The Curse Of The “Irreversible” Euro

Wolf Richter's picture

Wolf Richter

Young educated Greeks are facing an insurmountable wall of unemployment [Merkel Has A Dream]. With little chance of finding a job in their field, they’re competing for any kind of job. Wages have plummeted. Benefits have disappeared. The economy has shriveled by 19.4% from the third quarter of 2007. Promises that education would open doors to a better future have evaporated.

Yet, Parliament passed another austerity plan that the Troika, the bailout gang from the EU, the ECB, and the IMF, is now loudly praising. It includes a provision to cut public sector employees by 80,000 over the next few years, starting with 2,000 employees this year. And it has to please the Germans who will foot a big chunk of the bill.

In the spirit of helping Greece improve the productivity of its public service, Hans-Joachim Fuchtel, German Deputy Labor Minister and special envoy to Greece, shared some Teutonic thoughts. “Studies have shown that 1000 workers in Germany perform the same amount of work as 3,000 workers in Greece,” he explained. “The partner countries that finance this Greek practice want to hear answers on how the efficiency of public sector workers in Greece can be raised.”

That was on Wednesday. Municipal workers were already furious; apparently, local authorities had been asked to come up with a list of redundant positions to be axed. On Thursday, they were ready for Fuchtel.

A German delegation that included him was supposed to arrive for a propitious conference of German and Greek mayors in Thessaloniki. Starting early morning, protesters gathered by the entrance of the conference center. As they waited for Fuchtel, they shouted, “Throw the Nazis out,” or more generically, “Capitalists should pay for the crisis.” They held up mock grave stones. “Fight to the end” was written on some banners.

But Fuchtel wasn’t born yesterday. He entered through a side entrance. So when Wolfgang Hoelscher-Obermaier, the German Consul in Thessaloniki, showed up at the conference center, all heck broke lose. Perhaps on the basis that all Germans looked alike, the protesters pushed and shoved him, ripped off his glasses, and threw cups of coffee and bottles of water on him. He was able to escape to the inside under police escort—shook-up, coffee-stained, and bedraggled but otherwise uninjured.

So the conference commenced. Outside, anger boiled over. Protesters pried open some shutters, stormed the conference center, and tried to force their way into the conference hall where the meeting was taking place, though they were stopped by riot police.

Inside the conference hall, the atmosphere was warm and friendly, once again pointing at the undercurrent of all “bailouts” anywhere: the people on the street suffer the consequence of decisions made in cushy conference rooms by privileged participants who take care of their own and tighten the belts of other people.

Yet Germany has become a Promised Land for young Greeks. Net migration to Germany (those moving in, minus those moving out) during the first half of 2012 jumped 35% over last year. Particularly strong were the movements from the southern austerity belt where the vision of a future has become a mirage: 53% more Portuguese, 53% more Spaniards, and 78% more Greeks moved to Germany.

Before the euro debt crisis, there was little tension between Germany and Greece. The gravy train of cheap euro debt dramatically elevated the Greek standard of living. But the money is now gone, some of it in offshore bank accounts. Germany, at the time “the sick man of Europe,” restructured. Real wages sank, benefits and pensions were cut, housing stagnated. In 2005, fed-up Germans kicked out Chancellor Gerhard Schröder, the architect of these reforms.

But with the debt crisis came the absurdities. Now a bunch of empowered Germans march around Greece, telling Greeks how to run their country down to the last municipal detail. And the Greek government is demanding hundreds of billions of euros from taxpayers in Germany (and elsewhere). Instead of being able to spend it on its citizenry, the government has to send most of it back to the ECB and the national central banks that had bought its old debt from the banks to bail them out [ Unintended Consequences Of Bailouts: Greece Gets Slammed].

This is playing out across the Eurozone. In their effort to keep the Eurozone intact, politicians, elected or not, are beginning to sacrifice the fabric of the European Union, the colorful family of 27 nations that used to wage war on each other. The euro is creating artificial problems between peoples. And by being “irreversible,” as ECB President Mario Draghi had said, it has become a curse—and a religious dictum that must not be questioned regardless of how much havoc it may ultimately wreak.

