The end of the Euro?

The European economy is in a state of crisis, to the point that some people are thinking that the Euro, the pan-European currency (except for the British pound a few others), may be finished.  Some businesses are planning what to do if the Euro ceases to exist:

International companies are preparing contingency plans for a possible break-up of the eurozone, according to interviews with dozens of multinational executives.

Concerned that Europe’s political leaders are failing to control the spreading sovereign debt crisis, business executives say they feel compelled to protect their companies against a crash that can no longer be wished away. When German chancellor Angela Merkel and French president Nicolas Sarkozy raised the prospect of a Greek exit from the eurozone earlier this month, it marked the first time that senior European officials had dared to question the permanence of their 13-year-old experiment with monetary union.

“We’ve started thinking what [a break-up] might look like,” Andrew Morgan, president of Diageo Europe, said on Tuesday. “If you get some much bigger kind of … change around the euro, then we are into a different situation altogether. With countries coming out of the euro, you’ve got massive devaluation that makes imported brands very, very expensive.”

via Businesses plan for possible end of euro – FT.com.

That wouldn’t help American exports.  But it would mean the dollar would suddenly become very, very strong.  That sounds like a good thing, but it would probably mean more dollars flowing out of this country into foreign imports and investments.

What might the breakup of the Euro mean for the American economy?

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Klasie Kraalogies

    Well, I’m not an expert, but consider that the most valuable economic commodity out there is not gold, or dollars or whatever: It is STABILITY. Instability is to an economist/banker/trader what krypton is to Superman.

    Now consider the breakup of the Eurozone….. Yip. “Sum of all fears…”

    But what we are really seeing out there is the actions of what has been termed last week as the “Bond Vigilantes” First they attacked Italy etc, but not without some reason. But then the bond yields spiked on countries with very good economic data – France (well, reasonable, not “good” in that case), Austria, Finland and the Netherlands. Babies and bathwater. Then last week the Germans couldn’t sell all their bonds, or bunds, as they are called. Now consider that the German debt to GDP ratio is 57.2%, compared to 72.6% for the US, 81% for France and 100.4% for Italy (Canada is 34.9%…). It is obvious that the troubles in the Eurozone is now worsened by people beginning to run around like headless chickens, and the Bond vigilantes moving in, wanting to make killings. Reminds me of the 2008 oil price spike…. What exacerbates this further is the inability of Angela to move outside the traditional German rigid economic policy (an economic policy, I would normally advocate, but as in everything, blind obedience to a policy or ideology is not a good thing either).

    So a break-up is possible, but it will send enourmous financial waves throughout the world. Hopefully those waves will “drown” a couple of bond vigilantes too. But the better option, though some ideologues are bitterly opposed to it, but tit is the logicalone, and sems to be indicated by history, is the move towards greater politcial unity, so as to be able to deal in a concerted manner with the economic woes. It makes economic sense. And at the end of the day it “is the economy, stupid!”.

  • Klasie Kraalogies

    Well, I’m not an expert, but consider that the most valuable economic commodity out there is not gold, or dollars or whatever: It is STABILITY. Instability is to an economist/banker/trader what krypton is to Superman.

    Now consider the breakup of the Eurozone….. Yip. “Sum of all fears…”

    But what we are really seeing out there is the actions of what has been termed last week as the “Bond Vigilantes” First they attacked Italy etc, but not without some reason. But then the bond yields spiked on countries with very good economic data – France (well, reasonable, not “good” in that case), Austria, Finland and the Netherlands. Babies and bathwater. Then last week the Germans couldn’t sell all their bonds, or bunds, as they are called. Now consider that the German debt to GDP ratio is 57.2%, compared to 72.6% for the US, 81% for France and 100.4% for Italy (Canada is 34.9%…). It is obvious that the troubles in the Eurozone is now worsened by people beginning to run around like headless chickens, and the Bond vigilantes moving in, wanting to make killings. Reminds me of the 2008 oil price spike…. What exacerbates this further is the inability of Angela to move outside the traditional German rigid economic policy (an economic policy, I would normally advocate, but as in everything, blind obedience to a policy or ideology is not a good thing either).

