Posted on 06/20/2011 8:40:03 PM PDT by NoLibZone
he euro is becoming an ever greater threat to Europe's common future. The currency union chains together economies that are simply incompatible. Politicians approve one bailout package after the other and, in doing so, have set down a dangerous path that could burden Europeans for generations to come and set the EU back by decades. By SPIEGEL Staff
In the past 14 months, politicians in the euro-zone nations have adopted one bailout package after the next, convening for hectic summit meetings, wrangling over lazy compromises and building up risks of gigantic dimensions.
For just as long, they have been avoiding an important conclusion, namely that things cannot continue this way. The old euro no longer exists in its intended form, and the European Monetary Union isn't working. We need a Plan B.
Instead, those in responsible positions are getting bogged down in crisis management, as they seek to placate the public and sugarcoat the problems. They say that there is only a government debt crisis in a few euro countries but no euro crisis, citing as evidence the fact that the value of the European common currency has remained relatively stable against other currencies like the dollar.
But if it wasn't for the euro, Greece's debt crisis would be an isolated problem -- one that was tough for the country, but easy for Europe to bear. It is only because Greece is part of the euro zone that Athens' debts are a problem for all of its partners -- and pose a threat to the common currency.
(Excerpt) Read more at spiegel.de ...
Read more: http://www.dailymail.co.uk/news/article-2005499/Greek-debt-crisis-Let-Greece-default-leave-euro-says-Boris-Johnson.html#ixzz1PsTYeH5H
Ping.
So, its just like any socialist system. The hard workers have to pay for the few who are irresponsible until the whole collapses. Whether it be individuals, towns, nations or “Unions” of nations; socialism ruins all for the benefit of a few.
It’s really too bad that people cannot get this through their heads once and for all.
bump
The lure of "stuff for free" is irresistible, and freeloaders are in the majority.
How can you fix that in a democracy? Education doesn't work because people don't want to learn. You might be better off teaching tensor analysis to a gangbanger. In other words,
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
-- Upton Sinclair
The cause is actually common between socialism and pyramid schemes - people want to get rich on labor of "someone else," and they make sure that "someone else" is not them. The hard working people don't have a say in this decision; often they are ridiculed for their effort. Citizens of USSR at least had a chance of escaping to Israel or the USA; but can a European today escape into the USA, and is it even worth it, as things are?
So how is Greece any differant thah General motors or Chrysler or any other outfit that had to be rescued from their high spending managements? Let them file for chapter 11 and then sort out the mess and start from scratc. Yea, I know, the humanitarian cost to the people, especially the older ones, but they have lived like kinge on borrowed money for a long time now, perhaps they could sell of some of their realestate, those ilands they have must be wort quite a bit, a good auctioneer should be able to get top $ or uros as it were, after all, if it was you or I, we would have to dispose of some of our assets if we couldent pay our bills, so why is a little country any differant?
The ties that bind...
When countries joined Euroland, their current debt was converted to Euros and the Euro has been gaining value making the converted debt more expensive day by day plus paying interest to bankers including new bailout loans with new interest to pay.
They have to payback in Euro.
So far rich-uncle Germany (citizens) are the bulk of the ones who can afford to loan Euros for bailouts. The banks just sit back and collect interest.
I remember well in the mid 90s Milton Friedman explaining in The Economist how the Euro would produce national unemployment instead of national inflation using the differences between fiscally sane and insane States in the US as a model. The assumption that the Euro would instill any kind of discipline was therefore illusory from the beginning, and its backers knew it. There had to be another reason for the "European monetary union."
The real goal was to replace the US dollar as the world's reserve currency, because that allows the issuing entity to produce excess currency that doesn't go into domestic circulation. It is inflating somebody else's assets without the apparent cost. If the Euro replaced the dollar as the world's reserve currency, those dollars would then come home and the US would experience massive inflation almost immediately. That is why the international reserve currency status the dollar has enjoyed is both a blessing and a peril. Essentially, the Euro coupled with Democrat fiscal policy, has put an inherently unstable world financial system on the path to total catastrophe.
Gee, funny how no one saw that one coming. (/sarc)
I cant wait for 1 world government and finance..../s
Any eurozone bailout is an outrageous breach of contract. Bailouts were specifically forbidden when the euro was adopted.
Never trust a politician. Never.
All the EU pricks are having an epiphany about the dead Euro, from the mushy EU Left like SPIEGEL to the mushy Brit Lib/Lab/Tories....their big dreams of another Roman Empire of Europe just may be at an end. Beware though that the dying EUSSR will be a dangerous enemy of freedom everywhere.
-———inflate their way out! ——
That process is well under way here......... now
-——so why is a little country any differant?———
You noted corporations. The most glaring American comparison is California. California is Greece. It completely lacks the will and the means to recover.
And the response from Europe's political class is exactly as expected (and as I've written some dozens of times since 1999). They will attempt to "muddle through", as the article puts it -- delay, evade and unlawfully fund bailouts for as long as they're allowed to do.
There is something in the mental makeup of politicos and would-be politicos that simply will not permit them to admit failure and start again. As a result, the financial situation in Wonderland (my term for the Eurozone) will steadily become worse over time, as the political class cling to guaranteed-to-fail "solutions". The blowup will come when the Germans -- the citizenry, not the pols -- quits this idiotic game. When is that? Good question. I'll have a guess at 2017, sooner if the socialists get back into power.
Not that the US is in anything other than terrible shape financially, of course. However, the US' financial problems are, generally, a result of greed, both political and financial. Wonderland's problems are based on more or less equal parts of greed, Fantasyland-style idealism and outright stupidity.
As the maxim goes: you can't fix stupid.
FReegards!
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