EPTEuropean Politico-economics QA Mega-thread - Page 203
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Integra
Sweden5626 Posts
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Evil_Sheep
Canada902 Posts
On July 14 2015 08:40 lord_nibbler wrote: It is just not true, what you say, please stop pretending like there is universal consensus on your personal opinion! I did not claim there is a universal consensus. Only that I have seen in the past 24 hrs, even many formerly pro-German cheerleaders, from completely different backgrounds, start to express reservations or outright criticism of how far the German leadership have gone. Most notably the leaders of France and Italy, who have until now parroted everything Germany says, have come to the point of telling Germany (allegedly), enough is enough. Or the Economist, which has largely gone along with the "punish Greece" narrative, leading with a headline of Greece "humiliated." Or the BBC's economics editor, in the same camp: "The widespread perception that Berlin and Brussels have put fiscal rectitude, the importance of a country paying its debts, above humanitarian concern for a nation's plight, or even the long-term sustainability of the euro itself, will reap a bitter future harvest for the eurozone and the wider EU." Or across the Atlantic, where neutral observers in North America have expressed their concern over the direction of the crisis, with the New York Times running an editorial calling on Europe to relent on Greece, noting: "Under the policies currently demanded by the eurozone leaders, the Greeks will find their suffering worse and their prospects unchanged." In reaction to the latest deal, one columnist writes: "On Monday, there was yet another deal. But this time it is one that pushes Greece into the abyss." Even in Germany there has been dissent. Der Spiegel: "A lot of damage has been done. Merkel and Schäuble have, with their staunch rhetoric of austerity, managed to turn half of Europe against Germany. Even the key partnership between Paris and Berlin seemed close to breaking point this weekend. A pure horror scenario for unified Europe." | ||
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Toadesstern
Germany16350 Posts
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zlefin
United States7689 Posts
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Banaora
Germany234 Posts
On July 14 2015 13:21 zlefin wrote: Is there a link to what the current proposed deal is? Googling around all I get is people commenting on the deal, even in newspapers, but no links to the actual terms of the deal itself. I need to do my own assessment of it; way too many idiotic editorials out there. Here you go http://www.nytimes.com/interactive/2015/07/13/world/europe/document-text-of-the-euro-summit-statement-on-greece.html?_r=1 | ||
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zlefin
United States7689 Posts
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InVerno
258 Posts
On July 14 2015 06:23 cLutZ wrote: I wasn't comparing the ability to bond them, I was comparing the protections provided to citizens because inflation is not an option for the local governments. We all know its less of a culture shock going from Houston to San Fransisco than Lisbon to Berlin. If I was going to make a hamfisted America analogy I would compare Greece to Illinois and Germany to New York. I read what you wrote, and aside from the fact isn't the first time i read these analogies with USA and maybe i'm just very bored with them, (heck, a big chunk of EU propaganda it's about making the "United States of Europe") and aside from the fact I also believe what WhiteDog wrote about inflation, there's just one simple question i wanted to inspire in you. Any economic tool, inflation or whatsoever, will ever work without a working political union settled before? I give you an example, where I live there was a theory sold at the popolation before Euro, "our industries are too small, but joining the Euro they'll have to jump higher and they will start fusions, at the end we will have bigger industries". Nice and clear, and this guy talking wasn't only a prime minister but also a european commission president.What happened next? Instead of "jumping" industries have been delocalized, sold, and eventually closed. Not a single "big industry" has been created, they indeed jumped, through national boundaries of different coutries trying to attract industries by huge taxation\regulation differences coordinated by none in reality. A normal economic fact you would say, true, but nothing similar to a federation i would say, true also. | ||
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maartendq
Belgium3115 Posts
