The Eurozone was a beautiful idea that didn't, and indeed couldn't possibly, go
far enough. As Keith points out, the members of the EU remain sovereign
states, each responsible to their own people for all matters that countries are
normally responsible for except for one very major thing, their currencies.
Responsibility for that was given to the European Central Bank and ultimately
to the EU's powerhouse, Germany. What is being recognized with increasing
clarity by EU members is that crucial affairs of state like levels of debt,
employment and other critical matters simply cannot be managed if the state
doesn't have fiscal and monetary control. And yet, one wonders what will
happen if Greece goes back to the drachma, Spain to the peseta, Italy to the
lira, and Ireland to the Irish pound. Would the huge debts that Greece and
Spain have incurred be repayable? Would creditors who expect repayment in the
relatively stable Euro accept payment in much less stable national currencies?
Is default inevitable, and if it is, what might the consequences be for the
international economy? We live in interesting times that will likely become
far more interesting in future, though not in a positive sense.
Ed
----- Original Message -----
From: Keith Hudson
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION ; Ed Weick
Sent: Friday, June 01, 2012 9:49 AM
Subject: Re: [Futurework] Goodby Euro?
At 13:47 01/06/2012, you wrote:
http://www.washingtonpost.com/business/economy/ecb-chief-calls-euro-unsustainable-slams-spanish-bank-response/2012/05/31/gJQAB7qY5U_story.html?wpisrc=nl_headlines_Fri
Ed
As you know, I've been forecasting the imminent death of the Eurozone for the
last two years or so. But they've been able to devise another money-printing
type plan each time and kicked the can down the road. The problem gets worse
each time it recurs. The one that's been gathering pace for the past three
weeks (and paralyzing shares on the New York Stock Exchange) is by far the
worst yet. It's now seriously rippling from Greece to Spain and Italy. Euros
are fleeing those countries or going into German bonds (where they get a
negative rate of interest). Eurodollars are fleeing Europe for US bonds (with
almost no real rate of interest).
The Eurocrats might possibly kick the can down the road once again with
another Euro-printing solution, but I can't see how the end of the Eurozone as
we now know can be delayed for much longer.
15 minutes ago The Guardian has already said that America's job position "has
hit a wall in May". Collapse of the Eurozone's imports and exports will send
America and China into tailspins. We live in interesting times!
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com
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