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d_e_solomon · 2453 days ago · link ·
There is entirely too much bold text in this article. Anyways, the issue with the Euro is that monetary decisions (how much money to print) are centralized while fiscal decisions (how much money governments spend) are not centralized. In the initial setup of the Euro, Euro countries were required to hold to certain fiscal parameters (limits on debt as portion as GDP, etc). The PIIGS (and Greece in particular) misreported and/or manipulated their numbers to hold within the parameters. Now we're seeing the result of that.
Things like conflict aggregation and self destroying systems don't really explain the issues in the Euro today.
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That's just zerohedge's "tyler" giving his read of the pdf.
There is a bit of conflation here in your equating the national intent and the actual acts by the ruling classes of those nations. Specifically, you are accepting the superficial state of affair e.g. that the said ruling class of "PIIGS" are nationalists and were not implementing a plan designed to lead their nations to this point, where elected leaders of these nations are replaced with technocrats of the Financial System. A very interesting thing I have noted in my (limited) travels is that the upper classes typically have greater affinity and ties with their peers in other nations than with the unwashed of their own nation. They speak the same language and have shared concerns regarding their precarious position in regards to the subject classes. It is natural for them to flock together and it is not unreasonable to note that it is possible for them to find a synergetic solution to a common concern. So there remains the possibility that back room discussions between ruling elite of various "southern" European states and their peers from the dominant powers in Europe regarding the effort of preventing another European WW (with the implied threat of use of force by the dominant powers). & So, perhaps, they sold out their countries in order to assure the continuity of their privileged socio-economical position; that they would lose political power was a given based on the practical facts of the matter: they were not in a position to challenge the dominant European powers and might as well make the best in face of the inevitable. Anyway, I would hope you do agree that even when superficially considered, the current Brussels centered system is egregiously undemocratic and has repeatedly ignored clear expressions of "NO" by various European people, so the above thought is not entirely errant (or imo should not be dismissed at hand) if one considers the political attitude of the EUrocrats to date. The foundation of your POV is the soundness of the political process that gave rise to EU. One can certainly challenge that assumption based on historic facts to date. Something to think about ...
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d_e_solomon · 2450 days ago · link ·
Sorry I didn't reply sooner. I've been down for the count with a sinus infection and a cold. Anyways...
I don't have a lot of reason to suspect that the European governments don't express the will of the people. It doesn't mean that everyone is always happy with every decision made by those governments, but the governments are formed via elections and a reasonably fair political process. Nor does it mean that the government makes good choices. As an example, consider in the US where polls consistently show support for cutting taxes, additional social spending, and reducing the deficit. What's a politician to do? With regards to Greece, I don't see what good options they had. The state of affairs couldn't continue. Greece had reached deficits that could no longer be supported by their current GDP and tax revenues. There are really two options: leave the Euro and default - which means capital flight and a lack of investment - or radical austerity measures which leads to structural unemployment. Either option leads to suffering for the people. I work for a US subsidiary of an Italian company. I met with one of the Italian controllers for dinner not too long ago. His comment to me was "David, the next generation is paying for the political incompetence and comfort of this generation" I'm not sure that anything can be done to correct this problem now - to fix it, we'd have to go back fifteen or twenty years in time
I don't buy the whole story he gives on Iceland. It seems an oversimplification to say that maturity and currency mismatching occurred because of implicit bailout guarantees. It also happens when people can get rich from doing it.
I see a lack of financial regulation as a type of socialism as well. When there are no rules, that is a rule in of itself.