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Anger erupts as EU summit fails
BBC News ^ | Saturday, 18 June, 2005

Posted on 06/18/2005 4:45:25 AM PDT by Panerai

A bitter war of words has erupted among EU states after the failure to reach an agreement on the union's future budget.

German Chancellor Gerhard Schroeder blamed UK and Dutch obduracy for one of the EU's "gravest" crises.

UK Foreign Secretary Jack Straw expressed sadness, but said the failure could prove a turning point.

The EU's current president Jean Claude Juncker said he was ashamed poorer countries had offered to cut their EU income to reach a deal.

The summit collapsed after Britain refused to accept a demand by France and some other countries to accept a reduction in its EU rebate.

The BBC's correspondent in Brussels, William Horsley, says the recriminations mark perhaps the deepest and most spectacular bust-up ever in the EU.

It comes just weeks after voters plunged the union into uncertainty by rejecting its proposed new constitutional treaty.

(Excerpt) Read more at news.bbc.co.uk ...


TOPICS: News/Current Events
KEYWORDS: europeanunion; eusummit; germany; uk
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To: Always Right
I said "relative interest rates" for a reason. The European Central Bank hasn't been sitting still.

The US has always had Trade deficits and spending deficits, so crying wolf about those is pretty dumb.

This statement just demonstrates your profound ignorance on this topic. My guess would be that it's based on little more than kneejerk partisanship. Here in reality, even if the present deficits and their trajectory aren't much of a big deal, they still have an economic impact, and the most direct of those are in current account flows. That's current account flows - as in cur-ren-cy.

The US is more capable than anybody of growing out of debt.

Yup. Thanks for confirming that your comments are nothing but kneejerk political rhetoric, as if that's relevant to the topic at hand.

Please stop pinging me on this subject. There's really no use to our conversation.

41 posted on 06/18/2005 11:08:03 AM PDT by AntiGuv (™)
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To: AntiGuv
The Big Mac Index
42 posted on 06/18/2005 11:17:57 AM PDT by Torie (Constrain rogue state courts; repeal your state constitution)
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To: Always Right

On second thought, I shouldn't ask you to stop pinging me about something when I just pinged a response to you that you may want to reply back on. That's rude! So, instead, I'll just say I have no interest to discuss this further. Feel free to ping me if you wish anyhow!


43 posted on 06/18/2005 11:18:24 AM PDT by AntiGuv (™)
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To: Torie
The fly in the ointment however is this:

China 1.27 3.43 -59

That must change, and much more urgently than the present euro overvaluation must change, and the US gives every indication of taking measures to compel the change. That will require China to diversify out of dollar assets, and should bring the dollar/euro PPP exchange into line.

The currency markets are complex beasts, as I'm sure you know. Many people make the mistake of treating them like stocks, even people who should know better. People who should know better often make mistakes too - I should know!! =)

44 posted on 06/18/2005 11:32:26 AM PDT by AntiGuv (™)
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To: Torie

PS. And with Japan Inc. roaring back to life, fixing that -23 undervaluation is gonna leave a nasty mark too....


45 posted on 06/18/2005 11:37:55 AM PDT by AntiGuv (™)
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To: AntiGuv
I was "commenting" on the Euro. The price of a burger is of course heavily impacted by labor costs, and thus low wage countries typically have cheaper burgers. But since labor costs in the Euro zone are comparable to those in the US, there the camparison has more value in evaluating exchange rates. As the Economist states, in the "long run" (there is that term again), there is a tendency to move towards parity in the cost of the burger between the dollar and Euro zone.

At least that is my simplistic take. I understand that you have spent far more time than I studying and thinking about this issue, and putting your money on the table regarding it. For myself, I have foreign funds in part to diversify my currency risk. When in doubt, simply punt, is my motto. I don't like being exposed to that part of the bell curve where the tails tend to get rather uncomfortably close to the bottom horizontal line.

46 posted on 06/18/2005 11:43:22 AM PDT by Torie (Constrain rogue state courts; repeal your state constitution)
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To: AntiGuv

Ya, going with the yen would seem to make more sense if one thinks this analysis has any value, than with the Euro.


47 posted on 06/18/2005 11:45:41 AM PDT by Torie (Constrain rogue state courts; repeal your state constitution)
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To: Torie

With regard to both your posts, the trillion dollar question is what China will do. China is the unstoppable force in this equation; there are no immovable objects.

The yen is not the refuge one would think simply because the Bank of Japan is the most interventionist central bank in the world, and they are determined to keep the yen cheap for the time-being. They will fight tooth and nail against China revaluing at their expense.

Our options here are limited: someone is gonna get the long, fat end of the shaft. My guess is that the Euros will put up a more limp-wristed fight than the Japanese. =)

Actually, all of this should balance out OK if Germany can kick itself back into gear, and I personally think that they will under Angela Merkel. We shall see!


48 posted on 06/18/2005 12:01:28 PM PDT by AntiGuv (™)
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To: Torie

Also, this discussion has completely ignored the Eastern European boom, and the consumer market growth that will inevitably follow, and that those nations will begin drifting into the eurozone during the coming decade. I am also of the opinion that Britain will ultimately win this current spat about reordering and reinvigorating the EU. Anyone who thinks that Blair's motivation is to weaken the EU is projecting. Europe's big political stumbling block is Jacques Chirac and he'll be gone by 2007 to nary a lament...


49 posted on 06/18/2005 12:08:16 PM PDT by AntiGuv (™)
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To: RobFromGa; Publius

Bush's fault? LOL BTW Publius, TANSTAAFL strikes again ;)


50 posted on 06/18/2005 12:09:24 PM PDT by Libertina (nonewgastax.com (We're going to win!))
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To: AntiGuv

I really have no idea why your panties are in such a bind. The Euro is just something I would not bet on.


51 posted on 06/18/2005 4:51:11 PM PDT by Always Right
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To: Always Right

I'm not sure what's bothering me either. LOL!

I'm not telling anyone to bet on the euro; I just think your assessment is incorrect and misguided.


52 posted on 06/18/2005 6:00:32 PM PDT by AntiGuv (™)
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To: AntiGuv
I just think your assessment is incorrect and misguided.

You disagree that Europe has a huge problem with an aging population? You disagree that Europe has too much regulation and socialism? You disagree that Europe has shown no signs of decent growth? I would take our trade deficits anyday over the problems Europe is facing. I just happen to believe in this country. Call me uninformed and misguided, but my record against doom and gloomers is about 50-0 during the last 4 years.

53 posted on 06/18/2005 6:53:27 PM PDT by Always Right
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To: Always Right

The United States has a big problem with an aging population as well, or have you failed to notice GWB's effort to make this point the past several months?

I full agree that Europe has too much regulation and socialism but as I've outlined above I expect this to start moving in the right direction over the next several years.

Many parts of Europe are booming, particularly in the East which I suspect is better positioned than China to be the next China. ;)

Overall, I disagree with your assessment of the implications with regard to currency exchange rates, which is the topic at hand. I don't doubt that Europe has economic problems, and that they are bigger than those presently in the United States, but these are not new phenomena, and the euro has risen sharply all the same over the past several years.

Why? Well one reason is because the only factor that you listed which has a direct and crucial impact on currency exchange is the balance of trade, and the nation you yourself fingered as having problems in that regard is the United States, not Europe....

Think what you will. Currency exchange rates are one of the least ambiguous data points to keep track of. We will see where the euro/dollar exchange is one year from now, five years from now, and ten years from now.


54 posted on 06/18/2005 7:10:54 PM PDT by AntiGuv (™)
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