part of the Euro zone.

The result was that, when the insolvency of their banks and inability to fund their bloated welfare systems became known, amidst the general upheval of 2007-8, panics occurred. These countries and banks, which were or soon would be insolvent and unable to service their debts, requested that solvent countries bail them out.

Imagine that you ran up hundreds of thousands of Pounds in debt on your credit-cards, took out loans based on exaggerated statements of income and lowballed statements about your debts and bills, and then when you got caught (and nobody would lend you money anymore) asked a neighbor to pay off your debts, refinance your house, and repair your credit. And -then,- when the neighbor agreed to do so on the condition that you live honestly and within your means, you pitched a tantrum, torched your car, and made an ass of yourself.

That's the position Germany finds itself in. They're on the hook for the PIIGS debt thanks to the shared currency, the Schengen Zone, etc...and they are NOT happy about it. Their banks and governments have been forced to assume a great risk, dishonestly imposed, by covering the debts of banks and governments which can't seem to stop spending other people's money. It's nothing to do with German exports. That's a tertiary issue at most. The whole Euro zone is so monetarily interconnected that Greece or Italy's unwillingness or inability to control their spending stands a good chance of destroying or substantially degrading the economies of those nations which have their shit together.

Smartest thing the UK's done in the past century was not adopting the Euro.

__________________
"I personally think that America's interests would be well served if after or at the time these clowns begin their revolting little hate crime the local police come in and cart them off on some trumped up charges or other. It is necessary in my opinion that America makes an example of them to the world."

--Strange Famous, advocating the use of falsified charges in order to shut people up.

Strange Famous

Is there any evidence that anyone other than Greece was "cooking the books"? I havent heard that accusation made against Ireland or Portugal?

__________________
"Do not tell lies, and do not do what you hate,
for all things are plain in the sight of Heaven. For nothing
hidden will not become manifest, and nothing covered will remain
without being uncovered."

The Gospel of Thomas

citadel

On a similar note, what's confusing to me about the recent March For The Alternative in the UK is that they seem to view the government as a benevolent rich uncle. Do they realize that they're paying for those services, that the money has to come from somewhere?

Strange Famous

It is not about that at all.

Its about why we can fund a costly (financial and human) intervention into the Afghan civil war between the warlords and the Taleban, but not our own schools and hospitals. (for example)

__________________
"Do not tell lies, and do not do what you hate,
for all things are plain in the sight of Heaven. For nothing
hidden will not become manifest, and nothing covered will remain
without being uncovered."

The Gospel of Thomas

citadel

Fair enough. I still find the idea of "gradually balancing the budget" risky and undesirable though.