On 8th February 2013, the Texas International Law Journal organised a conference on the theme of The Nation State and its Banks. Click here for the full program. The organisers were kind enough to invite me to give the lunchtime talk, which I chose to be European Banking Union: Behind the rhetoric. You can here an audio of the talk by clicking Banking Union audio. In brief, my message was that Europe’s leaders agreed to begin the process of forging a Banking Union that is, to all intents and purposes, economically meaningless, at least in the context of the current crisis. If the Eurozone survives, the Banking Union will eventually emerge. But the current moves towards the Banking Union are a cynical attempt to ensure that Europe will not de-couple its banking from its sovereign debt crisis as part of a rational effort to arrest the current crisis; a crisis that is getting worse the calmer the bond markets are becoming under the influence of Mr Draghi’s OMT. In short, the prognosis I offered in my talk was threefold:
- There will be no meaningful Banking Union that helps resolve the current crisis
- OMT has created a dead calm but under the surface the crisis is getting worse, primarily because it allows Germany to kill off the June 2012 EU Summit agreement on bank recapitalisations
- If the Euro dies, the EU will follow suit. But if the Euro survives, a genuine Banking Union will emerge but then it will be undesirable and impossible for a nation to be in the EU but not in the Eurozone. For this purpose Mr Cameron is right (most likely for the wrong reasons): there will be no place for Britain in a future, post-Crisis, EU!
For my talk’s outline in greater detail, click…
A. THE EUROZONE’s TRIPLE CRISIS:
- Europe created a common currency that removed all shock absorbers while ensuring that the shock would come and, when it came, it would be tremendous. Its elements were: Perfectly separable debts, No lender of last resort (Irish PN), No default mechanism for banks or states.
- Once the Crisis hit, we observe a failure of Europe’s imagination to imagine a Decentralised Europeanisation of Debt, Banking Losses and Aggregate Investment
B. MY PROGNOSIS:
- There will be no meaningful Banking Union that helps resolve the current crisis
- OMT has created a dead calm but under the surface the crisis is getting worse, primarily because it allows Germany to kill off the June 2012 EU Summit agreement on bank recapitalisations
- If the Euro dies, the EU will follow suit. But if the Euro survives, a genuine Banking Union will emerge but then it will be undesirable and impossible for a nation to be in the EU but not in the Eurozone. For this purpose Mr Cameron is right (most likely for the wrong reasons): there will be no place for Britain in a future, post-Crisis, EU!
C. THE INSOLVENT BANKS-BANKRUPT STATES DEATH-EMBRACE: Two examples
- Unicredit LTRO – Greek state-banks-ECB-ELA
- EFSF-ESM: Principle of Perfectly Separable Debt and the toxicity of EFSF-ESM bonds
D. THE ROADMAP TO OUR FAKE ‘BANKING UNION’
- June 2012 – Monti’s desperate stand
- August 2012 – Schauble’s letter to the FT
- December 2012 – The Banking Union is announced, reflecting Shauble’s letter, rather than Monti’s stand
A Banking Union which is “CONFIRMED MORE IN THE BREACH THAN IN THE OBSERVANCE…”
- Supervision is not the issue – No common deposit insurance – No common resolution mechanism – No direct recapitalisation in lieu of existing losses
- France and Germany forming their own banking union to protect their insolvent banks from the ECB
- OMT removes pressure to effect a proper BU now
- Zombie banks and insolvent sovereigns will live on
D. MY PROPOSAL
- Direct recapitalisation of stricken banks without a Banking Union – at least 0.5 trillion (to 1 trillion) is necessary
- Replace OMT with ECB bonds
- Energise the EIB and EIF to become the Growth Pillar of the Eurozone
- Forge a free trade zone with the USA and let Britain and other non-EZ countries leave the EU
@Scandinavia
Since you asked about currency boards, there was one country which followed a different approach, namely, mine: Slovenia. After declaring independence, we introduced a currency with a floating exchange rate. We knew that it would probably depreciate substantially, leading to higher inflation, but since our economy was always export-oriented, the policymakers at the time judged that higher inflation was a reasonable trade-off for a faster adaptation of our economy.