France, with its private-sector jobs fiasco, has become the new fulcrum of the debt crisis. But now the government lashed out against the media for pointing at the miserable results of its economic policies. Read... French Minister Whines: “Le French Bashing” Is Terrible.

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astoriajoe's picture

Tiny Houses, Aquaponics, Bitcoin/TEM.

JohnF's picture

Dear young people of Greece:

Apparently you slept through whatever economics classes you had. Sorry that your economy is shrinking back to the size it had before your parents took out all those loans and spent the money, but at the end of the day, that's your problem, not ours, since it was your parents who did this to you, not us. Go have a nice long talk with them about your inheritance...

What? You still blame us for letting your parents do that to you? Well, after you've taken whatever money they've got left from their Swiss bank accounts and have sold off their houses, let's talk. Get you tax system working again and your finances in order, give us a call, we can help. 

In the mean time, here's a hint: if you want a good paying job, come to those places where the economy still works and where you'll get paid a living wage for a hard day's work. Germany, Austria, Switzerland, the US...

...okay, sorry about that last one. It's been a tough week. Being your aunt has not been a lot of fun lately, especially as your Spanish and Portugese cousins are almost as thick as you appear to be.


Angela "Momma" Merkel

AnAnonymous's picture

This is playing out across the Eurozone. In their effort to keep the Eurozone intact, politicians, elected or not, are beginning to sacrifice the fabric of the European Union, the colorful family of 27 nations that used to wage war on each other. The euro is creating artificial problems between peoples. And by being “irreversible,” as ECB President Mario Draghi had said, it has become a curse—and a religious dictum that must not be questioned regardless of how much havoc it may ultimately wreak.

'American' populations around the world are in a different stage.

'Americans' residing in Europe live in a post theft economy but have not yet blobbed up in that massive european People entity as dictated by 'americanism'

The euro in this regard is not a curse. It is an enabler. European 'Americans' are walking in the steps of US Americans and will foster a society full of communauties, one loathing another, always wishing to push the other communauties on the bad side of 'americanism' etc

From an 'american' perspective, the euro is a blessing as it will help achieving 'american' goals.

The Greek there are in Germany, the more Germans they are in Greece, the more the political union will have to be advanced to solve all the inherent issues.

Are the issues artificial? Maybe. But they are wanted in order to push for the great 'american' project in Europe: the European People. Social engineered the very same way US Americans socially engineered the US American People. If you do not like dirt, dont look because it is going to be dirty, 'american' style.

TheFourthStooge-ing's picture

Goonie, goonie, your mind has gone looney.

disabledvet's picture

The countries "succumbed" to the EZ have been small (by design) to date. (there's no way these results weren't predicted by the policy makers.) Not so France and Spain. These two nations are "too big for the euro."

adonisdemilo's picture

What's the problem with 1000 Germans doing the same amount of work as 3000 Greeks?

They're paid 3 times as much, probably more,

Freegolder's picture

'The euro is creating artificial problems between peoples.'


The writer is clearly blind (and biased).

The Euro is merely a currency, used in these countries. Greece's problems have nothing to do with it's currency, it has structural problems, which it is slowly resolving.

European citizens clearly don't know how lucky they are to have a currency which is free of the nation state, free from political influenc, free from debasement and printing. (or perhaps some of them do know, as earlier this year when MSM speculation about Greece leaving the Eurozone was rife, what did Greek savers do?....they all rushed to get their savings out of the banks into Euros, knowing a new Greek drachma would collapse.

I suggest the writer holds ALL of his savings in dollars/Yen/Sterling for the next few years, not the Euro, and then posts when the storm has passed by with a begging letter attached, as he will have been wiped out.


AnAnonymous's picture

European citizens clearly don't know how lucky they are to have a currency which is free of the nation state, free from political influenc, free from debasement and printing.

