EU a Happy Family
Not.
Europe had a stable currency, backed by consistent, responsible, disciplined economic policies. It was called the Deutschmark. As part of the European Union fantasy, that was replaced by the Euro, which created a system of international socialist finance. Whenever the terms 'socialist' and 'finance' appear together, prepare yourself for the host of additional non sequiturs that are sure to follow.
Today's EU can be divided into two camps, the disciplined and responsible (France, Germany, Benelux countries) and the profligate and irresponsible (Portugal, Ireland, Italy, Greece, Spain -- abbreviated as PIIGS). All are yoked together at the common trough by the Euro. What could possibly go wrong?
Surely, the PIIGS didn't think that the EU magically would make them just as rich as, say, Germany, but without any need to become as financially responsible and economically productive as the Germans? It appears that they did think that.
Ireland has run up the largest per capita debt in the world. Greece's government debt is now 125% of GDP and climbing. The chances of that debt ever being paid are, of course, zero. Currency devaluation is not an option, because it's the Euro. Meanwhile, Greek unions are rioting against any plan to cut their benefits. German and French financial institutions now hold large amounts of Greek debt, so default is also not an option. Everybody's stuck, while the PIIGGS continue to run the tab and hit the beaches. Obama thinks the US has much to learn from Europe. He's right.
German voters were strongly against the abandonment of the Deutschmark. But the EU is run by bureaucratic mandarins in Brussels, with voters back in the home country counting for very little. Now the Germans are discovering that they may "have to retire at 69 rather than 67 to pay for Greek workers striking against proposals to increase their retirement age from 61 to 63." Sweet!
For a good summary of the situation see: http://weeklystandard.com/articles/do-mention-war
Byron
Europe had a stable currency, backed by consistent, responsible, disciplined economic policies. It was called the Deutschmark. As part of the European Union fantasy, that was replaced by the Euro, which created a system of international socialist finance. Whenever the terms 'socialist' and 'finance' appear together, prepare yourself for the host of additional non sequiturs that are sure to follow.
Today's EU can be divided into two camps, the disciplined and responsible (France, Germany, Benelux countries) and the profligate and irresponsible (Portugal, Ireland, Italy, Greece, Spain -- abbreviated as PIIGS). All are yoked together at the common trough by the Euro. What could possibly go wrong?
Surely, the PIIGS didn't think that the EU magically would make them just as rich as, say, Germany, but without any need to become as financially responsible and economically productive as the Germans? It appears that they did think that.
Ireland has run up the largest per capita debt in the world. Greece's government debt is now 125% of GDP and climbing. The chances of that debt ever being paid are, of course, zero. Currency devaluation is not an option, because it's the Euro. Meanwhile, Greek unions are rioting against any plan to cut their benefits. German and French financial institutions now hold large amounts of Greek debt, so default is also not an option. Everybody's stuck, while the PIIGGS continue to run the tab and hit the beaches. Obama thinks the US has much to learn from Europe. He's right.
German voters were strongly against the abandonment of the Deutschmark. But the EU is run by bureaucratic mandarins in Brussels, with voters back in the home country counting for very little. Now the Germans are discovering that they may "have to retire at 69 rather than 67 to pay for Greek workers striking against proposals to increase their retirement age from 61 to 63." Sweet!
For a good summary of the situation see: http://weeklystandard.com/articles/do-mention-war
Byron
posted by Byron | Saturday, March 06, 2010
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