Author Topic: Is the Euro Zone in an "Endgame?"  (Read 6390 times)

0 Members and 1 Guest are viewing this topic.

Online David Rochlin

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 1001
  • -Receive: 1317
  • Posts: 6714
  • Gender: Male
  • Statue of the Motherland
Is the Euro Zone in an "Endgame?"
« on: 10:48 16-Jun-2012 »
There have been endless articles and predictions that the pivotal moment or final months are unraveling as we visit on Expatua.  We are all, well mostly reading them, or at least the headlines. 
The problem really, is not that nobody is willing to do what it takes to salvage the zone, but that events might outpace the generosity of potential saviors or martyrs for the Euro. 
For example, Spain is given the Euro 100 Billion bank bailout, but everyone suspects that only part of the problem has been exposed.  The banks and Government in Spain play a shell game with debt. 
Greece, is at best going to be unable to implement the bailout agreement, regardless of the outcome of elections.   The kind of event that could finish the zone is suggesting itself now.  We see that Spain was loaned all this money to shore up banks, but, despite this,  even because of it, interest rates for not just Spain, but Italy as well, have been hitting 7% a level that is not sustainable.  Previously, the ECB and other entities have done some quasi-legal stimulus, and currency manipulation and a lot of money creation through low interest loans.  But, they haven't intervened to correct the present problem.  Is it because they are waiting on the result of the Greek elections to spend their fiat money?  Or are they already trying to stem the tide, but unsuccessfully?  Are they marshaling their resources for one huge defensive manouver? 
The interest rate issue is how the end can happen.  Rates could suddenly spike to unsustainable levels...
   Most seem to agree that the Euro will survive, if only to become the currency of a much smaller Zone, a much more Teutonic Euro.   
Many experts describe the problem as an existential, identity or maturity issue for Europe.  Is Europe going to make additional steps toward becoming one unified government, a single, huge country, or was the project a mistake, or even a bubble, fantastic object, or dream  ala the Soros speech?


Offline P-N

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 634
  • -Receive: 2266
  • Posts: 8031
  • Gender: Male
  • Cogito Ergo Sum
    • Odessatalk
Re: Is the Euro Zone in an "Endgame?"
« Reply #1 on: 11:40 16-Jun-2012 »
Who knows?

"Events, dear boy, events" to quote MacMillan.

However, George Soros is dreaming if he thinks a single united government and fully recognisable federation will come from this encompassing what constitutes the EU geographical area of today.

Even Martin Schultz, a federal Europe dreamer in his youth, and currently the European Parliament President, stated only 3 days ago, there was not the appetite amongst the citizenry of Europe, nor the political appetite amongst the national capitals for what Soros proposes/wants to see happen, during a speech at Berlin University.

What is absolutely and abundantly clear is that the Eurozone crisis is only the tip of the EU iceberg when it comes to structural failings.  Whilst it is making the headlines, there is a very large and very loud conversation that has now been recognised by the European Commission, that the EU has a very large and growing democratic legitimacy gap between the Commission and the citizenry.

There are also massive differences on many major policies not only within the 27 EU member states themselves, but also the European Council (made up of those 27 member states) and the European Parliament and the European Commission.  Currently the European Council is at loggerheads with the European Parliament over the downgrading of Schengen and the reintroduction of some internal border checks.

The European Parliament is likely to scupper, once and for all, ACTA, which was introduced by the European Commission and backed by the European Council.

The CAP is up for renegotiation and is in gridlock, as is the EU budget for the next 7 year period, no withstanding issues with democratic rollbacks in Hungary, EU negotiations with Kosovo on visa-free travel when 5 member states don't and won't recognise Kosovo and therefore can't recognise a Kosovan passport, the European Commission is once again pushing Turkish accession despite the fact Germany will veto it, several data storing and mining agreements with the US thrashed out behind closed doors by the Commission are systematically being struck down by the German courts and the European parliament - the list goes on and on and on and on and on!

At a party of Russian diplomats last week, they are of the opinion the EU is now rapidly becoming all form and very little substance, and Russia is generally pro-EU as it wants multiple centres of political gravity, thus in the grand scheme of things from a Russian perspective, a functioning EU, alongside Russia, India, China, the US, etc suits their wishes for the global future far more than one absent of a major pole of political gravity - At least that is what they said, and they were very convincing when they said it.

