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The Broken Model Of The Eurozone
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Alfred Palmer White Motor Company, Cleveland Dec 1941
I stumbled upon these few words in an Ambrose Evans Pritchard article the other day, and they hit me almost like some sort of epiphany, which in turn made me feel a little stupid, because it’s all so obvious. What Ambrose wrote (and this time I’m not making fun of him), was about the eurozone (EMU), of which he said:
The North is competitive. The South is 20% overvalued.
And I realized that’s all you need to know about the eurozone, and about why it will fail. Or has already failed, to put it more accurately. There’s no other information required. Other than a bit of context perhaps to clarify.
Before the euro, and the eurozone, countries like Greece, Spain, Italy, Portugal, would perform 20% or more lower economically than Germany or Holland would. And that was kind of alright, because periodically, their governments and central banks would revalue (devaluate) their currencies down against for instance the Deutschmark by those same 20% or so.
Of course Germany hated this to an extent, since it made it harder for its industries to compete against Greek and Italian companies. Which may by the way well be a mostly hidden reason for them to push the eurozone on the Mediterranean. Devaluation still worked for many years, though, and as we presently find, it was the only thing that could have worked.
Today, because they now have the same currency, and devaluation is thus impossible, and southern Europe also still underperforms the north, there’s only one possible outcome: the south keeps getting poorer all the time. It’s inevitable. Unless Greece starts outproducing the Germans, and we all start driving Hellas quality cars, but that’s not in the cards.
The fatal flaw in the eurozone model is that there’s no way, no escape clause, to rectify the inherited differences between north and south. Moreover, because there isn’t, the differences must and will get bigger. There’s nothing any kind of stimulus by the ECB or EU can do about that.
Unless they directly tax the Germans and Dutch and Finns with the stated purpose of handing what they raise directly to the Greeks. Not going to happen. And there was never any intention of doing such a thing. The Germans wanted to expand their distribution markets, and the Greeks were promised they’d get richer by default if they joined the shared currency.
Neither side thought this through, not with a longer – or even medium – term view. The Greeks et al are the first to pay the price, but the Germans will end up paying as well, no matter how the growing tensions and differences end up being resolved.
All anyone ever considered was a tide to lift all boats. But there is no such tide now. There is no economic growth, other than perhaps in a few niche markets (and they will fall too). And no provisions or plans were ever drafted for this to happen.
Ambrose’s 20% may be underestimating things, or overestimating them. It makes no difference other than perhaps in the timing of events. And not all southern nations will be overvalued – and underachieving – vis a vis Germany – by the same percentage. But that doesn’t matter either down the line.
All countries that entered the EU in the past received large sums of money for things like infrastructure projects. But that money is long gone. Now it’s back to the same performance ratios that have existed for many decades, if not for centuries.
The only thing that might help southern Europe here would be debt restructuring on a massive scale. Still, that would be considered far too costly by the north, provided it even could be achieved in a globalized finance system (look at Argentina).
What makes this interesting is that there is now a question of responsibility. Are only the Greeks accountable for their debts, or is the entire eurozone, given that they share a common currency? These are issues that should have been resolved in times of plenty; in times of less they will prove extremely hard if not impossible to solve.
Northern Europeans see their lifestyles being cramped from many sides in the ongoing crisis, and they would not accept more being taken from them to be handed to Greece. Even if 50%+ of young Greeks have no jobs, and over 40% of Greek children grow up in poverty. That’s not how the union was explained to them. And they would not have agreed if it had been.
The fact that Brussels has attracted a highly dubious breed of politician and bureaucrat certainly hasn’t helped, and still doesn’t. But it’s not the core problem. The core is that there never was a mechanism to reconcile the 20% differences, which means we’re fast on our way to 30% and more. Nothing anybody can do about that other than to leave the union.
The EU was founded on ideals of peace. But unless someone does something, fast, it will be the source of bitter and bloody fighting. Better wisen up now, guys (and I don’t mean the leadership, they’ll go on till the end). In math, there are things that just don’t add up. This is one of them.
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"Fuck the EU"
-Some crazy bitch with cookies
We've got the south who are tired of getting bent over to get the cash to prop up their economies and the north who are getting tired of throwing money into a blackhole with no real chance of repayment. Then of course we've got France, who is a special and unique disaster. There will be a fucking and the race is on to decide who gets reamed.
I read both the AEP article and this completely.
It will only exist as long as the leadership of ALL THE COUNTRIES want it to exist. As soon as 1 of the 17 changes their mind, its game over. Completely.
Apart from the finances of the project, which are a complete disaster, and aren't even worth debating anymore.
Ghordo and EMZ supporters et. al.,
What benefits do you have now that you wouldn't have if they split the EMZ in half?
Yup. It is helpful to recall that during the Cold War large percentages of the electorates in the southern countries voted Communist. In France the percentages weren't quite as high. But the 20% sort of numbers bandied about here reflect the productivity penalty, and honesty and integrity penalties, you'd expect against a civilisation where the communists did so well for so long, and still do.
Your have sumed it up perfectly CCanuck - Fuck the EU!
Couldn't have put it any better myself!
Greece will fail again and this time they will not be able to put Humpty Dumpty back together. Everyone knows that debt is unsustainable in the South of Europe. But hope springs eternal in the human breast when backed by the best lies that Draghi and Goldman can come up with.
But lies have never sustained an economy for long. Buying those sovereign bonds at record low yields in Southern Europe is financial suicide
"Greece will fail again"
I see your point but to counter, Greece is a failed state, there is only human suffering at the hands of know it all central planners from this point forward. The same for the rest in varying degrees.
Keep voting, we almost have them right where they want us.
Greece with its near infinite corruption was a failed state when it joined the Euro ably aided by Goldman adjusting their finances. So when the Euro collapses, it will be significantly due to Greece. Here is a simple example of Greek honesty:
In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.
