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European Disunion
Greek Mess Still Unresolved
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  • ctobserver

    But facts are facts, and unless Europe can look seriously and realistically at the horrendous mess that the euro fiasco has created, the Union will continue to degrade.

    This is undoubtedly true. However, the Euro fiasco came about (in large part) because many governments broke the fiscal rules that were supposed to bind them. The framework of the Euro and the ECB explicitly excludes any possibility of international bailouts, and voters (especially German voters) take those terms seriously. So, if the European leaders do look seriously and realistically at the mess created by the Euro fiasco, that will also contribute to the degradation of the Union. It seems to me that the Union is doomed to degrade due to the combination of over-ambitious goals, poorly thought out execution, and lack of democratic legitimacy. I’m not sure the degradation would be decreased by squarely facing the problems.

  • Jacksonian_Libertarian

    I’ve been saying for years that the Euro and the EU would disintegrate, just as the Soviet Union and Warsaw Pact did, 25 years ago.

  • CapitalHawk

    “The Germans want IMF involvement in the Greek debt issue as a way of certifying to skeptical German voters and lawmakers that the Greek reform program is serious and tough.” <— This is a false statement. The Germans want the IMF involved as a means to force the US taxpayer to assist in the bailout of German banks. We should refuse until the Germans escrow a few hundred billion dollars to assist in the future bailout of US public employee pension funds who just happened to have accidentally done exactly the same thing as the Greeks.

  • David Schuler

    Greece’s problems will continue until it exits the euro or the Germans recognize that Greek purchases of German goods require subsidies paid by the Germans, much as purchases of goods made in New York or California by people from Mississippi require that New Yorkers and Californians be taxed and the proceeds given to the people of Mississippi.

    That would require Germans to relinquish the comforting fiction that German prosperity is founded on German thrift and industry while Greece’s problems are caused by the Greeks’ profligacy and laziness and to abandon Germany’s predatory mercantilist policies. Don’t expect that any time soon.

    • Fat_Man

      And where are the Greek Mercedes, BMW, Porsche, Audi, Siemens, BASF?

      • David Schuler

        Greece is horribly under-capitalized. That’s typical of post-colonial countries. Keep in mind that Greece was an Ottoman colony for hundreds of years. Since the Ottoman Greece has suffered from terrible governments.

        • Fat_Man

          “Greece is horribly under-capitalized”

          So was South Korea in 1953. And it had a horrid history of colonial domination by Japan. Actually there is a long list of countries where capital was non-existent a couple of generations ago, that are now the scenes of dynamic economies. this sort of like the old British excuse that their factories were not destroyed during WWII.

          ” Since the Ottoman Greece has suffered from terrible governments.”

          I love the passive voice. Greece has been an independent country that has governed itself for almost two centuries. If Greece has terrible government, the Greeks are responsible. Nobody made them elect a far left government.

    • Andrew Allison

      It is certainly true that Germany is an export led economy. However, whilst it might have been encouraged, nobody forced the Greek (and Italian) governments to borrow, and malinvest, money they now cannot possibly repay. The EU is incapable of resolving the debt problem and will continue to extent and pretend until either the debt is written off. This could happen in one of two ways: simply defaulting while remaining in the eurozone (there’s no mechanism to expel a member), or exiting the eurozone. Unfortunately for the people of Greece, the result (real, as opposed to pretend, austerity will be the same either way. There will be no real reform as long as Greece (and Italy) can continue to borrow money.

    • Jim__L

      Er, what goods are made in California or New York?

      Stock certificates?

  • Kevin

    Merkel is a fool. She needs this wrapped up and done well before heading into election season. AFD will make hay of it if she has to bailout the Greeks during the next crisis during the election season. Refugees are already a loadstone, adding bailouts of Greece (and who knows what’s to come in Italy) will only lead to the burden she has to carry. Perhaps exchange the bailout/write off with prosecution of the former bureaucrats who falsified Greece’s accounts (and maybe some Deutsche Bank execs and bond salesmen who connived at the whole mess) if they need to show they’re being tough, but pretending Greece will repay these debts is delusional and just prolonging and deepening the crisis.

  • charlesrwilliams

    The problem is not the euro. The problem is the integration of eurozone banks which operates on the fiction that sovereign debt is risk free. Greece defaults and banks all over Europe fail. European banks are two big to fail – at least they operate on that premise. So Greece defaults and the German taxpayer ends up holding the bag. This is because Germany has the deepest pockets. Well, since Greece cannot pay, Greece will not pay. The dominoes will eventually fall and the strongest nations in Europe will end up holding the bag.

  • Fat_Man

    And the British a crazy to want nothing to do with this cluster&%$#?

  • gabrielsyme

    We should thank our lucky stars that the Greek fascists – Golden Dawn – are not poised to win the next elections. When you think about it, fascism has often prospered when they claimed a foreign conspiracy to impoverish and dominate the nation, and that they were the only party that would actually resist foreign domination.

    In Greece, this is actually the case, no conspiracy theory necessary! The socialists, the conservatives and now the hard left have all been discredited by their cooperation with German/EU/IMF dictates, and a persistent failure to get Greece back on its feet.

    Perhaps a less Nazi-like fascist movement than Golden Dawn would be in a dominant position in these circumstances, but one take away is that western societies are now extremely resistant to genuine fascist movements.

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