Should Germany ditch the Eurozone?

[Boomhauer]

Here's a good piece on Monday from NPR.org http://www.npr.org/2011/08/15/139650488/germans-debate-the-cost-of-keeping-a-eurozone , but the basic jist is there are countires with sound finances in Europe, and there are free-spending socialist flunkies buried in debt to their eyeballs. To date, a Eurobank has been taking money from the sound (as well as America) to bail out, right off debt and reduce interest rates for the flunkies, but the citizens of the sound countries are growing weary now that that bill looks to at least triple.

One idea being floated is Eurobonds, in which all the nations debts would become one pile and one interest rate. For the flunkies, they'd be able to continue their obscene spending at lower rates, but the sound economies would get screwed with the lower, combined credit downgrade. Italy and other flunky states are fans of this idea. Germany has already said that won't happen unless Euro-wide fiscal policies with teeth are implemented so the Eurobond doesn't turn to junk bonds from the flunkies' spending approaches. The UK (outside the Euro, but still involved) agrees with Germany as do most financial analysts.

There's also been the issue of nations leaving the Euro. At first, it was thought the lowliest flunkies - Greece, Ireland, Portugal - could be kicked out, but now that Spain, Italy and France are close behind are faltering it seems more likely sound countries will leave rather than get drained by socialist flunkies. "Socialism works until they run out of other's money to spend."

So, here's the question -
- Should Germany and other sound economies keep funding socialist flunkies to wipe out everything?
- Should they bail, go back to their individual currencies and forget the failed One-Europe experiment?
- Should they form a new NorthernEuro - possibly inviting Britain, Sweden and others, using the Pound or Mark? ie N.Euro; Norway, Sweden, Finland, Britain, Belgium, Netherlands, Denmark, Luxembourg, Germany, Austria

[gyldenlove]

- Should they form a new NorthernEuro - possibly inviting Britain, Sweden and others, using the Pound or Mark? ie N.Euro; Norway, Sweden, Finland, Britain, Belgium, Netherlands, Denmark, Luxembourg, Germany, Austria<!-- / message --><!-- edit note -->

What dildo wrote that piece? Norway is not a member of the EU and would never go for a shared currency, Denmark, Sweden and UK are all outside the shared currency and voter feelings towards a shared currency are at an all time low. That leaves Finland, Belgium (who has no government), Holland, Luxembourgh and Austria, in order to pull out of the Euro they would almost certainly have to also leave the EU and Germany would certainly never do that.

There are only 2 real options:

1. EU establishes a financial government that controls and oversees all eurozone member countries to ensure unilateral budget constraints are being respected.

2. Austerity measures are passed and enforced on Mediterranian countries whose economies are in tatters until debt increase is controlled, assets can be liquidated and Germany can unload bonds.

[Fedaykin]

So, here's the question -
- Should Germany and other sound economies keep funding socialist flunkies to wipe out everything?
- Should they bail, go back to their individual currencies and forget the failed One-Europe experiment?
- Should they form a new NorthernEuro - possibly inviting Britain, Sweden and others, using the Pound or Mark? ie N.Euro; Norway, Sweden, Finland, Britain, Belgium, Netherlands, Denmark, Luxembourg, Germany, Austria


You do realize Germany is exactly the kind of economy you all say is terrible/socialist/communist/etc. right?, right? Public Health Care, large unions (25% of German workers are in a union), High income taxes (top marginal rates are around 45%, revenue-per-gdp of over 40%), high government spending ( over 50% of GDP), VAT taxes, high capital gains taxes ( 35%)

[Tombstone RJ]

I think Germany should invest in a huge army/air force/navy and goose step across europe, spreading that special German love we all know so well...

[Requiem]

Boomhauer fails again.

[Boomhauer]

The divide in both German and EU politics seems to be widening over the snowballing debt crisis. While the idea of Eurobonds is dead in the water -from public disgust, individual constitutional challenges and no Eurozone authority for such actions- German Chancellor Merkel and France continue to push the idea of pouring money into endless pits.

The Euro bailout fund is now rapidly diminishing - since it's purshasing over a dozen $billion in worthless Spanish/Italian assets per week in attempt to lower their borrowing costs, similar to Bernake's QE programs - and Greece's second bailout approval is likely just around the corner. It should be noted the first Greek bailout failed, this one will likely fail, and similar approaches like Bernake's QE1&2 have also failed. There's not only no reason to think QE3 or Spanish/Italian knockoffs will be effective, but every indication that this 'economic crack' approach is an idiotic and catastrophic failure.