So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools
http://www.nytimes.com/2010/05/02/world/europe/02evasion.html?pagewanted...
How Goldman Sachs helped mask Greece’s debtBack in 2001, the Greek government was pondering how it could meet the conditions of Euro membership. A key requirement of the Maastricht criteria, five criteria that determine whether an EU country is ready to adopt the euro, was that member states show ‘directionality’ in their public debt.
This meant that the country’s debt ratio needed to be going down year on year: ‘The national debt should not exceed 60% of GDP, but a country with a higher level of debt can still adopt the euro provided its debt levels are falling steadily’.
The solution they came up with was not to cut spending or raise taxes, as Dunbar incredulously points out, but to attempt to hide their debt. Enter Goldman Sachs, global investment banking and asset management company.
Newsnight revealed that one of the Goldman Sachs bankers hatched an ingenious plan to strike a financial deal called a ‘swap’ with the Greek Government, using it to hide 2.8bn Euros of national debt. The deal was legal but completely secret.
http://www.thebureauinvestigates.com/2012/02/21/how-goldman-sachs-helped...
A few years ago a similar article on swimming pools in Greece mentioned the healthy market for camouflage pool covers.
I have faith that bankers know exactly how to take advantage of such imbalances and profit from them. It's almost like.... it was planned this way or something.
keep these propaganda pictures of a broken euro symbol coming. Should I shiver with fear of our predicament after years of predictions of a euro collapse ?
Brussels has attracted a highly dubious breed of politician...
Is there any other kind?
I believe the word POLITICS was derived from the terms POLY, meaning many, and TICKS, meaning blood sucking insects.
Not insects, but arachnids... else all correct. +1
Or cephalopods, e.g. squid.
The euro project was a economic disaster for the internal Irish economy since day one.
I am talking the 1973/79 period.
Looking back to irish trade records since 1930 we were only ever in goods trade surplus during the hard hard war years of 1941,43 & 44.
It took more then a world war to drive the irish economy into structural trade surplus.
We bacame of full colony of the bankers during the first euro depression of the early to mid 1980s.
After 1985 Irieland posted exponential rises in its trade surplus.
In return for this surplus goods we received goods back from Europe that we could not afford. (chiefly capital goods dumping of little real utility)
Been saying this for years. Also, that none of this destruction could have occurred without the willing collusion of the ratings agenies, who know exactly who pays them.
If that hadn't been the case, they'd haver been closed down long ago for their part in Lehman and all that followed.
no shit sherlock - you basically described the properties of monetary union
A little squinting, changing of a few names and inverting the directionality, and this all sounds eerily like the U.S. of the 1850s.
Of course, any recognition of that is obliterated by the obsession over 'slavery' that was ingrained in the American consciousness during the so-called "Reconstruction". But the rise of Hamiltonian, "American System" economics in D.C. - with its emphasis on renewed central banking, federal fiat currency, "internal improvements" (pork), federal tax on income and all the rest - absolutely attracted a highly dubious breed of politician and bureaucrat that certainly didn’t help, and still doesn’t.
The banksters sneaked blanks into Aaron Burr's dueling pistol. If Hamilton had been killed maybe some of this crap would have been diverted or avoided in today's world. That, and had a fortuitous serial killer wiped out the crowd at Jekyll Island in 1913.
Hamilton was killed.
His desire to re-create an 'elected' oligarchy, propped up by mercantilism and a centrally-controlled economy, however, lived on through Carey, Clay, Lincoln, et al.
We're watching the all-too-predictable endgame of that legacy.
While I get the article and agree with the idea that the EU is made up of unequal parts I always have a problem when reading about financial 'models'. How exactly are we to 'model' reality and why would we possibly declare the model 'broken' if it doesn't match reality? Being broken implies it was operational and correct originally.
Bullshit.
All you need to know is this: Goldman Sachs thinks Europe is its own little private playground. And guess what. It is.
Europe? I'd say The World
Let us focus on the venue currently under discussion.
Although the vampire squid wields great deal of influence everywhere, it certainly appears that its stranglehold in Europe is consummate.
If you have ever been around any of them in Europe, they certainly condescend as though they own the whole joint.
Since you are discussing it in earnest: as much as I hate The Vampire Squid Firmly Wrapped Around Th Face Of Humanity...
I make a difference between The Squid Proper and The Squid Academy
The first is a megabank I'd forbid. Banking is too valuable to be TBTF
The second is a classic Old Boys Club network problem, where The Squid is adept in recruiting lots of europeans that have a deep knowledge of local conditions. The only way to solve the second problem without touching the first would be some unsavory "joint liability"... which leads back to merchant and investment banks being too big, in every sense
We all know that the EU in the past 6 year period since Lehman moment has protected the three tier banking structure (core + middle + peripherals) which has never known separation in Europe like that which existed before G-St revoke in US. At the price of sacrificing its middle class and now two generations of young people.
When market predominance; aka the neo-liberal Reaganomics model's fall out; was declared in Europe in the 80s during WS's deregulated surge, all european banks were consolidated as privatised institutions (in France as in Club med countries, after Italy's "années de plomb" and Spain/Portugal post Franco/Salazar reforms. Then they all were allowed--by the Mitterrand/Kohl/Maggie entente-- to make entry into Delors's Eu currency concoction which was "supposed" to be a counter-weight to US$ predominance.
In theory but alas not in practice and EZ was never put on a consolidated footing to fight the FED and $ clout. The North South divide which had been papered over since 1999 was now wide open.
That the politics of this construct was corrupt; aka inverted totalitarianism (private corporates leading the state sector by their noses in Brussels, as opposed to classical totalitarianism, where State monopolies run the economy and private sector plays second fiddle --think De Gaulle's France--); is only too evident, as can be seen in Maggie's "tax haven" farm and JC Juncker's Luxwhitewashing currency laundrymat.