    So a break-up is possible, but it will send enourmous financial waves throughout the world. Hopefully those waves will “drown” a couple of bond vigilantes too. But the better option, though some ideologues are bitterly opposed to it, but tit is the logicalone, and sems to be indicated by history, is the move towards greater politcial unity, so as to be able to deal in a concerted manner with the economic woes. It makes economic sense. And at the end of the day it “is the economy, stupid!”.

  • Cincinnatus

    Word on the street is actually that greater fiscal union is likely in Europe at the moment: the establishment of a European central bank empowered not merely to print a continental currency, but also able to issue continental debt. Yes, this represents a further loss of a sovereignty for individual European peoples and a huge increase in the bureaucratization of Europe. So I am against it.

  • Cincinnatus

    Word on the street is actually that greater fiscal union is likely in Europe at the moment: the establishment of a European central bank empowered not merely to print a continental currency, but also able to issue continental debt. Yes, this represents a further loss of a sovereignty for individual European peoples and a huge increase in the bureaucratization of Europe. So I am against it.

  • Klasie Kraalogies

    Cincinnatus, the sovereignty argument doesn’t impress me all that much. Remember, the current “Nation-states” already compromise sovereignty to a great extent. A recent survey in Spain, for instance, showed strong support for greater European union amongst the Catalans and the Basques. Greater European union will actually lessen the amount of “overwhelming” of lesser or regional ethnicities. Localism would/could flourish much better than contrived post-Industrial nnationalism. Which is a good thing.

    As anoother example, the SNP is also strongly supportive of greater European union.

    As to your bureaucracy argument. Greater union might actually lead to bureaucratic simplification. The copmplexity of dealing with all those national entities currently neccessitates an overcomplex bureaucratic mechanism. The need for such mechanisms willl subside once greater unity is achieved.

    Lastly, a single European entity has been the dream since Charlemagne, and with the last of the Hapsburgs ddying earlier this year (Otto von Hapsburg), and the Hapsburgs being the heirs of the Carolignians in a manner of speaking, it is sort of fitting that the next great wave, the nnext great attempt (hopefully successful) and unity in Europe be undertaken now.

  • Klasie Kraalogies

    Cincinnatus, the sovereignty argument doesn’t impress me all that much. Remember, the current “Nation-states” already compromise sovereignty to a great extent. A recent survey in Spain, for instance, showed strong support for greater European union amongst the Catalans and the Basques. Greater European union will actually lessen the amount of “overwhelming” of lesser or regional ethnicities. Localism would/could flourish much better than contrived post-Industrial nnationalism. Which is a good thing.

    As anoother example, the SNP is also strongly supportive of greater European union.

    As to your bureaucracy argument. Greater union might actually lead to bureaucratic simplification. The copmplexity of dealing with all those national entities currently neccessitates an overcomplex bureaucratic mechanism. The need for such mechanisms willl subside once greater unity is achieved.

    Lastly, a single European entity has been the dream since Charlemagne, and with the last of the Hapsburgs ddying earlier this year (Otto von Hapsburg), and the Hapsburgs being the heirs of the Carolignians in a manner of speaking, it is sort of fitting that the next great wave, the nnext great attempt (hopefully successful) and unity in Europe be undertaken now.

  • Cincinnatus

    KK@3,

    Your points, while skillfully articulated, will receive strong disagreement from many others.

    You may be correct that “localism” in Europe will flourish to the extent that Basques (many of whom are associated with terrorism) and Catalans are more likely to be more sympathetically regarded by the Union as a whole rather than, say, the Spanish national government. And the SNP favors greater Union because a) the English don’t (they’re contrary for its own sake) and b) because it will be a check on–pay attention–English sovereignty.

    But that’s about as much as I’m willing to grant your claims. The idea that greater consolidation and centralization will lead to greater localism, distributed power, and local sovereignty is oxymoronic and absurd. No serious observer believes that the European Union has or will restore indigenous rights, national sovereignty, etc. In fact, the point of the Union is precisely the opposite: defang national sentiments and institutions to prevent war, etc. Practically speaking, the complaint right now is that, by definition, a national currency has represented a large transference of sovereignty from the nation-state. Thus, Germany, a strong economy, finds itself subject to the vicissitudes of Greece, Spain, and Italy. Imagine if national banks were eliminated altogether and European nations were no longer responsible for or sovereign over their own debts! Imagine if Germany had no choice but to bail out Greece, Italy, Spain, Portugal, et al.! Surely I don’t need to explain to you that national banks are a keystone institution of national sovereignty. The next step, I suppose, is the elimination of national armies in favor of a unified European defense force–another obvious occlusion of national and local sovereignty.

