Tuesday, 25 October 2011

By on October 25th, 2011 in forensics, government, politics

09:13 – Geez. Anyone who’s even slightly aware of what’s going on believes that the crisis super-summit tomorrow is the absolute last chance the EU has to prevent the collapse of the euro and the disintegration of the EU. And yet the actions of the leaders of the top four EU countries are reminiscent of the Animal House food fight. We have Merkozy lobbing vicious verbal grenades at each other, both of them publicly making fun of Berlusconi (who richly deserves it, actually), and Sarkozy telling Cameron that Cameron “has missed an opportunity to shut up” and that he’s “sick” of Cameron “interfering” in the discussions. It’s fortunate that European countries no longer have much in the way of military forces, or Germany would probably have invaded France by now. And France would have surrendered. And yet, by tomorrow, these “leaders” are supposed to agree to terms that none of them are willing to agree to and by so doing save the euro and the EU. Not bloody likely.

Not that there’s actually anything that can be done to save the euro or the EU anyway. The euro itself has a fatal design flaw, and no amount of gerry-rigging can fix that permanently. The problem now is that the EU is running out of temporary patches, each of which was extremely expensive and ultimately futile. All of the argument now isn’t about how to save Greece and the euro and the EU; even the politicians by now realize that is impossible. What they’re arguing about now is who will pay the costs of the collapse. Everyone except the FANG nations wants the FANG nations to take the hit, cutting them down to size. The FANG nations aren’t willing to do so. The only thing they’re seriously concerned about is how to minimize the damage to their own economies from the collapse. They’ve already written off not just Greece, but Portugal, Ireland, Italy, Spain, Belgium, and France.

15 Comments and discussion on "Tuesday, 25 October 2011"

  1. BGrigg says:

    Merkozy? That’s not a mash-up I would have put together!

  2. Robert Bruce Thompson says:

    Okay, Sarkel then.

    Actually, I think they’d have a better chance of coming to an agreement if we replaced Merkel, Sarkozy, and Berlusconi with Moe, Larry, and Curly, respectively.

  3. Robert Bruce Thompson says:

    Oh, yeah. I see that Sarkozy is (again) threatening to leave the euro. Like that’s going to happen. France will end up holding the euro bag when the FANG nations depart it.

    And, as another interesting datum, I see that many Italians are now trading in their euro notes with S country codes (Italian) for euro notes with X country codes (Germany). As one Italian said, when the euro collapses he wants to trade his euro notes for D-marks rather than lira.

  4. Chuck Waggoner says:

    Sarkozy’s political career is over. He is just going nuts because of that.

    There IS NO agreement that is going to resolve the EU crisis. It will be battle after battle as the only thing they accomplish is kicking the can down the road. The best that can be hoped for, is that the can gets smaller, instead of too big to move with a kick.

    Sit back and enjoy the theatre. This is war without the guns,–using the mouth, instead.

  5. SteveF says:

    I’m surprised that the EU leaders* aren’t calling on the US to bail them out. Their little economic problem bodes to be as large an existential threat as the Cold War.

    * And by “leaders” I mean “sub-moronic slime who have somehow scammed their way into positions of respect, trust, and authority”.

  6. Robert Bruce Thompson says:

    Well, the longer they kick that can, the bigger it gets. Even a couple years ago, they could have delayed the collapse by some years just by letting Greece default, but they didn’t want to pay the €500 billion or so that would have cost them then. Those costs are now at least an order of magnitude larger and getting larger every month. And it’s no longer just Greece. It’s the entire southern tier of the eurozone, including Belgium and France. Of course, the entire structure was doomed to collapse eventually anyway, but refusing to deal with Greek problem a couple of years ago just made the collapse occur all that much sooner.

    And, although it may be war without guns (so far, anyway), that doesn’t mean there’s not a great deal of human suffering to come. The politicians are about to find out what happens when huge numbers of people who thought they were middle-class learn that they’ve been living in a dream world for years (or decades in some cases) and that they’re in fact citizens of third-world countries, with all the changes in living standards that implies.

