Is Europe finished?

Humes fork · 23rd July 2012, 12:53 PM

I came across this summary of the two possibilities for the Eurozone and their consequences. It's in Swedish, so most of you huys can't read it, but it was very interesting.

Basically, according to the writer the EMU faces two possibilities, and one of them will come to pass in the near future (any other solutions are just temporary). These are:

1. Abandoning the euro. Will in the short term lead to a serious recession in both northern and southern Europe. But after a few years the individual European economies will recover and would lead to better functioning economies and normalized European state relations.

2. Increased economic control for Brussels. In this scenario, the EMU members would hand over their economic decision-making to Brussels. It would save the euro (with the exception of Greece, which the author thinks will leave in either case), but to the price that the recession in southern Europe becomes permanent, with mass unemployment and industrial death for many decades ahead. Northern Europe will become a social office for the south.

According to the author, the best long-term scenario for the general public would be #1. However, he believes that what will happen is #2, because there are very strong political forces in Europe that want it. The politicians want it (they would look like clowns if the euro collapsed), the markets want it (they are short-sighted), lobbyists for the banking sector and the German export industries want it. And special interests tend to be highly organized and methodical, the pubic interest not so.

In addition, the EU will use the Greek exit and its consequences as scare-mongering for what can happen in order to justify its new levers of power. The EU will also play with words in order to dupe the public into accepting its new powers by making very big issues look like minor administrative isssues. Personally I don't think that will be necessary because the EU is rarely affected by public opinion.

Do you think this estimation is correct? If so, what does that mean for the future of Europe? A steep decline of southern Europe will affected northern Europe negatively as well, due to the many trade-links. It looks like we are moving toward very bad times.

The US, though it has a very serious debt problem, seems to have an economic dynanism which southern Europe simply lacks (and the south will drag the north down with it). Australia, New Zealand and Canada seem to be tucking along just fine.

stevea · 23rd July 2012, 01:52 PM

So it's either a/ EMU dissolves, b/ EMU takes control of all member economies, issues debt, levies taxes, bails out the poorly managed economies.

The listed are just two extremes among many alternatives. I think there are better alternatives, BUT none of them very pretty. So I think this is a case too much fear & gloom in that analysis.

I think there is zero chance the entire EMU dissolves. If that happened we'd never see it reconstructed for 100yrs and it's just too advantageous despite the current pain.

The worst case scenario is (I think) that the EMU drops Greece, Portugal and Spain and is forced to both write off their debt and prop up Italy. That's ugly but better than no EMU.

More likely they keep Spain and Portugal and prop them up too. Perhaps Greece, but that's iffy - Greece is historically very intransigent and their recent arrogance has surprised me.

A bailout perhaps means issuing some new class of bailout bond that pays a higher but rational interest rate and is only partly backed by the EMU, the remainder by the near-defaulting nations.

Merkel hasn't been very supportive despite that Germany is perhaps the biggest beneficiary of a past and continued EMU. Of course Germany might politically more easily support a reduced EMU with the poor/badly-managed economies kicked out, but this would effectively mean writing off all that debt and suffering with destitute trading partners and ultimately that's intolerable. You can afford to kick out Ireland Greece, Portugal, but only Greece is acting silly enough to kick (I'm not well informed abt Portugal).

Europe is severely lacking in decisive leadership, but if rationality prevails the union remains with a common currency and with several economies on probation and *maybe* only or two very small economies exit. It might help greatly if they purposely broke their charter and ran some inflation for a few years, but ... Germany has a phobia about that. The alternative is pro-growth agenda, but that's very problematic in the current world status.

No the future is somewhere between those two alternatives.

Mostly OPINION above, I won't try to justify it.

So what do YOU think Hume'sF ? You are closer to the action ?

mikeyx · 23rd July 2012, 03:02 PM

Europe must be destroyed and made into a Theme Park. That and , France Sucks.

stevea · 24th July 2012, 09:07 AM

Originally Posted by mikeyx

...That and , France Sucks.