    As for your bureaucracy argument, are you mad? Really? The bureaucratic largesse of Eurocrats is infamous. Witness the temple they are building to themselves as we speak. The “need for such mechanisms” never subsides. And by definition, the invention of new departments increases bureaucratization. I’m surprised this is a serious argument you’re making.

    Lastly, who cares about Charlemagne’s dreams? Why on earth would you want a unified European superstate/empire? This argument you’re making is purely normative and idealistic, not in the least practical. You aren’t going to convince me that the Union should be strengthened because then maps would look cooler and the Hapsburgs could rest easily in the afterlife.

    Look, my problems with the European Union are myriad and profound. And I’m not denying that the nation-state has its own problems. But even if I loved the EU, you wouldn’t find me arguing that the EU increases local sovereignty while decreasing bureaucratization. Seriously. The explicit point of the EU is precisely the opposite. Absurd.

  • Cincinnatus

    KK@3,

    Your points, while skillfully articulated, will receive strong disagreement from many others.

    You may be correct that “localism” in Europe will flourish to the extent that Basques (many of whom are associated with terrorism) and Catalans are more likely to be more sympathetically regarded by the Union as a whole rather than, say, the Spanish national government. And the SNP favors greater Union because a) the English don’t (they’re contrary for its own sake) and b) because it will be a check on–pay attention–English sovereignty.

    But that’s about as much as I’m willing to grant your claims. The idea that greater consolidation and centralization will lead to greater localism, distributed power, and local sovereignty is oxymoronic and absurd. No serious observer believes that the European Union has or will restore indigenous rights, national sovereignty, etc. In fact, the point of the Union is precisely the opposite: defang national sentiments and institutions to prevent war, etc. Practically speaking, the complaint right now is that, by definition, a national currency has represented a large transference of sovereignty from the nation-state. Thus, Germany, a strong economy, finds itself subject to the vicissitudes of Greece, Spain, and Italy. Imagine if national banks were eliminated altogether and European nations were no longer responsible for or sovereign over their own debts! Imagine if Germany had no choice but to bail out Greece, Italy, Spain, Portugal, et al.! Surely I don’t need to explain to you that national banks are a keystone institution of national sovereignty. The next step, I suppose, is the elimination of national armies in favor of a unified European defense force–another obvious occlusion of national and local sovereignty.

    As for your bureaucracy argument, are you mad? Really? The bureaucratic largesse of Eurocrats is infamous. Witness the temple they are building to themselves as we speak. The “need for such mechanisms” never subsides. And by definition, the invention of new departments increases bureaucratization. I’m surprised this is a serious argument you’re making.

    Lastly, who cares about Charlemagne’s dreams? Why on earth would you want a unified European superstate/empire? This argument you’re making is purely normative and idealistic, not in the least practical. You aren’t going to convince me that the Union should be strengthened because then maps would look cooler and the Hapsburgs could rest easily in the afterlife.

    Look, my problems with the European Union are myriad and profound. And I’m not denying that the nation-state has its own problems. But even if I loved the EU, you wouldn’t find me arguing that the EU increases local sovereignty while decreasing bureaucratization. Seriously. The explicit point of the EU is precisely the opposite. Absurd.

  • http://www.utah-lutheran.blogspot.com Bror Erickson

    I have never been able to see how this Eurozone thing will work. I still don’t. And sovereignty is a funny thing, Nations tend to like it, and will defend it. What is being given as a way to bring peace, may in the end bring war.

  • http://www.utah-lutheran.blogspot.com Bror Erickson

    I have never been able to see how this Eurozone thing will work. I still don’t. And sovereignty is a funny thing, Nations tend to like it, and will defend it. What is being given as a way to bring peace, may in the end bring war.

