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(Global Geopolitics)   Merkel & Co. begin developing plans enabling them to tell broke EU members to GTFO   ( glblgeopolitics.wordpress.com) divider line
    More: Interesting, Angela Merkel, GTFO, eu countries, CDU, Colorado State University  
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1109 clicks; posted to Business » on 15 Nov 2013 at 10:19 AM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-11-15 10:05:52 AM  
Merkel's insistence on austerity (which breaks debtor nation's GDP and creates massive unemployment, essentially ensuring that the debtor nation will never be free of debt or reliance on EU and IMF bailouts or debt forgiveness) is basically what is killing the Eurosphere's growth.
 
2013-11-15 10:19:03 AM  
You mean, kinda like the US would like to get rid of Missouri?
 
2013-11-15 10:48:05 AM  
Germany benefitted from fiscal expansion and high inflation in the euro periphery to pull itself out of it's doldrums, but isn't willing to let expand it's own balance sheet or let inflation rise in order to help out the periphery.

Instead, they somehow believe that everyone should be running a trade surplus...somehow.
 
2013-11-15 11:03:36 AM  
Your blog still sucks. Your blog is still ugly.
 
2013-11-15 11:21:30 AM  

Cubicle Jockey: Germany benefitted from fiscal expansion and high inflation in the euro periphery to pull itself out of it's doldrums, but isn't willing to let expand it's own balance sheet or let inflation rise in order to help out the periphery.

Instead, they somehow believe that everyone should be running a trade surplus...somehow.


Yes, Germany thinks if all countries ran trade surpluses like them, everything would be just peachy.
 
2013-11-15 11:34:54 AM  

RexTalionis: Merkel's insistence on austerity (which breaks debtor nation's GDP and creates massive unemployment, essentially ensuring that the debtor nation will never be free of debt or reliance on EU and IMF bailouts or debt forgiveness) is basically what is killing the Eurosphere's growth.


So you are saying that Germany should bail out the nations who can't support themselves?

Sorry, that excuse doesn't fly. Germans have a much more streamlined economy than the European nations that are in trouble, thanks to tough labor market reforms. Greece and Spain and Italy cling to the rigid sclerotic labor practices of the past, which holds them back.
 
2013-11-15 11:44:43 AM  
It remains a mystery to me how European politicians allowed themselves to be believe that they could have a monetary union without fiscal union.
 
2013-11-15 11:45:20 AM  
Oddly in Greece, some people blame their economic problems on when they switched to the Euro from their previous currency of small bottles of extra virgin olive oil.
 
2013-11-15 11:52:02 AM  

syrynxx: Oddly in Greece, some people blame their economic problems on when they switched to the Euro from their previous currency of small bottles of extra virgin olive oil.


something something Grecian urn?
 
2013-11-15 12:02:56 PM  

Debeo Summa Credo: Greece and Spain and Italy cling to the rigid sclerotic labor practices of the past, which holds them back.


Irrelevent.
They would still have to go through an internal devaluation unless Germany was willing to accept higher levels of inflation, which they are not.

You are just moving the pain around, and not addressing the source of the pain.
 
2013-11-15 12:02:56 PM  
Well, that wasn't a misleading headline at all. Merkel's party is against it, and so is the SDP - the main opposition party.

Maybe suspension of voting rights would be a good idea.
 
2013-11-15 12:03:50 PM  

Debeo Summa Credo: RexTalionis: Merkel's insistence on austerity (which breaks debtor nation's GDP and creates massive unemployment, essentially ensuring that the debtor nation will never be free of debt or reliance on EU and IMF bailouts or debt forgiveness) is basically what is killing the Eurosphere's growth.

So you are saying that Germany should bail out the nations who can't support themselves?

Sorry, that excuse doesn't fly. Germans have a much more streamlined economy than the European nations that are in trouble, thanks to tough labor market reforms. Greece and Spain and Italy cling to the rigid sclerotic labor practices of the past, which holds them back.


If the Euro didn't exist, Spain, Greece and Italy could devalue, and get out of the mess.  The Euro is the problem.
 
2013-11-15 12:07:02 PM  

Debeo Summa Credo: So you are saying that Germany should bail out the nations who can't support themselves?


The Germans don't need to bail them out, they just need to fix their side of the balance sheet, by either allowing inflation or reducing their euro-zone trade surplus.

Everyone CANT run a surplus. Someone has to be a net buyer.
 
2013-11-15 12:19:04 PM  

JohnAnnArbor: If the Euro didn't exist, Spain, Greece and Italy could devalue, and get out of the mess. The Euro is the problem.


Europe also doesn't have the large internal federal system that the US has which mitigates imbalances between rich states and poor states (the old red-state welfare map).
 
2013-11-15 12:40:30 PM  
If Germany drives out Greece, it'll be like lambs to the slaughter.
 
