Comments on: The euro zone, slow-motion crashes and Latvia http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/ Sun, 28 Jul 2013 14:34:09 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: whyknot http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-7842 Thu, 12 Jul 2012 12:32:44 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-7842 The US has a monetary and fiscal union yet there are cities and maybe soon to be states that are going bankrupt. 800 billion stimulus only delayed the reality that the money is not there.

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By: southmed http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3968 Mon, 18 Jun 2012 16:35:47 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3968 What´s clear now is that foreign lenders mistrust about “europe” as we know it continues to thrive by the inability of the political leadership to explain their own people some basic facts of life:
1. Even if northern europeans (people and leaders) are regretting now the former adhesion to euro of “mediterrean countries” they cannot simply throw away this by the window and rebuild a new “reliable” and restricted currency without a transition period.
2. Of course this will probably be accompanied by another set of new currencies (for instance, Portugal and Spain are now so inextricably integrated that is virtually impossible to maintain peacefully two different currencies in the Iberian Peninsula).
3. Apart from geostrategic issues arising from this eventual split between north and south, an important economic question should be adressed: are northern rich countries aware that a solidarity failure in a grave moment such as this, even if there is some “moral reasons” to “punish” “lazy” countries coult shatter not only the “Idea of Europe” but also a natural internal market to north european industry.

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By: phoenixnews http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3851 Wed, 13 Jun 2012 02:33:57 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3851 This is a great article well written. However, using Latvia as an example of people pulling together is showing me that they still feared their past with the Soviet Communist. Latvia is not Greece or Italy or Spain or Portugal. It’s comparing a family of one child with a family with eight children. A lot harder to bring 8 kids together and lock them up in one room and make them co-operate with their parents than having a one child co-operatelive on the cusp of a new era in economic cycles. Nothing can be done in terms of stopping the crash in Europe or US or China or India, and most of the world countries.

Reason is very simple, democracy does not work in the long term, politicians are fighting each others to get elected and they’re willing to do anything to get elected just read what’s written in this article above. That’s the problem, how do we elected people to serve us to our best long term interest and serve the interest and the future stability of a nation vs serving the largest block of voters to get elected in the short term, at the expense of the future growth and earning and tax liabilities of a nation. Democracy as we are practicing it today has been around very short time. Just find out when in the US for example gave the right for everyone to vote, women, minorities, etc.

Read what’s in the news everyday, Obama still can win because of the Hispanic voting block in key state, that’s it right there. Short term goal to get elected and be in power.

Eventually all countries are heading the place where Greece is right now.

If Germany comes in and print more money to bail Greece and Italy and Spain, they will add more debt on their country and the rest of the European countries. If they don’t they will see Greece and other nation defaulting and creating a large political vacuum that is being taken advatange of by the far left or far right etc.. more uncaring people taking over.

Adding more debt will put them closer tot he Greek situation.

The US is not far away as well, no matter who they elect, is Obama stays they get closer, another person will delay the eventual change few more years.

I believe the next ten to twenty years things will not be the same in every country.

A new Era will emerge based on more honest and caring leaders that want to really fix the problem and not get re-elected or get elected in the first place.

They measure debt by GDP percentage, a very deceiving measure. You borrow 10 to create 2 in GDP, what happened to the 8?

US Debt is about 6 to 7 times our collected tax revenues, our ability to pay. I never heard of anyone able to pay debt that is 6 to 7 their yearly salary, and still able to buy a house and raise a family and save for his retirement and saving for his kids education and marriages. Try, please someone on this board do the math, to help all of us understand. an income of 100k per year, 600k in revolving credit at 2 percent, a mortgage of about 2k per month and utilities, … I forgot that this person is allowed to spend 3% more than his or her earning per year, so you need to add that 3% additional debt to accumulate each year. I really want someone else to calculate this formula and post it here.

no place to hide, even Gold is not a safe heaven, when the problem is global, all the Indians and Chineses will net gold sellers.

Only your hard labor to produce basics goods like food, and medical care will be first priority.

A new Era will emerge after this large train crash and all of us will suffer the consequences of not taking politics seriously. we as citizens are to blame, we elected and agreed with them to borrow and spend on us.