On July 14 2015 11:44 Evil_Sheep wrote: I did not claim there is a universal consensus. Only that I have seen in the past 24 hrs, even many formerly pro-German cheerleaders, from completely different backgrounds, start to express reservations or outright criticism of how far the German leadership have gone. Most notably the leaders of France and Italy, who have until now parroted everything Germany says, have come to the point of telling Germany (allegedly), enough is enough. Or the Economist, which has largely gone along with the "punish Greece" narrative, leading with a headline of Greece "humiliated." Or the BBC's economics editor, in the same camp: "The widespread perception that Berlin and Brussels have put fiscal rectitude, the importance of a country paying its debts, above humanitarian concern for a nation's plight, or even the long-term sustainability of the euro itself, will reap a bitter future harvest for the eurozone and the wider EU." Or across the Atlantic, where neutral observers in North America have expressed their concern over the direction of the crisis, with the New York Times running an editorial calling on Europe to relent on Greece, noting: "Under the policies currently demanded by the eurozone leaders, the Greeks will find their suffering worse and their prospects unchanged." In reaction to the latest deal, one columnist writes: "On Monday, there was yet another deal. But this time it is one that pushes Greece into the abyss." Even in Germany there has been dissent. Der Spiegel: "A lot of damage has been done. Merkel and Schäuble have, with their staunch rhetoric of austerity, managed to turn half of Europe against Germany. Even the key partnership between Paris and Berlin seemed close to breaking point this weekend. A pure horror scenario for unified Europe." I guess the reason this deal turned out the way it did is the complete and utter lack of trust in Greece politicians to get the job done themselves. Tsipras' and Varoufakis' grandstanding the past five months definitely didn't help either. On top of that the people making the decision whether or not to be more lenient are accountable to their voters as well, and a large part of them does not want to see more money disappear in the black hole that is Greece, or at least not without the assurance that Greece can sustain itself and will not be back for another couple of billions every couple of years. The opinions of economists don't matter anymore at this point. Politics will always trump economics. | ||
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cLutZ
United States19574 Posts
On July 14 2015 15:39 InVerno wrote: I read what you wrote, and aside from the fact isn't the first time i read these analogies with USA and maybe i'm just very bored with them, (heck, a big chunk of EU propaganda it's about making the "United States of Europe") and aside from the fact I also believe what WhiteDog wrote about inflation, there's just one simple question i wanted to inspire in you. Any economic tool, inflation or whatsoever, will ever work without a working political union settled before? I give you an example, where I live there was a theory sold at the popolation before Euro, "our industries are too small, but joining the Euro they'll have to jump higher and they will start fusions, at the end we will have bigger industries". Nice and clear, and this guy talking wasn't only a prime minister but also a european commission president.What happened next? Instead of "jumping" industries have been delocalized, sold, and eventually closed. Not a single "big industry" has been created, they indeed jumped, through national boundaries of different coutries trying to attract industries by huge taxation\regulation differences coordinated by none in reality. A normal economic fact you would say, true, but nothing similar to a federation i would say, true also. What I think you are saying is first can a monetary union work without a political union? Basically, could the economy work on a worldwide gold standard, or bitcoin, or something similar where the money supply is dictated by a formula? I would argue yes, because that is how most of the world already works aside from national governments. Governments are an issue and I don't think I can hazard to know if it would work, particularly short term. As for the industries issue, a monetary union doesn't fix that in the least. If you are not a competitive firm you will lose market share and eventually go out of business. Perhaps that was sold as propaganda for the union, but its just fundamentally untrue. | ||
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Evil_Sheep
Canada902 Posts
On July 14 2015 16:19 maartendq wrote: The opinions of economists don't matter anymore at this point. Politics will always trump economics. Right, that's exactly the point. This is, fundamentally, an economic crisis. As long as the governments of the EU continue to ignore the laws of economics, this economic crisis will go on and on and on, and the costs will continue to be paid by all Europeans. Germans, French, Dutch, Belgians, Latvians, and especially Greeks, will continue to put their money into this black hole, and they will never be able to get it back. And the actual price Europe is paying is far, far greater than the relatively tiny amount that Greece owes. They are paying the ultimate price: the dream of a United Europe. This deal has solved nothing. This crisis is not over, it's far from over. But even if one doesn't understand a thing about economics, surely one can understand that destroying a country's economy makes it impossible for that country to pay back its debts. | ||
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rezoacken
Canada2719 Posts
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WhiteDog
France8650 Posts