This was labelled quite radical by foreign observers, quite ironically, since most of our arguments were drawn straight out of a study called The Case for Flexible Exchange Rates, written by that well-known communist, M. Friedman. The only departure from the flexible exchange rate system was the introduction of checking accounts, a very, very weak form of capital restriction, which we implemented since we were a very small currency area, and wanted to discourage speculative transactions which could render the exchange rate too unstable (when introducing sizeable amounts of capital into the country or removing them from it you had to deposit them into a special account for a couple of weeks).
Outside observers associated with the Washington Consensus predicted disaster, which, um, didn’t materialise. We had inflation run over 10% per year for a couple of years (not at all hyperinflation, by the way), but had a short and mild transition, quite a large chunk of the domestic real economy survived, and we were the only post-Communist country to retain its own financial system. Our economy grew roughly at its estimated trend growth rate (3.5 – 4.5% per annum in real terms), governments ran more or less balanced budgets, and we even had a positive current account balance, investing more abroad than vice versa, which is usually associated with developed countries.
When we joined the euro, everything changed: Our former positive current account balance vanished when we joined the ERM, but we still maintained balanced foreign accounts. When we joined the euro, however, higher interest rates sparked a massive inflow of foreign capital, as there were no longer any exchange rate risks. In the 2004-2008 period our net foreign debt went from 0% to 30%, we faced a massive real estate and stock market bubble and crash, and now our economy is being strangled by our lack of macroeconomic stabilisation mechanisms, as is the rest of the periphery.*
*Data reproduced from memory. Have to recheck on Eurostat, but I think it is mostly accurate.
Shhh dont wake them up…
Thanks T, pretty lightening stuff. Greece aint going very far with own flowing currency and feta, but this was something, what I expected.
I just found to this site few days ago, but i still dont see any point pointing finger to german, greek or nigerian and blaming them from this crisis. Its mostly result from neoliberalist agenda to take off peoples rights and make industrials, banksters and big buck men rule the continet. Most people aint have anything to do with this mess, Only thing, why you could blame regular fellows is ignorance and not learning from the past. Merkell just have a lot power in EU and he is using it to favoring banksters and other dudes with not such a good intentions. I havent noticed, that he would have thought regular german at any time.
I read yesterday some of those modest proposes for this mess, and I have to say that I cant really join Yanis in those resolutions. World doesnt need another Roman empire, which will stump on people.
T. – A couple of points. ” leading to higher inflation, but since our economy was always export-oriented, ” if you are an exporter you currency appreciates not depreciates. If you accept payment in your local currency there is more demand from the rest of the world for your currency in order to pay you. The higher the demand the higher the price.
“well-known communist, M. Friedman. ” I had to chuckle. Friedman was not a communist.
“since we were a very small currency area, and wanted to discourage speculative transactions which could render the exchange rate too unstable” – If your currency was based on a commodity you would have had no problem. Unless someone cornered the Gold market for example.
“massive inflow of foreign capital……. our net foreign debt went from 0% to 30%, ” – How can both happen together? Maybe you meant to split government finances from private finances.
Interesting comment all the same
@Richard
Several points:
Ad 1: You are confusing the exchange rate with the economy’s general orientation. Think of it this way: At a given exchange rate, the economy might export more than it imports, less than it imports, or the value of imports and exports in a given period might be equal. If a country exports more than it imports, it will experience a capital inflow, and the exchange rate will appreciate (block it, and inflation will rise), rendering exports less competitive and imports more so until exports and imports equalise. The opposite process occurs when you import more than you export (both are impossibilities over the long term).
How open the economy is is a separate question from the appropriateness of the current exchange rate: A largely closed economy can have, say, an undervalued currency just as easily as a largely open one.
Ad 2: Of course he wasn’t a communist. I was being sarcastic.
Ad 3: In that case, we would’ve had the same problem that we have now in the euro: We would be completely unable to depreciate our currency to become competitive and/or to dampen capital inflows. Although a gold standard is easier to break than leaving a currency.
Ad 4: Both are possible at the same time: Banks borrowed massive amounts of capital abroad and relent them at home.
T – ” and the exchange rate will appreciate rendering exports less competitive” Exactly
“Of course he wasn’t a communist. I was being sarcastic.” – In that case, mission accomplished, I found your comment funny
“We would be completely unable to depreciate our currency to become competitive” – This is the government propaganda and it is obviously false. You can have the same currency and still devalue prices. You can see it within cities, some areas have higher wages than others, some areas have more expensive houses than others, a beer in the centre of a city is more expensive than a beer in the countryside all other things being equal http://www.pintprice.com/region.php?/United%20Kingdom/ etc etc. In short a different currency is not required for devaluation.
