A Couple of Perspectives on the Eurocrisis

Christopher Booker in the UK Telegraph sees the Euro's economic problems as rooted in the E.U.'s political hubris:

Greece was just the antipasto: Italy, Spain, Portugal and others are now hanging over an abyss of debt which scarcely all the money in Europe could fill – created by countries living way beyond their means, thanks not least to the euro's low interest rates...

What we are witnessing here is a judgment on the entire deceitful and self-deceiving way in which the "European project" has been assembled over the past 53 years. One of the most important things to understand about that project is that it has only ever had one real agenda. Everything it has done has been directed to one ultimate goal, full political and economic integration....by far the most important project of all was locking the member states into a single currency.

This was always above all a political not an economic project, to be driven through at any cost, which was why all those "Maastricht criteria" laid down to bring it about were repeatedly breached....

As was advised by Sir Donald MacDougall's report to Brussels in 1978, it could only work if, following the US model, between 20 and 25 per cent of Europe's GDP was available to such a government, to enable a huge transfer of wealth from richer countries such as Germany to the poorer, more backward countries of southern Europe – and how ironically has that come about!

When the 10-year-long construction of the euro began in the 1990s, all these warnings were ignored. The cart was put before the horse. So fixated were the Eurocrats on the need to get their grand project in place that the "rules" were treated as mere window dressing. The member states were locked together willy-nilly in a one-size-fits-all system, with a single low interest rate, enabling countries such as Italy, Spain, Portugal and Greece to live on a seemingly limitless sea of borrowed money. And now, entirely predictably, judgment day has come.

And the Australian comedy due Clarke and Dawe lay out Europe's current problem in laycomedian terms:

BRYAN DAWE: How much does Greece owe, Roger?

JOHN CLARKE: $367 billion.

BRYAN DAWE: Correct. And who do they owe it to?

JOHN CLARKE: Mostly to the other European economies.

BRYAN DAWE: Correct. How much does Ireland owe?

JOHN CLARKE: $865 billion.

BRYAN DAWE: Correct. Who do they owe it to?

JOHN CLARKE: Other European economies mostly.

BRYAN DAWE: Correct. How much does Spain and Italy owe?

JOHN CLARKE: $1 trillion each.

BRYAN DAWE: Correct. Who to?

JOHN CLARKE: Mainly France, Britain and Germany.

BRYAN DAWE: Correct. And how are Germany, France, Britain going Roger?

JOHN CLARKE: Well they're struggling a bit, aren't they?

BRYAN DAWE: Correct. Why?

JOHN CLARKE: Well ‘cause they've lent all the vast amounts of money to other European economies that can't possibly pay them back.

BRYAN DAWE: Correct so what are they go to go have to do?

JOHN CLARKE: They're going to have to bail them out.

BRYAN DAWE: Correct. Where are they getting the money to do that Roger?

JOHN CLARKE: That is a good question. I don't know the answer to that one.

Tim Cavanaugh blogged back in February on the unfolding of the beginning of the drama of the potential collapse of the Euro.

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  • Tman||

    What's even more pathetic about Europe is that the US has subsidized a huge percentage of their security with our military since WWII, which allowed them (like South Korea) to spend far less on maintaining a military than what we spend. But they are still in this mess anyways.

    If the US had the luxury of cutting what we spend in GDP on the military in half (to what most Europeans do) we would be in much better shape right now economically. It still wouldn't do much to dent our entitlement problems, but it's incredible to think how much worse it would be for Europe if they had to pay full costs for their security.

  • ||

    "If the US had the luxury of cutting what we spend in GDP on the military in half (to what most Europeans do) we would be in much better shape right now economically."

    I think you are kidding yourself. The Congress would have just found other ways to piss the money away. Look at the "peace dividend" from the cold war. Yeah, we had a few years of budget surpluses thanks to that. But as soon as one party got control of both the Whitehouse and Congress (2002) we were right back to having deficits again.

    Hell if anything funding the cold war may have given us an advantage over the Europeans. Congress was going to spend the money anyway. And giving them an excuse to spend it on defense probably kept them from spending it in ways that damaged the economy even more.

  • Tman||

    You are probably right, but at least allow me the illusion that this wouldn't happen. It's farking Friday for chrissakes.

    The worst part (to me) of our budget cuts for the military post-cold war and pre-9/11 is that in 1993 they axed the plans for the Super Collider Waxahachie, Texas. That thing would have been AWESOME.

  • ||

    I know. Those fuckers. If I ever became a Bill Gates type billionaire, the first thing I would do is fund the building of that thing.

  • ||

    But remember America is barbaric for not having a European style social welfare state. We can afford it.

  • ||

    We can bail out the world! Yes we can!

  • Tim||

    We need to focus on what works...

  • ||

    Spain lost its AAA rating today. Looks like it is next on the chopping block. Every country that has a system American liberals look to emulate is going broke. But it is somehow all capitalism's fault.

  • Tman||

    RACIST!

  • Tim||

    Are Spaniards "Hispanic" or "Latino" ?

  • alan||

    Are Spaniards "Hispanic" or "Latino" ?

    Depends on who is doing the beaner counting. From the Wikipedia . . .

