By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.
Anti-euro movements were pushed aside or squashed by political establishments across the Eurozone. There is, for example, Marine Le Pen, of the right-wing FN in France—“Let the euro die a natural death,” is her mantra. Though she finished third in the presidential election, her party has next to zero influence in parliament. Austria has Frank Stronach, who is trying to get an anti-euro party off the ground, without much effect. Germany has the Free Voters, an anti-bailout party that has been successful in Bavaria but not on the national scene.
Then Italy happened. Two anti-austerity parties with no love for the euro, one headed by Silvio Berlusconi the other by Beppe Grillo, captured over half the vote—and locked up the political system. Newcomer Grillo had thrown the status quo into chaos, for better or worse. Suddenly, everyone saw that anger and frustration could accomplish something.
It stoked a fire in Germany. Chancellor Angela Merkel’s euro bailout policies—“There is no alternative,” is her mantra—hit increasing resistance, particularly in her own coalition, but wayward voices were gagged.
“Time has come,” Konrad Adam called out as a greeting to the crowd Monday night and reaped enthusiastic applause. Despite the snowy weather, over 1,200 people had shown up at the Stadthalle in Oberursel, a small town near Frankfurt, for the first public meeting of the just-founded association, Alternative for Germany (AfD), that isn’t even a political party yet, and that wants to be on the ballot for the federal elections on September 22.
So Adam, one of the founders and a former editor at the Welt and FAZ, was pressed for time. It’s wrong to say there’s no alternative to the euro bailouts, he said. “Politics is nourished by alternatives.” He introduced his demands:
• Dissolution of the “coercive euro association.” An orderly end of the monetary union. Countries should be able to legally exit if they “could not, or did not want to remain.” The euro would be replaced by parallel national currencies or smaller, more stable monetary unions.
• Observance of the rule of law, specifically the laws laid out in the now totally flouted Maastricht Treaty that specified, for example, that no Eurozone member would guarantee the debts of other members.
• A referendum if “the basic law, the best constitution that Germany ever had,” were modified to allow the transfer of sovereignty to a centralized European state.
The event had been opened by co-founder Bernd Lucke, an economics professor who’d been a member of Merkel’s CDU for 33 years until he abandoned it in 2011 over her bailout policies. So he hammered her. “We have a government that has failed to comply with the law and the rules and the contracts, and that has blatantly broken its word that it had given to the German people,” he said to rousing applause.
But this wasn’t the radical fringe of Germany. The mood was enthusiastic and serious. The people weren’t so young anymore. Supporters, by now 13,000, were a well-educated bunch, with a higher concentration of PhDs than any party. Among the early supporters were prominent economics professors, ex-members of the CDU, and even Hans-Olaf Henkel, the former president of the Federation of German Industry (BDI), an umbrella lobbying organization representing 100,000 businesses. And so the event was orderly, a picture, as the Wirtschafts Woche described it, of the “German bourgeoisie.”
Many supporters hailed from the center-right CDU and FDP, but AfD didn’t want to be categorized in the classic scheme of left and right. “We represent non-ideological values that people of different views can share,” Lucke said.
A claim that was validated: 26% of Germans would consider voting for a party that would steer the country out of the monetary union. They came from all political directions: on the right, 17% of CDU voters and almost a third of FDP voters; on the left, 15% of SPD voters, 27% of Green voters, and 57% of Left voters.
The challenges are huge. One is fragmentation. It would be difficult to get people from that kind spectrum to agree on anything. Another is time. The founding convention will be on April 13 in Berlin. By June 17, the party and sections for each state must register with the federal election office. By July 15, the party must collect signatures in every state amounting to 0.1% of the electorate or 2,000, whichever is lower, just to get on the ballot. But Lucke was optimistic. “With you, we can easily get the signatures,” he told the crowd.
It will be tough. Merkel is immensely popular. The major parties are well-oiled political machines. The AfD lacks truly prominent personalities, experienced politicians, economically powerful supporters, financial resources, structure…. And its platform is still skimpy.
