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I thought the ECB keeps the spread down.

To the sorrow of many neoliberal ideologues.

Aren't bond vigilantes mostly regarded a myth nowadays?

by IM on Thu May 29th, 2014 at 11:56:46 AM EST
[ Parent ]
France has consistently had no spread problem throughout the euro crisis. Draghi's promise to buy bonds calmed the market down for the countries that were having to accept high interest rates on their bonds. It made no significant difference to France.

The day France breaks with Germany, French interest rates will jump. Whether one believes in bond vigilantes or not is irrelevant to that simple fact.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu May 29th, 2014 at 12:53:28 PM EST
[ Parent ]
That isn't a simple fact, that is just a assumption.

And it depends on the meaning of "breaking".

Neoliberals and austerity preachers have prophesied the arrival of the bond vigilantes any morning since autumn 2008. They never arrived.

by IM on Thu May 29th, 2014 at 12:55:59 PM EST
[ Parent ]
IM:
They never arrived.

That's your assumption.

As for a sharp rise in French rates in the case of an open French challenge to the euro as currently organised, it's necessarily an assumption insofar as it hasn't yet happened. But I suggest it takes on the status of fact in the mindset of the civil servants and pols involved in French government finances.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu May 29th, 2014 at 01:10:57 PM EST
[ Parent ]
In a liquidity trap, which we are in, it is simply economics. The interest rate will not durably go up, there are too much savings, too little demand and therefore too little investment. So unless you have a model to show how interest rates would go up, I would say the one doing the assuming is you.

It may of course be a matter of fact that high civil servants make this same assumption, but I don't understand why you would lend any credence to the claim on that basis. After all, they have been wrong about most everything lately. Why would they be right on this score?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Thu May 29th, 2014 at 03:32:10 PM EST
[ Parent ]
This subthread began with my suggestion that fear of a jump in interest rates (aka punishment by teh markets, whether personified by "bond vigilantes" or metaphorically represented by the "invisible hand") was a factor in Holland/the government's pusillanimous stance. That's a political comment that doesn't call for an economic model.

As to how justified that fear may be, you seem to agree there would be a rise, but it would not last long. You may be right. It doesn't change my political comment.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri May 30th, 2014 at 02:06:11 AM EST
[ Parent ]
I just remarked that the "bond vigilantes " are an largely imaginary threat.
by IM on Fri May 30th, 2014 at 09:24:45 AM EST
[ Parent ]
They are very real, for any country which lacks a lender of last resort.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri May 30th, 2014 at 11:11:13 AM EST
[ Parent ]
It's interesting how much top politicians (and their policies) are driven by imaginary threats. On both sides of the Rhine.
by Bernard on Fri May 30th, 2014 at 12:53:33 PM EST
[ Parent ]
Our imaginations can provide us with reasons to do or not do anything we desire. Very convenient. Convenient imaginations conjoined with convenient consciences.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 2nd, 2014 at 07:24:16 PM EST
[ Parent ]
that France wouldn't simply challenge the Euro directly. France leaving the Euro would essentially put paid to the entire project. That's not a challenge, in my view, that is an execution.

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Thu May 29th, 2014 at 03:33:31 PM EST
[ Parent ]
Here and in other parts of the thread I'm basing my comments on the (admittedly unlikely) hypothesis that France would attempt to renegotiate the euro. You say France would simply pull out. That's another hypothesis.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri May 30th, 2014 at 02:09:42 AM EST
[ Parent ]
And I base my hope on a French pull-out in 2017.

I also take Evans-Pritchard at his word when he describes Marine Le Pen's comments to him, as to being the left side of Gaullisme. I hope everyone will agree that this is far better than what we have.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Fri May 30th, 2014 at 03:42:32 PM EST
[ Parent ]
Europe has an even bigger crisis on its hands than a British exit

It is widely claimed that the Front is eurosceptic only on the surface. Perhaps, but when I asked Mrs Le Pen what she would do on her first day in office if she ever reached the Elysee Palace, her reply was trenchant. She would instruct the French Treasury to draft plans for the immediate restoration of the franc, that great symbol of emancipation from the English occupation (franc des Anglais).