However, where the EU's biggest failings are, is in leadership.  There are no visionaries, no imagination.  It is a technocratic/bureaucratic administrative behemoth which suffers from an incredibly large identity problem with those it claims to represent.  Without a visionary, imagination, leaders of charisma and  a uniting image, even if the EU sorts out all the impending crisis which will continue to appear, then national identity and national politics will always trump European identity and European politics in the minds of the electorate.

When all is said and done, it must be remembered that those working within any European institution (elected or appointed) are there to put the needs of Europe first and the 27 national interests of its member states second.  National politics are completely the reverse and politicians are expected to put national interests and national politics before that of the EU.

I know who to blame for any national issues as they are identifiable, the responsibilities are clearly defined and accountable through the ballot box.  The EU on the other hand has been designed so that nobody can be held accountable, their roles and responsibilities are smudged and overlapping, and I have no way to hold any European Commissioner responsible for anything through the ballot box as they are not elected, but appointed.

If the EU is going to survive the numerous crisis that currently envelop it, and those that are quite obviously on the horizon but not getting any MSM coverage (yet), there is a decade of fire-fighting still to come.  In the meantime voter turn out for MEPs is very likely to continue its ever downward spiral and at some point you have to question the legitimacy of any vote when it comes to representation, if those voting numbers are of a very low percent of the population.

Now it is very easy to say low voter turn out is political apathy and that people simply don't care.  That may be true.  It may also be true that they don't vote because they don't like any choices given to them and in fact, by not voting they are making a democratic statement that all options given are bad and there needs to be a serious re-think.



"When surrounded by the dark void of the willfully blind, it does not excuse those that are a spark of light their duty to shine" - Me

Offline Tis_me

  • Living life to the min...
  • Subscriber
  • Expat VSOP
  • *
  • Thank You
  • -Given: 119
  • -Receive: 138
  • Posts: 423
  • Gender: Male
  • Look not at where you fell...
Re: Is the Euro Zone in an "Endgame?"
« Reply #2 on: 12:23 16-Jun-2012 »
It will survive, although it will have to be renamed to... 'The Deutcshmark'


Defaults may happen along the way, but with other countries previously having been interested in joining, stability will eventually be restored. There's nothing to stop countries leaving and re-joining at some point in the future.

Granted, i think it is the most stupid idea ever thought up, (well besides the UK being part of the EU that is!).

Expect parity with the dollar at some stage in the next year.
« Last Edit: 12:25 16-Jun-2012 by Tis_me »
"Give a man a fish and he will eat for a day. Teach him how to fish, and he will sit in a boat and drink beer all day."

Online Tnic

  • Rogue Moderator at large
  • Global Moderator
  • I live here
  • *
  • Thank You
  • -Given: 4042
  • -Receive: 1741
  • Posts: 3885
  • Gender: Male
  • Gainfully unemployed
Re: Is the Euro Zone in an "Endgame?"
« Reply #3 on: 12:24 16-Jun-2012 »
I'm far too lazy for all that writing mates.  This video says it quite well though.

http://youtu.be/TN_1mF-3JTI
Recent science has shown that saliva causes cancer, but only swallowed in small amounts over a long period of time.

Offline Tis_me

  • Living life to the min...
  • Subscriber
  • Expat VSOP
  • *
  • Thank You
  • -Given: 119
  • -Receive: 138
  • Posts: 423
  • Gender: Male
  • Look not at where you fell...
Re: Is the Euro Zone in an "Endgame?"
« Reply #4 on: 12:28 16-Jun-2012 »
Funny, i posted a great clip of Farage's opinions elsewhere a couple of days ago, (only minister i have any time for);


Epic Rant - 'Nigel Farage Was Right!'


"Give a man a fish and he will eat for a day. Teach him how to fish, and he will sit in a boat and drink beer all day."

Online Fraucha

  • Administrator
  • I live here
  • *
  • Thank You
  • -Given: 3116
  • -Receive: 4846
  • Posts: 7356
  • Gender: Male
  • What's the future ever done for me?
Re: Is the Euro Zone in an "Endgame?"
« Reply #5 on: 13:34 16-Jun-2012 »
Hitler's dreams seem to be finally coming true.  A unified Europe under German economic control...he would love this. I believe we are witnessing the birth of the 4th Reich.
Peace is the failure of the military to convince the government that it can and should kick its enemies ass.