  • Klasie Kraalogies

    Cincinnatus, “many of the Basques associated with terrorism”. Your arguument lost its validity once you made. That dumb comment. Yes, there is a Basque terrorist group, the ETA. That doesn’t mean “many Basques are associated with terrorism.” That’s just typical ignorant Yankee crap.

    Furthermore, the rest of your argument is seriously coloured by ideological bias. And yes, there are those, both within and without the EU, that argue against the Idea of Greater Union. But in looking at the strongest arguers against greater unity from within the EU it is difficult not to come away with an impression that those are big fish in small ponds not wanting to become smaller fish in a Big Pond. Furthermore, the electoral reality is that on the non-national scale, ie on those localised scale I mentioned earlier, parties such as the SNP achieved electoral success with a greater EU mandate.

    A further reality is that in an increasing globalised world, with rapidly growing economic entities such as Brazil, India, China and others, small, independant European economies with little resources will dwindle into irrelevance, endangering the European way of life. Polling resources is therefore needed, but as events of late has shown, this might necesssitate greater political union. The economy drives everything, and sacrificing economic well-being on an ideological/nationalistic altar is never, ever a good idea.

  • Klasie Kraalogies

    Cincinnatus, “many of the Basques associated with terrorism”. Your arguument lost its validity once you made. That dumb comment. Yes, there is a Basque terrorist group, the ETA. That doesn’t mean “many Basques are associated with terrorism.” That’s just typical ignorant Yankee crap.

    Furthermore, the rest of your argument is seriously coloured by ideological bias. And yes, there are those, both within and without the EU, that argue against the Idea of Greater Union. But in looking at the strongest arguers against greater unity from within the EU it is difficult not to come away with an impression that those are big fish in small ponds not wanting to become smaller fish in a Big Pond. Furthermore, the electoral reality is that on the non-national scale, ie on those localised scale I mentioned earlier, parties such as the SNP achieved electoral success with a greater EU mandate.

    A further reality is that in an increasing globalised world, with rapidly growing economic entities such as Brazil, India, China and others, small, independant European economies with little resources will dwindle into irrelevance, endangering the European way of life. Polling resources is therefore needed, but as events of late has shown, this might necesssitate greater political union. The economy drives everything, and sacrificing economic well-being on an ideological/nationalistic altar is never, ever a good idea.

  • Cincinnatus

    KK: Not crap. Polls indicate that the ETA still boasts significant social support–you know, for a terrorist group; I consider 10% in a parliamentary vote significant support–though this support is declining. Anyway, that remark of mine regarding the Basques was, I admit, tangential and distracting. I retract it. You’ll notice that nothing in my argument hinged upon it. Thanks for calling me an ignorant Yankee though!

    I agree that my argument is “coloured” by ideological bias. So is yours. Whose isn’t? I harbor a normative commitment to the nation-state, to localism, to local sovereignty, to subsidiarity. I harbor a normative distaste for consolidation, bureaucratization, etc. I don’t see how this is a strike against me or my argument, especially since most of my argument was, in fact, objective: it is basically a fact that the EU has increased bureaucratization and decreased national sovereignty, by definition. The question isn’t whether this is true but whether you are for or against it. I am against it. I don’t think the perceived benefits of the EU (still unclear to me, by the way) outweigh the costs. Which brings me to your third point: I am not willing to subsume all commitments and communal goods under the rubric of economic growth. If I were an English citizen, for example, I would not be willing to cede sovereignty, democracy, localism, etc., to a distant bureaucracy. I don’t care if I would potentially be materially richer as a result. (By the way, that the EU improves the continental economy is a dubious claim, at best; isn’t that the problem? The fate of the established economies in Europe has been tied to the instabilities of the profligate disasters to the South).

    So occluding numerous European ways of life via the EU is necessary to stop Brazil from endangering “the” European way of life? First, what is the European way of life? Second, how is Brazil going to accomplish this feat? And why is the gradual elimination of national sovereignty and distinctives necessary to foil Brazil’s dastardly plot?

    Yeah, I’m a Euroskeptic, to say the least. I’m also an Anti-federalist, so it fits. I am skeptical of all concentrations of power.