On July 14 2015 16:27 cLutZ wrote: What I think you are saying is first can a monetary union work without a political union? Basically, could the economy work on a worldwide gold standard, or bitcoin, or something similar where the money supply is dictated by a formula? I would argue yes, because that is how most of the world already works aside from national governments. Governments are an issue and I don't think I can hazard to know if it would work, particularly short term. As for the industries issue, a monetary union doesn't fix that in the least. If you are not a competitive firm you will lose market share and eventually go out of business. Perhaps that was sold as propaganda for the union, but its just fundamentally untrue. Here is the main problem with your narrative : you undervalue the role of a currency in an economy. 1) a currency area can't work without some kind of mecanism for fiscal adjustment ; 2) in a common currency area with no fiscal redistribution from competitive to least competitive, the inequality in competitivity tend to worsen due to the inability of the exchange rate to adjust themself. It lead to what InVerno describe, delocalization, because firms research competitivity and the cost for delocalization are lessen. It happened in the whole europe with an increased specialisation throughout Europe (Germany in industry, France in services, etc.). Just for the lol, I'm linking an old article from 1997 about the euro (everybody laugh about it then, what about now I wonder) - it's a fun read, I only link the intro (he even forsee a confration between Russia and Europe about Ukraine) : EMU and International Conflict To most Americans, European economic and monetary union seems like an obscure financial undertaking of no relevance to the United States. That perception is far from correct. If EMU does come into existence, as now seems increasingly likely, it will change the political character of Europe in ways that could lead to conflicts in Europe and confrontations with the United States. The immediate effects of EMU would be to replace the individual national currencies of the participating countries in 2002 with a single currency, the euro, and to shift responsibility for monetary policy from the national central banks to a new European Central Bank (ECB). But the more fundamental long-term effect of adopting a single currency would be the creation of a political union, a European federal state with responsibility for a Europe-wide foreign and security policy as well as for what are now domestic economic and social policies. While the individual governments and key political figures differ in their reasons for wanting a political union, there is no doubt that the real rationale for EMU is political and not economic. [b]Indeed, the adverse economic effects of a single currency on unemployment and inflation would outweigh any gains from facilitating trade and capital flows among the EMU members. The 1992 Maastricht Treaty that created the EMU calls explicitly for the evolution to a future political union. But even without that specific treaty language, the shift to a single currency would be a dramatic and irreversible step toward that goal. There is no sizable country anywhere in the world that does not have its own currency. A national currency is both a symbol of sovereignty and the key to the pursuit of an independent monetary and budget policy. The tentative decision of the 15 European Union (EU) member states (with the exceptions of Denmark and the United Kingdom), embodied in the Maastricht Treaty, to abandon their national currencies for the euro is therefore a decision of fundamental political significance. For many Europeans, reaching back to Jean Monnet and his contemporaries immediately after World War II, a political union of European nations is conceived of as a way of reducing the risk of another intra-European war among the individual nation-states. But the attempt to manage a monetary union and the subsequent development of a political union are more likely to have the opposite effect. Instead of increasing intra-European harmony and global peace, the shift to EMU and the political integration that would follow it would be more likely to lead to increased conflicts within Europe and between Europe and the United States.[...] http://www.nber.org/feldstein/fa1197.html | ||
zatic
Zurich15362 Posts
On July 14 2015 11:44 Evil_Sheep wrote: Even in Germany there has been dissent. Der Spiegel: "A lot of damage has been done. Merkel and Schäuble have, with their staunch rhetoric of austerity, managed to turn half of Europe against Germany. Even the key partnership between Paris and Berlin seemed close to breaking point this weekend. A pure horror scenario for unified Europe." Germany's press is much more diverse than what is sometimes suggested here. If we leave entertainment trash like Bild out, of the big titles only the FAZ is usually harldline on Merkel-Schaeuble course no matter what. The rest of the media landscape fans out across the political spectrum, also in their discussion of the Greek situation. From today: THÜRINGISCHE LANDESZEITUNG towards the institutions / the German administration: "... delay in filing for insolvency instead of strong crisis management. The European leaders have once again bought time with the money of European tax payers, without solving the problem." FRANKFURTER RUNDSCHAU: "The European leaders decided to continue the failed policy of 'rescue'. A policy that relies on an ideology of dumb austerity and the prevalence of national