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Greek Problems Will Drive Integration - WSJ.com
... whatever happens the process is built on an important new principle that will define the euro zone: each nation is indeed its brothers' fiscal keeper.

No matter that troubled Ireland, Portugal and Spain are expected to contribute to the bail out, or that Angela Merkel has yet to explain to her disapproving electorate why every German should cough up €100 each to enable Greeks to retire earlier than any German can hope to. A long step has been taken to move the integration project forward.

No taxation without representation is another American notion that will now come into play. European citizens will now be in effect taxed to support the Greek government, which they did not elect and in which they are not represented. <...>

Olli Rehn, EU commissioner for economic and monetary affairs will begin using his long-dormant monitoring powers, supplementing IMF oversight, and allowing Mr. Sarkozy to claim Europe is following Voltaire's advice and cultivating its own garden. We are about to learn just how much additional sovereignty each euro-zone nation is willing to surrender as Europe takes another step--a giant step--down the road to more complete economic integration.



The point is not to be right, but to get to right.
by marco on Mon Apr 19th, 2010 at 03:46:07 AM EST
[ Parent ]
These people are seriously obessed with taxes.

They'd rather "freely" pay larger amounts to lawyers, private insurance companies, oil companies or mercenaries than to the government... it's sick.

Of course, what's really at stake is not so much the taxes but the fact that if all basic services were provided by the private sector, plenty would be excluded and the rich would feel even more exclusive and special...

Wind power

by Jerome a Paris (etg@eurotrib.com) on Mon Apr 19th, 2010 at 08:37:59 AM EST
[ Parent ]
And the rich would be more stressed and less healthy. Isn't the world just great?
by Colman (colman at eurotrib.com) on Mon Apr 19th, 2010 at 08:45:31 AM EST
[ Parent ]
yeah - I keep on saying that we have a simple argument: "how do you know that you pay the bodyguards of your kids enough money that they won't kidnap them?"

Wind power
by Jerome a Paris (etg@eurotrib.com) on Mon Apr 19th, 2010 at 10:19:45 AM EST
[ Parent ]
Jerome a Paris: They'd rather "freely" pay larger amounts to lawyers, private insurance companies, oil companies or mercenaries than to the government.

No.  In this specific case, they simply would rather not pay extra taxes in order to save another country from the incompetence and/or corruption of its own government.  Has nothing to do with lawyers, private insurance companies, oil companies or mercenaries.

The point is not to be right, but to get to right.

by marco on Mon Apr 19th, 2010 at 11:37:13 AM EST
[ Parent ]
Well, the Germans didn't mind the Greek debt when they sold them several state-of-the art submarines...

"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Mon Apr 19th, 2010 at 12:41:07 PM EST
[ Parent ]
We're talking 3 year loans in this case, with a yield of 5.33%.

Munchau says this is a net transfer of wealth from Athens to Germany, a kind of loan payout dynamic that is quite familiar historically.

by Upstate NY on Mon Apr 19th, 2010 at 12:50:17 PM EST
[ Parent ]
That's ridiculous. Germany could extract 4% in seigniorage out of Greece. If the German government is unable to fund that without raising taxes...

Not to speak of the fact that they probably think they cannot do it without raising taxes partly because they wrote into the ECB regulations that the German government cannot borrow from the ECB. But of course, if Greece could borrow from the ECB we wouldn't be having this conversation.

Ultimately, this is all the fault of the Bundesbank's ideologues.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 01:41:51 AM EST
[ Parent ]
Like this one.

Bundesbank attacks Greek rescue as a threat to stability - Telegraph

The Bundesbank, headed by ultra-hawk Axel Weber, said the decision to bring in the IMF makes matters worse, arguing that the EU would impose tougher budgetary discipline.

The report mocked the IMF as the "Inflation Maximising Fund", saying the body had gone soft under Dominique Strauss-Kahn, a French socialist and Keynesian. It has shifted focus from fiscal cleansing to "growth-oriented" financial policies. "Currency reserves from the Bundesbank cannot plausibly be made available for such purposes," it said.

by generic on Tue Apr 20th, 2010 at 06:59:25 AM EST
[ Parent ]
Alex Weber is the front-runner to replace Trichet next year.

Or was. I cannot imagine that the rest of the Eurozone will take kindly to him spouting this kind of nonsense.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 07:06:48 AM EST
[ Parent ]
It's unfortunately hard to see Germany accepting anyone else...
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Apr 20th, 2010 at 07:30:37 AM EST
[ Parent ]
Then there will be an impasse.

As with other high-profile European appointments, if there is disagreement an outsider gets the job.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 07:34:26 AM EST
[ Parent ]
That is the only way out.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Apr 20th, 2010 at 07:37:03 AM EST
[ Parent ]
Axel Weber has a reputation as an inflation fighter. If Germany can't collectively muster enough neurons to realise Europe's problem right now is deflation...

The brainless should not be in banking -- Willem Buiter
by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 07:44:23 AM EST
[ Parent ]
Sorry, not Alex but Axel.

The brainless should not be in banking -- Willem Buiter
by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 08:10:16 AM EST
[ Parent ]
sorry, I was writing about the WSJ writer who spouted that article and wrote about "no taxation without representation" and other similar inanities.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Tue Apr 20th, 2010 at 11:29:57 AM EST
[ Parent ]
Correct me if I'm wrong, but...

...Germany's 67 retirement age is unmatched in any other country. Germany is also the biggest net contributor to EU funds. In other words, Germans already work longer than other Europeans AND they contribute more to EU funds.

Greece raised its retirement age to 65 (although women, for some reason,--bizarrely--can retire earlier--don't ask me), and that number seems largely in keeping with other European countries, no?

by Upstate NY on Mon Apr 19th, 2010 at 12:48:49 PM EST
[ Parent ]
the actual retirement age in Germany is 61.5 (official: 67)
the  actual retirement age in France is 61.5 (official: 60)

So, again: bah.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Tue Apr 20th, 2010 at 11:30:50 AM EST
[ Parent ]

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