  • Cincinnatus

    KK: Not crap. Polls indicate that the ETA still boasts significant social support–you know, for a terrorist group; I consider 10% in a parliamentary vote significant support–though this support is declining. Anyway, that remark of mine regarding the Basques was, I admit, tangential and distracting. I retract it. You’ll notice that nothing in my argument hinged upon it. Thanks for calling me an ignorant Yankee though!

    I agree that my argument is “coloured” by ideological bias. So is yours. Whose isn’t? I harbor a normative commitment to the nation-state, to localism, to local sovereignty, to subsidiarity. I harbor a normative distaste for consolidation, bureaucratization, etc. I don’t see how this is a strike against me or my argument, especially since most of my argument was, in fact, objective: it is basically a fact that the EU has increased bureaucratization and decreased national sovereignty, by definition. The question isn’t whether this is true but whether you are for or against it. I am against it. I don’t think the perceived benefits of the EU (still unclear to me, by the way) outweigh the costs. Which brings me to your third point: I am not willing to subsume all commitments and communal goods under the rubric of economic growth. If I were an English citizen, for example, I would not be willing to cede sovereignty, democracy, localism, etc., to a distant bureaucracy. I don’t care if I would potentially be materially richer as a result. (By the way, that the EU improves the continental economy is a dubious claim, at best; isn’t that the problem? The fate of the established economies in Europe has been tied to the instabilities of the profligate disasters to the South).

    So occluding numerous European ways of life via the EU is necessary to stop Brazil from endangering “the” European way of life? First, what is the European way of life? Second, how is Brazil going to accomplish this feat? And why is the gradual elimination of national sovereignty and distinctives necessary to foil Brazil’s dastardly plot?

    Yeah, I’m a Euroskeptic, to say the least. I’m also an Anti-federalist, so it fits. I am skeptical of all concentrations of power.

  • Cincinnatus

    Also, re. your apparent obsession with the SNP’s regard for the EU, which you apparently think proves your argument: the SNP, you’ll notice, is less about recovering Scottish independence and a robust Scottish way of life and more about serving as a (rather silly) platform for a rather radical leftism. Not that leftism itself is problematic, but their stated policy goals–elimination of nuclear weapons, greater integration with the EU, massive redistribution of wealth, etc.–have little to do with Scotland and more to do with social democracy. They should probably rename themselves, in fact. If I were Scottish, I would vote for them as a statement of nationalist sentiment, but their platform is not indicative of a recognition that a more powerful EU will advance localist and indigenous sovereignty. Again, that idea would be–and is–absurd.

  • Cincinnatus

    Also, re. your apparent obsession with the SNP’s regard for the EU, which you apparently think proves your argument: the SNP, you’ll notice, is less about recovering Scottish independence and a robust Scottish way of life and more about serving as a (rather silly) platform for a rather radical leftism. Not that leftism itself is problematic, but their stated policy goals–elimination of nuclear weapons, greater integration with the EU, massive redistribution of wealth, etc.–have little to do with Scotland and more to do with social democracy. They should probably rename themselves, in fact. If I were Scottish, I would vote for them as a statement of nationalist sentiment, but their platform is not indicative of a recognition that a more powerful EU will advance localist and indigenous sovereignty. Again, that idea would be–and is–absurd.

  • Klasie Kraalogies

    OK, I retract the “ignorant” part of my statement.. :)

    Ideology: I’m supporting greater EU unity – because it makes economic and politcal sense. Not because of ideology. I’m not a greeat ideologue – marrying yourelf to an ideology is a stupid thing to do, imho. If I have to describe myself, I stand within the broad stream of the greater Liberal-Democratic Tradition, but I do believe in Realpolitik as well,. Economically, and this is probably the closest I come to being “ideological”, I’m an Ordoliberal, which is as ideologically neutral an economic position as any.

    What I mean by endanger is that fading into economic oblivion means that those European states would not be able to fund their way of life anymore. Just as much as the US, if your government doesn’t take some sort of corrective action will land in the same pickle. And the current situation in Europe necessiates greater unity to be able to manage that corrective action, otherwise the domines will fall. And they will fall all the way to Cincinnatti.