This was before the Squid got involved. Admittedly the Petrodollar monarchy already ruled Europe (remember the Euro serpent?) from unregulated City shenanigans that nearly brought the world to a halt in 1979 crash of mega bank debt.
So....what the Squid has done is an inheritance and exacerbation of this ongoing financial global shooting match, once it became the lead financial banker bankrolling Clintonian Pax Americana, as globalization ramped up the corporate race to world resources.
IMO, the current situation in EZ is a dynamic that added the financial explosion of 2008--occurring essentially in US's derivative scammed world-- to an already toxic oversold real estate bubble in Club Med countries ready to blow up that got transferred to the public ledger which has made Keynesian plays impossible until there is debt deflation both in banks as in government books; whatever Draghi may say.
Our political leaders had already been eating and drinking at the trough of petrodollar money to buy their Oil from the ME oil patch run by the US.
When a country controls money, oil and guns on a unilateral basis, the result is inevitable.
Europe has NEVER been able to achieve independence from this triple whammy of Dear Henry's making.
This is now payback time. As Cog Diss says so cryptically you cannot repair a broken reality with a Delorian half assed and "well intentioned" model.
Just as human beings adjust to uncomfortable realities with all the self defense mechanisms in their availability heuristics so too does Goldman Sachs and Economics proper. Denial as defense has been operating in business and banking for eons. GS alters reality to suit their growth models
and when they need to engage in denial to get a deal to close they do so
with relish. Denial is a GS operating model of business given that business is no longer to be perceived as ethical or legal when the the executive operates outside of those types of constructs. GS cannot be jailed for crimes if they are never convicted of crimes by legislators. The White House has deliberately taken the banking sector out of harms way by instituting fines as opposed to convictions for fraud and criminal activity.
The industry operates extra-judicially and extra-legally without fear of sanction by anyone involved in government or industry. Admissions of criminal activity are non-existent and fines are imposed every single time. If a firm gets too close to the flames of jurisprudence the security industry takes up the slack and assassinates the target insider via the CIA bankster assassins that have so far offed a slew of banksters and their family members. GS only need to signal to security when they want someone killed for potential whistleblowing or because they are specific targets of investigators. All the dead banksters were under investigation when they were assassinated.
"The fatal flaw in the eurozone model is that there’s no way, no escape clause, to rectify the inherited differences between north and south" Ilargi is wrong here. Devaluations only work when you have effective trade......the south has no need for the Norths products.........its not a question of a ability or not to pay for them. Current "free trade" in Europe is not free trade.............the trade is caused by various bank created local money shortages.............what has truely broken down in Europe is local trade to service local demand...........we are traded to death when looked at international links.......our economies are completly open to capital flows which direct the energy surplus via trade to the financial centers.
the problem with reading Ambrose Evans-Pritchard's articles is that they are full of criticism, and some of it is excellent. But then, before you are aware of it, you fall with him in the deepest recesses of Neo-Keynesianism while staying on the political right of UKIP
in short, for AEP a national bank and currency is not only the thing, it is the only thing. it is so important and so clearly profiting those who manage it that the very transfer of funds becomes... a necessity, a precondition to a currency zone
in other words, AEP says that a currency will always be perfect for one region and decreasingly bad for all the others, who then need funds from the one region that profits from a "currency perfection"
it's utter bollocks, but don't forget that AEP does not write to inform, he writes to entertain prejudices, otherwise he would not be writing for the notorious British rag "The Daily Telegraph"
it's AEP's model that is broken, because it does not allow for market adjustments, ever
Productiveness is not the issue as his article tries to suggest. it would be if Greek or Portuguese or Irish workers would get the same wages as French or Dutch or German ones. It would be if they would have common trade unions bargaining for common wage levels. It would be if the eurozone or even the EU had a common minimum wage. It would be if the countries in the EZ would have the same taxes at any level. This is not so
AEP could as well stop looking at his incredibly hated EUR and say that Southern taxes on labour are too high, or many other components. and yet all this shows that he is an economist (super-neo-keynesian, of course, but nevertheless) that has no idea why an entrepreneur sets up production sites in Croatia or Bavaria or in Greece or whatever. If labour costs vs productivity would be the only issue, as it is for hopelessly financialized global entrepreneurs, then no industry would be left in places like Denmark, or the Netherlands, or Switzerland
nah, as usual an article about the eurozone that has only one purpose: to entertain... prejudices of the UKIP voting Briton, constantly thanking himself about being always been against the UK's adoption of the EUR and hoping for an exit from the EU
you are on duty on sundays ?
is this the usual innuendo that I am paid for making comments? I like ZH. I like to post comments, from time to time. that's all, believe it or not
and I like your posts a lot. But you do it with such a zeal and professionalism, if you like, that sometimes one wonders..
he does it with zeal because he may be someone who respects facts, logic, himself, as well as those who read his posts; aka his fellow men.
I call that being sincere and ethical; which is not incompatible with being the doorman at the Dorchester saying "good day" to the Oligarchs.
I don't know why zeal to be coherent is considered a default unless you have a pathologically suspicious mind and consider that free will amongst your peers is a thing of another world.
Yeah I think many Brits are pissed with the EU and their main parties due to its lack of regional imparity causes a great deal of problems providing infrastructure housing and work etc. We are the half the size of France with over twice the population, we have been building on flood plains for over 20 years already, in short we are full. Add to this the ridiculous bureaucracy taxation and lack of representation in the commission I think the average UKIP voter is justified in feeling angry with the EU and the neo-liberal line managers in Westminster. We will probably have a war situation happen before Britain can GTFO.