Offline Tis_me

  • Living life to the min...
  • Subscriber
  • Expat VSOP
  • *
  • Thank You
  • -Given: 119
  • -Receive: 138
  • Posts: 423
  • Gender: Male
  • Look not at where you fell...
Re: Is the Euro Zone in an "Endgame?"
« Reply #6 on: 14:28 16-Jun-2012 »
Deleted
« Last Edit: 19:07 02-Nov-2012 by Tis_me »
"Give a man a fish and he will eat for a day. Teach him how to fish, and he will sit in a boat and drink beer all day."

Online David Rochlin

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 1001
  • -Receive: 1317
  • Posts: 6714
  • Gender: Male
  • Statue of the Motherland
Re: Is the Euro Zone in an "Endgame?"
« Reply #7 on: 19:26 16-Jun-2012 »
I wasn't suggesting that politicians would freely choose to unify Europe.  The idea or theory I referred to, is that the Euro Zone was created with known flaws, because some of the people who put it together, fully realized that resolving those flaws would push or even force politicians to take additional steps toward unity in order to resolve them.  Maybe they didn't expect the alternative to be some economic cataclysm...
   We have today, some circumstances that will compell political leaders to make choices that they don't like, accept decisions that they don't want.   They already are doing that. 

As for the Euro's direction, we have a situation where the U.S. and China are taking turns running the printing presses, because both countries find cheaper money is spurring trade and manufacturing, for the present, at least.  But, until recently, with the huge cheap loans made to banks, the Euro Zone has not entered the game.  Austerity has hurt EU exports.  So, the EU economies will benefit from a cheap Euro.  It really just brings the EU in sync with other economies, allowing fair competition.  Even Germany would benefit.   The potential Euro=$US scenario would really crank up exports.  It would not be good for the U.S. or China, though.

Offline P-N

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 634
  • -Receive: 2266
  • Posts: 8031
  • Gender: Male
  • Cogito Ergo Sum
    • Odessatalk
Re: Is the Euro Zone in an "Endgame?"
« Reply #8 on: 20:44 16-Jun-2012 »
I think you are giving those who designed the Eurozone far too much credit if the idea was to draw a political union further down the line when a crisis came along.

It is much more realistic to see it as ineptitude, something which endemic throughout the EU due to its design to avoid accountability and personal responsibility.
« Last Edit: 20:48 16-Jun-2012 by P-N »
"When surrounded by the dark void of the willfully blind, it does not excuse those that are a spark of light their duty to shine" - Me

Online David Rochlin

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 1001
  • -Receive: 1317
  • Posts: 6714
  • Gender: Male
  • Statue of the Motherland
Re: Is the Euro Zone in an "Endgame?"
« Reply #9 on: 23:11 16-Jun-2012 »
The idea is that the process of fiscal integration is forced upon policy makers, to remediate the flaws in the common currency union.  In this scenario, step by step, they resolve the financial problems of the day, surrendering sovereign rights, little by little.  One day they get out of bed, and step into "One Europe."  It is more that this may have been the intention of some of the creaters of the Zone, perhaps more of an rationalization  for accepting something flawed at its inception, than a plan.
Fixing the common currency means more Europe, despite that only some want it.
    A problem is that markets can destroy a weak currency in a matter of days, much faster than the Eurozone can reinvent itself.  The most perplexing thing about the whole mess is that if the ECB simply gave every country in the  Zone, a some Euros in proportion to the size of their economy (Germany would get more than bankrupt states,) but at a minimum enough to pay their debt, then this would solve the immediate crisis and provide a couple of years to reach some new economic solution.

Online David Rochlin

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 1001
  • -Receive: 1317
  • Posts: 6714
  • Gender: Male
  • Statue of the Motherland
Re: Is the Euro Zone in an "Endgame?"
« Reply #10 on: 00:26 17-Jun-2012 »
It will survive, although it will have to be renamed to... 'The Deutcshmark'


Defaults may happen along the way, but with other countries previously having been interested in joining, stability will eventually be restored. There's nothing to stop countries leaving and re-joining at some point in the future.

Granted, i think it is the most stupid idea ever thought up, (well besides the UK being part of the EU that is!).

Expect parity with the dollar at some stage in the next year.

It seems to me that although Europe and UK are hurting, UK actually is seeing some benefit from being in EU, but not part of the Eurozone.  London has become the most comfortable safe haven for capital flight. 