Except for the wine & cheese and cuisine.

Steve · 24th July 2012, 10:28 AM

For now. It is summer and they are all planning to go on holiday. Europe will be starting up again in September.

DC · 24th July 2012, 10:44 AM

aaah you meant, is the EU finished....
for a moment i worried a bit.

Humes fork · 24th July 2012, 10:55 AM

Originally Posted by DC

aaah you meant, is the EU finished....
for a moment i worried a bit.

No, strictly speaking it would be the EMU. But since we do much of our trade with them, if they go down then so do we.

UndercoverElephant · 24th July 2012, 01:13 PM

Originally Posted by DC

aaah you meant, is the EU finished....
for a moment i worried a bit.

The EU is not finished. The EUROZONE is in very, very serious trouble. Greece and Spain need to do what Iceland and Argentina have done, but they can't. But they have to...

GlennB · 24th July 2012, 01:22 PM

Originally Posted by stevea

Except for the wine & cheese and cuisine.

And the aqueducts.

mikeyx · 24th July 2012, 03:05 PM

Originally Posted by stevea

Except for the wine & cheese and cuisine.

they get to be caterers

Marduk · 24th July 2012, 04:35 PM

Originally Posted by stevea

Except for the wine & cheese and cuisine.

you don't believe that do you, thats just propaganda designed to boost their economy which as everyone knows is really based on selling weapons to your enemies

consider the only french food recognised and served globally, the fry, isn't even french, typically real french cuisine is frogs legs and snails buddy

kevsta · 26th July 2012, 12:46 AM

..and goes on holiday lol.

http://www.bloomberg.com/news/2012-0...cation-1-.html

Quote:

German Finance Minister Wolfgang Schaeuble declared bond traders all wrong in driving up Spanish borrowing costs to unsustainable levels.

because the markets are always wrong, and the politicians and planners are always right.

now put my towel on that sunbed and get me another tequila.

and can you stop that bloody tide coming in over there, its wrong.

stevea · 30th July 2012, 09:04 AM

Originally Posted by Marduk

you don't believe that do you, thats just propaganda designed to boost their economy which as everyone knows is really based on selling weapons to your enemies

I've got several hundred bottle of Bordeaux and Rhone in the cellar that say you are wrong. As far as selling weapons to enemies - I think Russia, China (w/ proxy Korea) and Germany top that list.
[quote]

Originally Posted by kevsta

...because the markets are always wrong, and the politicians and planners are always right.

It's unsurprising that the guys at the podium are never at fault, according to their own description. What is surprising is that the news reportage and "the 99%" are so easily deceived and co-opted.

23rd July 2012, 12:53 PM	#1
Humes fork Master Poster Join Date: Jul 2011 Location: Sweden Posts: 2,369	Is Europe finished? I came across this summary of the two possibilities for the Eurozone and their consequences. It's in Swedish, so most of you huys can't read it, but it was very interesting. Basically, according to the writer the EMU faces two possibilities, and one of them will come to pass in the near future (any other solutions are just temporary). These are: 1. Abandoning the euro. Will in the short term lead to a serious recession in both northern and southern Europe. But after a few years the individual European economies will recover and would lead to better functioning economies and normalized European state relations. 2. Increased economic control for Brussels. In this scenario, the EMU members would hand over their economic decision-making to Brussels. It would save the euro (with the exception of Greece, which the author thinks will leave in either case), but to the price that the recession in southern Europe becomes permanent, with mass unemployment and industrial death for many decades ahead. Northern Europe will become a social office for the south. According to the author, the best long-term scenario for the general public would be #1. However, he believes that what will happen is #2, because there are very strong political forces in Europe that want it. The politicians want it (they would look like clowns if the euro collapsed), the markets want it (they are short-sighted), lobbyists for the banking sector and the German export industries want it. And special interests tend to be highly organized and methodical, the pubic interest not so. In addition, the EU will use the Greek exit and its consequences as scare-mongering for what can happen in order to justify its new levers of power. The EU will also play with words in order to dupe the public into accepting its new powers by making very big issues look like minor administrative isssues. Personally I don't think that will be necessary because the EU is rarely affected by public opinion. Do you think this estimation is correct? If so, what does that mean for the future of Europe? A steep decline of southern Europe will affected northern Europe negatively as well, due to the many trade-links. It looks like we are moving toward very bad times. The US, though it has a very serious debt problem, seems to have an economic dynanism which southern Europe simply lacks (and the south will drag the north down with it). Australia, New Zealand and Canada seem to be tucking along just fine.
	__________________ "Faith is the surrender of the mind; it’s the surrender of reason, it’s the surrender of the only thing that makes us different from other mammals. It’s our need to believe, and to surrender our skepticism and our reason, our yearning to discard that and put all our trust or faith in someone or something, that is the sinister thing to me. Of all the supposed virtues, faith must be the most overrated." - Christopher Hitchens