"It's important to realize that whenever you give power to politicians or bureaucrats, it will be used for what they want, not for what you want."-- Harry Brown
The UKs 2014 Pink book (geographical section)
http://www.ons.gov.uk/ons/dcp171776_382948.pdf
See figures 9.1 which shows the massive Uk current account deficit with mercantile Europe.
Who benefits?
See fihure 9.4
In Y2003 the UK(london) was earning a small income from oil waste activites in the eurozone.
Today its all about real goods.
For example Spain has increased its goods (mainly food /fruit) exports to the UK with its rising population .(figure 9.7)
Spain must export to get currency
This is not free trade.
This is directing energy into favoured areas of wealth claims.
Venice operated much like this during the middle ages - eventually causing a collapse of Europe.
they hit me almost like some sort of epiphany, which in turn made me feel a little stupid, because it’s all so obvious.
-lol... so obvious that the politicians "in charge" have forced this idiocy upon an entire continent....
the price of having ekonomists (particularly of the keynesian stripe) in charge...
voodoo sounds like a better strategy at this point....
Should have made a EuroNorth and a EuroSouth.
And where do you put France into this?
+1 it would use the British Pound, of course ;-)
Euro South-West with open arms for Muslim conquest.
Notre Dame to be a mosque in 50 years.
You just figured this out?
The green lie, massive immigration of people without any kind of hope to find a job and a failed monetary union plunging the south into poverty and dragging the nort with it, is all the EU has. And there's no way back in the political sense. Please stop using the politically correct word 'crisis' and call it by its genuine name: The New Reality. It will last until the first heads start rolling.
Don't people in the EU vote? Come on!
Don't people in the EU vote? Come on!
Don't people in the EU vote? Come on!
So precient. At this stage I'm actually bored caring so I accept The New Reality. It could last another 50 years so at this stage I'm just gonna shrug my shoulders & think about the next paycheque. But when the heads finally start rolling, I'll be in the 3rd or 4th wave (along with the rest of the middle-class family-men).
I´m not being funny but many of us have been saying this for ages. Namely it´s the euro which is the structural flaw in Europe. EU politicians wont admit it because it would mena the end of the eurozone, or at least a major shakeup.
The southern eurozone should never have been in a currency union with the likes Of germany. That has always been the problem, and always will til it changes. The smartest thing the UK has done in last decade was NOt to join. It´s probably saved the whole nation from bankruptcy.
Nations with completely different economies should NEVER be tied to a common currency! Nations like Greece, with its laid-back tourist economy, ought to have the freedom to devalue their currencies against manufacturing behemoths like Germany. Sure, that makes German products less desireable to those Greek shoppers, but so the fuck what! Those people can't AFFORD German shit anyway, forcing them to go into debt doesn't make the shit any more affordable for them!
Germany, going to the prom with a bunch of your ugly girlfriends won't make you any prettier you know...ditch the entourage and stand on your own.
That south (inc France) has no need for German high end products if its people cannot afford bread and wine.
The question is why is Spain forced to export its food to deficit UK so that can afford Northern products such as German cars ?
The UK is not part of the euro but it is certainly intregal to internal eurozone mercantile based trade.
This great triangle of trade is not looked at for some reason.
Deficit England , Industrial surplus North (Germany and the rest)
And the south which reduces Northern energy expenditure massively (UK ,German etc tourists and Pensioners burn energy in the South and expect the south to pay for it)
Added to Spains troubles is its now structural food surplus with the north.
let them eat cake if there is no bread
France is the greatest wheat producer in western europe for 100s of years.
There is no shortage of bread and wine in France.
If it must export this for mere currency then its people have lost basic purchasing power in the quest for failed modernism.
You get trade for trade sake.
This is not "free trade"
This is trade captured by the financial elites who then claim they want free trade.
Seems the US has the same problem as France, Spain & UK.
If any country industrializes they end up raising the Labor Rate for the population.
And so US will continue to Decapitalize.
Germany looks smart in all this.
I'm in Lisbon at the moment, and life is good! For me, that is. The Portuguese? Not so much.
no escape clause? Sounds like the USA. We need a civil war in the EU and the USA.
you don't need a civil war in order to leave the EU or the EZ
W
estern Europe has a close-meshed logistics network that is unparalleled anywhere
in the world. Nevertheless, many people fail to realise the important
role played by rail when it comes to supplying everyday goods. The fruit and
veg counters of English supermarkets, for example, would remain empty if the weekly
train bringing fresh produce from Spain failed to arrive. DB Schenker Rail (UK) and the
British forwarding company Stobart have equipped this train with cutting-edge technology
to ensure that oranges and lettuce reach their destination in perfect condition
after the long journey.
https://www.rail.dbschenker.it/file/2520480/data/railways_032010.pdf
"The fact that Brussels has attracted a highly dubious breed of politician and bureaucrat certainly hasn’t helped, and still doesn’t. But it’s not the core problem. The core is that there never was a mechanism to reconcile the 20% differences, which means we’re fast on our way to 30% and more."
The choice of the political breed in Brussels was always a large part of the problem.
Those with control of the levers are mostly old wannabe commies, fascists, and outcasts and failures from their home countries. They simply play out their utopian dreamland in Brussels.
Virtually none of them have a clue about structuring the EU to minimise government or to make it nimble, forward looking and business/citizen friendly. It's all been about "control and regulation". A giant political contruct aimed at melding 28 cultures into a new country called the "United States of Europe". Nothing more.
virtually none of them? In the steering body of the EU, i.e. the EU Council?
And where are you picking that USE theme?
Yes, virtually none of them.
The ex-Maoist Barroso - now retired - is one example. The garden gnome Rompuy is another. Junkett is another. Neil Kinnock and Peter Mandelson from the UK were two more. Years ago there was Delores. Plenty more of them. A bunch of has-beens if ever I've seen them.
