Could Italy collapse the euro?

listermint

Wanderer78 wrote: »

and this is where it becomes even more disturbing, its clearly obvious!

Very insightful.

So you can't name any areas of either country that it hasn't worked.

Wanderer78

listermint wrote: »

You actually haven't given any specifics as to how it hasn't worked .

Just quoted some economists about GDP measurements.

Specifics please.

apologies, i dont have the time

mark blyth

http://markblyth.com/

https://twitter.com/mkblyth?lang=en

blackwhite

Wanderer78 wrote: »

id have to completely agree with other posters and economic experts such as joe stiglitz and yanis varoufakis, there is something fundamentally wrong with the design of the eu, in particular our common currency. theres no effect surplus recycling mechanism in place in the euro zone, lowering interest rates and imposing regressive policies such as austerity, is not working, the problems in italy are showing, very little has actually changed within the euro zone to address these problems.

Holding Varoufakis up as an economic expert doesn’t do your appeal to authority argument any favours there.


Claiming that only spending what you can afford to is inherently bad doesn’t help either

Wanderer78

blackwhite wrote: »

Holding Varoufakis up as an economic expert doesn’t do your appeal to authority argument any favours there.


Claiming that only spending what you can afford to is inherently bad doesn’t help either

disagree but thank you

listermint

Wanderer78 wrote: »

apologies, i dont have the time

mark blyth

http://markblyth.com/

https://twitter.com/mkblyth?lang=en

Quite literally wasting my own time.

You can't even back up your own points .

This demonstrates enough for me.


The points made are invalid. I appreciate you making the point for me.

View

Wanderer78 wrote: »

View wrote: »

Let’s see - we have falling unemployment, a falling debt:GDP ratio and a high GDP growth rate. And that counts as “not working” in which parallel universe?

my point exactly, this is actually getting disturbing now! its important to realise that the creator of the modern method of measuring gdp, Simon Kuznets, even warned of the short comings of using such a metric to measure the well being of a society. this is explained very well in the work of english economist kate raworth. and again, our true debt burden is in fact our private debts, i.e. the metrics and metric systems we use to measure the well being of our societies are in fact no longer valid, the more we rely on these metrics and their systems to do so, the more disconnected society becomes to them

I am not sure what your point here is. Whether you or I can pay our private debts has nothing to do with whether the State can pay its debts or not.

Likewise it is fairly pointless to claim that our current metrics and measures are invalid, without any real evidence to back this up, and, more importantly, without a new improved system of metrics & measures to replace the existing ones.

ancapailldorcha

Wanderer78 wrote: »

apologies, i dont have the time

mark blyth

http://markblyth.com/

https://twitter.com/mkblyth?lang=en

Wanderer78 wrote: »

disagree but thank you

Dropping links and refusing to engage in discussion is not acceptable here. No more, please.

KyussB

Kermit.de.frog wrote: »

...
Neither should be in the euro but we are where we are.

All the creditor countries can really do is to force discipline on the periphery or the euro won't survive.

Why are we trying to save the Euro when it is contributing to the fiscal destruction of these periphery countries?

This 'fiscal discipline' is not necessary when the countries operate their own currency, because they don't experience the fiscal imbalances caused by the Euro itself, then (imbalances largely dominated by trade imbalances, caused by the strength of the Euro relative to each countries previous national currency, artificially harming most countries trade competitiveness, in terms of currency valuation, compared to the previous national currency).

The Euro can't survive if it has to crater countries in order to maintain on-paper economic sustainability - because this triggers political instability that will undermine it in the end, as we are seeing threatened right now.

You can't maintain economic stability for the currency - if the measures required for doing so, create political instability that threaten the currency. That is precisely the problem the Euro is creating.

The only way to fix it is wider reforms within the EU and running of the single currency - which there appears to be no appetite for - or to allow countries to reintroduce some variation of national currency. No sign of anything like this becoming acceptable.

no.8

View wrote:

Let’s see - we have falling unemployment, a falling debt:GDP ratio and a high GDP growth rate. And that counts as “not working†in which parallel universe?