If these leaders are so bright and capable how come we have had more bad policies than good successful policies. Just take each decision in every country and you will that more than 70 percent of policies are a failure that leads to more failures, and they are able to compensate via more borrowing and more spending.

Nobel Lauerates that are talking about more spending to fix the problem, in theory yes, it will work, if all people are equals in skills and intelligence. that’s one of the issue that economist does bother to delve into, the quality of each individual and what motivate them.

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By: Radek.kow1 http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3846 Tue, 12 Jun 2012 14:00:10 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3846 Latvia, compared to other East European states, is not a success story but rather a disaster story. The IMF-EU austerity programme made Latvia into one of the poorest Eastern EU member states.

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By: DLT http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3814 Mon, 11 Jun 2012 19:59:14 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3814 Latvia is in fact an excellent example of the complete failure of the policy of internal devaluation, a.k.a. austerity recipe. Latvia is, sadly, a dying country/nation.
The problem with the austerity cure is that it kills the patient. 13% unemployment is ACTUALLY a catastrophic number, especially given the fact that it was “achieved” only after an emigration exodus of biblical proportions – the unemployment figure would be much higher, if hundreds of thousands had not voted with their feet and left the country. Even as it is, it just suggests an economy unable to create jobs and chronically lacking aggregate demand.
Also, the much advertised 5.5% GDP growth (after a 18% collapse) are but a temporary blip – growth figures for 2012 and on are much lower and declining.
And a note to the author – Latvia is operating under a currency peg, which means that they are not in control of their currency, they simply cannot “just devalue” their currency. A currency peg is an extremely STUPID and HARMFUL arrangement that leaves them with no room for fiscal stimulus and catastrophic internal devaluation as an only “choice”. A choice that is destroying the country and the nation before our very eyes.

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By: wirk http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3799 Mon, 11 Jun 2012 05:32:20 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3799 Chrystia, Latvia indeed made bravely through the crisis and you correctly identified that was politically possible due to the fear of Russia. Latvians (and to not forget there is huge Russian minority there) want to be in EUrope at any price, at any price indeed as the data are showing. In this context you do not mention the heaviest price paid for the crisis, the price which is not financial. This is massive emigration of young people, thoug not visible on the EU scale it is really of collosal proportions if one takes the size of the country.

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By: Jim1648 http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3795 Sun, 10 Jun 2012 23:29:13 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3795 The reason that the delegates to the U.S. Constitutional Convention were able to achieve compromise is that James Madison locked the windows in Constitution Hall in Philadelphia during the summer of 1787.

The Europeans just don’t get it.

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By: GMavros http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3794 Sun, 10 Jun 2012 21:41:59 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3794 If the Eu had less leaders of Christine Lagarde’s caliber there might have not been as much damage.

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By: GMavros http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3793 Sun, 10 Jun 2012 17:09:12 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3793 The Latvia analogy is irrelevant in the big picture of the Euro’s inherent flaws. The Euro was specifically created to profit the few exporting EU countries at the expense & economic destruction of the rest. Fraud in its grandest form.

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By: Keithhudson http://blogs.reuters.com/chrystia-freeland/2012/06/07/the-euro-zone-slow-motion-crashes-and-latvia/#comment-3792 Sun, 10 Jun 2012 14:29:06 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1662#comment-3792 Even as the idea of a (centralized) United States of Europe was taking off a few decades ago — and long before the Eurozone — a brand new area of science (epigenetics) was rapidly developing. This not only explains why the dour, hard-working disciplined personalities of the Baltic periphery are so different from the laid-back, less disciplined personalities of the Mediterranean periphery, but also why there can never be a coherent and widely-shared ‘European-ness’ until the Eurozone citizens, like Americans, move around between regions so much more freely and, as it were, ‘merge’ their cultural differences. We know now from revolutionary discoveries following on from the Human Genome Project that psychological differences are heritable. All those subtle personality propensities which make one culture (say, German) so different from another (say, Greek) can persist. Epigenetic inheritance is not so permanent as that of genes themselves but they can continue for generations if background environments (of which climate is extremely important) remains the same. It is possible to envisage a successful northern bloc of the Eurozone (in which Latvia would be included), and an equally successful bloc (though with a different way of life) in the south but there are simply too many cultural disparities for the present arrangement to continue for much longer.

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