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If we do not get rid of the Maastricht straitjacket, there is a realistic possibility that you will not have a European Union to spend an EU budget in.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 30th, 2011 at 06:05:00 PM EST
[ Parent ]
It's not about the Maastricht straitjacket, it's about Keynes' negative feedback loop on surpluses.

Of course, admitting that deficit spending needs to be unconstrained in a recession and that the ECB should monetize public debt if necessary, would help.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon May 30th, 2011 at 06:37:21 PM EST
[ Parent ]
Lifting the Maastricht straitjacket would impose a negative feedback on surpluses. Unless the surplus countries enjoy getting paid for their exports with their own money.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 30th, 2011 at 06:53:36 PM EST
[ Parent ]
But that's what they have been doing. The German export surplus gets loaned back to the deficit countries so they can continue to import.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Tue May 31st, 2011 at 01:29:13 AM EST
[ Parent ]
No, that's not what they've been doing.

They have clearly been living under the impression that they were going to get paid in the Greeks' money. Eventually.

The fact that this is mathematically impossible does not seem to have dawned upon them just yet.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 31st, 2011 at 01:35:47 AM EST
[ Parent ]
Of course they were always going to be paid in the ECB's money, given that the Euro is a fiat currency. The real problem is that the Germans and the ECB are Aust[e]rian gold bugs.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Tue May 31st, 2011 at 01:40:08 AM EST
[ Parent ]


Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 31st, 2011 at 01:41:04 AM EST
[ Parent ]
Sending in the bailiffs to take away some sun-drenched islands and perhaps an Acropolis (or more mundane goods) is a way of getting paid in Greeks' money.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue May 31st, 2011 at 07:10:58 AM EST
[ Parent ]
Or just buying up even more holiday homes, businesses and other property assets in Greece. The Greeks get an Aldi near them by way of recompense.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 31st, 2011 at 07:28:57 AM EST
[ Parent ]
PS an Aldi is about yo be built just up the road from my home...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 31st, 2011 at 07:29:40 AM EST
[ Parent ]
In rural France, I don't have far to go to two Lidls and an Aldi. I don't consider them evidence of German colonisation, just part of an even cheaper crap food distribution subsystem of large-corporate supermarketry in general.

As to Greece, I did mention "more mundane goods". The point being that the core financial system will (if not checked) extract its pound of flesh.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue May 31st, 2011 at 07:49:51 AM EST
[ Parent ]
... if they get to keep them.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 31st, 2011 at 08:02:59 AM EST
[ Parent ]
Just like to note for clarification that "they" are not a consistent group.

German workers has by way of slashing the social safety net been convinced not to fight for their fare share of production increases. (If they had more would have been consumed, leading to imports and more even trade.)

This surplus has instead been claimed by German owners of industries and gambled through the financial system.

The German financial system has then loaned the money back to the deficit countries, unaware or not caring about how unsustainable the total is.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue May 31st, 2011 at 04:44:37 PM EST
[ Parent ]
If instead of excess German capital going to Greek bonds, Irish real-estate banking, US mortgage backed bonds and so on, the money had been paid out to German workers for vacations in the South, the world economy would have been on a more solid footing and German workers would have been happier.
by rootless2 on Tue May 31st, 2011 at 06:37:09 PM EST
[ Parent ]
Yes but if everyone was happy with their lot, why would we need banks? People wouldn't have to borrow.  We need pain and suffering to make the system work.  How else can we extract "value" from the have nots to make sure the have mores have more.  Isn't that the point of economics?

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 31st, 2011 at 07:30:44 PM EST
[ Parent ]
the problem is not so much the euro as the robber baron policies of all of our elites, including the Germans.

But the Germans have been especially effective at pushing the blame away from them and towards Southern Europeans and making the average Germans feel self-righteous about their efforts instead of furious at having being ripped off by their bosses and banks.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 2nd, 2011 at 08:06:23 AM EST
[ Parent ]
The design of the Euro, like the gold standard before it, encourages mercantilist inflation policies by allowing the mercantilists to externalise the unemployment caused by their irresponsible policy.

You can't design a system that favours irresponsible policy and then claim that the only problem is the stupidity of the people who implement that policy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 2nd, 2011 at 10:59:53 AM EST
[ Parent ]
 

  "You can't design a system that favours irresponsible policy and then claim that the only problem is the stupidity of the people who implement that policy."

 

  Your point, which I grant and agree with, is that one ought not do that.

    But, unfortunately, "you can do that."  And that is, to greatly over-simplify things, much of the trouble today.  You can do that and do it over and over and over again.  We are perhaps going to discover whether or not this state of affairs can last much longer.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Thu Jun 2nd, 2011 at 11:28:28 AM EST
[ Parent ]
A swedish kind of death:
The German financial system has then loaned the money back to the deficit countries,

all the while patting themselves on the humanitarian back for 'developmental aid'. who can deny the new businesses and suv sales? GROWTH has arrived!

send in the clowns.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Wed Jun 1st, 2011 at 02:03:57 PM EST
[ Parent ]

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