What % of that GDP is Apple profits?

hatrickpatrick

KyussB wrote: »

When do people predict the Eurozone will actually stabilize, to the point that the economic conditions of individual countries, will not pose a threat to the Euro?

I honestly believe that many people believe the answer to that question to be "when governments in Europe adopt a fully right wing / libertarian attitude to economic policy and stop looking after people whose needs will never be met by the free market". So in other words, when we submit to US style "if you can't afford housing, food, or healthcare, we leave you to die, tough sh!t" ultraconservatism.

Of course this sounds hyperbolic, but that's the logical conclusion from what a lot of people go on about - some humans deserve to "fail" just as business does, in other words they just fold and erase themselves.

All financial and monetary policy in a civilised nation should be geared towards "what will maximise the quality of life for as many people as possible without hurting others". That's literally the only thing that really matters as far as government goes. That's what the social safety net of Europe was designed to accomplish - "there's a minimum standard of living that we do not allow our citizens to fall below, regardless of mistakes they might have made".

Entities such as the ECB and IMF, Do. Not. Care. about ordinary people or their struggles - all their care about are numbers on a spreadsheet. Sure, some will make the argument that those numbers are supposed to point towards whether people in general are able to access a decent quality of life, but we all know that this is no longer how society works, largely because of the wave of neoliberal / third way policy which followed Reagan and Thatcher, in which supposedly liberal politicians were too cowardly to rip up the Reaganomics / Thatcherite playbook and turn the clock back on the changes they made to society. Instead, they followed the unbelievably short sighted approach of saying "this is the new paradigm, let's work within it and not try to undo it".

It's no coincidence that it's since that period of Western history that we've essentially had "macro stagflation", in other words on a very long timescale and encompassing a very large proportion of population and economy, price inflation has far outstripped income. Case in point is the very obvious example that in the mid-20th century a family on a single income working an average job could afford somewhere to live, food for their kids, clothing, and a decent quality of life, whereas now even families on two incomes are often scraping for rent or mortgages. Of course conservative types always trot out the "oh well back then nobody had iphones, internet, or sunny holidays to eat into their incomes" but anyone with a brain stem knows that the dent made in disposable income by modern luxuries comes nowhere close to closing the discrepancy between the lifestyle a single income family could afford in the mid-20th century and what they can afford now.

For some reason, it's never "the time" to talk about this. It's never the time to talk about the fact that the institutions which fundamentally control the workings of modern society do not put the wellbeing of, and maximising the quality of life of, the average citizen at the top of -or even on their list of priorities. It literally doesn't matter to them. The individual human stories don't matter. The individual heartbreak, suffering and misery don't matter to them. As long as their numbers and their graphs and statistics are showing what they like to see, they're happy.

Fine Gael made this exact mistake (and largely acknowledged it afterwards, before anyone accuses me of merely stating opinion) going into the election which delivered our own inconclusive parliament - they weren't listening to individual peoples' stories and learning about how peoples' lives actually were. They were looking at everything from a mathematical point of view from behind computer screens, and utterly failing to understand that macroeconomic success in no way guarantees individual citizens a decent quality of life.

What I don't understand is why any time a country rebels against this status quo (or when people like us on forums like this even suggest doing so), others accuse them of being short sighted, or greedy, or selfish. Maybe - just maybe - what people are sick of is being ruled by technocrats, who would literally praise the wreck of the Titanic as a "stable" situation, because it's not going anywhere given that it's lying on the bottom of the ocean in two halves. And they would wax lyrical about how stable that wreck is, while totally ignoring the hundreds of people desperately swimming around above water, trying to find a lifeboat to get into.