“Banks borrowed massive amounts of capital abroad and relent them at home.” – the banks in Slovenia are in trouble? Who was lending the money?
From looking at this it looks like the bubble was created by government borrowing. Just like Greece.
http://www.tradingeconomics.com/slovenia/government-debt-to-gdp
http://www.tradingeconomics.com/slovenia/gdp
I dont really know what you are arguing about Richard, but do you mean that its good thing to do inner devaluation? Inner devaluation is one of the idiotics things what can be done and most often just leads to debt deflation. Inner devaluation will make government debt even harder to pay, cause it will reduce tax incomes and that will just increase more gdp\debt ratio.
I would also like to know why Slovenias Debt is rising compared to gdp? What are you guys doing?
If Slovenia would borrow in its own currency, it wouldnt be a problem, but we are not issuers of euro, we are kind of like households and thats just 100 % dumb.
Im wondering how long Estonia can keep debt to gdp in 6.1 %, cause thats just amazing
http://www.tradingeconomics.com/estonia/government-debt-to-gdp
I would recommend this for Richard http://neweconomicperspectives.org/ You might even learn something smart.
The State of the Economic Union article would be good for Yanis also. Especially this part: 5. Break up the “to big to fail” banks. A financial institution that is too big to regulate, too big to supervise, too big to manage and too big to exist.
T – “Arguing”? Im commenting on your comments. I can desist if you want.
“do you mean that its good thing to do inner devaluation?” I dont think your reading what I write. People decide what things are worth. Thats it. If you mean do I think a central banks printing excess cash deliberately is a bad idea, then yes, that is stupid. At best.
“I would also like to know why Slovenias Debt is rising compared to gdp? ” the link i gave you suggests the government is on a spending spree.
@Richard
This government printing money is much deeper subject, than just that its bad or good, depends from many things and how you use it. All money is somebodys debit and if private sector is saving or doesnt have any money left, government must spend or it will be great depression in 1929 all over again.
Second, those statistics aint really telling whats going on in Slovenia, so you cant really make any real conclusions from those. Where those moneys are going is much more important… to corruption, to stimulate private sector, for banks to play more casino games. I would like to know why they are plummeting.
I would really recommend you to investigate MMT… http://www.modernmoneyandpublicpurpose.com/
Scandinavia – “if private sector is saving or doesnt have any money left,” Two completely different things
“government must spend or it will be great depression in 1929 all over again.” Your not up to date. The general trend is towards recognizing that the US government was heavily involved in the economy which is why the depression was so long. Re Hoover, Roosevelt
“Where those moneys are going is much more important” – I disagree. The fact of the matter is government never pay back the principle and can barely service the interest and get no imporvements in productivity from the borrowing. In short, government spending is for the most part, a waste of money. Government borrowing simply serves to indebt the population.
@Richard
I see this discussion pointless, because you obviously dont understand macroeconomics.
I have gave you enough links that you can sophisticate yourself. Its in your own hands now.
Well Xenos, than take a look at the +1000 billion -euro in Target II.
This is good for Germany???
No, I think that greek people are always good in pointing with their fingers to others.
The Greeks (greek elites at least) had a party, and now comes the bill.
I remember very well the Olympic Games 2000, where Greece spent more than 1 billion Euros for security alone. Already at that time I had the feeling that something is very wrong in Greece, but no one in Greece seemed to have paid attention.
I do not deny that the management of the Greek economy has been very poor indeed, nor do I deny the very high levels of corruption. [I am not Greek, by the way.] However, I stand by my comment that German politicians are concerned primarily with German interests. If you think that this is not what is happening, then your complaint is about the German democratic process and nothing to do with Greeks. Of course, you are right that everywhere neoliberal nonsense is being spouted as “wisdom”, and much that is being done in this regard is very harmful. Again, this has nothing to do with (most) Greeks.
As far as nationalistic sentiments are concerned, you will find that Yanis is very opposed to the development of this problem, as am I. However, common people everywhere tend to follow this pattern and simplify things to “the Germans”, “the Greeks”, etc. My comments are relevant for the current German government and most of the German mass media, which is closely linked with them.
“However, I stand by my comment that German politicians are concerned primarily with German interests.”
I wish. Plus, this is what they have sworn. Of course they should be concerned primarily with German interests, what else?