But it doesn’t need to govern. The parliament let itself be intimidated by the executive branch “through the assertion that there is no alternative,” Lucke said. When the AfD arrives in parliament, “it will cause the large parties to begin to rethink.” This would lead to “a critical questioning of the monetary union.” And to a look at the very alternatives that Merkel said didn’t exist.
There have been waves of threats by Eurozone politicians to bully people into accepting “whatever it takes” to keep the shaky monetary union glued together. These threats peaked last year with disorderly default, and when that wasn’t enough, with collapse of the Eurozone. But now, the ultimate threat has been pronounced: war. Read…. The Ultimate Threat In The Euro Bailout and Austerity Racket: War
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turkeys voting for christmas. this will crystallise german banks dodgy loans to the likes of spain.
Well they can’t fix their banking mess until they admit to it. Nor can we. Once it is acknowledged it can be changed. What will this do to the big effort to form a US-UK-EU trading pact? Will they resort to little banks and specialized products? And in the end less trade. I’d like to see that because the global trade frenzy is eating up the planet as we deliberate. And if global trade is reduced, national economies can rebound. I think it is flat-out nuts to consider national economies as parochial. That’s like saying blood is too liquid.
Also Junker’s comment (and Sarkozy’s at the beginning of the Libya mess) which alludes to war: You can’t go to war without oil. End of argument.
About a year ago in Frankfurt there was the normal Friday protest by leftists at the Hauptwache. Suddenly another protest march came up the Zeil…. these were a bunch of middle-aged looking guys…. not the normal “protester” stereotype. They looked like a bunch of engineers or accountants and they were carrying anti-Euro signs.
The leftists immediately went berserk and started screaming at them though their megaphones, calling them nazis, fascists, fools, etc. I had the distinct feeling that no one on either side was particularly sure of their arguments. I do know that in the end, Germans will always pick the pro-German solution and screw the neighbors.
Tangerine says:
Well Germans have never done that in the past, so why should they start now?
Nothing’s changed since Versailles, when Germany, and the rest of Europe, began marching to the tune called by the Anglo-Americas. As is noted in “The Ultimate Threat In The Euro Bailout and Austerity Racket: War”,
It boggles the mind that rank and file Germans are so blind to the fact that Juncker is nothing more than a handmaiden for the Anglo-Americans. For it is quite obvious that “His problem” is the same problem Zbigniew Brzenzinski — the masatermind of Jimmy Carter’s and America’s gunboat diplomacy — expresses in his latest book. Here’s how Pepe Escobar sums it up:
You think Dr. Alphabet is going to lay out all his cards in a book? How old is he now, ninety? He doesn’t even know any more what he thinks. He probably spends half a day trying to urinate.
How long will it take for the European public to realize that only corporate looters and bankers and politicians (and of course toadying academics, and foozling bureaucrats, and enabling lawyers, accountants and consultants) derive significant benefits from the common currency? They’ve had twenty years to figure it out.
@ jake chase
You and I seem to have very similar takes on the nature of the problem. If yesterday’s post and thread reveal the true nature of MMT, then I’d say the MMTers are trying to sweep the problem under the rug. They deal with neoliberalism the same way the calvary generals of 1914 dealt with the machine gun — by ignoring it.
Where you and I seem to part ways, however, is where we go from here.
Yesterday, in response to my question “if you believe a democratic solution is futile, then just what is it that you are proposing?” you answered as follows:
Could you elaborate a bit, as I fail to understand exactly what you believe the appropriate way forward to be.
America has been overwhelmed by an avalanche of private greed and public corruption. People caught in an avalanche must dig their way out. Responsibility always rests with the individual, because any group is just a crowd, and I am certain you are familiar with Le Bon on crowds- you cannot expect anything from them; indeed, what individuals caught in crowds must do is protect themselves. I believe in doing what I can for friends and family, in not doing positive harm to strangers, in not trusting any political figure of any stripe, regardless of what he says. I do not trust judges, legislators, bureaucrats, mayors, governors or presidents, any more than I trust communists or socialists or fascists or liberals or conservatives or corporate executives or bankers (private or central) or celebrities or pundits or anyone, really, whom I do not know personally and have observed in operation for a rather long time. At present, there are about four people whom I trust. Everyone else still has something to prove.
