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No, because it's a currency crisis and not a debt crisis.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Mon May 30th, 2011 at 05:11:09 PM EST
[ Parent ]
What is at issue is the future of the Euro, not the future of debt - although, arguably, both are being recast in more sustainable terms according to the very optimistic scenario I have outlined.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon May 30th, 2011 at 05:23:18 PM EST
[ Parent ]
is the currency of the core. That's not in doubt.
What's the issue is the nature of the political relationship between the core and the periphery.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Mon May 30th, 2011 at 05:38:00 PM EST
[ Parent ]
That is an interesting way of putting it.

Europe in One Country?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 30th, 2011 at 05:48:23 PM EST
[ Parent ]
To end up with the Deutsche Mark we didn't have to spend 20 years in this pointless exercise drawn up by the French Bureaucracy.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Mon May 30th, 2011 at 05:48:39 PM EST
[ Parent ]
It wasn't pointless.

The political point was - and as far as the French are concerned, still is - political union.

The economic point was and is - through neo-liberal hegemony by and for the corporate sector - the withering of the State.

But the Austerian agenda embodied in the ECB constitution did not emanate from the French, I think.

We must thank the Germans for that.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon May 30th, 2011 at 06:41:39 PM EST
[ Parent ]
What a wretched deal.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Mon May 30th, 2011 at 06:43:15 PM EST
[ Parent ]
... "Faustian bargain."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 30th, 2011 at 06:54:19 PM EST
[ Parent ]
The Germans wanted to dominate the EU through increased corporate dominance, and the French wanted to contain that threat through increased political direction? Then the Brits weighed in behind corporate dominance and the French lost the battle - partly because Sarkozy doesn't know which side he's on anyway?

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon May 30th, 2011 at 07:01:34 PM EST
[ Parent ]
Best summary I've seen of the last twenty years of European history.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 30th, 2011 at 07:08:02 PM EST
[ Parent ]
by Jerome a Paris (etg@eurotrib.com) on Tue May 31st, 2011 at 05:08:27 AM EST
[ Parent ]
that more than a few of the French elites have now joined the corporate gravy train (leaving the administration/policial side of the world) and weakening France's political ambitions from the inside.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Tue May 31st, 2011 at 05:09:59 AM EST
[ Parent ]
The Reagan/Thatcher revolution, the "pensée unique" and later the social-democrat "third way" have coincided with an erosion of the ethic of public service. The cultural effect of the last 30 years may be more lasting and damaging than the economic effect.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Tue May 31st, 2011 at 05:27:59 AM EST
[ Parent ]
Migeru:
an erosion of the ethic of public service.

and a corresponding diminution of public trust in their government spokesmen.

The cultural effect of the last 30 years may be more lasting and damaging than the economic effect.

it's quicker to whip up a bubble than educate a child... the yawning gap between rich and poor, 3 generations of entitlement, and the paucity of employment opportunity leads to intense cynicism amongst the youth, and a rejection of even the most basic of social pacts. a cocktail of reasons for dissent, but the PTB, in their flawless wisdoom, have decided that a please state is one where renewables are ignored, suppressed, defamed and otherwise hobbled, when a switch would guarantee umpteen responsible jobs for the unemployed and reduce social tensions no end*, in favour of coal/gas/nuke top down oligarchy where no-one in their right mind would want to work, just to keep those freaking utility bills coming in.

*and just for kicks possibly save our species from mass extinction.

yes, we have no bananas.

'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 Tue May 31st, 2011 at 05:57:54 PM EST
[ Parent ]

   Indeed.  To say the least.  The idea that France's power élite are, were, or wanted to be some sort of counterweight to a supposed German-led penchant "to dominate the EU through increased corporate dominance" strikes me as strange and fanciful.  Certainly not "the world we live in."

"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 Tue May 31st, 2011 at 07:18:37 AM EST
[ Parent ]
  Not sure there's really in fact what appears to be some incongruency, implied or expressed, there.

   For true-believers in the neo-lib faith, there's no such thing as a distinction between "inside" and "outside" (the nation)  or "public" and "private" administration.  All administration, properly seen, is to be (or become, eventually) privately held whether in appearance or not.

    So, while political ambitions there are, they aren't "french" or any other nationality; they're "purer" than that.  This test of strength is at least in part a struggle over the question of who "owns" and directs the "Euro" as a currency and the monetary policies which are attached to it--- shall it "Europe", its member states, or, as corporate interests would have it, banks and their clientele interests?

