Thursday February 23, 2012

JAPAN NEWS AND DISCUSSION

Merkel, Sarkozy say EU treaty needed to save euro

World Dec. 06, 2011 - 07:00AM JST ( 23 )

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23 Comments

1

MaboDofuIsSpicyDec. 06, 2011 - 08:33AM JST

Be nice to see this mess cleaned up so stock markets can start rallying again.
0

Elbuda MexicanoDec. 06, 2011 - 09:05AM JST

Also be nice if they can actually save the Euro!!
-2

AiserXDec. 06, 2011 - 09:36AM JST

It would be nice if the Euro would just collapse already. It is such a horrible fiat experiment that hampers economic growth and redistributes wealth from goods producing countries to none producers. Such as German incentives to Greece. The Euro MUST be replaced by national currencies so that individual countries can compete in the market place, instead of having the same rate of inflation/deflation and interest rates for all members of diverse economies.
1

TriumvereDec. 06, 2011 - 10:18AM JST

a horrible fiat experiment that hampers economic growth and redistributes wealth from goods producing countries to none producers.

Say what now?

Germany, industrial powerhouse, has been the chief beneficiary of the Euro, allowing it to export its goods much easier than it would have been otherwise.
0

ScroteDec. 06, 2011 - 10:20AM JST

I can't see this working. They already have a stability pact, which is widely ignored. If the treaty is changed countries will simply fiddle the figures to make it appear they are meeting the targets. For example, PFI spending in the UK is not counted as government spending, with the result that it appears that hospitals etc are being built for nothing. The money still has to be repaid though.

Not long ago the Conservatives promised to put PFI spending on the books, but that promise was soon broken. They prefer the off-the-books PFI, even though it's far more expensive, wasteful and complex than direct government investment. This is exactly what will happen in the Euro zone. Countries will still end up bankrupt despite claiming to have run a balanced budget.
0

DotobockDec. 06, 2011 - 10:46AM JST

First Greece, then Portugal, then Hungary, where does it end? It doesn`t. The EU will keep on imploding and the Euro will go down as a failed experiment. European countries which did not become EU member or implement the Euro were right all along.
0

AiserXDec. 06, 2011 - 11:57AM JST

Germany, industrial powerhouse, has been the chief beneficiary of the Euro, allowing it to export its goods much easier than it would have been otherwise.

Now think how much easier it would be if it had it's own currency? It certainly would not have no obligation or need or incentive to bail out the PIIGS. Yes Germany would have been in a much stronger position.

The point is, you cannot argue that Germany is the "chief beneficiary" of the Euro when it's forced to redistribute its hard earnings for lazy economies like Greece. It is not beneficiary.
-1

WilliBDec. 06, 2011 - 12:31PM JST

Triumvere:

" Germany, industrial powerhouse, has been the chief beneficiary of the Euro, allowing it to export its goods much easier than it would have been otherwise. "

Absolute nonsense. Exports that you pay for your yourself are not a benefit. By the same token, you can go shopping on credit and then ask the shop to give you the money so that you can pay them.... saying that you are boosting your sales. That is the logic you are applying here.

Fact is, the moment that Germany stopps guaranteeing PIIG country debts, the Euro is over.
-2

WilliBDec. 06, 2011 - 12:33PM JST

Scrote:

" can't see this working. They already have a stability pact, which is widely ignored. If the treaty is changed countries will simply fiddle the figures to make it appear they are meeting the targets. "

Exactly. And if the PIIG country really accepted Brussels new powers and a de facto colonial rule by German financial governors, their populations would revolt.

And EVEN if this undemocratic scheme were to work --- is this new European Franco-German empire really what we want.
-1

JeremiahWDec. 06, 2011 - 02:16PM JST

They will beg America to intervene sooner or later.
-1

WilliBDec. 06, 2011 - 03:45PM JST

JeremiahW:

" They will beg America to intervene sooner or later. "

They are doing that already, check out here: http://www.reuters.com/article/2011/12/04/us-eurozone-imf-fed-idUSTRE7B30X320111204

The American Fed is going to try to give money (freshly printed) to "help" keep the Euro alive. You really can´t get crazier than this.
0

edbardoeDec. 06, 2011 - 05:20PM JST

Merkozy will require a "balanced budget amendment" from the euro countries!! American liberals must be dizzy, always telling us the Europeans do things so well and now they take a page straight from the Tea Party!
-1

unreconstructedDec. 06, 2011 - 05:54PM JST

The price people, cultures, nations and even civilizations pay in pretending to themselves that we are all alike, have the same values and work ethic.
1

ExportExpertDec. 06, 2011 - 10:22PM JST

Burn the euro its dragging everyone down, stand on their own and win or fail, they are not equal economies.
0

TriumvereDec. 06, 2011 - 10:33PM JST

You guys don't get it. A strong deutch mark would had destroyed their exports, because no one would have been able to afford them. It's the same reason that China keeps its currency devalued. Yes, the idea that hard-working Germany should have to pay for lazy Greece and Portugal is obscene, but most economist believe that the bailouts will cost Germany several times less than what Germany will lose if the Euro disintegrates. Essentially, Germany not salvaging the Euro would be cutting off its own nose to spite its face, as the saying goes.
1

DSDec. 06, 2011 - 10:40PM JST

No, it would be allowing the free marketplace to decide winners and losers, instead of incompetent central planners. If banks are gonna fail, let them. That's the cost of doing business poorly. The system doesnt work if rewards are kept, but risk is spread around and/or eliminated..