The Greeks (greek elites at least) had a party, and now comes the bill.
I remember very well the Olympic Games 2000, where Greece spent more than 1 billion Euros for security alone.
If you must know regarding the 2004 Athens Games, it was Siemens that had THE PARTY (indeed, in capital letters as it was one helluva party), not the Greeks. Siemens was awarded the contract to provide security for the 2004 Games; it was a technological fiasco — you know, because of corruption, bribes, incompetence, etc.. Effectively, there was NO security. Bummer. Btw, this is the same Siemens that sold the hapless Greeks the defective submarines. Bummer again [faceplam]
Already at that time I had the feeling that something is very wrong in Greece …
I had that feeling the moment Greece was awarded the 2004 Games.
… but no one in Greece seemed to have paid attention.
Neither did the German lenders. So why are the Greeks bailing out the irresponsible German lenders?
Looking at the discussion, the Euro is really a currency that brings peace & prosperity over Europe
To Guest (xenos)
I am veryx happy that you are so smaret. That must feel good. I have swallowed no propaganda. I am actually workinng on the making of the crisis long before 2007, when I lived in Hungary and followed closely the boom, financed by cheap credit, and enabled by Mr. Soros who made big gains in Japanese carry trades, and when he and his buddies pulled the plug, the HUF went into oblivion. It was also Soros who started the first attacks on Greece. So, don´t be so arrogant.
It is nothing to do with being smart or not. Your position is entirely emotional — and therefore unlikely to be rational. You ask why everyone is blaming Germany: the answer is clear. Europe is without proper political direction or leadership, and national politicians are deferring to German politicians for that direction. Even the British press refers to Germany as “Europe’s paymaster”.
For their part, the German government is doing what it thinks is in the interests of Germany. Not for the EU, not for Greece, but for Germany. That is what they are elected to do, and (to the limits of their abilities) they more or less do it. We do not have to agree with what they do, we do not have to respect Germany’s decisions about Europe, we do not have to continue with Germany in Europe…
Well. Right. We are always bailing out the banking sector, which is a very bad idea which will lead us to a Neo feudalistic authoritarian System in the whole of Euriope. But you give the impression, that you blame Germany for the current “situation”. That Germany takes the profits. Germany is always the problem, right.
You have no idea how much the salaries got slammed in Germany. Unions are completely corrupted. Inflation (especially food, rent, energy) is big time. People have often hard times to meet month end. We have 6 million people without jobs, double of the official fake rate. But no talk about these millions of people in the media. Soup kitchens all over the place.
So, I warn about heating up national resentments. I wrote that complain also to Max Keiser, who has the same tendence of finger pointing direction Germany. We had that already twice the last century. So, these talks turn my stomach and they are a distradtion from the Mafiosi who are running this continent.
If you have some minutes left I would be curious to hear some words of you about Target II.
Thanks in advance
Uwe – Pointing fingers at “Germany” (as if it is a single entity) in my mind shows a distinct lack of understanding with regards to the problems in the Eurozone and economics in general.
Patrick,
I truly wish that your putative tautology was actually one. To turn it into an almost tautology, we modify it — you must want to have a new deal to want to have a new deal. It is still, strictly speaking, not quite a tautology, but it is closer. And I hope shows clearly what you are getting at – the circularity of the reasoning.
We will see whether the UK is lucky in getting Carney.
Voodoo economics made in Greece! You found your favourite enemy in Germany. Why don´t you talk about your corrupt elites with Grannies bank account??
You speak about the necessity of a European Union to save Greece, that´s your motive. Me, as a German don´t fell like bailing out neither corrupt #Banks nor corrupt countries.
Greece should declare bankrupcy, because Greece is bankrupt. A new layer of debt solves nothing. Besides that, the EU is a completely undemocratic, opposed by the Anglo-Sachsons onto Europe, esspecially Germany.
Germany is withTarget II already 1000 billion Euros into the woods. Why the hack should German tax payers stand straight for all this crap???
But, my dear fellow, ‘bailing out Greece’ was all about you, the German taxpayer, being conned into bailing out Deutsche Bank et al, passing your bankers’ losses from their books to your shoulders via the Greek government. So, both you and the Greek workers/taxpayers are being screwed by the Berlin-Frankfurt-Brussels coalition. This is not a Greece vs Germany clash. It is a clash between a coalition of vested interests with branches both in Greece and in Germany against the majority of the Germans and the Greeks. Of course the Greek state ought to have declared bankruptcy. Why did it not? Because Berlin wanted to bail out Athens? No. It was prevented from defaulting because Berlin wanted to save Frankfurt. If you insist on seeing this as a clash between Germans and Greeks you will have offered this evil coalition a grand victory.