That's the problem. They refuse to focus on individual human beings. They focus on everything theoretical with their "a rising tide lifts all boats" attitude to economics, without considering the fact that when people are drowning, the rising tide does absolutely sweet f*ck all to help them.

johnp001

View wrote: »

I am not sure what your point here is. Whether you or I can pay our private debts has nothing to do with whether the State can pay its debts or not.

Likewise it is fairly pointless to claim that our current metrics and measures are invalid, without any real evidence to back this up, and, more importantly, without a new improved system of metrics & measures to replace the existing ones.

John Williams' Shadow Stats charts are a very useful alternative metric for things like GDP, unemployment, money supply and inflation. In some cases the methodology used is simply a previous methodology used for the official government statistics and in some cases it is adjusted to remove what Williams sees as flaws in the official methodology.

Even taking only those statistics that are calculated according to previous methodologies I wonder would this set of alternative figures better support the austerity or anti-austerity side? It would be interesting to note where government has changed the methodology, what effect this has had on the metrics and whether the new metrics are being interpreted to justify greater government intervention or a more laissez-faire approach.

The other objection to anti-austerity coming from an Austrian/praxeology standpoint is put forward in this podcast:

Wanderer78

ancapailldorcha wrote:

Dropping links and refusing to engage in discussion is not acceptable here. No more, please.

Apologies, but Blyth's work on austerity and it's dangers, comes highly recommended by well respected economic commentators such as ha-joon chang, it's probably the best work on this topic currently available. Sadly and disturbingly, people who believe in highly conservative economic policies such as austerity, have little or no interest in hearing about their dangers or even potential dangers, as pointed out by others. These issues have the potential of tearing the EU apart, as explained very well by many commentators, some previously mentioned, and the result is, a slow rise of demonic forces such as the far right.

On a personal note, I struggle to communicate these issues by text, so I'd rather point people towards the work of experts, I'd highly recommend these readings. we need to be careful what we wish for, for the future of Europe, if it does collapse, we re all in trouble

listermint

Wanderer78 wrote: »

Apologies, but Blyth's work on austerity and it's dangers, comes highly recommended by well respected economic commentators such as ha-joon chang, it's probably the best work on this topic currently available. Sadly and disturbingly, people who believe in highly conservative economic policies such as austerity, have little or no interest in hearing about their dangers or even potential dangers, as pointed out by others. These issues have the potential of tearing the EU apart, as explained very well by many commentators, some previously mentioned, and the result is, a slow rise of demonic forces such as the far right.

On a personal note, I struggle to communicate these issues by text, so I'd rather point people towards the work of experts, I'd highly recommend these readings. we need to be careful what we wish for, for the future of Europe, if it does collapse, we re all in trouble

You were asked for and requested twice to give details in Ireland and Portugal as to how the measures taken have not turned both economies around into growth.

You refused to engage and instead went on a rant about the measurements of GDP and economic commentators who think that measurement is false.

None of that addresses the real and visible growth in either country and your thoughts on why that occured.

You don't struggle to discuss these topics by text you make points and don't back them up you dump links out of context .

Wanderer78

listermint wrote: »

You were asked for and requested twice to give details in Ireland and Portugal as to how the measures taken have not turned both economies around into growth.

You refused to engage and instead went on a rant about the measurements of GDP and economic commentators who think that measurement is false.

None of that addresses the real and visible growth in either country and your thoughts on why that occured.

ive explained many times on this forum why i struggle to explain myself via text, those i mentioned would do a better job of it as well.

the failures of austerity are almost unmeasurable, but if you speak to people, particularly those working in our health services, you ll find, measures such as austerity in fact cause death, as you reduce the funding for these critical public services.

again, it has been well noted, by many of those ive mentioned, and others recommended by other posters, metrics such as gdp are almost meaningless in describing the hardship gained by people through measures imposed by austerity, its hard to measure the feelings of stress and emotional strain, this is not represented by metrics such as gdp.

i particularly like kate raworths take on the acronym of gdp, i.e. going to destroy the planet! its time for us to move on from neoclassical theory and its metrics such as gdp

KyussB

Unless something is seriously wrong on a permanent basis, all countries verge towards positive GDP growth as time goes forward - it's about as inevitable as the wind or flow of water, over time.

