What Really Caused the Eurozone Crisis? - Article

[joea]

Very eloquent Sky.

[Skybird]

For those who can understand German:
http://www.spiegel.de/politik/deutsc...789619,00.html

The doubts have been there from beginning on .

Wie schrieb Augstein knapp ein Jahr nach Ratifizierung des Euro-Vertrages: "Die Probleme, die jetzt nicht gelöst werden, müssen die Deutschen ausbaden, wenn all die Maastricht-Macher nicht mehr im Geschäft sind und in ihrer Gartenlaube sitzen."

2 years ago when I started actively posting on this forum I dis-agreed with Sky 100%. The more time goes on the more I agree with him

Many years ago I agreed with most of what he wrote, as time goes on I find some of what he writes is nonsense and some of what he writes is just simply false.
On the EU he is in the right direction, but far too frequently makes up the most ridiculous lies and insists again and again that they are really true.

[Skybird]

A German journalist (in English) with a piece readers of the Sunday Telegraph already might have read - about the Germans waking up to realising that the EU they once were so helpful to create has turned from a dream into a nightmare, and how much the people and the politicians are apart. Germany has accepted guarantees for the bailout now that exceed its yearly state budget. Rating agencies for the first time ever threaten Germany to decrease its rating. But the talk already is aboput boosting the bailout pool from hundreds of billions to beyond 1.2 trillion, while American voices demand it to be pushed even beyond the 2 trillion border.

I am living on a planet of lunatics. The German people always were for "Europe" - but not by the means the politicians have enforced on them especially in the past ten years, anmd not at the cost of beeing sold to an absolutistic rulership of bureaucrats without any legitimation by the people in the European nations, that run their powerbusiness in a neo-feudial fashion. And a majority of Germans - always was against the Euro.

http://flatworld.welt.de/2011/10/04/...and-of-others/

Euro crisis shows Germans that their fate is now in the hand of others

4. Oktober 2011

Till the Euro crisis most Germans thought that the united Europe was basically a good idea and that a pooling of national interests was good for everybody, while the fate of a people was still largely decided on a national level. But now they have to realize that they have bound their economic fate and future to people they hardly know, whose Byzantine political systems they don***8217;t understand and whose corrupt practices they disapprove of. A sobering experience. My piece in the ***8220;Sunday Telegraph***8221; about a fateful week for Greeks and Germans and a conflicted German public:

When George Papandreou addressed an audience of businessmen in Berlin on the painful subject of the euro crisis last week, he must have been surprised by the warmth of his welcome: far friendlier than anything the increasingly isolated Greek prime minister is used to back home.

Even more remarkable, given that Greece and its ever-expanding need for a bail-out is the cause of so much angst in Germany, the applause he received was louder than that for the Chancellor, Angela Merkel.

But the reason goes directly to the heart of the problem Germany faces. None of the industrialists ***8211; representatives of great German manufacturing companies like Siemens, BMW and Volkswagen ***8211; who gathered a 1960s conference centre in the former communist east ofBerlinto hear him speak, want the euro to fail. Most would rather gamble just a little bit more of Germany***8217;s hard-earned cash to help Greece get out of its mess. And all wanted to believe his message, that the tough reforms promised by Greece would not only be delivered, but would work.

***8220;We***8217;re not asking for applause, but we are simply asking for respect of the facts,***8221; he said. ***8220;Is there any hope? Will we ultimately succeed? My answer is yes, we can!***8221;

As it turned out, last week was a decisive one for Mrs Merkel. On Thursday, she saw off a rebellion in her own ruling coalition and got the plan for an expanded bail-out fund through the German parliament, the Bundestag, with enough votes not to have needed the strong support that also came from the opposition.

But the question for Germany is still unanswered. Are Germans right to continue, grudgingly, to help their southern European cousins out of the mess that their bad habits have got them into? Or are we simply pouring good money after bad?

Nations in need usually don***8217;t like the nations that rescue them. Germany was suspicious of America for decades after the Second World War; now the Greeks have mixed feelings towards Germany. They admire the stereotypical country of efficiency and fiscal prudence, but they resent what they perceive as a patronising and moralising attitude towards them.

One result is frequent allusions in the Greek press to the Nazi occupation in the Greek press: the arrival of an EU technical assistance team was greeted by Eleftherotypia newspaper with the headline: ***8220;30 Gauleiters sent into the ministries***8221;.

On a recent visit to Athens, however, I discovered a widespread hope among Greeks that Europe will rescue them from the state apparatus and a political class that they deeply mistrust.

But will we? Bailing out euro economies in need is highly unpopular in Germany***8211; which is why Chancellor Angela Merkel had to work the phones so hard to convince sceptical MPs to vote for the new EU crisis mechanism. That rescue package raises the direct risk taken on by German taxpayers from ***8364;123 billion to ***8364;211 billion ***8211; roughly two thirds of the annual German budget. Or more, according to the respected German Ifo institute, which calculates that accumulated German risk ***8211; including exposure of the European Central Bank and Deutsche Bundesbank ***8211; now totals ***8364;465 billion.

And even this is not sure to do the trick: already there is a discussion among the European partners about further increasing the leverage through the ECB. The rating agencies warned that this might endanger the hitherto rock-solid credit rating of Germany itself.

On top of that it***8217;s slowly dawning on the EU that what***8217;s needed inGreeceis not just a bail out, but nation building. ***8220;No adjustment programme ever had so many components; every sector of the economy is touched by it,***8221; said a senior EU expert inAthens.