I have no idea what goes on in the CoM meetings because minutes are never published. I can safely assume they collaborate in conspiracies against the people of Europe.
And I think you already know where the USE meme comes from...widely broadcast across Europe.
Ooh I forgot...how many years is it that EU annual accounts have not been signed off?? ha-ha.
from what you write I can only gauge that you have not understood who is the real boss of the EU. which is understandable, then the British press loves to harp on the EU Commission, which is the equivalent of a ministry or civil service
the real boss of the EU is the EU Council. No have-beens, there. It's Cameron and Merkel and Renzi and Hollande and so on. The current governments of the countries, all 28 of them. Nothing moves in the EU without this body, which is so damn unknown in the British press
you mean Peoples of Europe, don't you? because if you say People of Europe (singular), you are making an argument for... a federal Europe
Ghordius, given how the EU operates, you overstate the importance of the CoM and you omit to mention that the EU Commission has A LOT more power than a regular civil service. The CoM sets some of the general policies and the Commission writes all the laws and regulations to give effect to them. That places a lot of power in the hands of unelected officials like Barroso/Rompuy. And of course the CoM itself is subject to majority voting, stitch-ups, wheeling & dealing and all sorts of other get-outs and wriggles to ensure that no country can get its own way and is subject to the votes of other countries.
Given that EU members and the Commission apparatchiks are overwhelmingly socialist, it's not difficult to see why so many EU Directives and other assorted regulations that come out are favourable to the political Left.
And when you say: "...the real boss of the EU is the EU Council. No have-beens, there", I give you Hollande in France, Rajoy in Spain and plenty of others who are virtually useless and committed to the EU and the planned future USE. Hell, Barroso himself was an outcast Portuguese PM and accordingly to some people was "the most hated person in Portugal". Hence he left the country and took up a top-job in Brussels.
The fatal flaw in the eurozone model is that there’s no way, no escape clause, to rectify the inherited differences between north and south.
Didn't seem to bother the USA. South says "I'm out of here." North says "no you're not". Hundreds of thousands die for their cause (or as hired substitutes for the beneficiaries of the North prevailing), and vois là ... all is well in paradise.
And by the way, the USA had no clause either way but it was implicit that participation in the union was totally voluntary. But in fact it was a "domestic entanglement".
Go figure.
They know damned well what that 'escape clause' is...War is inevitable in Europe. Just like economic collapse is inevitable here in the US. (Psst! Hey Europe! This means it isn't likely that the US will be able to come to the rescue this time. So, maybe you should STOP pissing your people off with your economic games, because if they turn on you, you're on your own.)
They KNOW that war is the logical outcome, they're just counting on the US military being available to keep things from slipping out of their grasps...egged-on by big finance, and all their threats of Armageddon if their Ponzi isn't supported.
They miscalculated. Again. American soldiers may have been willing to fight the Nazis, but they won't be firing on German street demonstrators, or helping quell riots in Brussels, despite what any of our "leaders" may have promised.
You're living up to your moniker if you think it was American troops who 'rescued' us from the NAZIs.
Not saying that's what YOU think, but what the EU leadership thinks...you have to separate the people from their various leaderships.
I KNOW America didn't come flying in to Europe wearing brightly-colored spandex to save the day...but that's how the leadership sees it, and what they count on...America being so financially tied to Europe that they will HAVE to step in if countries start going 'rogue'.
I'm saying they should not be so complacent. These leaders should not assume America will save their regimes if their people start rising up against them.
They seem to have weapons that are clean, but like nukes. I suppose they might enjoy killing millions in Europe if they can keep the industries or buildings and monuments... Well, no that sounds crazy doesn't it.
But US and NATO have fancy weapons that could convince Southern Europe to Stay in EU. Not sure I think this is possible or clear. Seems like Class warfare going on and people seldom have revolutions. Usually it is the governments that cause the wars and start the escalation to full regional wars.
"it isn't likely that the US will be able to come to the rescue this time."
I think Monte Burns remembers that the Russians destroyed most Nazi Armies and lost the most people.
This country does not have the ability to wage any kind of major war. We still CAN kick up a lot of dust all over the world, don't get me wrong, and we are by no means face-down in the dirt. And we are still dangerous.
But we are no longer lean and mean. No longer driven by high ideals. We are a deeply-divided nation, second-guessing our past and uncertain and fearful of our future. Our finances are a mess with no solution in sight, and if we were all to jump out of bed tomorrow morning to gear-up and take on the world, we'd be unable to do anything because we gutted our manufacturing infrastructure...who's going to MAKE all the gear we'll need? We'd be buying our soldier's supplies from China, made in the factories WE helped build over there.
All we got are the nukes. We're gonna end up like some over grown North Korea...isolated from everyone, thought of as nuts, and periodically issuing threats to force small favors from an increasingly frustrated world.
Well I wasn't really thinking about full war, or a smallish one in Europe.
We got guys that can set up camps to stage from and then deploy crowd control type weapons against an unarmed civilian population... or having navy ships in the North Sea, Atlantic, and Mediterranean we can drop EMPs & smart bombs to turn the people afraid. I don't know weapons other than rumors. But US spends constantly on weapons development.
Agree the public will is question, US Debt is a question, training for specific types of operations takes time.
I don't think NATO Leaders or EU Elites want full war within Europe. Maybe if NATO entered a War with Russia or North Against Southern Europe... the people would have a revolution type response in more than 3 countries.
I like to ponder about these things.
The Traps:
- North Europe has good paying jobs for it's non-immigrants, cheap imports, and seems to be clear winner over the losing countries
- Sovereign Debt & Public Debt is high in both USA & EU
- NATO Expansion, Missile Defenses, and Eastern Countries Joining EU & NATO
- Germany's Energy & Natural Gas problems
- Western Banking Links, EU Trade Links which mean economic risks
- Stability hinges on maintenance of Middle Class Success and Economic & Banking Success
- USA Meddling in EU Politics
I don't buy the Defense Lobbyist crying that US Military & Weapons are not ready for war. Defense Spending is very high. But a new war exposes CONUS to new threats from China, Russia.