I spent a little time in Mexico in 1982. It was a frightening place. Is it better now, and if so, why?
“Responsibility always rests with the individual, because any group is just a crowd…indeed, what individuals caught in crowds must do is protect themselves.” ~jake chase
I’ll accept that your experience of people has led you to this conclusion, but I have actually encountered groups of people who form not crowds, but communities. No sh*t! It is possible for people to interact in ways very different from the crowds I take it you’ve had experience with. I would guess that there are probably a whole lot of variables that go into determining whether a given group of people forms a community, a crowd, a mob, etc.
Wherever you’re at doesn’t sound too appealing, but here in Montana I feel pretty good about our ability to form communities and not just crowds.
“[T]here are about four people I trust.” Larger decay of trust in society due to financialization?
This is the big issue. Decline in general levels of trust.
“Financialization” isn’t really sufficient to explain it; it’s the step beyond financialization, where the people in charge become upper-class twits who don’t even understand their own balance sheets (but order their underlings to make them look good). Once the people in charge are revealed to be not merely malicious, but malicious *and* incompetent, people have a lot to distrust.
I’d say the MMTers are trying to sweep the problem under the rug.
Aaarrghh. Regarding the Euro, the MMTers, along with allies like Godley & Parguez, sweep problems under the rug by writing papers denouncing it more than a decade ago? As a malign neoliberal plot, though usually, but not always in more academic language?
This is like asking Paul Revere: Why didn’t you say the British are coming?
I think From Mexico is more concerned with the political side of things than the economic one. As Warren Mosler has said repeatedly MMT can be used just as well for conservative political goals as it can for liberal ones. By focusing on the economics MMTers do tend to ignore some pretty pronounced power inequities outside economics per se that impact the functional possibilities for politics.
I’m not as fatalistic as Jake Chase nor as deterministic as From Mexico: there have been periods of good government and general economic benefit and they have come from cultural forces broader than the specific politics that over time come to formally embody them. Things aren’t always and everywhere great, but they don’t, in perpetuity, perfectly suck either!
From yesterday’s post and thread, it became rather obvious that the MMTers are oblivious to, and completely ignorant of, geopolitics. They have some interesting insights as to domestic affairs, but their analysis ends at the nation’s border.
Diametrically opposed to the parochialism of MMT is Critical Globalization Studies. As William I. Robinson explains:
Or, to put the whole thing more succinctly,’send us some money and we will put out a report, unless the Xerox machine breaks down or we run out of quarters.’
I’m not sure if Michael Hudson would consider himself an all out MMTer but he is supportive of their ideas and his analysis definitely doesn’t end at the US border..
SuperImperialism (1972), Global Fracture (1977). ‘Trade, Development and Foreign Debt’ (2009)
and they are certainly supportive of anti-austerity measures in dealing with the euro problem..
http://www.mediaroots.org/mr-transcript-italian-mmt-summit-2012.php
The MMTers are also ignorant of aeronautical engineering and oenology.*
Dear lord. I’ve never seen a derangement syndrome take hold before, but it’s happening before my eyes. For a theory, not a person. And at such great length, too.
* And taxidermy. Shocking.
Adding… Yeah, Immanuel Wallerstein is great on world systems, but can he write a decent baseball column?! I rest my case…. Etc.
it became rather obvious that the MMTers are oblivious to, and completely ignorant of, geopolitics. They have some interesting insights as to domestic affairs, but their analysis ends at the nation’s border.
Yup, From Mexico. Except for the thousands of pages written relevant to such topics, they are oblivious and ignorant of geopolitics. Same is true of you too – except for everything you know, you know nothing of geopolitics.
A main point of MMT analysis is attacking the recent and ludicrous belief that states have a mystical magical constraint against domestic expansion imposed by international trade. Showing that nations outside your borders DO NOT have the mystical powers that mainstream BS “economics” ascribes them is exceedingly important to real world geopolitics. MMT is about doing the accounting right. If you don’t, all your geopolitical economic studies will be BS. If true, they will only be so by lucky accident.