'American' freedom, then...

THE DORK OF CORK's picture

What a stupid little bollox you are freegolder.

"The Euro is merely a currency"

Currencies can change all social & physical life as they register inputs and outputs in different ways.

I.e. they can change the physical world around them, often with devastating results.

Millions of people are now being thrown off monetary cliffs as the private debt is being repaid under basel III with no sov organisation to provide enough medium of exchange and thus counter the banks now full money power.

Power does not exist in a vaccum.

The banks are free to create credit in the coin of the realm without any exectutive or King that can print to pay off their horrid criminal debt.

What is it but a Hanovorian conspiracy on a scale hard to imagine.


The act of putting 10s of millions of young people in ice so as to pay off malinvested debt is a act of war against all of Europe.

When these people defrost there will be much less physical wealth remaining in Europe  - all so that some people might preserve their claims on the now rump Euro economy.

Very sick.

What do you think is going  to happen to these people when they believe the best years of their life was stolen for a idea ?

Freegolder's picture

Firstly, I think your opening line demonstrates you are somewhat emotional around this issue, but I forgive you your rudeness.


'The banks are free to create credit in the coin of the realm without any exectutive or King that can print to pay off their horrid criminal debt.'

I imagine you think this a bad thing? How odd.

Tell me, these banks that create credit, do they then rush out into the streets, and forcibly thrust the credit into the hands of borrowers? Nope, willing borrowers have to exist. So, don't blame the banks, don't blame the currency, blame human nature, which has always liked easy credit.

Economic activity will reset to a sensible sustainable level, not built on debt, and then the Eurozone will rebuild much quicker than other countries, because their central bank will not have wiped out the capital of the nation in destroying the currency.

Go get some Sterling bonds, you must love Mervyn King, do what he does, and you will be fine.



AnAnonymous's picture

Tell me, these banks that create credit, do they then rush out into the streets, and forcibly thrust the credit into the hands of borrowers? Nope, willing borrowers have to exist.

Willing borrowers? Does coercion exist actually in an 'american' world?

'American' economics include free market economy. So one has to put one's production on the free market, buy it back before consuming it.

So now as most production is not denominated in self emitted currency, it means that one has to get money before buying back one's own production.

To perform such acts, one has to borrow. So far, human beings have basic needs they need to cover so they can survive.

'Americans' love monetizing others' wealth in their 'american' currency and in a free market economy, it means that others have to borrow some money from the 'american' currency issuers just in order to consume their own production.

But, hey, 'americans' can not be coercers. So everyone involved in this little extorting of the weak, farming of the poor business scheme has to be a willing participant.

THE DORK OF CORK's picture

The banks are acting as if the now limited circulating medium is money and want to get paid back in full even if they now do not want to lend which reduces the money (money need not be interest bearing debt) supply further throwing people off the monetary cliffs as they run out of tokens.

This means people cannot modify their lives to suit the new changed circumstances - in reality this means they become non persons as they cannot obtain enough tokens to remain productive.


The banks make credit in the unit of account of goverment - this is a extreme privilege.

When this happens the asset they hold be it fiscal debt  , mortgage etc no longer holds any value which is why they don't care wether it is productive or not.

What infact they are doing is farming the fiat (taxable) money supply.

The value is in the legal right to do this and not in their asset quality.

A true King or sov has no skin in this game once he has enough money for whoring or whatever - he produces fiat and it is taxed and that is it baby.



This can clearly be seem in this video….

The chief exec. Bank of Ireland (not the Irish CB) was recently grilled in a Parliamentary Committee.

He repeated that it was all about the CASH FLOW of the customers and not the value of the present assets and he was right in the present context of banking units of account mixed up with goverments units of money account.

This divine right of the King has been replaced by the banks divine right to speak gobbledygook to the masses……the entire 1648 thingy has turned in on itself.