The idea of a unified currency was a joke. It's like having a joint bank account with the loser down the street. You want HIM to have access to your money?
0

TriumvereDec. 06, 2011 - 11:56PM JST

No, it would be allowing the free marketplace to decide winners and losers, instead of incompetent central planners.

In principle, I agree with you. But, there are real world costs to following this course of action. And you need to be serious about what those costs are, instead of just spouting rhetoric. Only then can you decide on a course of action.
-1

WilliBDec. 07, 2011 - 12:50AM JST

Triumvere:

" You guys don't get it. A strong deutch mark would had destroyed their exports, because no one would have been able to afford them. "

Your concern for Germany`s industry is touching, but where is your concern for the Greek tourism-and-olives economy, which is burdened with a way overvalued currency?

Fact is, German with a strong Deutschmark for 50 years BEFORE the introduction of the Euro, and did well through countless revaluations. For Greece, a the overvalued currency is a disaster. Likewise, German high-tech industry needs the turbo-charge of a too-cheap currency like a fish needs a bicycle. The Euro is bad for everyone.
-1

WilliBDec. 07, 2011 - 12:56AM JST

DS:

" The idea of a unified currency was a joke. It's like having a joint bank account with the loser down the street. You want HIM to have access to your money? "

Good analogy. Now to stick with the Euro situation, the original deal was that he should get his finances in order, and you would never have to bail him out. (The "no bail-out clause" in the Maastricht treaty.) Now eventually, the collectors know on his door, and suddenly you find that everybody expects you to bail him out anyway, since he must not go bankrupt. Well there we are.

Of course, this game stops the moment where you are yourself bankrupt --- i.e. when Germany´s credit rating gets as bad as Greeces. We are getting there rapidly. And that will be the end of the stupid Euro scheme.
-1

WilliBDec. 07, 2011 - 01:00AM JST

Dotobock:

" First Greece, then Portugal, then Hungary, where does it end? It doesn`t. The EU will keep on imploding and the Euro will go down as a failed experiment. European countries which did not become EU member or implement the Euro were right all along. "

Actually, Hungary is not part of the Euro, and Hungary's current problems are unrelated and can be solved. Hungary has control over its own currency, so is not affected by the Euro disaster --- except to the extent that the EU puts pressure on them to contribute to the various idiotic "rescue funds" for the Euro.

Think about it... rescue funds for a currency. Who ever has heard such idiocy before. Since when does a currency nees to be rescued.
-1

DotobockDec. 07, 2011 - 01:38AM JST

The $ needs to be rescued as it is going down the toilet and turned into toilet paper. But Hungary is going broke getting these idiotic loans as in an ultimatum for being an EU member.
0

TriumvereDec. 07, 2011 - 02:57AM JST

Your concern for Germany`s industry is touching, but where is your concern for the Greek tourism-and-olives economy, which is burdened with a way overvalued currency?

You misunderstand me. I am neither pro- (or anti-) Euro, or EU for that matter. (Though it has long puzzled me why European nations would be so eager to give up large portions of their own sovereignty).

I was simply refuting the absurd idea that the Euro was of no benefit to producers like Germany, when it has, in fact, been of enormous benefit.

There certainly have been costs, as well - not the least of which is the current debt crisis. The major mistake, it would seem, was monetary union without union of fiscal policy - aka you can't have your cake and eat it, too.

My broader overall point is that there are significant costs associated with abandoning the Euro, and these costs have to be taken into account. The entire matter hinges on whether or not A) you believe the Euro can be saved, and B ) whether you believe the cost of saving it is greater than the cost of not doing so.

You may be entirely correct in your belief that trying to save the Euro is a fool's errand. However, you don't arrive at that conclusion by spouting free market dogma. Rather, you must come to a conclusion after a rational evaluations of the costs involved.
0

WilliBDec. 07, 2011 - 04:56PM JST

Triumvere:

" I was simply refuting the absurd idea that the Euro was of no benefit to producers like Germany, when it has, in fact, been of enormous benefit. "

Again, your saying so does not make it so. Firstly, the export advantages that Germany gets from the cheap currency are more then offset by the transfer payments to the PIIG countries and other Euro related costs that Germany is paying.

Secondly, when you correctly point out that a cheap currency helps exports, why look at Germany and not at the PIIG countries? Germany can afford an expensive currency, the PIIG countries can not. For Greek exports, the expensive Euro is truly a disaster. If any country desperately needs a cheap currency, it is Greece.

So, is it curious that you stress the benefit of a cheap currency for Germany, but deny the same for Greece.