Money quote(s):
"The best chance for some sort of orderly outcome is to divide the Eurozone into two new currencies (Euro 1 - based on the deep logic of the old Hanseatic League which did well for 402 years! - and Euro 2), letting those countries which need a devaluation boost join Euro 2. If Germany heads Euro 1 and France Euro 2, the Franco-German axis can have a fine new job."
It reminds me of the Cold War story of some national leader or another saying he liked Germany so much he wanted two of them.
"What do we Europeans basically want? To get richer, live nicely and not fight.
There is no reason why this should not be achieved through a network of several smaller regional European Unions with customised levels of integration and mutually reinforcing basic trading and security relationships. This arrangement would also make further enlargement much easier - Turkey might become the core of a new Regional Union.
All the expensive and annoying central bureaucracy could be scaled back or even abolished - farewell, European Parliament. Legitimacy and public accountability within each Regional Union would soar, as the governing arrangements would be much less remote.
Above all such a scheme would not be brittle, subject to horrible institutional contortions as one sprawling Union tries to accommodate quite different needs, policies and cultures."
Dr. Helen Szamuely at Your Freedom and Ours ("A blog about politics and other things... ...but always from the right perspective.") welcomes Americans to their dawning realization.
Money quote(s):
"By and large, American attitude to the European project has varied from "not all that interested" through "you guys need to get your act together" whenever some American interest was hit to "great idea this unification if only it could be done the right way". I exaggerate but only a little though I do have a number of friends on the other side of the Pond who long ago grasped that the European Union was a very bad idea, ought never to have happened but now that it has, ought to be got rid of and Britain ought to take her rightful place within the Anglosphere"
The Anglosphere is an interesting topic and I think the notion sheds some light on why the "European project" hasn't (or isn't) resulting in the United States of Europe so desired by many of the Brussels persuasion.
(For those unfamiliar with the term, the "European project" refers to the ever-closer union-ing that's taken a coal & steel market to today's European Union.)
The Thirteen Colonies, for all their squabbling problems, had one thing that Europe has never had: a common language.
"(W)hat will come after "Europe" will be Europe without quotation marks. You know, the one that has been around for some time and has produced quite a few good ideas as well as a large number of bad ones."
Europe isn't going anywhere this side of a supernova or major asteroid impact.
How united it will be, or even how European it will remain, are different sets of questions.
"The outright fraud was there from the very beginning. Indeed, the fictions he lists, which some of us have been writing about for more years that we care to admit to, are inherently impossible without fraud.Nevertheless, this is quite a big step forward in our fight to make the truth known in the United States. Now, all we need is an understanding of it in Britain."
Blessedly, Great Britain never fully succumbed, at least to the point of joining the common currency, to the continental madness.
9/20
Charles Crawford at Blogoir ("A digital hybrid of blog and memoir presented on a daily basis, or not.") borrowed extensively from a Wall Street Journal piece.
His own comment(s):
"Apart from Belgium which ceased to exist long ago, no EU member state really wants to be subject to German intrusive control over its finances."
&
"Read the whole thing. Then run out and buy tinned food while the shops still operate."
9/20
Dafydd at Big Lizards ("everything in this site is under construction, except for the blog") made some predictions that seem a lot less crazy than they would have even a year ago.
(DISCLAIMER: CAA is not any sort of economist by training, education, or inclination.)
Money quote(s):
"We all know that something is rotten in the state of the European Onion; but I'll be the boldest by staking out this prediction:
Within six years from today, by September 14th, 2017, the European Union as a political body will cease to exist except on paper. And the whole sorry farce of "United in Diversity" will be nothing more than a vivid and utopian opium dream."
Recall that there are/were a host of lesser-and-or-included international organizations still persisting in sort of a state of suspended relevence, such as the WEU and other various treaty-generated bodies.
The EU, which is only the latest phase of long string of existances which began as a steel and coal consortium, will likely continue some sort of legal existance, even if only as a collection of surviving components.
In a similar fashion, some portions of the former League of Nations survived to be incorporated into the U.N.
"The Euro will no longer be a semi-pan-European currency; each country will revert to its native currency -- lira, deutschmark, drachma, pound sterling (all right, all right, the last never actually disappeared) -- and the Euro will only be honored as trade-in on the local national currency."
Speculation on just how that would be implemented is already making the rounds of the blogosphere.
(I particularly like the notion of checking ones Euro currency and coinage and separating out the ones printed/minted in other EU countries, then exchanging them until you only have those from you own country. Although I kinda/sorta/really doubt that would make any practical difference in the end.)
Back in the real world, you can already see news reports of capital flight such as from Greece to the U.K.
"(T)he EU (pronounced eeew!) has never really existed except on paper in the first place. Nobody really believes that Greece, Portugal, France, Spain, Germany, Bulgaria, Latvia, and the UK (pronounced yuck!) are all contained within a single geopolitical unit. It's impossible and insane.
But I mean something stronger: Under my prediction, nearly all the political entities putatively absorbed into the EU, and all of those with functioning economies without exception, will have formally repudiated any supernational "sovereignty" of the European Union; if it exists at all, it will be only as a "free-trade zone." "
Oddly, the "free-trade zone" is the single most practical and useful part of the EU. I hope it survives.