Its a absurdity

Riche B. is correct within this current monetary framework

“this is not a pawnbroking business”

They (the connected banks) are messing up the FIAT money supply to preserve their credit Kingdoms.

And remember, this is why Wim Duisenberg so proudly stated that the euro “is the first currency that has not only severed its link to gold, but also its link to the nation-state.”

But you have merely replaced one divine right for another…..ultimate power corrupts don’t you know.

The banks can create infinite credit that cannot be paid off as there is no King to counter the banks and produce Greenback like currency


Infact countries cannot even devalue under the Euro regieme ( when a country devalues the banks can still farm whatever surplus remains.......this was the nation state half way house of banking control)

The Venetian banks have infact created a massive capital export machine used to service their various slave colonies around the world.

They have been given total money power.

Freegolder's picture

You are clearly a nutjob.

But there is simple way to remedy your concerns.

It involves NOT saving in fiat, rather saving in physical gold.

Would have done you quite well since Another announced the changes to be bought about by the Euro.

So, stop fucking moaning and get some gold, best way to 'VOTE NO TO BANKS'.

Bye bye.

THE DORK OF CORK's picture

That maybe the case ......

But you are clearly retarded........

Gold is the money of the banks

FOFOA has recruited another Mormon it seems.


Greece & the other PIigs  capital bases is being transfered north to the banks Golden children in Germany & Poland (for the moment) so that the banks can waste the remaining surplus with more efficiency

The purpose of this is not to create wealth but to sweat the remaining capital assets of a debt yield.


You can clearly see this in German nuclear policey.

They have decided to shut down any prospect of increases in internal productive capacity because they think they can borrow off the collective european account.

This is in fact a act of war by Germany as it will drive up collective gas prices destroying capacity elsewhere.

The reason for this is perhaps complex but the root cause of this is that any new money spent on increases in productive capacity would reduce the real profits of corporate firms as their claims on wealth becomes diluted.

Canucklehead's picture

Dork, if you want to lead, LEAD..

Do you think the British, Americans, Germans, Chinese are busy looking over their shoulder and worrying what Ireland, Greece, the rest of the PIGS are going to do to eat their lunch?  I suspect they are looking at one another wondering how they should position themselves vis-a-vis their global competitors.

Stop whining about the Germans.  They are the least of your troubles.  If the Germans step aside and pay for your future, you still need to compete against the other economic pillars of the world.  The Germans are a pillar, but only one of many.

You whine about pillars.  Many of us are looking at the global Parthenon and wondering how to fix it...

THE DORK OF CORK's picture


What do you mean ?

Sov countries can only control what goes on within their own borders - if they wish to project beyond that it is a act of war.

The banks were once upon a time used to balance trade between countries - not within them.


There is clearly a collection of quislings within each Euro vassal state.

Anyway competition for what exactly ?

The euro market states don't control their own capital base.

If competition reduces your wealth capital how is that good ?

Its the banks that want us to compete - they can therefore extract the remaining surplus.....its a entropy engine.


You can see this quite clearly pretty much everywhere.

The worlds capital base was destroyed after the bing bang of the early 1980s

All for a pointless wage arbitrage game that has enriched the few at the expense of a massive collective wealth loss.

Canucklehead's picture

... What do you mean?

Relax.  I'm sorry.  Eat a Twinkie while you can still get them.

Freegolder's picture

I am no Fofoa fan, he makes it up as he goes along.

You ignore my points re banks needing willing borrowers I note.

You live in a strange conspiratorial world don't you, brainwashed by t'internet.

Best wishes.

jayman21's picture

Have you heard of lender of last resort and spender of last resort.  The spender of last resort taxes in order to pay.  Very simple if one can see from the top of a mountain.  No one wants to borrow but they do so anyway.

THE DORK OF CORK's picture

So what ?

The deed is done.

The credit has been wasted.

OK let me put it like this.

You can't bring it back , that capital is GONE.

Do you think its correct to mix up free banking credit with the need to sustain a positive or at least neutral overall state money supply to prevent current chronic wastage in the system.