Uwe: you have swallowed wholesale the propaganda that was intended for the consumption of others — namely, Greeks, Spaniards, Irish etc. As Yanis points out, the bailout is of Germany’s banking system. Here in Greece we have nothing out of it, just a collapse of economic activity and the poverty associated with it.
Of course, in a world of mass communication and almost monoglot too, it was very difficult for Merkel to say one thing in Germany and completely different things elsewhere. However, the smarter Germans know exactly what is going on; sadly, you are not one of them. However, we respect your honesty and straighforward speech.
Yanis – Simple question. Who is backing ECB bonds?
Simple answer: ECB-bonds issued on behalf of member-states are backed by the member-states in question plus by an insurance scheme funded by the ESM. The ECB-bonds that are issued in tandem with EIB-bonds are backed by the expected profit stream of the investment projects themselves – just like the EIB bonds have been for 25 years with great success (which is why they have retained their triple-A rating even after 2008).
So to simplify if further. The bonds ECB/EIB and the ESM are backed ultimately by the labour and property of Europeans.
Yanis – “Direct recapitalisation of stricken banks without a Banking Union – at least 0.5 trillion (to 1 trillion) is necessary” This sentence shows that you do not realise that even the banks themselves do not understand the true magnitude of their problems. I suggest reading the book Traders, Guns and Money to get some sort of perspective with regards to the state of bank balance sheets. http://astore.amazon.co.uk/i4w-21/detail/0273731963
And I also wonder from the sentence I quote above if you grasp the fact that you are condoning the use of taxpayer money without the taxpayer (or their representatives) having any say in how it is used. ie you are condoning handing over peoples land and labour to an undemocratic institution for use as it sees fit. Do you realise this is what you are saying? I do not think you do otherwise you would not be saying it.
Already there Richard, without any consent from those you mention, and seeing the worst part of it. What Yannis suggests is making something good out of this monster.
The breaking up seems catastrophic.
Waves – “Already there Richard”. My honest opinion? Compared to how bad things will get, I don’t think the economic depression has started yet.
Richard, do you think that by breaking up EZ the crisis will be avoided.
Hi Waves – In my opinion you are asking a non-question. Euro, drachma, DM. It does not matter. Money is labour and property in a form that is easy to trade. Changing the currency does not fundamentally change the things it is based on. In or out of the Euro does not make people more or less productive, it does not change the amount of land or resources in a country.
The problem in Greece is that the taxes and regulations make it impossible for the country to have some sort of balanced trade and that can only lead to one thing.
There is less and less money in the economy. What does this lead to? Lower prices and more products being created domestically, just like it would if Greece had the Drachma.
In short, it makes no difference what the currency is.
Why are prices not falling and domestic production ballooning?
Because the Greek government is raising taxes. So any reduction in the cost of labour and property is compensated and then some by the increased tax burden.
To give an example. I know the taxes the UK and I know them in Greece. Taxes are generally higher in terms of gold, yes gold, in Greece. If you want to compare the tax burden to the average income. The taxes in Greece are higher by an order of magnitude.
So where are we now? On the road to poverty. Wages are falling, the economy is shrinking, prices are stable, taxes are increasing, unemployment is increasing.
To avoid the crisis the government needs to default completely, stay in the Euro (there is no logical reason for Greece to leave after the government defaults) and revert to the same tax system as 2007 or 1997 or better still 1897 http://independence4wales.com/2012/best-article-on-tax-collection-in-greece-i-have-ever-read-voluntary-taxation . Personally I would push for a system based on Hong Kong but honestly anything from before is better than what we have today.
Richard
It will be catastrophic
Waves – “It will be catastrophic” What will? Everything? Yes I agree but in the one catastrophe situation Greece is put in a position where it can prosper, the other puts a beggar’s cup in the hands of the people permanently. Make no mistake, extreme pain is coming no matter what happens, question is, on whose terms? for how long? and for whose benefit?
Richard
Your proposal has been tested and doesn’t work
During the great depression and many more times
Breaking up the EU would mean isolation for the small states that will take its place.
