Comments on: Euro zone pain: hurts so good http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/ Fri, 05 Dec 2014 14:27:05 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: BajaArizona http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-197 Thu, 22 Dec 2011 03:23:23 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-197 I recommend the third comment by grafspee more than the article. The existence of the Euro currency is underlying every facet of what’s wrong with the European Union’s economy. It is a simple mismatch. A currency must reflect (positively or negatively) on a specific government and people’s market position. The Euro doesn’t, can’t, and never will be able to do that for a collection of independent countries. Either the euro must not exist, or the independence of European countries must not exist. Even a casual reader of history couldn’t imagine a scenario where all the countries in the Euro zone forfeit their independence and become parts of a larger federal structure, rather than the mere confederates they are now. Will. Not. Happen. So that means for certain that the euro will be discarded sooner or later. The markets have only truly been waking up to this fact for the last two months. The politicians will indeed be forced to acknowledge the same but only after a horrific amount of time and money has been wasted.

I have but one disagreement with grafspee. Germany has enjoyed an enormous trade surplus do to the Euro. For an outlay of around 76 billion, Germany has in the last ten years gained 1.6 trillion from beneficial trade that wouldn’t have existed with a fairly valued deutschmark. So I don’t see anyway for Germany to come out of the crisis in a better position than they are now, as you predict. Great post, btw. And I almost never say that.

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By: Beethoven http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-188 Mon, 12 Dec 2011 12:03:07 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-188 Funny how often anglo-saxons end up prophesizing and/or wishing the EU or the eurozone to break up. Must be some psychological thing. And here we have a comment that shows the way Mrs. Merkel (with that odd little chap she always takes along) has been going for a long time now: the EU and the euro are going to survive and the framework of treaties will be adjusted. 26-1.

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By: Jim1648 http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-186 Sun, 11 Dec 2011 15:19:59 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-186 Rewriting the treaty so that Germany dominates Europe (whether they want to or not) is not the way to ensure stability. (How soon we forget). Allowing the Eurozone to break up inflicts pain too, but is a more sustainable long-term course.

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By: Cranberries http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-185 Sun, 11 Dec 2011 07:15:12 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-185 For once this guy is correct. You cant have 17 nations and one currency. You need a central governmental authority and the only way you get that is from consolidation of power. Stop fooling with national pride Europe, set the world standard and create the beginnings of a new world. Create a world government!

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By: Cranberries http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-184 Sun, 11 Dec 2011 07:15:07 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-184 For once this guy is correct. You cant have 17 nations and one currency. You need a central governmental authority and the only way you get that is from consolidation of power. Stop fooling with national pride Europe, set the world standard and create the beginnings of a new world. Create a world government!

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By: FBreughel1 http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-183 Sat, 10 Dec 2011 16:21:36 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-183 Mr. Bremmer, thanks for this clear analysis.

Indeed, the EU is on the right path and now frontrunner when it comes to tackling government budget deficits.

We and our politicians need to do more and work harder but at least this crisis is not wasted.

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By: grafspee http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-182 Sat, 10 Dec 2011 06:41:41 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-182 The bottom line to the fiscal debacle in the Eurozone was the adoption of the Euro as a common currency. Based on my scant memory of international economics which I studied in the early 1970’s, the individual currencies of the five European countries had to operate within a speciffied snake band. Any deviation within that + or- bank could create a warning to that country deviating within the limits of the band. The individaul country currency was a reflection of the monetary, fiscal policies, gdp etc. The Euro distorted the economic position of each country. A common currency effectivelly meant that the fiscal policy and efficiencies of the Italian economy were the same as those of the German economy. The present Eurozone crises proves that the Euro is not a reflection of of the true efficiencies nor similarieties of each country.
The capital markets may force restrain and austerity on countries like Greece and Italy, but austerity are not going to improve the efficiencies of the markets of these two respective countries. The Emperor Diocletian set forth an Aggresive economomic reform in the 3rd century AD. The Roman people tightened their belts for 250 years..but eventaually the Roman economy collapsed.
Finally the only country that will come out of this crises as a net beneficiary is Germany. German aims in the First World War was the fulfilment of the concept of Mittleuropa in which Germany would be the dominant leader in Europe based on its political, economic and military dominance. It has fulfilled two out of the three goals.
Will European governments submit to the review of their national fiscal markets by some supernational European organization dominated by Germany and France.I do not believe so. The Concert of Europe failed after Napoleon’s defeat. The Eurozone operating under a common currency will fail within 10 years….pure and simple.
grafspee

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By: scythe http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-181 Fri, 09 Dec 2011 06:33:40 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-181 well written, ian bremmer, and good to read your analysis

resolving the current eurozone fiscal policy anomalies is a unique situation and provides much for analysis

some have tried to exploit its unknowns for speculative profit or simply to expunge EU institutions

hopefully thomson reuters will see this historic precedent as an opportunity and challenge to test the validity of its own preconceptions and predilections

they cannot continue to serve two masters

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By: Intriped http://blogs.reuters.com/ian-bremmer/2011/12/08/euro-zone-pain-hurts-so-good/#comment-180 Fri, 09 Dec 2011 06:22:27 +0000 http://blogs.reuters.com/ian-bremmer/?p=186#comment-180 A Rewrite of the treaty will not happen in our life time. They will have to settle for what they can get from 17 nations. No country in a coherent state of mind would relinquish there budget control to another nation of nations under the current teenage life of the Euro as a hole. Infant and former communist block countries that want to join the currency will also be left on the side lines for at least 2 decades. The Euro economy as we know it today will function but not at the perceived breakneck speed as once envisioned. And if the world stumbles financially so be it, we all need to re-look at our priorities in basic purchase and come down to earth. The world has been living beyond collective means for over a decade and it will stop somewhere.

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