23rd July 2012, 03:02 PM	#3
mikeyx Banned Join Date: Oct 2007 Posts: 3,570	Europe must be destroyed and made into a Theme Park. That and , France Sucks.
mikeyx Banned Join Date: Oct 2007 Posts: 3,570

24th July 2012, 09:07 AM	#4
stevea Graduate Poster Join Date: Aug 2007 Posts: 1,123	Originally Posted by mikeyx ...That and , France Sucks. Except for the wine & cheese and cuisine.
stevea Graduate Poster Join Date: Aug 2007 Posts: 1,123

24th July 2012, 10:28 AM	#5
Steve Graduate Poster Join Date: May 2005 Location: Surrey BC Posts: 1,338	Is Europe finished? For now. It is summer and they are all planning to go on holiday. Europe will be starting up again in September.
	__________________ Formerly known as dogguy. Caption from and old New Yorker cartoon - Why am I shouting? Because I'm wrong!"

24th July 2012, 10:44 AM	#6
DC dedicated aphilatelist Join Date: Mar 2008 Location: Switzerland Posts: 21,675	aaah you meant, is the EU finished.... for a moment i worried a bit.
	__________________ AGW is a fact, including the A, face it

23rd July 2012, 01:52 PM	#2
stevea Graduate Poster Join Date: Aug 2007 Posts: 1,123	So it's either a/ EMU dissolves, b/ EMU takes control of all member economies, issues debt, levies taxes, bails out the poorly managed economies. The listed are just two extremes among many alternatives. I think there are better alternatives, BUT none of them very pretty. So I think this is a case too much fear & gloom in that analysis. I think there is zero chance the entire EMU dissolves. If that happened we'd never see it reconstructed for 100yrs and it's just too advantageous despite the current pain. The worst case scenario is (I think) that the EMU drops Greece, Portugal and Spain and is forced to both write off their debt and prop up Italy. That's ugly but better than no EMU. More likely they keep Spain and Portugal and prop them up too. Perhaps Greece, but that's iffy - Greece is historically very intransigent and their recent arrogance has surprised me. A bailout perhaps means issuing some new class of bailout bond that pays a higher but rational interest rate and is only partly backed by the EMU, the remainder by the near-defaulting nations. Merkel hasn't been very supportive despite that Germany is perhaps the biggest beneficiary of a past and continued EMU. Of course Germany might politically more easily support a reduced EMU with the poor/badly-managed economies kicked out, but this would effectively mean writing off all that debt and suffering with destitute trading partners and ultimately that's intolerable. You can afford to kick out Ireland Greece, Portugal, but only Greece is acting silly enough to kick (I'm not well informed abt Portugal). Europe is severely lacking in decisive leadership, but if rationality prevails the union remains with a common currency and with several economies on probation and maybe only or two very small economies exit. It might help greatly if they purposely broke their charter and ran some inflation for a few years, but ... Germany has a phobia about that. The alternative is pro-growth agenda, but that's very problematic in the current world status. No the future is somewhere between those two alternatives. Mostly OPINION above, I won't try to justify it. So what do YOU think Hume'sF ? You are closer to the action ?
stevea Graduate Poster Join Date: Aug 2007 Posts: 1,123

