The eurozone is in bad need of an undertaker
http://www.telegraph.co.uk/finance/c...ndertaker.html
The eurozone is in bad need of an undertaker
- The EU’s Franco-German "Directoire" and the European Central Bank have between them ruled out all plausible solutions to the eurozone’s debt crisis.
Quote:
Originally Posted by Telegraph
There will be no Eurobond, no increases in the EU’s €440bn (£368bn) rescue fund, and no mass purchases of Spanish and Italian bonds by the ECB. Nothing. The system is politically and constitutionally paralysed. Spain and Portugal will be left nakedly exposed before their funding crunch in January. It is entirely predictable that Angela Merkel and Nicolas Sarkozy would move so quickly to shoot down last week’s Eurobond proposal, issuing pre-emptive warning before this week’s EU summit that they will not accept “a bundling together of all Europe’s debts”. How can Germany or France agree lightly to plans that amount to an EU debt union, with a common treasury, tax system, and budget policy, the stuff of civil wars and revolutions over the ages? To do so is to dismantle the ancient nation states of Europe in all but name.
Even if Chancellor Merkel wished to take this course – and even if the Bundestag approved it – the scheme would still be torn to pieces by the German constitutional court unless legitimised by radical EU treaty changes, which would in turn take years, require referenda, and face populist revolt in half Europe. What the German people are being asked to do is to surrender fiscal sovereignty and pay open-ended transfers to Southern Europe, taking on a burden up to six times reunification with East Germany. “If we pool the debts of the countries in the south-west periphery of Europe, we are blighting our children’s future: the debt levels are astronomic,” said Hans-Werner Sinn, head of Germany IFO institute.
Any attempt to prop up the status quo will cement the current account imbalances of EMU’s North and South, to the detriment of both sides. “I doubt that the current leaders of Europe fully understand the economic implications of their decisions. They are repeating the mistakes that Germany made over reunification,” he told the Handelsblatt. Transfers to the East are still running at €60bn a year two decades after the fall of the Berlin Wall. There has been no meaningful East-West convergence for the last 15 years. To those who blithely argue that EMU is a good racket for German exporters because it locks in Germany’s competitive advantage, he retorts that a trade surplus is the flip side of a capital deficit. Germany has seen €1 trillion – or two thirds of its entire savings since 2002 – leak out to fund the EMU party, gutting investment at home. This is toxic for Germany too.
It is no surprise to eurosceptics that Europe should have reached this fateful point where leaders must choose between the twin traumas of EMU break-up or giving up their countries. Nor is it a surprise to an inner-core of schemers within the EU system, who have always calculated that they could exploit such a crisis to catalyse political union.
Well there we have it, game over it does appear - and sooner than we'd ever thought possible. The EU elite will try everything to hold their European Superstate together, but ultimtely that would now require the immediate creation of a centralised federal European Superstate in public view which is something that they've been trying to avoid since the end of the second world war.
All we need now is for Portugal and Spain to go under (not to mention Belgium and Italy) and it will be the end of this undemocratic monster which has caused nothing but misery for the people of Europe especially those in the poorer countries who saw prices surge when their national currencies were swapped for the monopoly currency that is the Euro. I say that though, but the German people also lost out - they were never even consulted on the topic.
Although sensible as ever, the Germans never destroyed their old currency the Deutschmark - it sits right now in vaults across Germany, just waiting for the order to replace the failed Euro. I remember the fools who launched the 'Britain join the Euro campaign' though (see below); how wrong they have been proven.
Of course these dangerous people still believe in joining the Euro;
So the question is, what do you think; should Britain ever contemplate joining the Euro?