    The SNP – yes they are centre left party. But I meant to illustrate that the “Idea” is not anathema to the ethnically marginalised voter in Europe.

    I used to share your distaste for uniformity etc., and to some extent, I sill do. But likes and dislikes pale against the rwality out there. Better to then build a well-desgined Liner Europe than to be (Economially) smashed to smithereens in so many little boats, and loose it all….

  • Klasie Kraalogies

    OK, I retract the “ignorant” part of my statement.. :)

    Ideology: I’m supporting greater EU unity – because it makes economic and politcal sense. Not because of ideology. I’m not a greeat ideologue – marrying yourelf to an ideology is a stupid thing to do, imho. If I have to describe myself, I stand within the broad stream of the greater Liberal-Democratic Tradition, but I do believe in Realpolitik as well,. Economically, and this is probably the closest I come to being “ideological”, I’m an Ordoliberal, which is as ideologically neutral an economic position as any.

    What I mean by endanger is that fading into economic oblivion means that those European states would not be able to fund their way of life anymore. Just as much as the US, if your government doesn’t take some sort of corrective action will land in the same pickle. And the current situation in Europe necessiates greater unity to be able to manage that corrective action, otherwise the domines will fall. And they will fall all the way to Cincinnatti.

    The SNP – yes they are centre left party. But I meant to illustrate that the “Idea” is not anathema to the ethnically marginalised voter in Europe.

    I used to share your distaste for uniformity etc., and to some extent, I sill do. But likes and dislikes pale against the rwality out there. Better to then build a well-desgined Liner Europe than to be (Economially) smashed to smithereens in so many little boats, and loose it all….

  • Cincinnatus

    KK,

    Hey, Brit (or whatever you are), the colonies extend further West than Cincinnati these days, you know!

    I have great respect for the ordoliberal position. But there is no such thing as ideological neutrality and “realism”–unless you have literally no priorities and values whatsoever. Everyone has ends in mind. Even Machiavelli, the supposedly primordial realist, only advocates flexible “morals” and vicious actions in order to achieve the good end of political power and stability. Machiavelli’s contemporaries, meanwhile, simply disagreed on the ends: for them, the end of the state is to foster Christian virtue.

    Your ideological commitment apparently reposes in economic prosperity. To attain such prosperity, you are willing to advocate certain means–bureaucratic consolidation, etc.–at the expense of other ends–national self-determination and identity, local ways of life, etc. But make no mistake: these are goods and ends that many recognize just like the bland flatness of economic prosperity for individual agents in the market. You’ve yet to demonstrate that your preferred end–and that of other Eurocrats–is superior to these older, more venerable goods.

    Yes, the US is in dire straits and must take drastic corrective action. But you’ll never hear me advocate, say, a world bank, with global currencies and debt instruments, as a means to restore our prosperity and stability. Other goods trump these in my mind. This isn’t a battle between unreasonable ideals and “reality.” It’s a battle between my ideals and yours. Why are yours better?

    Might I submit also that ways-of-life don’t cost much? America’s best, most authentic, most thickly-constituted (in a social sense) days came before its wild prosperity and shallow consumerism. Money doesn’t buy a way of life, and in most cases can obscure it (cf. globalization). Obviously, we shouldn’t be starving in the streets beating each other with clubs for scraps of bread. But I don’t think the alternative here is between a Hobbesian state of nature and the EU.

  • Cincinnatus

    KK,

    Hey, Brit (or whatever you are), the colonies extend further West than Cincinnati these days, you know!

    I have great respect for the ordoliberal position. But there is no such thing as ideological neutrality and “realism”–unless you have literally no priorities and values whatsoever. Everyone has ends in mind. Even Machiavelli, the supposedly primordial realist, only advocates flexible “morals” and vicious actions in order to achieve the good end of political power and stability. Machiavelli’s contemporaries, meanwhile, simply disagreed on the ends: for them, the end of the state is to foster Christian virtue.

    Your ideological commitment apparently reposes in economic prosperity. To attain such prosperity, you are willing to advocate certain means–bureaucratic consolidation, etc.–at the expense of other ends–national self-determination and identity, local ways of life, etc. But make no mistake: these are goods and ends that many recognize just like the bland flatness of economic prosperity for individual agents in the market. You’ve yet to demonstrate that your preferred end–and that of other Eurocrats–is superior to these older, more venerable goods.