In contrast to the Merkel/French money party (which draws similarities to little-O/Berneke's actions, as well as Pelosi's money party 'stimulus'), the Finish Government secured a collateral arrangment ($1bil Euros) with Greece for their support. Austria, Netherlands, Slovakia and Slovenia all called for similar deals. Labor Minister and deputy chairwoman of Merkel's Christian Democrat party also called for collateral.

These calls have been strongly rebuffed by Merkel and kind. In turn, Finnish prime minister Jyrki Katainen said the country would abandone the Greek bailout if their collateral deal is overruled. "our parliament's decision that we demand it as a condition for us joining in".
http://www.telegraph.co.uk/finance/financialcrisis/8719095/Finland-threatens-to-withdraw-Greek-bailout-support.htmlhttp://www.bloomberg.com/news/2011-08-23/merkel-ally-von-der-leyen-calls-for-gold-as-bailout-collateral.html

[Boomhauer]

France announced today they won't reach expected growth targets and will make €11 billion (£9.7 billion) in cuts ahead of the 2012 budget. It is the last and largest socialist flunky in Europe to acknowledge their system is a failure and begin cutting back. There are also increasing signs that Germany is done wasting money on the failed and illegal Euro bailouts.

-snips- "German President Christian Wulff has accused the European Central Bank of violating its treaty mandate with the mass purchase of southern European bonds. ...

“I regard the huge buy-up of bonds of individual states by the ECB as legally and politically questionable. Article 123 of the Treaty on the EU’s workings prohibits the ECB from directly purchasing debt instruments, in order to safeguard the central bank’s independence,” he said. ... Mr Wulff said the ECB had gone “way beyond the bounds of their mandate” by purchasing €110bn (£96.6bn) of bonds, echoing widespread concerns in Germany that ECB intervention in the Italian and Spanish bond markets this month mark a dangerous escalation.

The blistering attack follows equally harsh words by the Bundesbank in its monthly report. The bank slammed the ECB’s bond purchases and also warned that the EU’s broader bail-out machinery violates EU treaties and lacks “democratic legitimacy”.

The combined attacks come just two weeks before the German constitutional court rules on the legality of the various bailout policies. The verdict is expected on September 7. ..."
http://www.telegraph.co.uk/finance/financialcrisis/8720792/Germany-fires-cannon-shot-across-Europes-bows.html

To bad America's leaders and media don't have the brass ones to call out little-O/Bernake for the same.

[Boomhauer]

A couple bulletins;

- Germany's High Court ruled the existing EU bailouts won't be overruled, but any further monetary transfers must have Legislative approval. Not likely to happen since 75% of the German population oppose further funding.
- Germany's Legislative just stated no more funds will go to Greece unless they abide by spending cuts agreed to in the last bailout. Other European countries have maintained their request for collateral instead of Greek bonds, which they consider worthless.
see; "Germany and Holland have threatened to block rescue payments to Greece unless the country complies to the letter with bail-out terms, raising the spectre of default and a chain-reaction through southern Europe."
http://www.telegraph.co.uk/finance/financialcrisis/8751180/Germany-pushes-Greece-to-the-brink-in-dangerous-brinkmanship.html

- Greece has stated it cannot abide by the cuts, but will take more money and more time to go deeper in debt. Already foreseeing this, the Greek people rioted during the last round of bailouts their Gov signed on to and demanded default. Just like then, after additional money and time was wasted away, it seems all but impossible for Greece to do anything but default.

- The EUBank has accelerated it's buyback of Italian and Spanish bonds, the same thing done for Greece, Portugal and Ireland, while Italy and Spain have both watered down the cuts they agreed to.
- The EUBank's Chief Economist, Jürgen Stark, just resigned over the ongoing and pointless bailouts.

- Cyprus is in the same situation Iceland was before it collapsed (see above article)
- England is predicting entering another recession http://www.telegraph.co.uk/finance/financialcrisis/8749436/OECD-warns-of-double-dip-threat-in-UK-and-cuts-forecasts.html and Germany, the lifeblood for failed socialist EU countries so far, has nearly flatlined.

http://1.bp.blogspot.com/-nzAux0JK-Z4/Tf3Fh6-qgkI/AAAAAAAAAyI/eZjNpnvoyuY/s1600/Euro%2Btombstone.jpg

[Tombstone RJ]

England is loving the fact that they still have their own currency... too bad for the EU flunkies who think they know how to do the real voodoo economics of huge entitlements, small workforces and a bunch of whiney people crying in their wine glasses.