She vowed to confront Europe's leaders with a stark choice at their first meeting: either to work with France for a "sortie concertee" or coordinated EMU break-up, or resist and let "financial Armageddon" run its course. "The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?" she said.

She said there can be no compromise with monetary union, deeming it impossible to remain a self-governing nation within the structures of EMU, and impossible to carry out the reflation policies necessary to defeat the economic slump. "The euro blocks all economic decisions. France is not a country that can accept tutelage from Brussels. We have succumbed to a spirit of slavery," she said.


We have a very, very big problem when the only politicians who even discuss the economic situation in a reality-based context are Marine Le Pen and Nigel Farage... :p

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri May 30th, 2014 at 05:12:27 PM EST
[ Parent ]
It is strange, isn't it?

Sometimes the right message comes from the wrong messengers, it's a struggle to emancipate oneself from unconscious biases.

But it's not hard to understand really, being wrong politically doesn't mean you're necessarily wrong intellectually, you can still come to some correct analyses with a shrivelled heart.

There is no real Euro-left anymore, just pusillanimous fakers, at least the truth is coming out in language the common person can understand, even if it's from bastards you would cross the street to avoid.

Finger, moon etc.

'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 Fri May 30th, 2014 at 08:38:17 PM EST
[ Parent ]
As Migeru points out, Evans-Pritchard is concern-trolling, and that particular comment is probably malicious. E-P is surely not really taken in by Le Pen's posturing.

Miss Le Pen is engaged in a major facelift of her party. A change of image towards something more apparently moderate, in order to gobble up the former "Gaullist" party, the UMP, and recuperating leftist themes the better to pick up disenchanted voters of the left. Under the pancake make-up, the FN is historically the enemy of the left, and inspired by hatred of De Gaulle and Gaullism. It belongs to the classic French nationalist xenophobic extreme-right tradition, and its more immediate ancestry is Vichy, in direct line via Daddy Le Pen. Marine is Pétain's grand-daughter.

I used to know a redstar who had a mind and a memory for these things, who wouldn't have been taken in by cosmetic changes. But then, maybe he's just concern-trolling too.

by afew (afew(a in a circle)eurotrib_dot_com) on Sat May 31st, 2014 at 01:58:46 AM EST
[ Parent ]
Why would Evans-Pritchard be concern-trolling? I'm not saying he isn't, but I don't really know anything about him and don't see why we should prima facie accept that he is.

Regarding the evolution of the economic ideas of the Front, over time they have certainly been... dynamic.

At the end of the 1970s, Le Pen refurbished his party's appeal, by breaking away from the anticapitalist heritage of Poujadism. He instead made an unambiguous commitment to popular capitalism, and started espousing an extremely market liberal and antistatist program. Issues included lower taxes, reducing state intervention, and dissolving the bureaucracy. Some scholars have even considered that the FN's 1978 program may be regarded as "Reaganite before Reagan".[133]

The party's economic policy shifted from the 1980s to the 1990s from neoliberalism to protectionism.[138] This should be seen within the framework of a changed international environment, from a battle between the Free World and communism, to one between the nationalism and the globalization.[93] During the 1980s, Le Pen complained about the rising number of "social parasites", and called for deregulation, tax cuts, and the phasing-out of the welfare state.[138] As the party gained growing support from the economically vulnerable, it converted towards politics of social welfare and economic protectionism.[138] This was part of its shift away from its former claim of being the "social, popular and national right" to its claim of being "neither right nor left - French!"[139] Increasingly, the party's program became an uneasy amalgam of free market and welfarist policies.[93][140]

Under her leadership, Marine Le Pen has been more clear in her support for protectionism, while she has criticised globalism and capitalism for certain industries. She has been characterized as a proponent of letting the government take care of health, education, transportation, banking and energy.[136][140]