@ Calgacus
Aren’t you even remotely curious about what William I. Robinson speaks of above, the “new transnational order” which “dates back to the world economic crisis of the 1970s and took shape in the 1980s and 1990s,” and how that might interrelate with economic phenomena?
Nixon’s moving the country to a fiat money system in 1971 and 1972, after all, was only one of several sea changes that occurred during that period. Here are some others:
1) The unprecedented growth in miliary spending that began about the same time:
In a paper authored by Marshall Auerback and Chris P. Dialynas titled “Renegade Economics: The Bretton Woods II Fiction,” here’s what they have to say about the phenomenon:
2) The even more explosive growth in the National Foreign Intelligence Program (which encompassed the budgets of national-level intelligence agencies such as CIA, NRO, NSA, DIA, etc.). Remarkably, total intelligence funding grew by 125 percent in real (constant dollar) terms from 1980 to 1989, as noted by the Aspin-Brown Commission on intelligence.
And this tells only a small part of the story. The elements of the US government mentioned above, along with the DEA, NED, USAID and others, make up what Peter Dale Scott calls the “deep state,” which is closely allied with the finance industry (which launders its money) and the war industry. Because the deep state’s activities are often illegal and always secretive, it frequently cannot turn to the state’s democratic institutions for funding. It must therefore turn to illegal activities, such as drug trafficking, for financing, something that is an open secret here in Latin America. The illgotten money is then channeled to all sorts of nefarious characters, as well as a broad array of illegal and morally reprehensible activities.
A far more detailed explanation is available in this interview of Scott:
3) The yet even more spectactular growth of the phenomenon Christian Parenti calls “Lockdown America,” where the number of Americans incarcerated has soared by eight-fold since 1970:
As Parenti notes:
And my big question is whether the United States could maintain the value of its currency in world markets — its dollar hegemony — without the precipitous increase in intimidation, murder and mayhem it has wrecked on the world since it switched to a fiat currency.
Aren’t you even remotely curious about what William I. Robinson speaks of above, the “new transnational order” which “dates back to the world economic crisis of the 1970s and took shape in the 1980s and 1990s,” and how that might interrelate with economic phenomena?
Sure. I created the Wikipedia article on Robinson, by the way.
The unprecedented growth in military spending that began about the same time: “Unprecedented”, or even “growth” is not really accurate in other than absolute terms, and for weaponry that gets ever pricier. As a proportion of GDP, it has shrunk. Nixon & Ford withdrew from Vietnam, remember? And we had some years of a glorious Vietnam syndrome. The military buildup was late Carter & then Reagan, but it wasn’t on the relative scale of Truman or Kennedy/Johnson.
Thanks for the interesting, old, paper by Auerback & Dialynas – Renegade Economics: The Bretton Woods II Fiction . Having learned himself some MMT since then, I doubt Auerback still asks:
Does the “currency” of global military might make the U.S. immune to debt trap dynamics?
No, correct accounting, understanding what we are accounting = MMT/FF does. Showing that the only conceivable deleterious effect of governments issuing domestic denominated debt is demand driven inflation. Something we haven’t seen since WWII, and would recreate such wartime prosperity first. And this goes for any country which doesn’t foolishly issue foreign denominated debt – for then there are no “debt trap dynamics”. Something everyone knew until economics decided to turn into astrology.
And my big question is whether the United States could maintain the value of its currency in world markets — its dollar hegemony — without the precipitous increase in intimidation, murder and mayhem it has wrecked on the world since it switched to a fiat currency. There was no such precipitous increase. There was no such switching, really. Currency means fiat currency; all currency is and always was fiat currency. A commodity standard is like clothes on a person. Switching to a fiat currency should sound as odd as thinking that people are naturally clothed, not naked underneath.
