14 responses to “Democracy Is Not the Fundamental Problem of the Eurozone

  1. So in order for the eurozone and the euro problem to rebalance itself you propose that the northern eurozone countries slow down and grow less, and export less in essence to assist and help the southern EU economies to recover? Mm strange analysis.

    I think your analysis to the problem is literally upside down. Its not Germany, Holland, Finland we should be slowing down to reduce your exports and GDP growth because it is hurting Greece, Portugal, and Italy. Its explaining to the southern EU economies they need desperately to rid themselves of excessive red tape, bureaucracy, and lack of competitiveness and enterprise, and over staffed bloated public sectors, and catch up?

    Don’t blame the hard working for working to hard, and the pity the under performing for falling behind due to negligence. The sad truth is many southern EU economies were desperate 10 years ago to rid themselves of the weak Lira, Drachma, etc, and rushed to join the euro. Now they complain they cannot devalue like they did so in the past to compensate for the weak growth, and constricted domestic markets.

    I may be wrong but I predict a northern euro and southern euro will emerge and divide the eurozone into two separate currencies. The southern euro will devalue to ease there economic problems, while the harder northern euro will in increase in value.

    • Вихър Георгиев

      You have not understood my point. The Northern countries need to encourage internal demand, which is something quite different. You need to read the first article from the technical appendix before arguing further. You may also read this quite useful paper.

  2. The question is whether you will solve these problems by doing it top-down and in a non-choice technocratic way.

    • Вихър Георгиев

      That is a very good point. We need experts in German and Dutch policymaking to tell us that. Who set those rigid labor market rules in the first place? Is there a national consensus in these countries on their economic development model? Who is actually profiting from it?

  3. In my opinion the EU institutions spend far too much time inward looking and navel gazing with technocrats and ‘experts’. The outside world is not interested in small minutia of detail the EU loves to digest.

    The Far East economies roll on like a juggernauts while the EU ponders every little policy detail in endless committee’s etc.. I fear Europe is shrinking in the world in many ways economically, and is falling behind. The Greek euro crisis as only exposed the EU economic matter wide open.

    • Вихър Георгиев

      It’s a mixed picture. We cannot evade the effect of demographic developments and other competitive disadvantages. We’ve also made some strategic blunders. Not everything is lost, though.

  4. I agree with you article. But how do you want to resolve the problem of trade imbalances in due time? This is a structural problem. Germany does not even want to talk about it…. Please find my own analysis on lostineurope.posterous.com (in German)

  5. The number of member states that will default is now out of control of the monetary union. This situation was predicted in that a one-value currency would not fit different countries valuations and costs of produced goods. Now we have a massively overvalued Euro and irrevocable fixed exchange rate set by the ESCB. Its true value is around 58 cents, as a system its-fraud Pawn broking and Betting on member countries Central Bank Depositors Assets.

    Stop delaying the fallout it is impossible to bailout and will only make the position considerably worse devalue before a fire sale of bank stock creates a much larger run on the banks by the public. See extracts below;

    Article 18 European System of Central Banks.

    18.1. In order to achieve the objectives of the ESCB and to carry out its tasks, the ECB and the
    National central banks may: operate in the financial markets by buying and selling outright (spot and forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments, whether in euro or other currencies, as well as precious metals; conduct credit operations with credit institutions and other market participants, with lending being based on adequate collateral. In order to conduct their operations, the ECB and the national central banks may open accounts for credit institutions, public entities and other market participants and accept assets, including book entry securities, as collateral.

    Article 30
    30.1. Without prejudice to Article 28, the ECB shall be provided by the national central banks
    with foreign reserve assets, other than Member States’ currencies, euro, IMF reserve positions and SDRs, up to an amount equivalent to euro 50 000 million. The Governing Council shall decide upon the proportion to be called up by the ECB following its establishment and the amounts called up at later dates. The ECB shall have the full right to hold and manage the foreign reserves that are transferred to it and to use them for the purposes set out in this Statute.

    Article 49 (ex Article 52)
    Following the irrevocable fixing of exchange rates in accordance with Article 140 of the Treaty on the Functioning of the European Union, the Governing Council shall take the necessary measures to ensure that banknotes denominated in currencies with irrevocably fixed exchange rates are exchanged by the national central banks at their respective par values.

  6. Pingback: The Second Greek Bailout: the Details | European Union Law

  7. Well it looks like its all happened and the sale has begun. If the US props up itself AQm Monday then gold will run. Normally I would be cautious but gold is looking good short.

  8. The Euro is now in danger of imploding, bank handed half a billion many more at risk Rumours of another UK bank bailout before it ends in 2012 and worse to come indicate firesale on the banks. Gold topping out when it bottoms 8 to 10 week then Euro gets burnt .

  9. The occupation of Wall Street, the London Stock Exchange and others now around the World will be the beginning of the end for Governments who ignore the protesting public.

    Ordinary law abiding citizens have seen corrupt Governments bail out banks with taxpayer money. Then devalue the £ pound to inflate away the Government and Corrupt Fraudsters debts. This has lead to hyperinflation for all taxpayers and the destruction of security of tenure for many homeowners who have been repossessed by the Banking Gangsters, with Government and Courts approval. For the Greedy Banks who make more money by repossessing homes. Than assisting homeowners.