And humanity has tested isolation during crises and it doesn’t work.
It didn’t work in much “slower” times, now it will be catastrophic.
Waves – Are taking the pi** right? “Breaking up the EU would mean isolation for the small states that will take its place.” This is the exact opposite of what I have been saying. To recap. The Greek government must default and stay in the Euro and the EU. To repeat, it would make non sense for the government to leave the Euro after a default. After a default the government would have the best balance sheet in the Eurozone.
then you do not dissagree with Yanis.
waves – “then you do not dissagree with Yanis.” – generally no. Where we disagree completely is in giving the ECB more power and the national government less power. The Euro system as it was created was fine. The ECB has shown to be the key culprit in destroying Greece. To give it more power is stupid.
I do not know if Yanis can admit that the Greek government debt problem was caused by the ECB, or if he admits it to himself but somehow believes they will have a change their tactics if they are given dictatorial powers. http://independence4wales.com/2012/eu-court-chooses-to-bury-the-truth-about-greek-debt-the-ecbs-involvement
In summary. I agree with Yanis on what needs to be done ie a Greek government default. I agree that Greece should stay in the Eurozone and in the EU (although ideally Greece would have the Euro and not be in the EU!). Where we diverge at opposites is in the fact I believe things are fine as it was and if you want to do anything, strip power from the ECB to monetise Greek government debt (this is obviously never going to happen). Yanis wants to give the party that caused the problems more power. And not only that, the ECB is actively profiteering from the problems they caused http://independence4wales.com/2012/did-greek-central-bank-with-provopoulos-defraud-greeks-of-840-million-euros . And this is Yanis’s saviour? Not only is Yanis negotiating with terrorists he is completely giving in to their demands.
I predict Yanis has a very rosy future ahead of him as a senior economist at the ECB overseeing the system he is now calling for. ie the recycling mechanism.
Traffic Chaos in Rabat……..
Watch the almost incident at 1.25
The deflation in Europe is creating massive inflationary forces in North Africa & Turkey as the European (french based banks in this case) desperately Seek wage arbitrage returns in any place possible.
Why would you want to create a banking union on a larger scale. ????
Why would you want to create a free trade system with the US of A
This would merely reduce the already seriously compromised redundancy within systems.
The energy is not available to scale up.
It has been burned by free banking operations which destroy capital by creating “assets”.
If ever states needed to create greenbacks to destroy banking systems before they destroy us all it is now.
“Direct recapitalisation of stricken banks”
What? No, not at all! let the zombies finally die, please. This madness must end, not be prolongued.
The world should never have bailed out the finance industry with taxpayers money.
We should have let the shareholders and employees of this industry swallow the big losses 1st. Also, the hedge fund and big bank players in the crazy market of CDOs should have been forced to pay their dues.
Then if necessary secure with taxpayers money only the savings of the average Yanis on the street, and of real world businesses, and public institutions savings.
I wonder why the overwhelming majority of the sophomoric armchair wannabe economists sound like soulless mass-produced crones from the Austrian school, just like this “Sam”. I suspect that even Hayek would be embarrassed.
I suppose it’s the easiest school of “economics” for a layman, but this kind of blind adherence to the “market principles” and incessant moralising of all economic matters are just face-palm worthy.
Are you a parrot, or a man?
Alex, where exactly in your laughable arrogant ad hominem rant does one find the erudite arguments which render my proposal worthless?
Right: there are none. Just idiotic showing off, w/o any merits. You are indeed a great economist and respectable discussion partner.
Alex – Souless? The use of this word in an Austrian context shows you do not have the first clue about Austrian economics.
“market principles” – You don’t think you deserve a day’s pay for a day’s work?
Before criticizing something at least take the time to educate yourself about it other wise it is you who ends up sounding like a parrot
I dont see any problem in this suggestion, where we let these Frankensteins die. Theres still many banks who havent give too much money for share holders and CEO’s. (All derivatives are not in our knowledge have to take in notice also) Could you please tell me whats the problem letting Goldmann Sachs and other banksters banks to go bankruptcy? These are now running the world and I dont see how thats doing any good for humanity.
Eurobonds will create a federation, which would be a terrible idea also, because EU is already now total Kleptocracy and it would only get worse.
Cheers Alex. You should know by now that Serious Sam is a Joke Sam really.