2013-11-15 02:37:30 PM  

RexTalionis: Merkel's insistence on austerity (which breaks debtor nation's GDP and creates massive unemployment, essentially ensuring that the debtor nation will never be free of debt or reliance on EU and IMF bailouts or debt forgiveness) is basically what is killing the Eurosphere's growth.


Maybe, just maybe austerity is the tool for those countries to fix their shiat. Greece didn't get into trouble because the world's economy shat its bed in 2007. Greece was a mess long before that. And Greece doesn't really have an export industry. Apart from some goat farmers and a Coca Cola bottling plant there is barely anyone producing something.
 
2013-11-15 02:48:22 PM  

Cubicle Jockey: Debeo Summa Credo: So you are saying that Germany should bail out the nations who can't support themselves?

The Germans don't need to bail them out, they just need to fix their side of the balance sheet, by either allowing inflation or reducing their euro-zone trade surplus.

Everyone CANT run a surplus. Someone has to be a net buyer.


Oh no!  Germany is way too fiscally responsible!!  They don't spend money they don't have!!!!  They must be stopped!

On a serious note, I can see the argument that austerity lowers Greece's GDP, and thus makes it more difficult for them to recover.  However, without austerity, Greece would just continue running up the credit card, and Germany would never be paid back.  Germany is still never going to be paid back, but at least now they aren't throwing even more money down the shiatter.
 
2013-11-15 03:04:17 PM  
Greece belongs in the EU. But they do NOT belong in the Eurozone.
Greece should join the UK, Sweden, Hungary, Denmark and a bunch of other EU countries which have their own currency.
Better for everyone in the long run, including the Euro.
 
2013-11-15 03:04:23 PM  

Klopfer: Maybe, just maybe austerity is the tool for those countries to fix their shiat.



How does purposefully decreasing GDP lead to increased competitiveness with a non-inflatable currency?
Ask yourself what increases competitiveness.
a) Innovation. Make better goods.
b) Price. Make cheaper goods.
Where does a smaller national economy and higher debt help those two things?

Austerity is a terrible tool for fixing an economy.
It is a wonderful tool for punishing a country for perceived moral failings, but that doesn't really help anyone. It's like yelling at your car for breaking down. You feel better, but the car is still not moving.
 
2013-11-15 03:19:26 PM  

RumsfeldsReplacement: Germany is way too fiscally responsible!! They don't spend money they don't have!!!!


I'm not talking about their government. I am talking about the country. Germany has a gigantic account-balance-surplus, roughly 6% of GDP.

As a result, there has to be an equally large account-balance-deficit elsewhere. Germany acts like the trade deficits in other countries are wholly unrelated to their surplus.

Germany: You guys need to be more like us. Spend less, save and sell more.
Periphery: Perhaps you are right. You have a lot of money. Would you like to buy this widget?
Germany: Fark no. Go sell to someone else.
Periphery: But they are all poor as well.
Germany: Not my problem.
 
2013-11-15 04:44:10 PM  

Debeo Summa Credo: RexTalionis: Merkel's insistence on austerity (which breaks debtor nation's GDP and creates massive unemployment, essentially ensuring that the debtor nation will never be free of debt or reliance on EU and IMF bailouts or debt forgiveness) is basically what is killing the Eurosphere's growth.

So you are saying that Germany should bail out the nations who can't support themselves?

Sorry, that excuse doesn't fly. Germans have a much more streamlined economy than the European nations that are in trouble, thanks to tough labor market reforms. Greece and Spain and Italy cling to the rigid sclerotic labor practices of the past, which holds them back.


Nope

Germany could add about 10 percent to growth over the next decade if it removed barriers to competition and other inefficiencies, according to the O.E.C.D. Surprisingly, the untapped potential in Germany was almost as high as that in Italy and higher than that in Spain, according to the O.E.C.D., an indication that the German domestic economy is not as superior to its southern neighbors as is often assumed.

http://www.nytimes.com/2012/02/23/business/global/in-germany-a-limp- do mestic-economy-stifled-by-regulation.html?_r=2&hp&
 
2013-11-15 04:55:35 PM  
Greece and Spain and Italy -

you forgot France, Mon Dieu!
 
2013-11-15 05:04:17 PM  

Cubicle Jockey: RumsfeldsReplacement: Germany is way too fiscally responsible!! They don't spend money they don't have!!!!

I'm not talking about their government. I am talking about the country. Germany has a gigantic account-balance-surplus, roughly 6% of GDP.

As a result, there has to be an equally large account-balance-deficit elsewhere. Germany acts like the trade deficits in other countries are wholly unrelated to their surplus.

Germany: You guys need to be more like us. Spend less, save and sell more.
Periphery: Perhaps you are right. You have a lot of money. Would you like to buy this widget?
Germany: Fark no. Go sell to someone else.
Periphery: But they are all poor as well.
Germany: Not my problem.


And why should Germany's people buy a whole bunch of imported crap they don't need or want?  Again, you're blaming them for being responsible.  As for the other side of their surplus, they aren't holding a gun to the Greek people forcing them to buy another Porsche.  The Greeks are doing that all by themselves.
 