Freegolder's picture

Ooh, can you point me in the direction of where I can get this 'free banking credit' please? Normally they charge interest.

You hate banks I can tell.

But you ignore mankind's lack of discipline.

Chicken and egg, which came first?

I think it was mankind, but it could have been banks.

Calm down dear, you will see how this all resolves.

I note you don't mention the ECB's move to oversee and tightly control EZ bank's credit quality. That would also damage the credibility of your anti- Euro rants wouldn't it?

You are truly a sad little chap, sunk in his own bias. A solid-gold ZHeeple.


THE DORK OF CORK's picture

I am sorry Freegolder , I will have to stop this conversation

You are bringing down my IQ and what little digits I retain is precious to me ......

Freegolder's picture

'You are bringing down my IQ and what little digits I retain is precious to me ......'

Did you mean 'are precious to me'?

I'd say your IQ is on a par with most conspiracy-theory ZHeeple, so don't fret.

LawsofPhysics's picture

Well said,  moreover, did that idiot just say that the Euro wasn't being devalued?  Everybody in the world is printing for christ's sake.

Freegolder's picture


The ECB has one mandate, it is working to ensure that mandate is fulfilled, nothing more. You have been duped by the ZH bias, all central banks are not the same.

Also, you ignore the mark to market gold held within the eurosytem central banks. marked to market. Not valued at $42.22, and held by a govt.

Wake up, think, don't be a sheep.

LawsofPhysics's picture

Right, because their debt monetization is "different".  Try again.  Better yet, I guess I should be asking for gold in exchange for the soybeans that I send to the E.Z.?  How's that gonna work again?  Full disclosure - I hold accounts in several currencies, mainly because the world is full of morons.  you are still talking about paper promises, period.  Wake the fuck up indeed, deal with the moral hazard and start insuring that there will be real consequences for bad behavior at all levels of society.  You are a sheep to believe the any of the current eCONomic models are in any way connected to reality.

Freegolder's picture

You are down in the dirt digging around.

I am up in the mountains looking down.

I see things clearly.

You believe what you read.

I do not. Some currencies are better managed than others. The Euro is the best. Their printing is indeed different, it is coupled with requirements for govts to get their deficits in order, irrespective of the depression it causes. Imagine any politicians taking that line? If you can give an example I'll be waiting. The Euro is behlden to no politician, and it has but one mandate. It will print to fulfill that mandate, but for no other reason.

You might think you own different currencies. Try getting the electronic digits converted to that currency when TSHTF. Don't think so. That is very old paradigm thinking.

I don't hold much in any currency.

Guess what I hold.

LawsofPhysics's picture

You are an idiot, and I have to deliver real produce and products every single day (and also hold PMs).  I take take care of my employees and customers.  Get your head out of the clouds because the laws of nature and physics are beholden to no species, much less a puppet politician, and really don't give a shit about any Euro trash mandate.

Your arrogance is typical of euro trash I have dealt with before and we will glady take your PMs in exchange for food in the future.

Freegolder's picture

I just read your comment twice.

The second time confirmed that is was just a pointless rant, making no coherent point on any issue.

So, good luck in the future, and there is only one 'PM' you know. And none of mine will be exchanged for food, in those brief few months of turmoil, my food supply is sorted already.

Afterwards, when I am living on my golden spoils, I will happily buy some food from you, once I have exchanged some gold for fiat.

You seem a nice chap, maybe a tad prone to losing your cool, but your customers are very lucky you care for them.

Time will prove all things by the way.

LawsofPhysics's picture

"Time will prove all things by the way."

Speaking of a useless rant.  No shit, it always does.

Freegolder's picture

We agree then, that is good.

I note your comments offer no solutions.

You should divert time to reading Another and studying the way international monetary developments have moved in the past 100 years. Not economic, but monetary.

It will open your eyes, then your mind.

Ignorance is indeed bliss, but it leaves one with a fragmented ant's view of the world.