    For the EU in general and the euro in particular to work, Europe has to become an actual country, like the US. A country in which not just the currency is shared, but in which fiscal and political decisions are centralized. That’s simply not going to happen, if only because the EU nations do not share a language, let alone a culture. If the EU were smart, which of course it isn’t, a good first step would be to declare English the official language of the EU and ban official teaching or use of local languages for anything other than private conversations among people too old to learn a new language. Of course, that’s not going to happen.

  7. Chuck Waggoner says:

    Oh, I think it will happen. Already, English is the defacto language in many countries. Germany–stupidly–is lagging behind everyone else. But even so, most of my students who married someone with a different native language, spoke English at home. Go to any Scandinavian country, or to Holland–everyone there can communicate with English that is often indiscernible from American English. The reason is because all of them stopped dubbing TV and movies to their local language. Only Germany, Spain, and Italy, still dub movies to their own language. Germany has also declined to allow English language radio and TV stations into the country (Liberty Media has been trying to get in for years). In Berlin, only the grandfathered stations from the occupation have been allowed to remain (which means RFI from France, and BBC World Service from Britain; the US Armed Forces gave back their frequency, which is now Star95–a strictly German language rock station).

    And the fact is that even judicial rulings of the EU are done in English (US English, actually). You can go look at the Microsoft ruling of a few years back to see. I am told that the English is the only official text. Translations to other languages are unofficial.

    This shift is happening. Jeri and I always said that if Germany freely allowed English language entertainment and stopped dubbing everything to German, our jobs as English teachers would vanish immediately.

    What the common man in Europe holds as his conviction matters about as much as what US citizens believe should be done by Washington–in other words, it WILL NOT be done. Same with federalizing Europe. Business and government leaders are together on making it happen. It WILL happen.

    Meanwhile, the Euro is suffering no crisis of confidence on world currency markets.

  8. Robert Bruce Thompson says:

    Yes, but the difference is that the EU is not a nation. It’s not really even a confederacy. It’s 27 nations, each of which jealously guards its national sovereignty. And even where the politicians are willing to give up that sovereignty, the people who elect them are not. See what’s going on right now in the UK. The average British citizen wants nothing to do with the euro, and is very suspicious of the EU itself. And rightly so, given that most (correctly) perceive the advantages of EU membership to be greatly outweighed by the costs, literal and figurative. I suspect that the UK is going to extract a bunch of concessions from the EU in return for supporting whatever reorganization the EU decides to do. Ideally, the UK would prefer to return to the Common Market, with free trade between the UK and the EU, but without any other financial or political or legal ties. Britain as a whole is very tired of having to obey dictats from Brussels.

  9. Jim Cooley says:

    RBT, couldn’t have said it better myself, and I find it odd that I’d that I’d agree with you 100%.

    Euro was doomed from the outcome, as I’ve said elsewhere lost to posterity because of the move to WordPress and not http://www.phpbb.com or its alternatives. Wish you’d consider a move backwards…

    Do note how how the price of gold responds to any question of the Euro’s demise.


    It’s a forgone conclusion, and has been from the outset.

  10. Chuck Waggoner says:

    I cannot agree with you two at all. The Euro was not destined to fail — it was just one step to complete integration. There have been, and will be, many more.

    Actually, my own close British friends favored joining the Euro from the outset — way back decades ago. But it is not surprising that — right now — any Euro non-member would look askance at joining. There are Eastern-bloc countries who still today, express every intent of joining the EU once the Euro is sorted out.