Elias Mossialos, the Greek government spokesman and a former LSE professor, didn***8217;t mince words.Greecewas afflicted by ***8220;a dysfunctional state and dysfunctional politics***8221;, he said, and the governing PASOK socialist party was itself part of the problem.

And reforms are desperately needed. Greek bureaucracy is bloated and expensive;Greecehas the highest rate of regulation among OECD countries, the least flexible labour market in the EU and 150 closed professions ***8211; even taxi drivers have their guild. It has huge tax evasion and the black economy is around one third of GDP. No wonder that Germans are not amused to have to step in to fill the country***8217;s coffers.

Germans realise that they are throwing their money at a mess that nobody seems able to control, and their anger at having to bail out the wrongdoers is checked only by doom-laden warnings about the consequences of the eurozone***8217;s failure. ***8220;If the euro falls, Europe falls,***8221; is one of Angela Merkel***8217;s oft-repeated slogans.

This ignores the simple fact that 10 EU countries are still outside the euro ***8211; and happily so. But the doomsayers have created a conflicted citizenry inGermany. An overwhelming majority takes a principled stand against the bail out. But a good part is uneasy at what would happen if Greece fell and the contagion spread to Italy and Spain. It***8217;s a lose-lose proposition.
Now, the optimism that followed the successful reintegration ofEast Germanyhas gone. Germans can feel the large dark cloud of the euro crisis hanging over them. For decades they have been among the most pro-European people on the continent. Now they are waking up from their European dream to find that it is a nightmare.

They have bound their economic fate and future to people they hardly know, whose Byzantine political systems they don***8217;t understand and whose corrupt practices they disapprove of (although Germans like to forget that some big German firms reaped huge profits from them).

They would have preferred Greeks and Italians to remain the nice holiday acquaintances they always were. But now they and their inept politicians hold Germany***8217;s future in their hands.

This crisis has created enormous suspicion between governments and the governed throughout the eurozone. In some European countries, including Britain, you have always had Euro-sceptics who saw the whole European endeavour as a conspiracy of the elites that was forced on the people. In some countries this feeling was channelled into right wing or radical liberal (in the European sense of free market and free societies) parties.

Not so in Germany, but this kind of thinking is beginning to grow here now. You find it in blogs and in the long threads of angry and sometimes nasty comments beneath almost every online article on Greece published by the big news websites.

And the reaction of Germany***8217;s political and media elites nurtures this notion of a conspiracy. Anyone who opposes the bail-out is labelled as anti-European. And although polls show that an overwhelming majority of people oppose giving more money to insolvent countries, no political force is taking up that case. On the contrary: the opposition in the Bundestag, with the exception of the radical Left, is more supportive of the bail-out than the governing coalition, where at least some dissenting voices are now being heard.

In the end last week***8217;s vote was a complete reversal of the mood in the country: 523 MPs voted for, and only 85 against, the new bail-out fund that, if ever needed, might break the back of the strongest economy inEurope.
And in most of the German media, as well as among the country***8217;s Europe experts, it seems to be all the rage to advocate yet further European integration to get out of the mess of too much integration already. It is as if a doctor advised an alcoholic to drink more beer in order to get better.

I am not the only German asking himself: when is this nightmare going to end? And how?

As somebody in the German press put it some days ago: At first, states saved banks. Now some states save other states. - But who saves the rescuers?

[Betonov]

Originally Posted by Skybird

The German people always were for "Europe

Insert WWI/WWII joke in here

[Skybird]

Originally Posted by Betonov

Insert WWI/WWII joke in here

Okay, it goes like this:
http://www.welt.de/politik/ausland/a...ionen-vor.html

Translation here:
http://www.militaryphotos.net/forums...erkel-to-power

Stupid bastard and repeat offender that little man is. Always the same hate-dripping propaganda by him.

[Betonov]

And soon Yugo... Slovenia falls

[Respenus]

Just one small bone to throw to the "dogs" concerning the current crisis: We should not allow the Greek syndrome to become the European disease (no matter how it may already be ill).

@Betonov, welcome to the club. You're not the only one ever more convinced by Sky. That doesn't mean we still see eye to eye. I still firmly support the idea that we should first clean our national "democracies", before turning to the EU and blame it for what is merely the mirror of what we have back home. Don't forget, every law is voted in by the governments of elected representatives of member states, that is, the ministers.

[Betonov]

Originally Posted by Respenus

I still firmly support the idea that we should first clean our national "democracies", before turning to the EU and blame it for what is merely the mirror of what we have back home.

Oh absolutely. But the political apathy this nation suffers from prevents us from actually changing anything. The only people who actually vote are are the party sheep, doing their shepherds orders. While fresh faces stay in the dark because nobody votes for them. If there are any fresh faces

[Skybird]

And news from Italy.

http://www.bbc.co.uk/news/business-15176947

Italian banks to feel the heat soon.

Bailing out Italy or Spain would be a completely new ballgame - we then talk about trillions for each of these two.

I cannot imagine the Bundestag to agree to anything like that.

[kraznyi_oktjabr]

Originally Posted by Skybird

I cannot imagine the Bundestag to agree to anything like that.

Good to hear. I'm sure that current finnish government will be more than happy to pay - as long as there are "good guarantees" like current ones available.

Nothing clever about this, Europeans simply pay themselves far to much and have been doing so for many years.