    Hispanic (Spanish: hispano, hispánico) is a term that originally denoted a relationship to the ancient Hispania (geographically coinciding with the Iberian Peninsula).[note 1] During the modern era, it took on a more limited meaning, relating to the contemporary nation of Spain . . .

    Hispanus was the Latin name given to a person from Hispania during Roman rule. In English, the term Hispano-Roman is sometimes used.[3] The Hispano-Romans were composed of people from many different tribes.[4] Some famous Hispani (plural of Hispanus) were Seneca the Elder, Seneca the Younger, Marcus Annaeus Lucanus, Martial, Prudentius, the Roman Emperors Trajan, Hadrian and Theodosius I, and also Magnus Maximus and Maximus of Hispania.

  • ||

    Deflation here we come!

  • ||

    See, I just don't believe deflation can happen in the current policy environment, at least not for more than, say, a quarter:

    "the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. [...] We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation. "

    "Deflation: Making Sure "It" Doesn't Happen Here", Governor Ben S. Bernanke, November 21, 2002

  • Turnkey||

    Except for all the ones that are not. (norway, to some extent denmark, etc)

  • Ebeneezer Scrooge||

    Now wait just a minute buster, there's still Canada and Australia and they're great.

    And even if they're not, it isn't getting your ass out ObamaCare.

  • ||

    I posted this video to my FB page last week. Damn damning (and funny) stuff.

    I got no likes from my lefty friends.

  • ||

    BRYAN DAWE: Correct. Where are they getting the money to do that Roger?

    From the US Treasury, which rang up over a trillion in swaps with the Euro banks over the last quarter.

    [Blast. Can't find link.]

  • Tim||

    If it's Tuesday this must be bankruptcy...

  • J||

    It's euro, not Euro. Like dollar, not Dollar.

  • MacGhil||

    BRYAN DAWE: Correct. Where are they getting the money to do that Roger?

    JOHN CLARKE: That is a good question. I don't know the answer to that one.

    From the "richest" member of the IMF, of course.

    The Greek Bailout's Two Secret Exit Clauses: Why Europe Is Now Cheering For Its Own Demise

  • ||

    Well, the Chinese and Japanese central banks have to find someplace to stash the cash from depressing their currencies.

  • Jersey Patriot||

    If the US had the luxury of cutting what we spend in GDP on the military in half (to what most Europeans do) we would be in much better shape right now economically.

    The US is currently fighting three unnecessary, pointless, no-one-can-figure-out-what-it-would-even-mean-to-"win" wars. It has a massive military stretched across a worldwide archipelago of military bases, despite not having had an actual First World enemy in 20 years. It has two huge borders and has not been to war with either neighbor in more than 150 years. It has two giant oceans on either side of it. It has not fought a serious invasion in 196 years. The US's giant military is the ultimate luxury.

  • ||

    This is like the Head & Shoulders commercial where the one guy is surprised that his friend has a bottle of Head & Shoulders in his bathroom.

    "But you don't have dandruff!"

    -- "Exactly."

    Maybe our military might has something to do with the fact that neither our neighbors nor any other aspiring world powers is anxious to fight us.

    And I'm still not sure how you count three wars. If you're talking about actual active military conflicts, that's two; if you're including all the "War on ________" business, then it's in double digits.

  • Tman||

    JP's post is unfortunately not worthy of a reply. Especially the "has not fought a serious invasion in 196 years" statement.

  • db||

    Please cite the last time enemy ground troops made a landing on, or attempted to occupy, a parcel of land claimed by one of the United States.

  • db||

    I should say, "claimed as territory of one of the United States." Pearl Harbor was an attack on the U.S., but no attempt was made to occupy the Hawaiian islands. It was simply an attempt to devastate the U.S.'s ability to project its military presence.

    While a serious war, the American Civil War does not qualify as a foreign invasion.

  • Tman||

    " It was simply an attempt to devastate the U.S.'s ability to project its military presence."

    now THAT'S funny. Japan was just protecting its borders.

    It's Guinness time after that one.

    Happy Friday kids!

  • melman||

    the islands of attu and kiska, alaska, june 1942 - august 1943

  • LarryA||

    Iraq, Afghanistan, Korea.

  • ||

    Just like to point out that John Clarke is a New Zealander.

  • ||

    Jemaine: It doesn't matter what country someone's from, or what they look like, or the color of their skin. It doesn't matter what they smell like, or that they spell words slightly differently...some would say, more correctly.

    Sinjay: Yeah...

    Jemaine: Let me finish. I'm a person. Bret's a person. You're a person. That person over there is a person. And each person deserves to be treated like a person.

    Sinjay: That's a great speech. Too bad New Zealanders are a bunch of cocky a-holes descended from criminals and retarded monkeys.

    Jemaine: No, you're thinking of Australians.

    Bret: Yeah, that's Australians.

  • Colin||

    Where are those lefty trolls telling us how European social democracy is so great?

  • Corduroy||

    Oh I know a few. They're completely blind to it. It must be Goldman Sachs fault.

  • Sam Grove||

    Progressive left: "It's the free market and European pursuit of libertarian policies that are at fault."

  • Ebeneezer Scrooge||

    No, c'mon. It's Bush's fault. Where have you been?

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