You're living up to your moniker if you think it was American troops who 'rescued' us from the NAZIs.
I'm sick of the BS bout how the eurozone was created to prevent war in the aftermath of the world wars of the 20th century. If that WAS the case, they would have opted for political unity, not a common currency!
It was created to impose this common currency, so that certain groups could enrich themselves. The countries in the eurozone were expected to impose 'unity' on their people in order to support this ridiculous currency and keep the scheme going.
War, or preventing war, had jack-shit to do with the creation of the eurozone, or the common currency. And the slow march towards nationalism in Europe is being caused by these very people!
Rather than prevent war in Europe, these Euro-freaks have actually made it more likely! And they have also ensured that the coming wars will be flavored with precisely the kind of nationalism that tore the place apart several times over the past century or so...good job Euro-freaks!
Are you talking about the EU or the EZ? Or just blenderinzing the whole thing? The EZ was done with wars in mind. Currency wars, to be specific
Look how the Ruble if faring. Look how exposed medium-sized currencies are. Look at the speculative positions, and the consequences
With the benefit of 20:20 hindsight it's perfectly clear that the EU was/is part of the overall Globalist/NWO agenda including that of a single world currency.
It was Germany that wanted the EU to be a single currency zone, so no nation could devalue and gain more competitve edge over the dominant productivity of Germany. Then Germany also became a vendor financier of consumption of their own consumer and industrial goods by the south. It all worked great, until it didn't. Now the EU needs war as it's only outlet for it's total financial failure which is looming.
sorry, but this is completely wrong, Jack Burton. it was France and Italy that convinced Germany to join the EUR, at a moment where Germany wanted support for reuinification of it's Western and Eastern parts. meanwhile, arguments against monetary union in Germany were a bit weak, since Germany was already contemplating a monetary union of West and East, the Deutsche Mark and the Ostmark
I love how the author avoided ranking France.
Mostly in the north, but has always behaved like a south. The attitude fills the gap; until it fails. Rinse, repeat.
When it comes to matters EU France believes that rules don't apply to her. They are for little people.
To be honest, I am surprised France was tempted to join the EU. They have never wanted to be ruled by any entity but French. So giving themselves over to German power was a surprise to me. Then the EU was a project of the elites, and was heavily sold to the public under a smoke screen of lies. Like the great lie that it was meant to maintain peace in Europe. Then the EU went on to fund, arm and train, plus command the entire Yugoslav war. Feeding arms and cash and military officers into their pet nations to ensure a battle field victory and the tearing into tiny little easily controlled pieces a former nation. And also creating Kosovo, Europes gangster state, where all of the EU's most evil forces can find safe haven under NATO protection. Like Sex Trade, Sex Slavery directed from Tel Aviv, Organ trade connected directly to Tel Aviv, illegal diamond trade, currency manipulators, the hub of drugs trade connected to Tel Aviv. illgeal arms smuggeling to terrorists the west favors. Oh yes, NATO has it's own pet gangster state that it set up as it's own criminal safe haven. And EU law enforcement does nothing, because the Criminal EU in Brussels is itself a gangster state.
See that story Dyncorp Employees buying & selling sex slaves in former Yugoslavia? Police would tip off the Brothels before raids.
I met a guy that said two of them from US went into a hotel, looked around, knew they were surrounded by mafia types. Apparently they didn't spend much time there and were careful.
The Franks were Germanic, Scandinavia seems Germanic, Nederlands seems Germanic... and many Jews appear to have German names. Seems Eu Elites would likely be Germans, Royals all German... and would be happy to deal with financiers of any kind Jew or not. And historically the Elites would go into Civil Service or Military... Like Bismark or Junkers.
Easy to follow your logic. EU set up by Elites with a Banker Plan for getting rich. Rothschilds seem an example everyone knows.
http://www.telegraph.co.uk/news/worldnews/europe/france/11218338/Life-in...
Germany remains the the UK's largest trading partner in terms of the value of goods exported and imported. However in Q3 2014 the UK recorded its largest ever deficit with Germany, reflecting a gradual decline in exports and rise in imports. The amount of energy needed to supply the former Industrial island of Great Britian is massive. This "trade" extracts huge amounts of basic purchasing power from euro roboten. The population is rising in the UK because that is where most of the tokens reside and for no physical reason. Logically the resident populatiuon of Europe should be returning villages , market towns and cities of the provinces but that is not the case. Why is this ?
FX manipulation ?
"Non-Monetary Gold
To comply with international statistical guidelines, ONS introduced estimates for trade in
non-monetary gold and other precious metals into the quarterly national accounts from 30
September 2014, and the monthly UK Trade statistics released on 10 October 2014. In
developing these estimates further it had been proposed to use data from a Bank of England
(BoE) survey collecting estimates of physical holdings of gold and other precious metals
for the reporting period March 2013 onwards, as described in the article
'Measurement of
Nonmonetary Gold'
published on 23 January 2014.
However, on receiving the aggregated survey results, the data were volatile with large monthly
changes that, despite being on a net trade basis, significantly distorted the estimated monthly
trade balance. Due to this volatility and given that the survey is relatively new, having only
commenced from the reporting period March 2013, it has been decided to undertake further
work to quality assure these data and to review the methods used to measure non-monetary
gold and other precious metals more generally. In addition, further disclosure assessment
is required to ensure the confidentiality of businesses within the survey is maintained. So,
the method used for the series pre-2013, derived from BoE information of gold as a store of
wealth by UK MFI's, has been extended with the survey information being used to inform the
movements of the later periods, but rescaled to the level of the pre-2013 data.
