The future of the Euro and EU.

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Originally Posted by Starter

I think he perhaps mis spoke with the term "democratic". The free market is not democratic in that all have equal representation. It is however "natural" as in survival of the fittest. And that's a good thing because, in the long term, all are better off.

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in the long term is an appropriate qualifier. In the short term a switch from the regulation and welfare to the market and personal responsibility can sink many people. That's why I see where many posters on this forum are coming from in their reasoning. However, the well-being of people is the last excuse EU politicians can use in their own support. EU is by far the richest part of the world and all the money spent for welfare and regulators' salaries could be used for cheap loans to small and medium businesses and re-training of workforce in accordance with the demands of the market. But that would leave Brussels folks far behind...

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Originally Posted by ioan

I thought I did mention above that Germany alone had already exported goods worth over 1 trillion Euros this year alone.

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Yes you did, its all you go on about when you try to explain why the credit rating downgrade isn't rational.

What's Germany's structural deficit ioan? Tell me what steps Germany has taken to cut government spending?

What do you think will happen to that trillion Euro export figure if the Euro collapses and all of Europe (not just the Eurozone) goes into recession again? What do you think will happen to German government deficit when they start bailing out not just the PIGS but the German banks that lent to them?

This is all in addition to what the Germans have already spent on bailouts for the PIGS already.

According to you this has no effect on Germany's creditworthiness. Unfortunately the markets think otherwise. You might find that if your future income was in doubt and you increased borrowing you might find your credit rating dropping too.

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Originally Posted by ioan

If you add the other countries which DO make a profit in Europe I am fairly sure that the 1 trillion is not a problem, and let's be honest no one say this money has to be put tomorrow in a safe deposit, they only need to say they do it, and it's job done.

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Yes it should be that easy and that would calm the markets. If you'd kept up with the news or this thread you'd have realised that Merkel has opposed this and continues to oppose it.

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Originally Posted by ioan

So, based on what exactly can't the Euro countries support their debts?

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Unfortunately noone anywhere is saying that the Euro countries can't support their debts. Not on this thread, not in the markets. What the credit rating agencies are saying is that the likelihood of the core Euro states defaulting has gone from nothing to tiny. You do understand how the rating system works right?

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Originally Posted by ioan

I'm not sure why we are trying to base the discussion on how Merkel's advisers did eat and drink at meetings?
Should they hang themselves? Would they do a better work if their were all desperate, drinking one coffee after the other?

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I thought you'd focus in on that line. Didn't you read about Merkel's failure to take action or even define what the problem facing the Euro right now is? Isn't that bit important?

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Originally Posted by ioan

And I think I did already mention that Germany wants to get something in return of their support to the Euro, they want to be able to have a say in how others are using the currency that they are upholding, and I can't fault them for this.

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That is natural, but claiming that lack of fiscal responsibility is the only cause for the current crisis indicates a lack of understanding of the problem.

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Originally Posted by ioan

Why would Merkel be the leader of the EU?

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You tell me, you're the one going on about how bulletproof the German economy is.

Arguing economics with ioan is akin to trying to clap one-handed. The blind faith he offers, failing almost completely to recognise any facts that are contrary to his opinion, completely skews his posts in a way not seen since he blindly followed Ferrari.

The markets responded positivity to the initiative from France and Germany to basically rewrite the EU Treaty and immediately the cost of borrowing for risky countries like Italy fell. What will happen to those rates when these proposed changes are watered down or don't materialise because France and Germany decided to announce this collaboration without including the other Countries that need to buy into this.

I can't remember how long I've been saying this now but the Eurozone is doomed in it's current guise, no matter what Merkel wants. The Southern European countries need to be cut lose and individual Countries manage their own affairs, succeeding or failing on their merit.

Good point, Knock-on. The way I see it the economic interests of Germany do not quite go along with its political ambitions. I am very much curious to see how Murky Angie handles the situation.

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Originally Posted by Rudy Tamasz

Good point, Knock-on. The way I see it the economic interests of Germany do not quite go along with its political ambitions. I am very much curious to see how Murky Angie handles the situation.

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I think tomorrow may show up some disunity between member states in the Eurozone and chasms between other members of the EU. For a start, there are 27 members and not just 17 but lets look at just the Eurozone countries shall we.

It is no secret that Germany has long desired to have a centralized Europe with the ability to better control the whole region. If you ask me, Merkel is trying to push this through as a fait acompli with these proposals. Centralised budget control of Nation States from Brussles? You think you have civil unrest now? See what will happen when Greece, Spain, Italy, Portugal, Ireland etc suddenly have stringent austerity measured imposed by Germany- Sorry, I mean Brussles ;)

Then we have the non-Eurozone states that are obliged to join the Euro. Can you imagine them doing that? No, me neither.

Lastly, what of the EU Treaty. Merkel and her little Poodle figure they can make unilateral changes to the EU constitution with impunity and just bully it through. Crazy!

Just found this Janet and John guide to the high level position of the different countries. It's pretty accurate although things may change tomorrow because the PIIGS are hungry and want feeding well for selling out to Germany.

BBC News - EU nations and the euro: What they want

Talk about Legislate in haste, repent at leisure :s

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Originally Posted by Knock-on

It is no secret that Germany has long desired to have a centralized Europe with the ability to better control the whole region. If you ask me, Merkel is trying to push this through as a fait acompli with these proposals. Centralised budget control of Nation States from Brussles? You think you have civil unrest now? See what will happen when Greece, Spain, Italy, Portugal, Ireland etc suddenly have stringent austerity measured imposed by Germany- Sorry, I mean Brussles ;)

Lastly, what of the EU Treaty. Merkel and her little Poodle figure they can make unilateral changes to the EU constitution with impunity and just bully it through. Crazy!

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Actually I think its worse than that, I think the Germans genuinely haven't grasped what is the cause behind the loss of confidence by the markets and believe that inaction is the best course of action.

Merkel has shown repeatedly that she doesn't have a big vision of anything unlike her predecessors who ruled in equally pivotal times. Adenauer knew how he wanted Germany to rebuild itself. Kohl had a vision of Europe with France and Germany at its core. Merkel makes massive decisions on the hoof with domestic political concerns at heart.

If Merkel had been in charge in 1939 she'd have run a poll to see whether invading Poland would boost her party's chances in some local election before deciding to go for it.

Harmonising fiscal policy is great but we've done that before when the Euro was launched. Germany and France sniggered at Spain and Portugal, claiming they'd never stick to the terms set out. In the end Spain and Portugal stayed within their spending limits whilst the Germans and French were the ones who flouted it.

As for Cameron, as with every British PM before him he'll try and dictate proceedings whilst insisting that Britain does not involve itself in the Euro, and just like every British PM before him he'll be astonished as the rest of Europe tells him to keep his hands off.

I agree with most of that but Cameron has to get down and dirty on this. There is a agreement in place and if that is going to be modified, we need to be right on top of it or get dragged into this car crash because as sure as eggs is eggs, if it goes to a referendum, the British people will say non, nein and NO!

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Originally Posted by Knock-on

It is no secret that Germany has long desired to have a centralized Europe with the ability to better control the whole region.

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When you say 'Germany' in this context, what exactly do you mean?

I detect no great enthusiasm for what you describe amongst the German people.

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Originally Posted by Malbec

Merkel has shown repeatedly that she doesn't have a big vision of anything unlike her predecessors who ruled in equally pivotal times.

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Living in Germany, I find the portrayal of Merkel in the UK, not least by commentators who ought to know better, as some form of 'iron lady' as utterly laughable. She is essentially a leader who has shown little other than indecisiveness, much aided by a variously troubled, divided opposition.