My impression, which might be wrong, is that the Front is mainly about completely other issues than economic policy, and adapts its economic policy over time in ways that the economic policy can support the main focus of the primary party policies.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat May 31st, 2014 at 12:16:52 PM EST
[ Parent ]
He's concern-trolling because he's a conservative Eurosceptic writing in a conservative Eurosceptic newspaper. He doesn't really have the interests of the European left, or of the EU, at heart.
by afew (afew(a in a circle)eurotrib_dot_com) on Sat May 31st, 2014 at 01:55:57 PM EST
[ Parent ]
in France. If I want to work, I need to leave France, which I indeed do, lately in North America, I will let you imagine the carbon footprint of that.

And as your article rightfully points out, the reactionary policies which cause this to be the case are being pursued by the PS.

And as a sentient person,  you think I should ignore that fact but remember what MLP's dad represented and assume she will be the same?

You do see the inconsistencies here?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sun Jun 1st, 2014 at 03:54:28 PM EST
[ Parent ]
You do realise that Jean-Marie is still an MEP?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Sun Jun 1st, 2014 at 04:13:57 PM EST
[ Parent ]
And Bruno Gollnisch.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Jun 1st, 2014 at 04:20:41 PM EST
[ Parent ]
is PM and François Hollande is President.

What is your alternative?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sun Jun 1st, 2014 at 04:46:43 PM EST
[ Parent ]
Pretty obviously, not Le Pen or Gollnisch.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jun 2nd, 2014 at 02:42:02 PM EST
[ Parent ]
We know what your viable alternative is not.

But what is your viable alternative?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Mon Jun 2nd, 2014 at 02:56:11 PM EST
[ Parent ]
If you consider a nationalist-xenophobe party that has consistently made racism part of its subjacent but apparent-to-all appeal as a "viable alternative", then I don't think we have anything more to say to each other.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 3rd, 2014 at 01:45:06 AM EST
[ Parent ]
answered my question.

And you are right. We have nothing to say to each other, just as you have nothing to offer to real people living in France.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Jun 3rd, 2014 at 01:48:16 AM EST
[ Parent ]
Well what's your offer?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jun 3rd, 2014 at 11:55:47 AM EST
[ Parent ]
Good not just for France but for all of Europe.

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Tue Jun 3rd, 2014 at 10:27:22 PM EST
[ Parent ]
And today's headline in The Ironic Times: France Determined to Become the United States.
by rifek on Mon Jun 23rd, 2014 at 10:08:26 PM EST
[ Parent ]
Because there is unemployment and the PS is applying reactionary policies, that's a reason to support the extreme right? I don't see much consistency there.

You'll get no help from the Front National. Marine is creating an illusion.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Jun 1st, 2014 at 04:20:02 PM EST
[ Parent ]
But if she were to pull France out of the Euro, that would be help enough. Because I am not about to learn German.

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Sun Jun 1st, 2014 at 04:42:28 PM EST
[ Parent ]
Because obviously France has a whole lot of nothing to the left of the PS.

Now, I'm not as scared as some on the left of working with ugly parties against neoliberals. But there is a difference between working with ugly parties after an election and empowering them during one.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jun 1st, 2014 at 05:03:21 PM EST
[ Parent ]
to the left of the PS in France.

Show me one though with anything approaching a brain regarding the Euro and the EU, and I will get behind them.

Hint...there simply is no one credible who fits that bill.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sun Jun 1st, 2014 at 05:07:13 PM EST
[ Parent ]
So, how does that make the FN credible?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Jun 1st, 2014 at 05:34:59 PM EST
[ Parent ]
Is very credible.

No one on the left is saying this outside of academia.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sun Jun 1st, 2014 at 05:57:16 PM EST
[ Parent ]
Nice wordplay, but this doesn't make them and their programme credible or one with anything approaching a brain.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jun 3rd, 2014 at 01:41:43 AM EST
[ Parent ]
If France really pulls out of the Euro, this would be a big deal.

You are saying this is impossible?

