Would the best solution with the current crisis in Europe just be to kick the PIGS( Portugal, Ireland, Greece, Spain) out of the EU altogether? I'm aware that there are many more problems surrounding the European Union as well, but would this be a legitimate start in the right direction?
Gerally speaking though, outside of my question, I think the Euro will turn out to be a failed experiment in the end.
LvMIenthusiast: But, for me it's slightly dissapointing in a sense. Because at the end of the day, I feel as if the majority of Greeks will not see the problem here: Government. Most of them never have and never will bring themselves to criticize the role of the Greek government.
They will when it collapses and defaults on all of its obligations.
The fallacies of intellectual communism, a compilation - On the nature of power
Fear of inflation is something built in the country's political DNA. Pretty much like militarism in the US or hairy chested nationalism in Russia it's a political constant. This is not as to say that German governments have refrained from inflation (far from it): they've just had to be more cautious than others when inflating their currency or risk defeat.
On real estate bubble. Most of the Spanish building frenzy was targeted at the "export market", meaning buyers from Germany, Sweden, Great Britain, the Netherlands etc looking for a vacation/retirement house. When you compare the bubble to the size of the economy and population it makes the US and Irish bubbles look like small fries. Small towns and villages literally doubled in size over the past ten years; huge realtors specializing in the foreign market appeared overnight. But this isn't the worst part: local councils set their future spending rates according to projected incomes. Foreigners and non residents pay much higher property taxes than residents. This means small town and village councils started spending like drunken sailors well before the houses were sold or even built. Now the houses are sitting there, building companies and realtors are going belly up one after another and the planned income is failing to materialize. The Zapatero Government responded like governments always do, by panicking and raising taxes, particularly succession taxes on property held by foreigners in Spain. Imagine how many more foreign buyers this decision will bring in! I am personally convinced that Greece is nothing compared to what's brewing in Spain. The ECB and the EU agree unemployment in Spain will grow to 25% by the end of 2010, with unemployment among youths (18-35) reaching an unbelievable 50% (figures are 20% and 44% respectively already): mind these are official figures. How do you restart an economy in this shape without radical reforms, something nobody in Europe really wants?
Because my friends, that's the big problem with Europe. Politicians and economists know very well we need reforms. We need to roll back legislation, particularly regarding labor, and radically cut welfare. But how do you sell that to the average voter who's come to expect everything from the State? My generation will be allowed to go into retirement at 65, but many of us won't be able anyway because so many were unable to find a regular job until their late 20's-early '30s. Today's youths will probably have to work until the end of their days, provided they can find at least one steady job in their life.
Kakugo: Fear of inflation is something built in the country's political DNA. Pretty much like militarism in the US or hairy chested nationalism in Russia it's a political constant. This is not as to say that German governments have refrained from inflation (far from it): they've just had to be more cautious than others when inflating their currency or risk defeat. On real estate bubble. Most of the Spanish building frenzy was targeted at the "export market", meaning buyers from Germany, Sweden, Great Britain, the Netherlands etc looking for a vacation/retirement house. When you compare the bubble to the size of the economy and population it makes the US and Irish bubbles look like small fries. Small towns and villages literally doubled in size over the past ten years; huge realtors specializing in the foreign market appeared overnight. But this isn't the worst part: local councils set their future spending rates according to projected incomes. Foreigners and non residents pay much higher property taxes than residents. This means small town and village councils started spending like drunken sailors well before the houses were sold or even built. Now the houses are sitting there, building companies and realtors are going belly up one after another and the planned income is failing to materialize. The Zapatero Government responded like governments always do, by panicking and raising taxes, particularly succession taxes on property held by foreigners in Spain. Imagine how many more foreign buyers this decision will bring in! I am personally convinced that Greece is nothing compared to what's brewing in Spain. The ECB and the EU agree unemployment in Spain will grow to 25% by the end of 2010, with unemployment among youths (18-35) reaching an unbelievable 50% (figures are 20% and 44% respectively already): mind these are official figures. How do you restart an economy in this shape without radical reforms, something nobody in Europe really wants? Because my friends, that's the big problem with Europe. Politicians and economists know very well we need reforms. We need to roll back legislation, particularly regarding labor, and radically cut welfare. But how do you sell that to the average voter who's come to expect everything from the State? My generation will be allowed to go into retirement at 65, but many of us won't be able anyway because so many were unable to find a regular job until their late 20's-early '30s. Today's youths will probably have to work until the end of their days, provided they can find at least one steady job in their life.