This makes the claim that austerity 'caused' a return to growth, something that is easy to claim without any evidence - yet requiring extraordinary evidence, as it's an extraordinary claim given that long term future GDP growth is an inevitability.

The real question is: What policy would have returned countries to growth, faster?

The more important question is: What form do we want this growth to take? (do we want it to take the form of growth from squeezing wages, while simultaneously massively inflating the cost of living, and particularly housing/renting - making it harder for everyone to live a basic and happy life?)

Austerity gave us policies that shaped how the return to growth occurred and was distributed (with many believing it delayed the return to growth as long as possible, and carefully shaped the return to growth to maximize the share of GDP going into wealthy hands, and out of the publics hands) - there are many different policies which would have shaped that return to growth very differently.

So austerity shaped the return to growth, it did not provide it - there are many alternatives to how the return to growth could have been shaped and distributed.

lawred2

Wanderer78 wrote: »

Apologies, but Blyth's work on austerity and it's dangers, comes highly recommended by well respected economic commentators such as ha-joon chang, it's probably the best work on this topic currently available. Sadly and disturbingly, people who believe in highly conservative economic policies such as austerity, have little or no interest in hearing about their dangers or even potential dangers, as pointed out by others. These issues have the potential of tearing the EU apart, as explained very well by many commentators, some previously mentioned, and the result is, a slow rise of demonic forces such as the far right.

On a personal note, I struggle to communicate these issues by text, so I'd rather point people towards the work of experts, I'd highly recommend these readings. we need to be careful what we wish for, for the future of Europe, if it does collapse, we re all in trouble

That's lovely. But you've been asked repeatedly for specifics and have squirmed out of it each and every time. This is just more of the same.

Wanderer78

lawred2 wrote: »

That's lovely. But you've been asked repeatedly for specifics and have squirmed out of it each and every time. This is just more of the same.

thank you, ive explained enough

An Ciarraioch

Two opinion polls today show 70+% support for remaining in the euro:

https://mobile.twitter.com/EuropeElects/status/1002135592061333504

https://mobile.twitter.com/EuropeElects/status/1002130775876276224

hatrickpatrick

listermint wrote: »

You were asked for and requested twice to give details in Ireland and Portugal as to how the measures taken have not turned both economies around into growth.

Nobody ever said that both economies aren't growing. The issue is a much deeper one than that, which is that positive macroeconomic statistics do not necessarily translate to an acceptable quality of life for average citizens. See my post over the page - this is the mistake FG hesitantly accepted was a factor in their poor performance in the last general election, the fact that they assumed everything was grand because the macroeconomic statistics told them it was, instead of actually talking to ordinary people who, good-looking numbers on a government spreadsheet or not, were finding life appallingly difficult due to Ireland's ridiculously high (and constantly rising) cost of living relative to average income.

Why is it that so many people refuse to acknowledge the stagflation the West has been experiencing since the age of third way neoliberalism began as an actual root cause of these problems? Is it not very, very obvious that if you plot the cost of living and the average income on a graph which shows the former increasing significantly more over the time period than the latter, resulting in an ever-growing gulf between the two, that this is a problem?

Have you anything at all to say about the suggestion that entities such as the ECB, European Commission, etc should have "making sure that as many people as possible can have the highest quality of life possible while ensuring there's a minimum universal quality of life which we don't allow anyone to fall beneath" as their absolute #1 priority above all others? That's what made "Europe" the envy of so many American liberals over the years, but the EU is in serious danger of destroying all that by prioritising macroeconomics over the guaranteeing of a minimum quality of life to all citizens which used to be what Europe was known for.