24th July 2012, 10:55 AM	#7
Humes fork Master Poster Join Date: Jul 2011 Location: Sweden Posts: 2,369	Originally Posted by DC aaah you meant, is the EU finished.... for a moment i worried a bit. No, strictly speaking it would be the EMU. But since we do much of our trade with them, if they go down then so do we.
	__________________ "Faith is the surrender of the mind; it’s the surrender of reason, it’s the surrender of the only thing that makes us different from other mammals. It’s our need to believe, and to surrender our skepticism and our reason, our yearning to discard that and put all our trust or faith in someone or something, that is the sinister thing to me. Of all the supposed virtues, faith must be the most overrated." - Christopher Hitchens

24th July 2012, 01:13 PM	#8
UndercoverElephant Pachyderm of a Thousand Faces Join Date: Jan 2002 Location: Sussex, England Posts: 9,060	Originally Posted by DC aaah you meant, is the EU finished.... for a moment i worried a bit. The EU is not finished. The EUROZONE is in very, very serious trouble. Greece and Spain need to do what Iceland and Argentina have done, but they can't. But they have to...
	__________________ "I am real!" said Alice, and began to cry. "You won't make yourself a bit realler by crying," Tweedledee remarked: "there's nothing to cry about." Last edited by UndercoverElephant; 24th July 2012 at 01:15 PM.

24th July 2012, 01:22 PM	#9
GlennB Jellied eel and offal fancier Join Date: Sep 2006 Location: Arcadia Posts: 8,962	Originally Posted by stevea Except for the wine & cheese and cuisine. And the aqueducts.

24th July 2012, 03:05 PM	#10
mikeyx Banned Join Date: Oct 2007 Posts: 3,570	Originally Posted by stevea Except for the wine & cheese and cuisine. they get to be caterers
mikeyx Banned Join Date: Oct 2007 Posts: 3,570

24th July 2012, 04:35 PM	#11
Marduk Banned Join Date: Apr 2009 Location: Newbury, Berkshire Posts: 10,242	Originally Posted by stevea Except for the wine & cheese and cuisine. you don't believe that do you, thats just propaganda designed to boost their economy which as everyone knows is really based on selling weapons to your enemies consider the only french food recognised and served globally, the fry, isn't even french, typically real french cuisine is frogs legs and snails buddy

26th July 2012, 12:46 AM	#12
kevsta RBL CHeck Failed Join Date: Jun 2007 Location: in the shadows Posts: 2,490	Schaeuble declares "markets wrong" ..and goes on holiday lol. http://www.bloomberg.com/news/2012-0...cation-1-.html Quote: German Finance Minister Wolfgang Schaeuble declared bond traders all wrong in driving up Spanish borrowing costs to unsustainable levels. because the markets are always wrong, and the politicians and planners are always right. now put my towel on that sunbed and get me another tequila. and can you stop that bloody tide coming in over there, its wrong.
	__________________ "The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." - Anonymous Last edited by kevsta; 26th July 2012 at 12:50 AM.

30th July 2012, 09:04 AM	#13
stevea Graduate Poster Join Date: Aug 2007 Posts: 1,123	Originally Posted by Marduk you don't believe that do you, thats just propaganda designed to boost their economy which as everyone knows is really based on selling weapons to your enemies I've got several hundred bottle of Bordeaux and Rhone in the cellar that say you are wrong. As far as selling weapons to enemies - I think Russia, China (w/ proxy Korea) and Germany top that list. [quote] Originally Posted by kevsta ...because the markets are always wrong, and the politicians and planners are always right. It's unsurprising that the guys at the podium are never at fault, according to their own description. What is surprising is that the news reportage and "the 99%" are so easily deceived and co-opted.
stevea Graduate Poster Join Date: Aug 2007 Posts: 1,123