We will, keep users informed of progress and it is likely we will seek views on how best to
proceed."
The Greeks brought this on themselves, They voted in, election after election, politicians who promised them endless goodies, early retirements, everyone who wants one a job in the public sector and 'anti-corruption Czars' who used their position to loot the country. Their motto was 'someone else will pay'. Someone did. But stopped paying about five years ago.
Interesting article seems the Economic Minister is a Rothschild creation:
http://www.telegraph.co.uk/news/worldnews/europe/france/11218338/Life-in...
I guess we are a lot like France employmentwise, since we have outsourced jobs, have little demand for Labor driving wages lower & preventing young from working, and face future cuts to jobs due to robotics, automation, further off-shoring.
US Employment
319 Million = Total Population (FRED)
245 Million = Total Population over 16 years old (BLS)
147 Million = Total Employed (FRED & BLS)
92 Million = Total Not in Labor Force (FRED)
98 Million = Total Not in Labor Force (BLS over 16)
37% are not Employed and over 16 years old (BLS population)
40% not Employed using BLS over 16 Population minus Total Employed
You mean hair dressers who were legally allowed full retirement at age 50, because they worked with chemicals and needed to be on pension early. I gather others also cashed in on the early retirment craze in Greece. Many seeking retirements no later than 55! Yes, they did fuck themselves up the ass. The excesses were epic!
Oh come on now.
Half the states in the USA pay more to the Feds than they get back. Half the counties in California pay more to the state than they get back. Half the citizens of the USA pay more in taxes to all levels of government than they get back.
... than they get back DIRECTLY is the catch here. Presumably there are some external benefits that come back as other than cash. This is the same theory under which the EU was proposed and must function. Maybe German taxpayers *will* pay for Greek unemployment for the next thousand years, but it gets them easy access to cheap restaurants and hotels for the holidays. Etc.
Nobody is ever happy.
If this were a properly functioning free market I'd say the southern countries, in producing less are contributing less to the prosperity of all in the euro zone and should not expect to be rewarded equally.
As with many other increasingly obvious symptoms in numerous aspects of prevailing societal mythology, the fatal flaw in the north-south European economic dichotomy is the ridiculous assumption of human "equality". An equivalent flaw in in finance in the application of statistical methods based upon the normal distribution, under the caveat of an assumption of "approximate normality" Models derived to explain the physical are misapplied to psychological processes. Worse still, these theories were never intended to bring about good of any kind. They are, and always have been simply tools used by the usual suspects to further their own interests.
It's not euro that is loosing it's value by the hour... isn't it ;)
No, it is the Ukrainian toilet paper currency. Troops use it to wipe their asses in the Donetsk front.
Ukraine is a small country & economy, it's not currencey that is important as euro - isn't it? :)
Ahhh I see you don't like the truth ;) You know it's ruble which is loosing it's values...
This article is worth reading! Even if just to remind ourselves of this little fact. On Greek and Spanish devaluations in the pre EU era. " Of course Germany hated this to an extent, since it made it harder for its industries to compete against Greek and Italian companies. Which may by the way well be a mostly hidden reason for them to push the eurozone on the Mediterranean. Devaluation still worked for many years, though, and as we presently find, it was the only thing that could have worked."
and this: "There’s nothing any kind of stimulus by the ECB or EU can do about that. Unless they directly tax the Germans and Dutch and Finns with the stated purpose of handing what they raise directly to the Greeks."
Fatal Flaws! Germany is using the EU to become hegemon of Europe without a war!
By loaning all these German Euros to everybody who wanted to borrow them (in combination with their own austersity and good quality stuff), Germany became boss in Europe. Then the crisis killed off competition to Germany elsewhere in Europe. But all this and the austerity that they are pushing down everybody else's throats is hitting them back. Cause nobody in Europe has the money to buy 'Made in Germany' anymore.
DUH.
All hindsight is 20/20.
The OP fails to point out the collusion with GS that allowed Greece into the EU.
sorry DP.
I have friends in Germany, who operate in upper management of German Chemical Giants. Also friends in the Education sector, that trains German workers to hit the ground running for whatever industry they enter. They tell me that this statement below is "ALL TOO TRUE".
" Northern Europeans see their lifestyles being cramped from many sides in the ongoing crisis, and they would not accept more being taken from them to be handed to Greece. Even if 50%+ of young Greeks have no jobs, and over 40% of Greek children grow up in poverty. That’s not how the union was explained to them. And they would not have agreed if it had been."
Not surprising, but a useful insight nevertheless. Thanks.
I live in Germany. A rural area in the middle of the country. My observation is that most of the people do OK, but aren't luxurious.
They tend to buy stuff that lasts, so expensive is OK because they it expect to last forever. They'll save up for it.
They tend to have a 'thing' for something, like a hobby, and will concentrate on that and spend their money on their thing, rather than a broad spectrum of stuff.
There's also less home ownership than the US. Those without homes spend more on their 'things', those with put a lot into their homes.
They get taxed a lot, but for the most part see some kind of return for it. Healthcare, too, is expensive (I have to pay 15% of my income, which includes my family if I needed to), but it's pretty hassle-free if something happens. No deductibles, etc., other than a 10 Euro a day hospital stay fee if you earn above a certain level, and, actually, they just did away with a 5 Euro (I think) per quarter office visit fee because the insurance companies were doing OK and didn't need it.
Vacations are big, too, they all go somewhere for a week or so a couple times a year. But they aren't extremely expensive.
Basically they don't really have that much money to give away to other people for nothing, and don't want to They use it for stuff to make the sucky weather and unfriendliness more bearable.
