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I think people fail to see the symbolic importance of leaving the Euro: it means the unravelling of a centralizing project.

Up to now things would are going in a single direction: more globalization (which essentially means more control by a small cadre). The Euro is a part of that narrative (with the implicit notion that democratic control is replaced by the "specialists in Brussels and Frankfurt").

So, irrespective of the monetary value (and I would dispute that it would be less than Argentina, because it would make all the debt void - due to devaluation and obvious inability to pay - PLUS making the Euro very unstable - who would follow next?). Irrespective of the money issue, there would be a symbolic unravel of a project. That is ideologically intolerable.

Furthermore, there is no need for patrolling any borders. There are plenty of (legal) ways to destroy a country. For instance, just see what what the current fall in price in oil is doing to some exporter-only countries. It would not be difficult to devise a set of informal things to have a devastating effect.

And if you think this is paranoid, you probably have not been seeing what is happening in the so called periphery. Even it it was unintentional (and it was not: saving the banks of the centre was deemed more important than the lives of millions), the outcome was of "paranoid" impact: if somebody, 5 years ago, came to this site and suggested the disaster that is unravelling, that somebody would be labelled paranoid or crazy (extra paranoid, as almost no one was as pessimist as reality).

by cagatacos on Wed Dec 3rd, 2014 at 08:12:07 PM EST
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if somebody, 5 years ago, came to this site and suggested the disaster that is unravelling, that somebody would be labelled paranoid or crazy (extra paranoid, as almost no one was as pessimist as reality).

I have to say, that personally I also did not expect things to go so horribly. I also think that there are clear mechanisms, of how Portugal would be attacked. One would be to sue against Portugal for lost property. All type of vulture funds would use this possibility. Most probably, all payments coming from Brussels would also stop.

Yet, still I do not see how things can improve with a ECB that doesn't to its job. At the very least, politicians from Portugal should remind the ECB of its Mandate. The discussion here, has convinced me that a threat to leave the Euro if the ECB doesn;'t credibly commit to 2% inflation could even do some good.  

I think the most important thing for a country leaving the Euro is how it treats its debts. If the debts gets payed, I do not think the repercussion would be such a disaster. If you leave the Euro you could in principle confiscate all savings of all your citizens and forcibly change them into new currency. The Confiscated Euro you can use to pay your debts. I understand clearly that this would be super unpopular. But as far as I can see it is the only clear way how to pay the debt and leave the Euro at the same time.

by rz on Thu Dec 4th, 2014 at 03:36:08 AM EST
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The debts can be paid years later. First of all It is way easier to pay the debts once your economy is operating at full capacity. I agree, It is gonna be a mess.
by Kristjan on Thu Dec 4th, 2014 at 04:33:21 AM EST
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