It’s nice to have a highly valued dollar, but not necessary for a prosperous economy. A natural effect of prosperity is to weaken the currency by increased importation. So what? Without military waste production and wreaking havoc around the world, with more New Deal economic structures, the USA would be more prosperous, powerful and rich. The lives of the ordinary person would be much better – the neoliberal “great moderation” decades had the worst economic performance in US history, even including any period containing the Great Depression. The dollar would probably be more hegemonic. But the destructive, parasitic elites would not be so tightly in control, in the USA and elsewhere.
What is truly striking about the neoliberal era is the triumph of stupidity. The simple tool of fuddling everyone’s minds with nonsense showed itself to be more effective than intimidation, murder and mayhem. The Big Lie, especially inculcated in concepts, is far more powerful.
Re noblesse oblige: It’s interesting to see outright advocacy of a return to feudal values. I wonder if this.is a trend?
A Triumvirate — Jake, Mexico, and Hugh (?). Nah. Hugh’s not a joiner.
Theres a lot of dots in their mind, but they cant really draw lines between them and count 1+1=common market only benefits huge corporations and doesnt really care about 99,9 % or enviroment = destruction for many who havent born in aristocratic families. Liberals always talks, that everybody leaves from the same line to life, but they forget, that some people already have couple billions in their back pocket, when they born and others doesnt have anything.
Disinformation and deception are greatest tools in their bag, cause oddly all media just loves EU in Europe. If you dont be with them you are weird, nazi, loco or something similar, but absolutely not normal.
Adam Smith
“Limited trade keeps the amount of wealth within the borders relatively constant, but the more trade a country engages in, the wider the market becomes and the more potential there is for additional labor and, in turn, additional wealth.”
This Nobel EU peace project isnt about peace, its to make wealth people even wealthier and abandon all limits, so that they can do what ever they want and be godlike.
@ “The Ultimate Threat In The Euro Bailout and Austerity Racket: War”
So the mask finally gets ripped off of neoliberalism to reveal its true face: the tortured, twisted, green-eyed mug of liberal internationalism or liberal imperialism.
And with this, the dissidents have scored their first great victory: “To tear the mask of hypocrisy from the face of the enemy, to unmask him and the devious machinations and manipulations that permit him to rule without violent menas, that is, to provoke action even at the risk of annihilation so that the truth may come out.” (Hannah Arendt, “On Violence”)
The truth. The truth about neoliberalism is this:
Yes, if one wants to see the future of the United States, maybe he should go to Mexico. Wait, you’re already there!
What I remember best is driving through villages with chickens obstructing the roads. It was the summer of 1982, right after the US Treasury had bailed out the banks with Brady Bonds. Because the roads were largely dirt you couldn’t always see the chickens. One evening we drove from Mexico City to Guadalajara (I forget why). In the middle of nowhere, the paved road came to an end. We drove the last twenty miles on a dirt path through the woods. Fortunately, it was going to Guadalajara too. The next day we flew to Puerto Vallarta in a four engine plane crammed with people and their pets: one guy had a goat, several had roosters. Everyone cheered when the plane took off and again when it landed. In Puerto Vallarta we stayed in a beachfront hotel. It was surrounded by a stucco wall with barbed wire and broken glass at the top. At six A.M. on our second day, occupants of the room next to ours were held up at gunpoint. From some reason the robbers chose the second room from the end to assault, which is fortunate from our point of view, because we were in the room at the end. I remember the streets were continuously crammed with open trucks filled with soldiers. They looked about eleven years old and had rifles taller than they were. They also looked murderous. I did not make jokes about them.
We got the hell out of that country and have not looked back since.
jake chase says:
Exactly! One has to remember that Latin America is, as Greg Grandin puts it, “Empire’s Workshop,” and the first place where neoliberalism was imposed.
My message to Americans and Europeans is this: You ain’t seen nothing yet.
At last we agree. More later; time for golf.