Austerity has meant gutting the famous European social safety net, and that's not acceptable to a huge number of people who believe that it should have been the last thing to get cut. Privatisation of vital services and cutting of state subventions contributes hugely to this. Very obvious example - public transport costs in Dublin (and I'm sure throughout the country) have skyrocketed to obscene levels since the beginning of the recession, and this is directly tied to the government slashing the state subvention as an austerity measure. It surely doesn't need to be stated that among those who use public transport are many of the less well off, those who wouldn't be able to afford the purchase and upkeep of a private vehicle for instance - so that's a very obvious example of how austerity has reduced quality of life by increasing the cost of a very basic, necessary public service while individuals' disposable income was simultaneously shrinking. Compared with how much public transport costs in other European countries, ~€5 for a daily commute in and out of town from a suburb ten minutes away is moronic.

But of course, nobody talks about the specifics, because "the economy is growing" - in other words, why consider the details as long as we can look at the big picture and pat ourselves on the back.

Simply not good enough, which again has been acknowledged as one of the reasons FG performed poorly in the last election - their insistence that everything was grand because they refused to look at personal-level stories instead of numbers on a computer screen came across as insufferably arrogant and condescending. This is a problem which is fundamental to euroskepticism - entities like the ECB do not put the public's quality of life at the top of their stated mission or list of priorities, and that makes them fundamentally at odds with how government should operate.

wes

An Ciarraioch wrote: »

Two opinion polls today show 70+% support for remaining in the euro:

https://mobile.twitter.com/EuropeElects/status/1002135592061333504

https://mobile.twitter.com/EuropeElects/status/1002130775876276224

I think the average person wouldn't want there savings obliterated, as well as a massive pay cut that leaving would entail.

listermint

hatrickpatrick wrote: »

Nobody ever said that both economies aren't growing. The issue is a much deeper one than that, which is that positive macroeconomic statistics do not necessarily translate to an acceptable quality of life for average citizens..

Ok what quality of life problems do we have in Ireland and Portugal.

Outside of a housing problem which we are all fully aware of why (supply)

Il leave your rambling paragraph aside and try to understand the specifics of your message.

hatrickpatrick

listermint wrote: »

Ok what quality of life problems do we have in Ireland and Portugal.

Outside of a housing problem which we are all fully aware of why (supply)

Il leave your rambling paragraph aside and try to understand the specifics of your message.

The cost of living is too high. I gave one concrete example which can be definitively traced back to austerity - government cuts state funding for public transport as an austerity policy, public transport costs skyrocket as a result. They're almost double what they were ten-fifteen years ago, and this somehow isn't a problem? Your average suburban commuter getting the DART in and out of the City Centre in Dublin on a daily basis during the week now pays almost €30 per week. That works out at €120 per month, which is far, far higher than it used to be.

To put this another way, the cost of transport is almost double what it was ten years ago, but average wages are not. This means that a higher proportion of peoples' income has to go on public transport, which is one concrete example of austerity-induced stagflation.

Government increases in VAT, and rates have undoubtedly contributed to the higher cost of living as well, by driving up the price of groceries and other goods and services.

Essentially, the policies of austerity caused simultaneous consumer price inflation, and income decreases through levies and taxes. This means that ordinary people get hit with a double whammy of having less disposable income while simultaneously having to pay more for their average weekly consumption then before.

tl;dr since you're not interested in analyses, stagflation is the ultimate hallmark of austerity policy, and stagflation is horrendous for ordinary people. But it's not being dealt with, because the macros all look ok on paper and that's all the EU (and especially the ECB) gives a bollocks about.

KyussB

wes wrote: »

I think the average person wouldn't want there savings obliterated, as well as a massive pay cut that leaving would entail.

You don't need to obliterate savings or introduce a massive paycut, in order to reintroduce national currencies, while relegating the Euro to being an exchange currency.