    Yes, the US is in dire straits and must take drastic corrective action. But you’ll never hear me advocate, say, a world bank, with global currencies and debt instruments, as a means to restore our prosperity and stability. Other goods trump these in my mind. This isn’t a battle between unreasonable ideals and “reality.” It’s a battle between my ideals and yours. Why are yours better?

    Might I submit also that ways-of-life don’t cost much? America’s best, most authentic, most thickly-constituted (in a social sense) days came before its wild prosperity and shallow consumerism. Money doesn’t buy a way of life, and in most cases can obscure it (cf. globalization). Obviously, we shouldn’t be starving in the streets beating each other with clubs for scraps of bread. But I don’t think the alternative here is between a Hobbesian state of nature and the EU.

  • Klasie Kraalogies

    You overstate what you perceive to be me position. As to localisms etc -the fact that you have heterogenous population, ranging from impassive Finns to passionate Portugese, from laissez-faire Italians to retentive Prussians, would inhibit the development of an overcentralized state (I am not even sure if “state” is the right word). Also, if I had a say in it, I would suggest a more Canadian model for the EU, rather than the over-Washingtonised (how’s that) US.

    As to ideology – of course, there is no ideological neutrality. But I’lm against marrying your ideology. But the truth is that money finances way of life. Bankruptcy is the primary reason Communism fell, not Reaganesque posturing or papal agitation. There are other factors,m sure, and one has to balance things out – but as per my previous comments, I don’t believe a single/unified entity destroys those other factors. But not unifying destroys the critical factor of the economy, and everything falls… Irrespective of how loud you sing your national anthem.

  • Klasie Kraalogies

    You overstate what you perceive to be me position. As to localisms etc -the fact that you have heterogenous population, ranging from impassive Finns to passionate Portugese, from laissez-faire Italians to retentive Prussians, would inhibit the development of an overcentralized state (I am not even sure if “state” is the right word). Also, if I had a say in it, I would suggest a more Canadian model for the EU, rather than the over-Washingtonised (how’s that) US.

    As to ideology – of course, there is no ideological neutrality. But I’lm against marrying your ideology. But the truth is that money finances way of life. Bankruptcy is the primary reason Communism fell, not Reaganesque posturing or papal agitation. There are other factors,m sure, and one has to balance things out – but as per my previous comments, I don’t believe a single/unified entity destroys those other factors. But not unifying destroys the critical factor of the economy, and everything falls… Irrespective of how loud you sing your national anthem.

  • DonS

    The EU was a horrible misfortune, particularly, it appears, for Germany. And while some thought that the current Euro crisis would lead to its break-up, it now appears that the EU bureaucrats have managed to turn it into an opportunity to consolidate and increase their centralized power, and to further subvert the self-determination of each historic European nation in the union. Germany’s industriousness and resultant relative wealth will be re-distributed to Greece, Italy, and others, it appears, rewarding those people-groups for their historic lack of discipline and relative slothfulness.

    As for the U.S., instability in a significant part of the world economy helps no one. We have a lot of European interests and investments which are certainly affected by this upheaval. Yes, it does appear that the dollar will be stronger vs. the euro in the shorter term, but it is historically weak against the yen, so its strength is not a worldwide phenomenon. Oil is at $100 per barrel in December, a normally weaker demand month, so that is not a good thing. We have many serious problems of our own, which will be exacerbated by the European problems.

  • DonS

    The EU was a horrible misfortune, particularly, it appears, for Germany. And while some thought that the current Euro crisis would lead to its break-up, it now appears that the EU bureaucrats have managed to turn it into an opportunity to consolidate and increase their centralized power, and to further subvert the self-determination of each historic European nation in the union. Germany’s industriousness and resultant relative wealth will be re-distributed to Greece, Italy, and others, it appears, rewarding those people-groups for their historic lack of discipline and relative slothfulness.