"(I)it's already happening; and the trigger has been the looming debt defaults (often driven by bank failures) and proposed and actual bailouts of perpetual paupers Greece and Portugal; countries with serious deficit and debt problems, such as Italy, Ireland, and Spain; and even the very powerhouse economies that are called upon to bail out everyone else: Germany, France, and the United Kingdom. (Ireland and the UK are in trouble mostly because their banking systems are integrally tied into their federal budgets.)"
What goes unmentioned here is how much debt paper from the PIIGS is held by the major banks in the "powerhouse economies" (esp. France and Germany). The last thing those countries want is for the music to stop and for those "investments" to be written down (or off).
"Take Germany as one example; it doesn't want to bankrupt its relatively good economy with a succession of bailouts to the many countries in the EU that face imminent economic collapse. But on the other hand, I doubt Germany is anxious to be made into the scapegoat for the political implosion that might result from denying those bailout loans.
And there are likely legal consequences, too: By joining the EU, Germany and the other member states accepted the jurisdiction of the Court of Justice of the European Union. If the other strong economies (France, the UK, others) bought into the loan package, but Germany refused, the contributors might be able to go to the Court of Justice and try to force Germany to comply.
I have no idea whether the CoJ has either jurisdiction or authority to force a member state to join a bailout... but my guess is that neither does anyone else; I strongly suspect that the rules of that court are kept deliberately vague, allowing tremendous latitude for the court itself (and favored litigants), and tremendous risk for Germany, or any other member state thwarting the decisions reached at the upper reaches of the European Parliament. I wouldn't be surprised if there was some provision allowing Germany to be haled into the dock at Luxembourg and hit with fines and potentially political punishment.
Bottom line, I don't think it's feasible for Germany to refuse to lend the money, but still remain in the European Union. (Note that this same analysis applies to every other member state expected to pour its treasure into rescue packages for the basket cases.)"
How many divisions has the CoJ? Jurisdiction or authority notwithstanding, exactly how does Brussels expect to force Germany to do anything?
"In the end -- if not for this bailout, then for the next, or maybe the one after (that's why I gave my prediction a six-year time span) -- the rich states will not crucify themselves upon a cross of continentalization. Either the current government, or else the next, after that government falls, will run for election on the platform of withdrawing from the EU, notwithstanding the fact that there is no provision for unilateral withdrawal.
Once some nation, Germany or another, punches the first hole in the dike, the other EU member states who have a functioning economy will disassociate from the Union rapidly. If stable states are reluctant to bankrupt themselves propping up the perpetually collapsing states, think how much more reluctant they'll be when one of more of their fellows in stability opt out: "Why should we pay tens of billions to Greece and Portugal when Germany isn't paying a single deutschmark?", the next state will cry... and that argument is pretty unarguable." (Emphasis in original text. - CAA.)
For the moment, I expect more deckchair shuffling, and perhaps the morphing of the Eurozone into a two-tier arrangement.
On the other hand, as a consular officer I believe it's incumbent in my duties to thing-the-unthinkable and do some worst-case-scenario crystal ball reading in order to anticipate some worst-case contingencies. In the event the Eurozone were to come unglued, what happens to the tens of thousands of American travelers and tourists passing through when their bank cards stop working (or worse).
Money quote(s):
"From good if over-optimistic or even naive intentions you can end up in a hopeless place, where no good move is available. This is why the eurozone problem is so difficult for our top policy-makers."
Bonus quote:
"(A) Scary Thought about FCO consular work: what would HMG do if Greece's money system crashed during peak holiday season, leaving a million Brits stranded there with cash machines not working?
The FCO mind boggles."
CAA earnestly hopes someone or several someones back in the (U.S.) Bureau of Consular Affairs (i.e., the CA "mother ship") is "thinking the unthinkable" about the Eurozone and doing a little bit of contingency planning.
11/4
Money quote(s):
"(T)the Wikileaks document dump exists in a category of its own.
The material is so powerful precisely because it blows away Assange’s banal anti-Americanism. Yes, it’s horribly embarrassing for Washington that all these cables have leaked. Confidences have been ruined. Sources endangered. In terms of writing style the cables often err on the dense and overlong side.
However, far from exposing the dark side of American/Western policies they show as never before the strengths and values of the Western Anglosphere diplomatic method. The documents uncover mile after mile of sensible, balanced, practical, timely and reasonable analysis and comment by American diplomats, often with amusing extra insights and personal touches..." (Bold typeface added for emphasis. - CAA.)
Which is nice of him to have said. One tries, after all.
"The UK has of its own free will (at least as expressed through Parliament when ratifying the Lisbon Treaty) accepted EU voting rules which allow this to happen, just as the Treaty also provides a procedure to enable a Member State to leave the Union and get back all its sovereignty once again.
Nonetheless, as the eurozone crisis gathers momentum, the existential question of sovereignty is coming back to the fore even in placid, postmodern Europe. What claims, if any, do (say) Greeks have on (say) German resources and hard work by virtue of EU ‘solidarity’? What claims do eurozone members have on (say) the UK, smugly watching the disarray from across the Channel? Tricky."
These are not exactly idle questions nowadays.