Watch out when you go to Brussels. I pulled out of a parking lot...never went 200 ft. and got a $160 euro fine.In cash....they do not give change and will only communicate in Flemish or French.When War breaks out, after the help was given them in the past, I will think twice before coming to their aid. As a matter of fact I will tell this story over and over .Their Old buildings are run down....They can't afford to repair them and the little statue of a boy peeing, (their claim to Fame) is about a foot and a half. Hardly worth any effort.The Bars are filled with Men....Never seen this before, unless I accidentily went in to a Bar that was by accident.
I've seen nearby that the Police or Parking Police have credit card readers... Seems like pretty expensive if you park in a residential zone. Like $110 Euros. So apparently you have certain police with credit card readers.
Like police have made serious inroads into Banking.
Britain and Sweden, the two European nations I have the most stake in family wise, should both get the fuck out of the gad damned fucking EU hell hole. Both nations were far better off before they entered the Communist Dictatorship of Brussels, and their Crony Capitalist Manipulated Fake economies. Social communism and economic crony capitalism, and a foreign policy that is a total slave of USA commands and direct orders.
Both nations I knew well as a young man before the fucking EU tempted them in. Now as an older guy, I see them being fucking destroyed by Brussels corruption and their evil communist social polices. The worst form of Communism rules the Brussels social and immigration officials and laws. Evil and racist.
I'm not much informed. But Germany has this Triparte System which is a marriage between Labor, Corporations (commerce) and Government. Where Spain never fully industrialized and which was Fascist with support of US .gov after WWII.
So we see the Rothschild influence to bottle up investment in UK, France, Spain, Greece, Italy... with a few banking countries like Luxembourg.
Germany just would not let the Bankers cut out the workers and now has favorable conditions for starting businesses.
Switzerland seems like old Europe Banking Center, so put that where you will. Austria, not sure.
UK never re-industrialized after WWI... as far as I know.
Banker Control is what the EU seems to be.
didn't you just state in a different thread on this article that Germany is in the EU for hegemonistic purposes, and profiting most from it? and now you are advising Germany to leave the EU?
further, you constantly mix up two clubs, the EU and the eurozone. That's a difference between 28 and 18 countries
and you don't seem to know much about the "Brussels social and immigration laws"
all in all, the EU and the EZ seem to be an excellent ranting target. too bad you aren't interested in facts and detalis about them
Yeah, remind me next week to buy another "luxury dutch car" that I love so...
The North should just take a step back and relax a bit more.
The difference in productivity between Catalonia and the rest of Spain is precisely why the Catalans are insisting on autonomy. And although they haven't brought it up yet my bet is that they will also vote to seceed from the EU and the Euro.
It is also the core reason why the productive states/regions like Texas and Washington/Oregon should leave the Union and issue their own currencies.
Ultimately there will be another "War Between The States" in the US, with the states that could not exist without Federal government re-distribution of wealth at war with the states whose wealth is being confiscated and re-distributed and who want to see that criminal conspiracy ended.
At its heart the issue will once again be about slavery, but this time it will be about a different kind of slavery - the enslavement of the American people by the Federal government - or "Massa" as it should properly be called. "Massa" is employing some of the oldest, most effective principles of keeping people under control.
1. Divide and conquer. Play people off against each other. Either exploit natural hatred or create the equivalent.
2. Use paid informants - and in the case of the US, overwhelming technology - to find and neutralize potential opposition.
3. Use a combination of taxes and military/police force to ensure that resistance is futile.
4. Squash dissent and anything that even faintly resembles dissent immediately and lethally - no exceptions.
americanspirit, your's is one of the few really worthwhile comments to this article. but it is full of items of projection, too
from a Catalan perspective, central government is not in Brussels. it's in Madrid. the "federales" are the Spanish government
remember that there is no EU army or police. but there is a Spanish Army and there are Spanish federal police units
the biggest reason for the request for independence is not productivity, it's language (and so culture), and of course history. productivity just "helps"
further, most of those independentists favour the EU and the EZ because they are Nation's clubs that makes sense for... small Nations
the argument for independence is made stronger because there are international clubs like the EU and the EZ, or even NATO
"remember that there is no EU army or police"
Wrong.
There is an European Police, the EuroGendFor.
Here is the "official" wikipedia entry ( http://en.wikipedia.org/w/index.php?title=European_Gendarmerie_Force&red... ), but make some research by yourself on its level of "immunity" from the European national governments and judicial systems, and you will find some interesting data on its REAL and REALLY DISTURBING powers...
is this a valid argument? the Euro Gendarmerie is a standy outfit, and more a pure military police then anything else, and part of a military contingency planning
not "door breaking" "federales", nor an FBI, nor a CIA, nor a police force you see on the street
you could as quote the other wikipedia article about the euro military, an embrionic contingency outfit, too
there are lots of such "embrionic" state things in the EU. fact is, if someone is going to arrest me in the EU, it will be a national police force, which in Spain traduces in a Spanish policemen
"Ancestral voices prophesying war"
See
https://www.academia.edu/8816411/Rogue_Swan_EU_disintegration
Europe has been there at least two times
Bronze age
Roman Empire .
EU seems more like the Holy Roman Empire .
Premature
See also http://andreswhy.blogspot.com/2014/05/belarus-and-european-instability.h...
Catalonia wants to become more mercantile.
This is not independence.
They want to love bomb the euro.
I have seen this false independence meme running through Scottish nationalists also.
Need I say - look no further then Ireland.
The Darling mercantilist model for Europe until it went Kaput.
As I keep saying there is no internal economy in Ireland.
it does not exist.
Its a extreme conduit.
A sort of SPV for capitalists.
Fidouchebags in Bruxelles: Fuck the EU, IMF BIS and Central Banksters everywhere!
http://www.maxkeiser.com/2014/11/kr677-keiser-report-copyright-cartels/comment-page-2/#comment-808541