    If you have money you have power, and you are able to buy off most in Government, Banking, Finance, Insurance, and the Media, this is fact.

    What Governments are attempting to do is hide the truth about the gigantic debt owed by the Banking Gangsters and Insurers who have stolen £ trillions from you and many future generations. The truth is the BANKS and INSURERS do not know just how much Money they have lost, or need to pay out. But the gambled away and lost money by UK BANKS and INSURERS is in £ trillions.

    Just how much this equates to is:

    You would have to pay back one million Pound a day (for 2000 years, just to pay off three quarters of a trillion Pound.

    If we put this into time:

    A million seconds is around 11.5 days. A billion seconds is around 32 years. And a trillion seconds is approximately 32,000 years. A Pound a second for 32,000 years

    Banks and Government and its Agencies cannot be trusted they are Crooks Fraudsters and much worse. I would certainly advise any business to keep everything away from prying eyes. Most of the Banks have hundreds of subsidiaries that are Competitors to most businesses. They are Ruthless and Intent on getting hold of inside information for its Group Subsidiaries.

    The same applies to all Government Departments and Agencies; it’s not unusual for your designs ideas plans or methods to be stolen by Government Departments and restrictive impossible terms (then used in competition against you.

    What has been Normal Business for large Corporate Insurers, Banks, etc such as buying off Ministers and MPs has meant that in Britain SMEs small and medium enterprises have been starved of Funding, Help, Assistance, Relocation, Premises etc. And (had instead Planning Objections, Restrictions, Bureaucracy, Red tape, a Multitudes of Taxes and Destructive, Restrictive Policies from past and present Governments.

    For years Government has only been interested in looking after those elite few who pay £millions in all manner of bribes to have their dirty work done for them.

    When the Government stops its fraud, and the Banks Insurers and Corporate do the same, then and only then will Britain become what it once was (GB) Great Britain.

    But things are changing quickly the Baby Boomers are Angry they have the numbers and have seen the Corruption and Fraud just like their sons and daughters have. Meaning the next elections will come sooner than this Corrupt Government and MPs would like, and if the newly elected don’t do the publics bidding they will be booted out as well until they do.

    Also the younger generation will not tolerate the hype or bottom of the pile crap fed by a Government Controlled Media to placate them. ITSFRAUD and they know it.

    The recent riots are a precursor of what may come next should the young be ignored. They have no prospects hope or future because this and previous Corrupt Governments took the Financial Markets Money, and didn’t invest in small businesses this destroyed manufacturing their only hope of a decent job. Yet they see the MPs commit fraud Ministers being paid by Corporate Insurers, Bankers being paid Millions, Police taking bribes, while they exist on the cost of a bankers shoe lace.

    If they riot again, and they are angry, they will take control because they know there isn’t enough police or military. A Government spokesman recently broadcast that fact, (multiple attacks could not be dealt with especially while the Crooks in charge are on holiday.

    Austerity, Taxes, Fines, Vat, Fuel, Food and other Commodity increases imposed by the IMF are seen to be unjust. Especially when a recent very wealthy IMF chief appears in News reports to be able to avoid alleged very serious criminal proceedings with a chequebook and expensive lawyer.

    But no matter what happens now, the public are in unity; they will not allow the Banks to be bailed out again. No matter how long the inevitable is delayed, or QE or whatever other names it is called ITSFRAUD.

  10. 21/04/2012

    The IMF recently stated that there is a problem in Europe, and that it may break up. This is an understatement the situation was created in the 1990s with Credit default Swaps and fraudulent actions by Insurance giant Zurich, and its CDS issued by its subsidiaries AIG and its London AIGFP unit.

    But lets get back to the situation now in Europe, the single market, there is no contingency plans whatever should Countries leave the Euro. Just like the CDS above there was no contingency plan for a major default.

    There is no plans in place should Countries leave the single market, causing the EU to break up. Its likely and now serious and deteriating and may be worse than pundits predict.

    The financial crisis Bank losses and the bailout in 2008-9 just shoved the banking collapse away for a while, but the crisis with Insurers and Banks is still here. And no amount of paper money printed will solve the situation, Bank leverage is perilously high and it won’t take much to tip banks over the abyss.

    Other factors like Italy and Spain are now having a visible effect on the euro zone and investors are now in fear of an impending collapse. China for example is buying huge quantities of Gold and so are Central Banks. The BIS stockpiles being hoarded now in its vaults are staggering.

    It is terrifying the situation is now worse than it was in 2008 and there will be Bank failures. I remember reading that the 2007 CDS market had a hypothetical value of $50 Trillion. AIG at the time had greedily issued around $450 Billion in CDS. When Mortgage backed values fell, AIG had to find about $15 billion it didn’t have. Leading to AIG and its Parent, (Zurich Financial Services) being rescued bailed out and taken over by the US Government in a massive $800 Billion Bailout of Banks.

    The IMF Governments and Central banks know the Bailout hasn’t worked and the situation is now dangerous and may cause a run on the already unstable Banks possibly leading to panic public unrest and riots.

    Further recent events like the IMF being given £10 billion by the UK to part fund another bailout of the euro zone today is not much better than burning the money in a bin. It will take € Trillions and no Government has the guts or money to fund such a staggering bailout of a lost cause.

    Gordan Finch.

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