Kakugo, you know what's funny? One of my Political Scnience teachers (who is is infatuated with Europe and deverything about the continent) said yesterday, it would be almost illogical if not crazy to suggest scaling back the welfare state. She basically went on to say that every voter is particularly happy and comfortable with the welfare state and no one wants to see it reduced. She then told me to stop getting my views from FOX news (which I haven't even flipped that channel in over 3 months). I have absolutely no problem with Europe or Europeans themselves. What I do have a problem is with all the intervention occuring and very few people moving to question the necessity of all this. But then again, considering I am posting from a welfare-warfare state really makes the situation over here no different in the end.
It is really sad to not see more Americans/ Europeans alarmed over all this. Instead the people that actually question this are called "paranoid" and whatever other pejoratives exist in the book.
(Also by the way, I now genuinely hate FOX news, so it irked me even more when she said this)
Enthusiast, it's not a matter of being "crazy" or "illogical". It's a simple matter of being able to afford something. Every single politician will agree with you that welfare costs are only bound to grow over time even if the benefit levels stay the same. That's one of the reasons every single State around the world is so obsessed with nominal GDP growth. Right now even mainstream economists are grudgingly starting to agree with Professor Huerta de Soto that the reasons behind the decades-long European stagnation are excessive regulation and taxation linked to the welfare State. Yet apart from Professor Huerta de Soto nobody has stepped forward with ideas. The prevalent mentality seems to be "the next generation will take care of this issue" so every single effort is directed at providing mostly ineffective short term fixes.
The big problem right now is that the "next generation" is here and is already footing the bill. Very few youths can find a steady job: most of them have to take short term jobs which have none of the warranties long term jobs have. This was done partly to supply the economy with cheap manpower and partly to solve the huge problem of unemployment among youths. Yet another short term fix: as soon as the economy slowed down another bit they were the first to be fired or to see their salaries slashed to below subsistence levels. These youths simply cannot save and most of them won't be able to retire because they won't meet the minimal contribution standards. Compare this with their overwarranted fathers who cannot be fired even in face of gross incompetence and are already retiring. That's how welfare works: somebody in the end has to be left holding the bag.
There’s no easy answer for this issue. But a 1) strong European leader could gamble on the following plan: 2)get turkey into the union, within five years. Forget northern Cyprus and give Greece the middle finder. Sell the Turks nukes if you have to, just get them in. If there is capital round to prolong the existence of the EU is certainly is contained in Turkey and turkey alone.
Having acquired some time, 3) proceed to sell charters for private cities: rent away sovereignty on large pieces of land to developers and watch 15 or so Free Cities develop, paying only “rent” on the land owned by the EU. Such rents would come to supply the union with most of its funds.
That being done, 4) abolish legal tender laws, privatize the ECB (going back to national currencies is both praxeologicaly impossible and economically unwise).
5) Expand Free Cities charters to cover all EU fund needs…and than pray that people don’t figure that anarchy is actually possible.
With a little luck, the EU would live for a millennium in this fashion, and the thunder will be stolen from China and indeed from us anarchists.
I do not understand why all the enthusiasm about Turkey joining the EU (not hinting at your sarcastic post, Merlin ). The people in the street is strongly against it, Euro politicians are not very enthusiastic and even Turkish politicians would rather simply sign a series of economical and commercial treaties than having full blown EU membership.
Part of this lack of enthusiasm stems from the fact that Turkey has 76 million citizens: it would become the second largest EU country immediately after Germany. This means they would become the second most represented country in the Strasbourg parliament and a true force to be reckoned with. Toss in three-four millions of German citizens of direct Turkish descent and you have the balance of power shifting dramatically overnight. Another part of the problem is immigration: Europe has a serious immigration problem which may already be too late to fix. We simply cannot afford having more people moving in.
In the meantime the Greek crisis is quietly being swept under the carpet by the media. The mantra is always the same "recovery is here, don't worry, go out and spend, spend, spend". No newspaper I've read in the past week had a single piece on the Spanish situation. The old childish trick "if I don't see it, it won't hurt me" is here again.
It is indeed true that almost no one would want Turkey to join, and for good reasons.