    On the sovereignty question, all I can say is that young people I knew in Europe could not care less about it — and the older, grouchier people will not be the prime influence in deciding the question. Young people travel freely throughout Europe (MUCH more so than American young people travel the US), and are willing to — and do — locate anywhere within the EU for work. For them, it no different than me, relocating to 4 completely different areas of the US for work. Okay, so I was born in Indiana. One of them might have been born in Spain, but is now working in the Netherlands (somebody I actually know). Whether the laws come from Strausburg or closer to home is of little concern to the average person, going to work every day to earn their paycheck. As long as there is no pay cut and they can take their massive vacation time to the far flung places of the EU, they are satisfied.

    The old nationalism will not survive, and Americans get much more worked up about this than the Europeans do. I have related before that the US is FAR more nationalistic than Germany — and that gives Americans a tilted perspective. Drive anywhere in the US and you see US flags waving everywhere. But you will be hard-pressed to find a German flag waving anywhere except during the World Cup games. Same in the UK, France, Spain, and the Netherlands. Outside of Parliament buildings, other government buildings often have no flags at all on them. On the other hand, you will not find any government building in the US that does not have a flag on it — even the post office buildings! and Perkins Pancake House. Not so in Europe.

    But we will see who is right about this. Gold futures may gyrate, but gold itself is holding pretty steady — and nearly $400 lower than just a month ago. I believe the next big step will be a round of EU quantitative easing that Sarkozy wants. Merkel is not going to win on that one in the end. Everyone else wants it too.

  11. Jim Cooley says:

    Study history, Chuck. Human nature doesn’t change. Clan behavior doesn’t change. Need I say more?

  12. brad says:

    I am sort of halfway between Chuck and Jim on this one. There is still a fair bit of nationalism under the skin. Not in Germany – there he is right. Germany may be among the least nationalistic, because people want to disassociate themselves from Germany’s actions in 20th century history. But in France? In Italy? Nationalism is still there…but fading slowly.

    The tribalism that Jim refers to seems to be morphing into a different form. Instead of countries, we have circles of like-minded individuals. You can see this in the OWS-movement, as it has overlapped onto Europe. Also in the many political movements, environmentalist movements, etc. This is where people are expressing tribalism – and the Internet is slowly making the geographical boundaries irrelevant.

  13. Chuck Waggoner says:

    Ah, but human nature does change. I have observed it throughout my life. When I was born, in the place I was born, there were separate restrooms for blacks. Now I am back in the place I was born, and no one would even think that was necessary, and most would pounce on, and reject it immediately, if someone proposed it. Every generation is different in what they want. And the younger generation everywhere around me, could not care less about tradition or heritage as a reason for making decisions in life. In fact, I came of age in the hippie rebellion era, and I believe today’s young people are more determined than those to make their own decisions, and live life according to those conclusions.

  14. OFD says:

    That’s not human nature changing, Chuck, merely societal norms influenced by political ideologies. Those certainly DO change over generations, but human nature itself has remained the same since Zinjanthropus or Adam and Eve, if one prefers. It has usually been those of the Left/librul mindset who fanatically believe that human nature can be changed, and we have seen the results in various forms of socialist totalitarian regimes over the last hundred years. And clans and tribes have been with us since then, too, and they are making a huge comeback around the world, along with the dreaded nationalist sentiments, no matter what the bozos in that monstrous edifice on the East River think and plan, or their co-conspirators in Mordor On The Potomac and in Brussels.

  15. Miles_Teg says:

    Chuck wrote:

    “I have related before that the US is FAR more nationalistic than Germany — and that gives Americans a tilted perspective. Drive anywhere in the US and you see US flags waving everywhere. ”

    British friends who lived and worked in DC for a few years did a reconnaissance trip to the US before their posting started. They were bemused and shocked at the flag idolatry they saw everywhere. And if a band struck up the Star Spangled Banner everyone would stop and put their hand on their chest in respect. They wondered what they were letting themselves in for.

    I stayed with them for 3.5 weeks in 2003 and didn’t find the nationalism so bad, but then I was in DC, a comparatively liberal part of the country. But yes, there were US flags *everywhere*.

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