2013-11-15 05:23:12 PM  

RumsfeldsReplacement: And why should Germany's people buy a whole bunch of imported crap they don't need or want?


Because it is either that, or accept high levels of inflation, or abandon the Euro.
These are the three options for the periphery to recover, because again:
EVERYONE CAN NOT RUN TRADE SURPLUSES.
It's literally impossible.

Of the three options, Germany agreeing to actually act like they have money and have a good time spending it is the best for everyone involved.
 
2013-11-15 05:29:48 PM  

RumsfeldsReplacement: And why should Germany's people buy a whole bunch of imported crap they don't need or want?  Again, you're blaming them for being responsible.  As for the other side of their surplus, they aren't holding a gun to the Greek people forcing them to buy another Porsche.  The Greeks are doing that all by themselves.


Because if the other countries had a stronger economy, they would buy even more German goods.  If the Germans would cycle their export earnings into imports rather than savings, not only would they have more goods and services in Germany but those other countries would be able to purchase more of those precious German exports that they love so much.

Bankrupting your customers is rarely a smart business decision.
 
2013-11-15 06:24:36 PM  
Everone is right.

* Austerity has a negative effect on economies
* Germany is under no obligation to keep loaning cash to other nations
* It was a mistake for Greece to join the Euro.

Now that we all agree on the problem, goood luck coming up with a solution. Because there isn't a good one, just a series of bad ones, some worse than others
 
2013-11-15 06:45:18 PM  

stratagos: * Germany is under no obligation to keep loaning cash to other nations


Again, they don't even need to do this.
There are other ways to lower their account balance.
And it is self-defeating for them in the long run to maintain the imbalance. The Euro was a mutual benefit to core and periphery. One of the major benefits Germany is enjoying right now is not having a rapidly appreciating deutschmark erode their global competitive balance. If the periphery dumps the euro, the currency will drift up and Germany will find it harder to sell in the local and global markets.
 
2013-11-15 07:02:07 PM  

Cubicle Jockey: stratagos: * Germany is under no obligation to keep loaning cash to other nations

Again, they don't even need to do this.
There are other ways to lower their account balance.
And it is self-defeating for them in the long run to maintain the imbalance. The Euro was a mutual benefit to core and periphery. One of the major benefits Germany is enjoying right now is not having a rapidly appreciating deutschmark erode their global competitive balance. If the periphery dumps the euro, the currency will drift up and Germany will find it harder to sell in the local and global markets.


Fine: Germany is under no obligation to adjust it's economy in a way to benefit other nations, and more than Georgia should feel shame about possibly poaching the Boeing plant. It may end up *costing* them, but the periphery countries shouldn't *count* on Germany doing it
 
2013-11-15 08:39:54 PM  

stratagos: Cubicle Jockey: stratagos: * Germany is under no obligation to keep loaning cash to other nations

Again, they don't even need to do this.
There are other ways to lower their account balance.
And it is self-defeating for them in the long run to maintain the imbalance. The Euro was a mutual benefit to core and periphery. One of the major benefits Germany is enjoying right now is not having a rapidly appreciating deutschmark erode their global competitive balance. If the periphery dumps the euro, the currency will drift up and Germany will find it harder to sell in the local and global markets.

Fine: Germany is under no obligation to adjust it's economy in a way to benefit other nations, and more than Georgia should feel shame about possibly poaching the Boeing plant. It may end up *costing* them, but the periphery countries shouldn't *count* on Germany doing it


That isn't an apt analogy.  The US federal government will use various methods to offset some of the losses to whatever state Georgia gets the Boeing plant from. That isn't to say that state will have a net-zero change, but the US makes sure no state just completely falls off the deep end.
 
2013-11-15 09:20:34 PM  

stratagos: Everone is right.

* Austerity has a negative effect on economies
* Germany is under no obligation to keep loaning cash to other nations
* It was a mistake for Greece to join the Euro.

Now that we all agree on the problem, goood luck coming up with a solution. Because there isn't a good one, just a series of bad ones, some worse than others


I was in Greece two months ago and learned one of their huge problems is a long tradition of politicians buying votes by granting government jobs. Of the 15 million people in Greece, about 1 million work for the government.

Their two main industries are tourism, ruined by the very public riots, and olive oil. The entire country is covered in olive trees - 120 million of them - and yet I have not seen a single bottle of Greek olive oil since I've been back and looking in normal grocery stores. Everything is from Italy.

So how do they turn around tourism when everyone is scared to visit, or olive oil production when Don Corleone will make you sleep with the fishes if you try to muscle into his market?

How do you fire half a million government parasites?
 
2013-11-16 01:23:03 AM  
img.fark.net
 
2013-11-16 01:48:30 AM  

Wake Up Sheeple: If Germany drives out Greece, it'll be like lambs to the slaughter.


mmm, greek lamb
 
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