Yet one must understand that a failed experiment as the EU can only survive this decade IF it gets a fresh injection of new capital. Now look around: which country is large enough, growing rapidly enough, export-oriented enough and still underdeveloped enough to provide EU investors with profitable investment ventures that would brig about enough profits (and taxes!) to keep the union going? (If one thinks thathe Ukraine could also do, please consider whether an unstable country such as that is worth fighting a war with Russia over).
Whether one likes it or not, the EU is now facing a simple choice: either Turkey gets in (or remains out, but is practically treated as an economic member to full effects) or the union crumbles. I really se no way around that. So, swallow the pill my dear Germans, to get your empire going, and that proceed with other needed reforms if Germany is not to revert back to a pre-Bismarck balkanization ( an untold horror form their point of view).
Edit: I still can’t see why Turkey would want to join though.
http://www.spiegel.de/international/europe/0,1518,676634,00.html
Hmh..
Can Someone explain this ?
Thanks.
Is California to the USA similar as the PIGS are to the EU?
Gerald Spencer: Is California to the USA similar as the PIGS are to the EU?
Yes, but the situation going on in Europe is but a blip on the radar screen compared to what's going on in the USA.
We are seriously !$@#%&, yet very few people actually want to come to terms with reality. It's truly astonishing.
I recently got into an argument with my Neoconservative cousin and when I said " We (our generation) are going to have considerably lower standards of living in this country, most of us will be lucky if we can find a steady job)". She basically then went into a sh!t fit and said I was an alarmist and you've overblown the entire situation....
I truly don't understand some people these days!
LvMIenthusiast: I recently got into an argument with my Neoconservative cousin and when I said " We (our generation) are going to have considerably lower standards of living in this country, most of us will be lucky if we can find a steady job)". She basically then went into a sh!t fit and said I was an alarmist and you've overblown the entire situation.... I truly don't understand some people these days!
Maybe if you told her how it was the Taleban who were behind it you would have gotten a better reception.
Marko: LvMIenthusiast: I recently got into an argument with my Neoconservative cousin and when I said " We (our generation) are going to have considerably lower standards of living in this country, most of us will be lucky if we can find a steady job)". She basically then went into a sh!t fit and said I was an alarmist and you've overblown the entire situation.... I truly don't understand some people these days! Maybe if you told her how it was the Taleban who were behind it you would have gotten a better reception.
I was talking with my mom in the car today about how 9/11 was the best event for the Federal Government to take advantage of. I haven't seen a single event that has vitiated such a disproportionately large amount of our youths minds (besides Pearl Harbor). We are all partially responsible for allowing the Neoconservatives to have their ultimate wet dream of a glorious imperial conquest in the Middle East. I'm so glad I eventually snapped out of that Neoconservative stage.
That was a dark stage of my life and I always beat myself up for all the ignorant crap I spewed!
Rodolphe Topffer: http://www.spiegel.de/international/europe/0,1518,676634,00.html Hmh.. Can Someone explain this ? Thanks.
I must admit I have pondered over it for quite some time too. In short Greece cut a deal with Goldman Sachs to sell them dollar-denominated bonds in return for euro-denominated assets. Fine with me.Greece then used these assets to artificially put down its debt since their bonds were now hold by Goldman Sachs and they got some quick cash in return,.Greece apparently got a better deal since her dollar-nominated bonds got more euro-denominated assets than the official exchange rate allowed.
The part I really do not understand is what did Goldman Sachs get in return. Because I doubt they set a more favorable exchange rate just to help a chap in need. Perhaps they were speculating on euro-denominated assets? Perhaps they expected to be repaid in the future when those bonds are supposed to be bought back by Greece?
Kakugo: Rodolphe Topffer: http://www.spiegel.de/international/europe/0,1518,676634,00.html must admit I have pondered over it for quite some time too. In short Greece cut a deal with Goldman Sachs to sell them dollar-denominated bonds in return for euro-denominated assets.
Rodolphe Topffer: http://www.spiegel.de/international/europe/0,1518,676634,00.html
must admit I have pondered over it for quite some time too. In short Greece cut a deal with Goldman Sachs to sell them dollar-denominated bonds in return for euro-denominated assets.
I remembered this discussion and now this in the news:
"Goldman Sachs officials declined to comment as did Morgan Stanley. JP Morgan officials were not immediately available for comment.
Italy, France and Spain were among the euro zone members doing such swaps at the time, he added."
Apparently not only Greece, as the information is slowly coming out on this event, was involved.