    As for the U.S., instability in a significant part of the world economy helps no one. We have a lot of European interests and investments which are certainly affected by this upheaval. Yes, it does appear that the dollar will be stronger vs. the euro in the shorter term, but it is historically weak against the yen, so its strength is not a worldwide phenomenon. Oil is at $100 per barrel in December, a normally weaker demand month, so that is not a good thing. We have many serious problems of our own, which will be exacerbated by the European problems.

  • Klasie Kraalogies

    DonS, make no mistake, the Germans benefitted in no small way from the EU – from free trade and many other things. Also, the Germans broke their own rules regarding spending, debt to GDP etc. Plus they lent to the Greeks without the necessary due diligence. Do not make the mistake that many do and look superficially at the whole problem. Breaking it all up is a worse olution to a bad probelm. Indicipline was and is a problem. Greek laziness and indifference to law and regulations is a major problem. But the reality is that breaking things up could be the worst option.

    But I must say, that given my very first statement, namely the horrendous affect of instability to everybody, that if that is the way things are going to go, it should be orderly, but quick. Same with greater unity. But the current dilly-dallying is the worst of all options.

  • Klasie Kraalogies

    DonS, make no mistake, the Germans benefitted in no small way from the EU – from free trade and many other things. Also, the Germans broke their own rules regarding spending, debt to GDP etc. Plus they lent to the Greeks without the necessary due diligence. Do not make the mistake that many do and look superficially at the whole problem. Breaking it all up is a worse olution to a bad probelm. Indicipline was and is a problem. Greek laziness and indifference to law and regulations is a major problem. But the reality is that breaking things up could be the worst option.

    But I must say, that given my very first statement, namely the horrendous affect of instability to everybody, that if that is the way things are going to go, it should be orderly, but quick. Same with greater unity. But the current dilly-dallying is the worst of all options.

  • Patrick Kyle

    Someone please enlighten me. How is bailing out the EU going to fix anything other than to delay it’s inevitable demise? They aren’t ‘plugging any leaks’ in the sinking ship, they are temporarily keeping it afloat.

    They claim that greater centralization will help, but historically that has never worked. It sounds to me more like a bunch of gambling addicts who ‘double down’ after each successive loss.

    If the EU tanks, the contagion will spread here because many of our banks and financial institutions are deeply invested in Europ;e

  • Patrick Kyle

    Someone please enlighten me. How is bailing out the EU going to fix anything other than to delay it’s inevitable demise? They aren’t ‘plugging any leaks’ in the sinking ship, they are temporarily keeping it afloat.

    They claim that greater centralization will help, but historically that has never worked. It sounds to me more like a bunch of gambling addicts who ‘double down’ after each successive loss.

    If the EU tanks, the contagion will spread here because many of our banks and financial institutions are deeply invested in Europ;e

  • DonS

    Patrick, as I understand it, the point of greater centralization is to take at least partial budgetary authority away from individual countries and move it to the Hague. In other words, for example, the EU could alter Greece’s budget to raise taxes and reduce expenditures without needing sign-off from the Greek government. Likewise, one presumes, the EU could divert German tax money to EU purposes without German government approval, or raise German taxes to pay Greek debt.

  • DonS

    Patrick, as I understand it, the point of greater centralization is to take at least partial budgetary authority away from individual countries and move it to the Hague. In other words, for example, the EU could alter Greece’s budget to raise taxes and reduce expenditures without needing sign-off from the Greek government. Likewise, one presumes, the EU could divert German tax money to EU purposes without German government approval, or raise German taxes to pay Greek debt.

  • Tom Hering

    I heard someone argue the other day that the most likely scenario isn’t a breakup of the EU, but a contraction, i.e., strengthening the union of its northern members while shedding its southern members. Any thoughts?

  • Tom Hering

    I heard someone argue the other day that the most likely scenario isn’t a breakup of the EU, but a contraction, i.e., strengthening the union of its northern members while shedding its southern members. Any thoughts?

  • Joe

    Northern and Southern Europe do have differences beyond the current financial mess – philosophically, linguistically etc. Beyond the attempt to challenge the US economically, I never thought it may sense for S and N Europe to jump into bed together.

  • Joe

    Northern and Southern Europe do have differences beyond the current financial mess – philosophically, linguistically etc. Beyond the attempt to challenge the US economically, I never thought it may sense for S and N Europe to jump into bed together.


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