Boy-o-boy, I’d agree with you on that one. “You ain’t seen nothing yet.” Jake and yourself seem to agree on that one. I too recognize the Mexicanization of the USA coming. I spent a few weeks in Mexico during the Clinton years. Driving though, not flying. And never to any resort towns. I seen mothers with small children living in cardboard boxes alongside the freeways. Virtually everywhere you went, children were begging, but were genuinely happy for anything they got. I ate great meals in houses that had dirt floors, but were still swept and very clean. Obvious poverty yet pride there. It stood in contrast to Clintons message at the time, that poverty caused all ills. I drove on their superhighways occasionally, where I’d go for many miles and not see any other traffic at all. Id wager the avg income was probably below $2000 annually yet gasoline was about $2.65 even back then. It was a bit over a $1 in the USA for comparison. I bought gas at places that measured it out in glass jars and dumped it in my truck. They didnt have the luxury of electricity. It was much higher than in the USA. Needless to say, not many drove. Anyway, thats just a small slice of what I observed. My point is, that there was no social safety net at all. Those I met were either very wealthy or had not much at all. The classes didn’t mix, for the most part. Yet the people made do and survived, in spite of their goverment, not due to it. I’m thinking that as the structure breaks down here, and corruption becomes rampant, that the US will resmble more and more what I observed there. For better or worse, its just how it is.
“My point is, that there was no social safety net at all.”
There was more than you observed. It just wasn’t government-run.
Nor did the government send the cops in to break it up and and arrest the survivors.
Mexico, you suggest US military apparatus is an extension of economic policy. The sole economic policy of the US government for the past fifty years has been the aggrandizement and enrichment of a plutocratic elite: bankers, defense contractors, corporate CEOs, inheritors, etc. If our military mission is protecting access to resources it is incompetent top to bottom. Fifty years of runaway military spending and exercise have produced what exactly? A thin trickle of Saudi oil. Two companies of marines could bring down the Saudi government over a weekend. Instead, our savvy government caves in to fifty years of extortion, keeping the price of oil high, why? To enrich the bankers and the oil companies and oil servicers and others collecting rents on high priced oil. You think these guys have a long term objective? You give them far too much credit. A few want power but most simply want money, as much as possible and as quickly as possible. We are ruled by a gang of self aggrandizing putzes, from Dr. Alphabet and his mentor Henry the Kreep on down. These guys don’t know any more about planning our future than they know about avoiding women with fake tits and the hope of a secure future. That is why so many get caught with pants down. Our system guarantees scum a greased pathway to the top. That’s the whole story.
I think you have proven Mexico’s proposition.
And we might add a few historical notes to this.
Neoliberalism came to Mexico beginning in the ealry 1970s in the personage of Luis Echeverria Alvarez, Mexico’s president from 1970 to 1976. As Carlos Fuentes observes, in his “highly rhetorical” style “he attacked the entrepreneurial class with gleeful Third World enthusiasm while making its members richer than ever.”
“Finally, the very illusion of progress shattered after Jose Lopez Portillo (1976-1982) promised Mexico unbounded wealth based on oil exports and brought inflation, debt, despair, and disillusionment,” Fuentes continues. “Riding the crest of the oil boom, Mexico contracted gigantic debts that it could not pay when the oil glut, followed by a plunge in prices, left the country without liquidity. In 1982, Mexico went broke. The miracle had become a nightmare.”
During the admistrations of Miguel de la Madrid (1982-1988) and Carlos Salinas de Gortiari (1988-1994), the neoliberals capitalized on the nightmare to push through macroeconomic “reforms,” stabilizing an economy that had hit rock bottom in 1982, taming inflation, opening up Mexico’s closed economy to the world, and concluding the North American Free Trade Agreement (NAFTA) with the United States and Canada. “The privatization schemes of the Salinas government dismantled a large part of Mexico’s economy and concentrated wealth and power in what the president considered to be big, competitive conglomerates for our entry into the world scene,” Fuentes notes. “The losers were small- and medium-sized businesses, lacking credit, and Mexican society as a whole, lacking the public investments that had once had repercussions across the whole economic board, stimulating further investment, employment, production, and a healthier balance of payments. Putting anti-inflationary policies at the head of the cart, and balance of payments in the driver’s seat led to excessive dependence on foreign financing, with the results that today have become dramatically evident.”