Him and his cohorts behave as a bunch of church going hypocrites than in their abundant retirement time always end up in a sexually explicit website to explain why sex is bad and that it shouldn’t be allowed without the consent of “taxpayers” or the “authorities”.
They are basically normal people with a terrorist fetish. That’s all.
Dean – “Him and his cohorts behave as a bunch of church going hypocrites than in their abundant retirement time always end up in a sexually explicit website to explain why sex is bad and that it shouldn’t be allowed without the consent of “taxpayers” or the “authorities” – Your comment, if there exists a better example of someone who completely and utterly misunderstands someone else speaking the same language, I have not see it.
Dean, if you can, please explain, what exactly is wrong with my proposals.
What, you can’t, lke the Alex Delarge guy?
I’m not surprised.
You could surprise me if you once, for a change, write a comment with thoughtful content, not your usual aggressive ad hominem rant.
4. If Britain leaves the EU, Sweden, DK & CZ will follow. After a small pause NL, AT & Germany will have to follow too.
Result: Europe is saved from a centralistic undemocratic dictatorhsip!
Yawn
I just listened very carefully to this talk — which is gripping. The unspoken barrier that you do not address is the northern european unwillingness to put the weight of their region behind eurobonds — and it is those bonds that would point the way to a federal future. You cannot have a federation — or even a crypto-federation — without the will to federate. You must want to have a new deal to have a new deal. How is that for a tautology?
Furthermore, those countries that still have their own central banks — not just the U.K. — can hardly be expected to go along with a vacillation that weakens all.
Please keep talking and writing. The U.K. is lucky to be getting Mark Carney at this time, in my opinion.
All the best,
Patrick B.
None of the regular people in scandinavia wants any god damn federation, but unfortunaley our politics aint listening us. Anyway, why would we like to destroy our welfare states and give up for plutocracy. Please tell me why Greece wont just leave the eurozone\EU and go bankruptcy like Argentina did, when IMF and capital investors screwed it.
This is why: http://yanisvaroufakis.eu/2012/05/16/weisbrot-and-krugman-are-wrong-greece-cannot-pull-off-an-argentina/
Scandinavia, do not worry. Greece, France etc. will stany in the Euro. We in the North will exit sooner than you think.
Yea, well I have to admit, that this one is hard to swallow.
Have you Yanis been investigating, what ex-Soviet Union countries did, when Soviet Union collapsed? At least Estonia founded currency board and locked their currency to deutsche mark to avoid hyperinflation. That of course blocked them from printing it for domestic purpose and currency wasnt really in their own hands. Did any of these ex-Soviet Union countries act any different?
I have to watch this from democratic view of point. Now I live in country where is 5 000 000 people and I have much better changes to make a differences, than in EU where is over 500 000 000 people. You can do the math… They wont even let me choose commissioners or president for this giant communist state. I support more straight democracy, like Switzerland. Our dummy prime minister came back from EU budget negotiations and declared himself as a winner once again, even us have to pay even more once again and it will be off from our healthcare, teaching, roads… We need to borrow all this money and most of it from foreign banks and theres just no point for all this EU-nonsense. EEC and Schengen are enough for everybody else, except for capital investors who want to get our natural monopolies and make us all neoliberalist slaves without any right and they will not even provide food or shelter, like old slave masters did. Theres not really proof, that this communist state would use moneys from bonds to create welfare. Probably most of those would go for the rich and beautiful. when you watch EU-structure most obvious direction for money to flow would be Italian Mafia.
Theres always a way and maybe you should look for help in different direction, this time best help might not found from Sheriffs in da west. If there is political will, there will be a pretty good opportunity to find a solution.
Of course best solution for everybody would be just destroy whole currency and start selling it like maniacs, like Soviet Union did, when ruble hyperinflated. Looks like you guys have had hyperinflation in second world war. How did you stop it?
Scnadinavia, you are absolutely right. The EU is not a penny better than the USSR. Their intentions might be better, but the result is similar. Good intentions, miserable result. An old issue of central planners.
If the South of the EU want to live in quasi Socialist states, we should let them, but we will not pay for it.
Anyways, all problems in the EU seem to be solved, since the EU now tackles the big problems & makes 350 page study about soccer: “The Economic and Legal Aspects of Transfers of Players”
http://ec.europa.eu/sport/library/documents/f-studies/study-transfers-final-rpt.pdf