And I guarantee you friend, I do have a brain.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Jun 3rd, 2014 at 01:50:25 AM EST
[ Parent ]
Well, then show it. What I see is an angry man trying to get back at and troll the PS in the wrong place. I suggest you go looking for the "social democratic types" at Le Monde or a similar place.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jun 3rd, 2014 at 12:02:43 PM EST
[ Parent ]
So you support somebody who isn't credible.

Syriza was "not credible" as late as the spring of 2010.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jun 2nd, 2014 at 12:32:40 PM EST
[ Parent ]
Excellent non-argument for legitimising nationalist xenophobes.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jun 2nd, 2014 at 02:41:17 PM EST
[ Parent ]
credible once the Troika are at Greece's throat. And by then, the mortality rate is already rising, much less civil liberties and social gains being gutted.

In other words, this should not be acceptable.

Keep in mind the apt phrase "the hun is at your throat or at your feet."

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Mon Jun 2nd, 2014 at 02:55:08 PM EST
[ Parent ]
There is value in keeping the Unserious left-wing option alive even if it only becomes credible once mortality starts rising and the hospitals start closing and the lights start going out.

Because the alternative to keeping the Unserious left-wing alternative alive is that the only parties left standing after the Very Serious People drive the country into a ditch are the far-right militias.

It's not particularly rewarding work, but it's important.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jun 2nd, 2014 at 03:19:31 PM EST
[ Parent ]
JakeS:
I'm not as scared as some on the left of working with ugly parties against neoliberals.

That's my reluctant feeling about Grillo and Farage. All the worry is about Farage contaminating Grillo, but there's not much talk about the possible good influence from the MV5. Farage is for nuke power, and I know the MV5 will never go for that.

'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 Sun Jun 1st, 2014 at 05:50:43 PM EST
[ Parent ]
Nukes are national policy anyways, and if Brussels want to wrench that policy choice away from us, they'll have to take it from our cold dead hands.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Jun 1st, 2014 at 06:58:26 PM EST
[ Parent ]
Tell that to Nick Clegg.
by rifek on Mon Jun 23rd, 2014 at 10:10:17 PM EST
[ Parent ]
If anyone believes that the Front National policies will be "on the Left" and not favor the French oligarchy -- at least those not foolish enough to oppose them, I have an Eiffel Tower in Paris I'm willing to sell for a good price.
by Bernard on Sat May 31st, 2014 at 08:25:30 AM EST
[ Parent ]
now, given German intransigence, the only way to assure even the possibility of social progress.

What is your alternative to the Hollande/Valls austerity suicide pact?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sun Jun 1st, 2014 at 03:56:39 PM EST
[ Parent ]
Tax credit-based Wörgl money, perhaps...

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Jun 1st, 2014 at 07:01:21 PM EST
[ Parent ]
If the ECB keeps the spread down, it is because of the "Draghi Effect" as it hasn't bought any bonds since 2011. That's why the criticism of plans for Quantitative Easing along the lines of "yields are low already, what's the point of QE?" is right (I think it may have been Weidmann to say so).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu May 29th, 2014 at 03:58:04 PM EST
[ Parent ]
>If the ECB keeps the spread down, it is because of the "Draghi Effect" as it hasn't bought any bonds since 2011.<

A very successful bluff

by IM on Thu May 29th, 2014 at 04:52:29 PM EST
[ Parent ]
Why did the BVG's ruling have no effect?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri May 30th, 2014 at 05:43:13 AM EST
[ Parent ]
They didn't rule, they kicked it up to the ECJ.
by IM on Fri May 30th, 2014 at 09:22:04 AM EST
[ Parent ]
I thought they ruled Germany could not cooperate with the OMT in any case, and asked the ECJ to clarify whether the rest of the EU could.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri May 30th, 2014 at 09:44:42 AM EST
[ Parent ]
I interpreted the majority decision (6:2) in the way that while they think OMT is illegal and Germany obligate to stop it, they still relegated the decision to the ECJ.
by IM on Fri May 30th, 2014 at 10:25:31 AM EST
[ Parent ]

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