interest over the European idea. [...] Under the cynical title 'rescue' loans in the billions are payed for by ever more loans in the billions. DIE RHEINPFALZ: "The democratically legitimate government of Greece will not be able to pass relevant legislation without the OK from the troika. [...] The institutions rule legislation, the Greek government is only their executioner, parliament is made obsolete". MITTELBAYERISCHEN ZEITUNG: "The final statement reads like a disempowerment of democracy in Greece. [...] The list of measures reads like a IMF program from the 60s: privatization, cutting of welfare, 'rigorous scrutiny' of unions and employee protection." HANDELSBLATT: "Up to 47.5 billions are supposed to be mobilized for investments now, but this is not a success yet [...] When if doubt, the other European leaders won't want too much value added elsewhere. This is not a new beginning for Greece. This is emergency repair." NEUE OSNABRÜCKER ZEITUNG: "No reason to celebrate, but at least reason to exhale. The Grexit has been prevented for now, that is the good news. A Greek default won't happen, at least not for now. Now the parliaments have to ratify, then we can go on." DIE WELT: "In the past Greek administrations have delayed reform, or not done any at all. Now the current administration is supposed to push through half a dozen reforms in record time. [..] The Greek voters are now served not only what a majority voted against - but much more in fact." LAUSITZER RUNDSCHAU: "It is not unlikely that in three years Greek is where it stands today. Except for then there will be an alternative - Grexit, thanks to Schaeuble. Next time it'll be plan B. Tsipras pays more for last night's agreement than before the referendum. He has to explain that to the Greeks, not to the creditors. Germans are the wrong addressee for the angry protests from the Greek press. Aside from promoting the agreed upon reforms, Tsipras should discourage the polemic against the saviors. Otherwise the agreement won't even make it past the very first parliament." MANNHEIMER MORGEN: Merkel has pushed through German interest with vigor, but not recklessly. Anything else would have been fatal, as the Bundestag still has to ratify the agreement. FRANKFURTER ALLGEMEINE ZEITUNG: "Whether the pros of the agreement outweigh the cons, only future will tell. Merkel and the other heads of government have, after long struggle, decided for the lesser risk and the lesser of evils. What ever you might think about the decision: Let's hope for Europe they were right. DER SPIEGEL: "Clean sweep by the creditors. If you desperately want to, you might say Merkel has won the struggle over a solution for Greece. But in reality everyone has lost." Die ZEIT: "If Greece is supposed to have any shot at reforming, austerity has to be relaxed and the primary surplus targets be lowered. This would mean that the creditors will have to write off large parts of the debts - and this is what Germany is unwilling to do. This means this agreement will also fail and the next crisis is only a matter of time" | ||
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InVerno
258 Posts
On July 14 2015 16:27 cLutZ wrote: What I think you are saying is first can a monetary union work without a political union? Basically, could the economy work on a worldwide gold standard, or bitcoin, or something similar where the money supply is dictated by a formula? I would argue yes, because that is how most of the world already works aside from national governments. Governments are an issue and I don't think I can hazard to know if it would work, particularly short term. As for the industries issue, a monetary union doesn't fix that in the least. If you are not a competitive firm you will lose market share and eventually go out of business. Perhaps that was sold as propaganda for the union, but its just fundamentally untrue. Indeed a monetary union without political union can work, even sex between seals and penguins sometimes works, the problem is *how* it works, who has the upper hand in it, and as a consequence if it's sustainable in a long term. As i wrote, i was expecting your answer to be "it's an economic fact, deal with it" .. got it, let's see where these "economic facts" will lead. | ||
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sneirac
Germany3464 Posts
On July 14 2015 20:31 zatic wrote: + Show Spoiler + On July 14 2015 11:44 Evil_Sheep wrote: Even in Germany there has been dissent. Der Spiegel: "A lot of damage has been done. Merkel and Schäuble have, with their staunch rhetoric of austerity, managed to turn half of Europe against Germany. Even the key partnership between Paris and Berlin seemed close to breaking point this weekend. A pure horror scenario for unified Europe." Germany's press is much more diverse than what is sometimes suggested here. If we leave entertainment trash like Bild out, of the big titles only the FAZ is usually harldline on Merkel-Schaeuble course no matter what. The rest of the media landscape fans out across the political spectrum, also in their discussion of the Greek situation. From today: THÜRINGISCHE LANDESZEITUNG towards the institutions / the German administration: "... delay in filing for insolvency instead of strong crisis management. The European leaders have once again bought time with the money of European tax payers, without