« Last Edit: 18:46 17-Jun-2012 by David Rochlin »

Online David Rochlin

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 1001
  • -Receive: 1317
  • Posts: 6714
  • Gender: Male
  • Statue of the Motherland
Re: Is the Euro Zone in an "Endgame?" Greek Election
« Reply #11 on: 18:58 17-Jun-2012 »
As of about thirty minutes ago, with polls almost ready to close, Syriza the Radical Left, anti-bailout party will clearly perform much better than in the previous election.  Polls show them within about half a percentage point of winning outright, and closer than the margin of error.  Polls were not able to call the other recent election, and news stories have suggested the countryside in Greece, might vote for Syriza.  Their votes might come in last.   Syriza victory would drastically intensify the confrontation between Greece and the EU Zone administrators/ Germany.  At best the confrontation between Greece and creditors will continue to simmer without resolution.

As of now, Pro-Bailout Party, New Democracy is officially projected to win the election by 2.5%.
« Last Edit: 19:37 17-Jun-2012 by David Rochlin »

Offline MWDabbs

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 217
  • -Receive: 285
  • Posts: 1270
  • Gender: Male
    • Opera Mobile Store Blog
Re: Is the Euro Zone in an "Endgame?"
« Reply #12 on: 03:19 18-Jun-2012 »
I think you are giving those who designed the Eurozone far too much credit if the idea was to draw a political union further down the line when a crisis came along.

It is much more realistic to see it as ineptitude, something which endemic throughout the EU due to its design to avoid accountability and personal responsibility.

I'd really like to think it is colossal ineptitude or incompetence. 

A.  "All warfare is based upon deception."  - Sun Tzu.   
B.  It also follows to never underestimate your enemy.

There are 4 possible categories of people involved per this breakout:

1.  The competent and honest.
2.  The incompetent and honest.
3.  The competent and dishonest.
4.  The incompetent and dishonest.

The facts as we KNOW and can PROVE them to be, clearly indicate that groups 1 and 2 are not involved. 

Are we really willing to take them at their word that this was all just a mistake, a series of miscalculations? 

Or maybe we could give them credit for coming up with a plan where they don't really lose anything except the "perception of wealth" with everyone watching what the right hand does oblivious to the actions of the left; gain a buttload of real estate/property; and a whole bunch of money from everyone else who had absolutely no or very little involvement with anything?   

I'd say that's a pretty good plan... hell, I'd even bet that's just the beginning of it.   Almost everyone I know would be happy to see the current system collapse and be replaced by something else.  Even I would... which is to say that things are getting so bad that we will be HAPPY to get something even worse. 

How's that for a nice bright ray of sunshine on a Monday morning?


Coronal Mass Ejections on my shoulders make me happy. 
Coronal Mass Ejections in my eyes can make me cry.
Coronal Mass Ejections on the water looks so lovely.
Coronal Mass Ejections almost makes me high. 

We cannot afford governments that cannot afford to take care of our veterans.

Online David Rochlin

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 1001
  • -Receive: 1317
  • Posts: 6714
  • Gender: Male
  • Statue of the Motherland
Re: Is the Euro Zone in an "Endgame?"
« Reply #13 on: 11:36 18-Jun-2012 »
I see the EU and the Eurozone as the product of visionaries, dreaming of a new age of Napoeon, or a new Austria-Hungarian Empire.  They wanted to lead a new superpower, or preside over an empire instead of a country, or simply make the future more secure, by absorbing neighboring entities into the Borg.
Cute Girl's  Cover of Voltaire's "USS Make poop Up" which includes at a minimum, one line about the Borg, and describes another Empire with a plan:
Voltaire - USS Make poop Up (Cover)

Online David Rochlin

  • Subscriber
  • I live here
  • *
  • Thank You
  • -Given: 1001
  • -Receive: 1317
  • Posts: 6714
  • Gender: Male
  • Statue of the Motherland
Re: Is the Euro Zone in an "Endgame?"
« Reply #14 on: 21:54 19-Jun-2012 »
Spain is now in the spotlight, because interest rates at the last auction of Spanish government bonds exceeded 7%, a rate generally regarded as spelling doom in the Eurozone.  Should the rate stay this high, Spain would eventually be forced to request a bailout.  Should Spain request a bailout, European, even American and perhaps Chinese banks would be forced to recognize that Spanish Gov't Bonds might be defaulted on.  This would be a much worse situation than Greece.  Remember that in the last year, European banks were lured into accepting super cheap loans that came with recommendations that Spanish Gov't bonds be purchased with the proceeds.  Spain may bring down many of Europe's largest financial institutions.  And then the fear factor.  In Spain private investors are withdrawing funds from banks, finding that it takes as much as a week to transfer large sums of money.
An interesting note about life in Greece is that burglars are making a fortune, because people are hiding savings in their homes...