In 1994, weighted down by massive foreign debts and the rapid outflow of hot money, Mexico went broke again. As Fuentes explains:
The consequences for rank and file Mexicans of all this have been devastating. The number of Mexicans living in extreme poverty has increased from 5 million in 1982 to 22 million today. The minimum salary today buys a third what it did in 1982, while the salary of the average union worker buys half what it did in 1982. Twelve million Mexicans have fled Mexico for the United States. Meanwhile, Mexico sports the richest man in the world, Carlos Slim. As Fuentes puts it, the country was
Mexico’s had a long, complicated history of this, however.
Most of the history of Mexico (dating back well into the Aztec era) has really been about rival military gangs. It seems to be returning to this, with the “drug wars”.
The Salinas/Zedillo period looks, to this outsider, somewhat odd, in that I haven’t figured out (a) what Salinas and Zedillo personally got out of selling the country’s assets to the US, and (b) where their military backing came from. (Everyone needs military backing.)
“Riding the crest of the oil boom, Mexico contracted gigantic debts that it could not pay when the oil glut, followed by a plunge in prices, left the country without liquidity. For a country to borrow denominated in a foreign currency is almost always insane. Doubly so for a country as big as Mexico. Triply so for a country with an oil boom. MMT / FF sez – don’t do insane things.
“Countries should be able to legally exit if they “could not, or did not want to remain.””
What is a country that “cannot” remain? Legally any country can remain in the Ezone, and default as much as it wants – in theory.
If a country – say Italy – exits the Ezone, will it be allowed to redenominate it’s debt in “new lire”? This can be a point where Italian and German eurosceptics might disagree.
Also, the idea that Berlusconi is anti-euro is complete BS (he ruled Italy with huge majorityes for 12 years and we are still in the Ezone apparently).
If one eurozone member was not to guarantee the debt of another member, even when the second is squeezzing it’s taxpayers in order to ensure that private obligations held by bondholders of the former member are repaid, then the eurozone should cease to exist. It seems to me that the germans do not understand that their bankers did lots of malinvestments with their money and should assume a fair chunk of the losses.
I don’t know if anyone else is experiencing this, but there is a very irritating advertising banner for ‘Westjet’ on this site (or as I see it on this site). It does not have the ‘X’ button to close the banner. I have an I-phone 3S, is this problem particular to my phone or is this banner on the site?
“Whatever it takes” will prevail. Venice on the Thames and their Ivy League agents in the U.S. who dominate Washington and Wall Street will have a tough time Balkanizing the European continent. They shot their wad with their failed Hitler project, presently making war very unlikely (and this no matter how close the Axis of Fraud brings its Arab foreign legion–al Qaeda–to the borders of Europe). It’s not like there are no simple solutions to the euro’s problems whose causes begin and end with a securitized banking system bloated by a hopelessly insolvent derivatives scam run out of London. Besides, there already is a European politician who has shown how to deal with the playthings of oligarchs, albeit his nation is not an EU member (hint: this nation likewise is brimming with natural resources more than ample enough to productively employ the entire Eastern hemisphere). Not to burst everyone’s bubble filled with excitement for the proto-fascist Beppe Grillo, but the political movement to watch for any gains in expanding influence over European politics is Greece’s Syriza, as this movement seeks to strengthen the euro-zone and keep it intact. OBVIOUSLY, growing anti-euro political rhetoric, as well as geo-political intrigues in the region featuring well funded NATO death squads (euphemistically called “rebels”) of the Islamic fundamentalist sort are signaling loud and clear that, Venice on the Thames is in its death throes. As ever, it seeks to drag down the rest of the world with it. It’s just not gonna happen. Britain’s imperial system is dead and I’m betting the U.S. will make its break very soon, while everything of the monetarist school this imperial dung pile glorifies will be flushed down the toilet, where it belongs. So, the EMU as we know it today might not survive, but the euro most certainly will, for this is how war will be avoided. We might consider, then, persistent German “recollection” of its Weimar experience likely more a statement of a political will possessing peaceful intention than a commentary on sound monetary management.