I prefer enlightenment myself.


falak pema's picture

the curse of the irreversible euro is less polluting than the curse of the USD reserve hegemony.

That is the reality of today. 

Not saying they won't both burn, but one is uber-alles in its corruptness whereas the other pays the price of its servile banksta and crony political classes, all mesmerised by the Reaganista "greed is good" derivatives cabal.

Admittedly, the Euro is more frontline today in the fiat bonanza death scream spiral. 

LawsofPhysics's picture

The western world is bankrupt, period, full stop, don't think beyond this simple fact.  The BRICs are biding their time (and have problems of their own).  We have seen major countries/sovereigns go bankrupt before and this time will be no different.  Turns out, the soviets are really pioneers after all.

falak pema's picture

bankruptcy is not the issue. The issue is WHEN they decide to deleverage and what monetary consequence that will entail for all FX players. Musical chairs and last man left standing...

LawsofPhysics's picture

Exactly why I hold physical assets of numerous types and take care of my employees.  All of the paper promises will burn this go around.

Canucklehead's picture

Is there any reason not to apply tariffs to Greek trade once they abandon the Euro, default on their debt, and try to partake in global commerce?

If you accept that tariffs and trade restrictions will be applied, why not have the Greeks pay their way while they are still in the EU and using the euro?

If tariffs and trade restrictions will not be applied, why should anyone pay taxes?

Quintus's picture

I wonder what the WTO would make of attempts to block Greece from the international markets using Tariffs and trade restrictions?


Canucklehead's picture

Do you think the WTO would have anything to say?  After all the rules have been broken by the Greeks, EU, ECB, IMF? 

Look at how the EU goes after Microsoft, McDonalds, Boeing, etc.

THE DORK OF CORK's picture

"Studies have shown that 1000 workers in Germany perform the same amount of work as 3,000 workers in Greece"

Not sure about those numbers  ,but sure Germans can get more out of one unit of oil - so what ?


You don't throw people on the scrapheap for some weird efficiency fetish.

Indeed you would dramatically reduce productivity so as to increase efficiency in what I now think is only by a marginal amount.

The Eurozone is all about this superioity of capital - despite the huge losses now in the system , created by this free movement of capital and its subsequent pointless labour flows.

People followed the money (credit) to Ireland in the 1990s and 00s - this created huge hidden losses called externalties.


Germany thinks its gaining from this supra - market state but it is not , its workers wages will be driven down - they will seek more credit , that credit will be malinvested as credit is not a rational money demand signal.


In truth this free movement of capital and labour is being used to destroy the cohesion of former nation states - zee Germans should not be happy with this - but who knows what goes on in their strange heads.

If Greek workers are so bad at the effiencey thingy , pay them in Drachma worth 1 third of the Deutchmark.

They will travel to work in a Bus rather then a BMW and soon things will appear different.

But you don't just dump people on a human scrap heap because they can't obtain artifically scarce Euros.


Who can now not say the Euro and the european experiment is the most dastardly project ever conceived.

It has  destroyed what has made Europe great

Its diversity.


All for a fleeting moment of efficiency

It is absurd from a economic perspective until you realise there is a deeper darker objective.

The creation of a supra state of lost rudderless worker drones.

The US of fucking A on steroids.

A giant plantation where the slaves have no concept of village life , of home  & the hearth.

The nation state experiment of the 1600s sought to break up tribal life so as to increase efficiency.(less workers for a unit of output)

But this destroyed productivity (units of output)

The highlands of Scotland at one time was full of Cattle  that required heavy labour inputs as young people were needed for transhumance activity - the banks destroyed this culture as although it was much more productive then sheep ranches they could not extract a high yield from such activities.

The low labour input of sheep farming was best for the boss men despite the catostrophic decline in productivity.

This change from a nation state to a extreme market state is not unlike the change from a tribal grouping to a proto nation state system in the 1600s.

Nothing good will come from it - other then a maximization of profit for the few.......the Hanoverian few.