    It's almost not even a question at all since there doesn't seem to be much force on the side of "Europe" except that which is to be seen in the streets and public squares of Spain, Greece, etc.--though, of course, that may change and in fact, I think one way or another, it must.  People have a strong aversion to starving to death.

"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 Tue May 31st, 2011 at 07:48:43 AM EST
[ Parent ]
Since a currency owes its values to the system of rules under which it has privileged uses, the crisis of the political relationship between the core and the periphery and whether the ECB should be so governed so that the periphery can survive within the Eurozone is a Euro crisis.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon May 30th, 2011 at 10:48:23 PM EST
[ Parent ]
 
 

 "the euro is the currency of the core. That's not in doubt."

 

     I find that a rather amazing statement to assert under the circumstances.  It seems to suggest that there isn't and simply cannot be any conceivable higher priority than that of maintaining the Euro.  It seems that we are now very close to the stage at which desperate people resort to ritual chanting in hopes of warding off some dreaded evil.

    I wish economists were required to study history, psychology, sociology and anthropology in addition to advanced calculus and quantitative analysis.  Then they might have a prayer of recognizing something very much at the heart of our current dilemma is simply the fact that very, very, important high officials made terribly mistaken decisions about the way in which the Euro currency could and should be instituted--i.e. without the necessary prerequisite authorities and operating issues resolved sensibly.   And, further, the study of these humanities would help economists recognize that now, these same very, very important high officials are before the stubborn facts of their errors and they want to do, to try, anything, no matter how dangerous or delusional, rather than face and admit their blunders--which, after all, had been very clearly pointed out to them well before they went ahead.

   At some point, don't even the highest world banking decision-makers, even European ones, and even with all their tremendous prestige at stake--don't they at some point have to admit that there just may be higher human priorities than the maintenance of the Euro currency at all costs?

     With everything else that this is, it's now also a deeply serious moral issue, the sort of issue which is at the heart of the humanities as disciplines.  Economics and economists must recover some of that before much greater harms are done out a blind and fear-driven denial which hopes to save very, very important faces.

"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 Wed Jun 1st, 2011 at 01:26:53 PM EST
[ Parent ]

It seems to suggest that there isn't and simply cannot be any conceivable higher priority than that of maintaining the Euro.

It's not a priority, it's a reality. Germany will continue to have a currency, and that currency will continue to behave as the euro does, and be governed like the DM and the euro have been for the past 60 years - by inflation hawks (or gold bugs, if you prefer). Various countries nearby will continue to use the same currency. France will likely stick around.

That's a reality - that currency (with or without France, euro or new-DM) will exist. Its not a priority, or a statement of desires or wishes, it's a fact.

That such a fact is incompatible with the EU as it currently is built is a possibility, hich means that the EU cannot continue as it is built.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 2nd, 2011 at 08:03:25 AM EST
[ Parent ]
Burt the EU has existed for a long time with multiple currencies; after all even now it is a economic area with multiple currencies. Why should a core euro or whatever change that?
by IM on Thu Jun 2nd, 2011 at 11:35:56 AM EST
[ Parent ]
It has coexisted first with the Bretton-Woods gold standard and then with the European Exchange Rate Mechanism. Both systems were punctuated by devaluation crises, as they couldn't fail to be. The Euro is an attempt to eliminate the possibility of a devaluation without moderating the macroeconomic imbalances that lead to devaluations.

EU countries outside the Euro are still committed to stable eschange rates and a structure similar to the old ERM. It has failed, too, as Hungary and some of the Baltics have experienced devaluation crises and/or depressions. The economy of Croatia, an accession country, is breaking under the weight of the Euro exchange rate peg without access to EU markets as it remains outside the EEA but has implemented free movement of capitals and opened its market to an extent.

It's a disaster.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Jun 2nd, 2011 at 11:42:52 AM EST
[ Parent ]

   So, in much the same way that a noose around one's neck would "emliminate the possibility of a devaluation" (i.e. falling down) "without moderating the macroeconomic imbalances that lead to devaluations" (while one's crutches are removed), "it works"!   The operation was a success.  Unfortunately, the patient died. and---->

   "ERM. It has failed, too, as Hungary and some of the Baltics have experienced devaluation crises and/or depressions."  ....

  ...  Your bill for the hospitalization and surgery.  Please pay in full.   The hospital management extend their condolences to the family of the deceased.

 

"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 12:00:32 PM EST
[ Parent ]

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