solving the problem." FRANKFURTER RUNDSCHAU: "The European leaders decided to continue the failed policy of 'rescue'. A policy that relies on an ideology of dumb austerity and the prevalence of national interest over the European idea. [...] Under the cynical title 'rescue' loans in the billions are payed for by ever more loans in the billions. DIE RHEINPFALZ: "The democratically legitimate government of Greece will not be able to pass relevant legislation without the OK from the troika. [...] The institutions rule legislation, the Greek government is only their executioner, parliament is made obsolete". MITTELBAYERISCHEN ZEITUNG: "The final statement reads like a disempowerment of democracy in Greece. [...] The list of measures reads like a IMF program from the 60s: privatization, cutting of welfare, 'rigorous scrutiny' of unions and employee protection." HANDELSBLATT: "Up to 47.5 billions are supposed to be mobilized for investments now, but this is not a success yet [...] When if doubt, the other European leaders won't want too much value added elsewhere. This is not a new beginning for Greece. This is emergency repair." NEUE OSNABRÜCKER ZEITUNG: "No reason to celebrate, but at least reason to exhale. The Grexit has been prevented for now, that is the good news. A Greek default won't happen, at least not for now. Now the parliaments have to ratify, then we can go on." DIE WELT: "In the past Greek administrations have delayed reform, or not done any at all. Now the current administration is supposed to push through half a dozen reforms in record time. [..] The Greek voters are now served not only what a majority voted against - but much more in fact." LAUSITZER RUNDSCHAU: "It is not unlikely that in three years Greek is where it stands today. Except for then there will be an alternative - Grexit, thanks to Schaeuble. Next time it'll be plan B. Tsipras pays more for last night's agreement than before the referendum. He has to explain that to the Greeks, not to the creditors. Germans are the wrong addressee for the angry protests from the Greek press. Aside from promoting the agreed upon reforms, Tsipras should discourage the polemic against the saviors. Otherwise the agreement won't even make it past the very first parliament." MANNHEIMER MORGEN: Merkel has pushed through German interest with vigor, but not recklessly. Anything else would have been fatal, as the Bundestag still has to ratify the agreement. FRANKFURTER ALLGEMEINE ZEITUNG: "Whether the pros of the agreement outweigh the cons, only future will tell. Merkel and the other heads of government have, after long struggle, decided for the lesser risk and the lesser of evils. What ever you might think about the decision: Let's hope for Europe they were right. DER SPIEGEL: "Clean sweep by the creditors. If you desperately want to, you might say Merkel has won the struggle over a solution for Greece. But in reality everyone has lost." Die ZEIT: "If Greece is supposed to have any shot at reforming, austerity has to be relaxed and the primary surplus targets be lowered. This would mean that the creditors will have to write off large parts of the debts - and this is what Germany is unwilling to do. This means this agreement will also fail and the next crisis is only a matter of time" True, but there is a reason the Bild is used as the mainstream opinion, daily readership: ![[image loading]](http://i.imgur.com/dAfyiuX.jpg) Statista | ||
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Simberto
Germany11752 Posts
Who are these millions of people that read it? They must populate a culture far different from anything i know. Maybe this also leads to my perception of people that tends to not fit well with stuff that happens in the world. I always assume that most people are kind of similar to those i know, but there seems to be a gigantic difference between milieus. | ||
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Gorsameth
Netherlands22102 Posts
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mahrgell
Germany3943 Posts
And personally, I would have actually thought that the deal proposed by Greece this weekend was sufficient (and the first reasonable offer from Greece in half a year...) and felt that Schäuble overdid it. But I'm really growing tired of that blind Antigerman nonsense, pretending everytime that Germany would be all alone fighting against entire Europe... When in reality there were a couple of nations with much more extreme opinions on the Greece question. And when the German course was indeed backed by the majority of nations/governments. And that course was far more Greek friendly than what most European populations wanted. | ||
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Alcathous
Netherlands219 Posts
With soon UK gone, the EU is defacto a German Empire. Until we get one citizen, one vote for an EU government. | ||
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maartendq
Belgium3115 Posts
On July 14 2015 22:20 Alcathous wrote: Germany has no opposition. That is the problem. France and Italy are too weak to oppose Germany and all other countries already follow or are irrelevant. With soon UK gone, the EU is defacto a German Empire. Until we get one citizen, one vote for an EU government. You mean like the European Parliamentary elections? | ||
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