Staying with just the Euro IS the paycut. It's being directly paired with policies that hold back wages, while inflating the cost of living.

Present and upcoming generations, will never have the same opportunities you had, because of the effects of the Euro and the policies paired with it - your generation made it, and has now pulled the ladder up on the generations coming behind you (making them work and provide for you, while giving them less) - and those upcoming generations are going to be the majority of the voters someday.

All that is doing, is fomenting significant political instability, which is only at the very earliest stages of coming home to roost in Europe, now. It's not going to last - the deteriorating political situation, will force change.

johnp001

hatrickpatrick wrote: »

...
tl;dr since you're not interested in analyses, stagflation is the ultimate hallmark of austerity policy, and stagflation is horrendous for ordinary people. But it's not being dealt with, because the macros all look ok on paper and that's all the EU (and especially the ECB) gives a bollocks about.

This effects of stagflation are certainly horrendous and its onset is currently being ignored. Greenspan was describing how he sees the stagflation problem not being dealt with in a TV interview this week.
Alan Greenspan -- Moving towards Stagflation feels good, but its a false dawn

In terms of the causes of stagflation I would agree with Shostak

Frank Shostak wrote:

"Stagflation is the natural result of monetary pumping which weakens the pace of economic growth and at the same time raises the rate of increase of the prices of goods and services"

as opposed to seeing it as the consequence of austerity policy.

Wanderer78

johnp001 wrote: »

This effects of stagflation are certainly horrendous and its onset is currently being ignored. Greenspan was describing how he sees the stagflation problem not being dealt with in a TV interview this week.
Alan Greenspan -- Moving towards Stagflation feels good, but its a false dawn

In terms of the causes of stagflation I would agree with Shostak

as opposed to seeing it as the consequence of austerity policy.

ah yes, alan greenspan, the man that believes, 'increasing worker insecurity is good for the economy'! really alan, really!

listermint

hatrickpatrick wrote: »

The cost of living is too high. I gave one concrete example which can be definitively traced back to austerity - government cuts state funding for public transport as an austerity policy, public transport costs skyrocket as a result. They're almost double what they were ten-fifteen years ago, and this somehow isn't a problem? Your average suburban commuter getting the DART in and out of the City Centre in Dublin on a daily basis during the week now pays almost €30 per week. That works out at €120 per month, which is far, far higher than it used to be.

To put this another way, the cost of transport is almost double what it was ten years ago, but average wages are not. This means that a higher proportion of peoples' income has to go on public transport, which is one concrete example of austerity-induced stagflation.

Government increases in VAT, and rates have undoubtedly contributed to the higher cost of living as well, by driving up the price of groceries and other goods and services.

Essentially, the policies of austerity caused simultaneous consumer price inflation, and income decreases through levies and taxes. This means that ordinary people get hit with a double whammy of having less disposable income while simultaneously having to pay more for their average weekly consumption then before.

tl;dr since you're not interested in analyses, stagflation is the ultimate hallmark of austerity policy, and stagflation is horrendous for ordinary people. But it's not being dealt with, because the macros all look ok on paper and that's all the EU (and especially the ECB) gives a bollocks about.

Yet with all that we see more commuters on the services than ever before (literally ever)

We see the consumer confidence index is higher than it has been in a decade.

We see people out spending money eating / drinking / entertainment we see holiday rentals in ireland itself busy, we see packed airports for trips away.


None of this matches with the dystopian scenario that has been outlined by you not the posters like you that are indicating people have a poor quality of life. No one is arguing that some people do not have it fantastic housing lists etc , there will always be some level of social exclusion (not widescale) But its a bit trite to say that Quality of life is poor in this country from what youve indicated.

to be brutally honest. And none of it gives credence to a call to exit the Euro or indeed the EU.

wes

KyussB wrote: »

You don't need to obliterate savings or introduce a massive paycut, in order to reintroduce national currencies, while relegating the Euro to being an exchange currency.

Staying with just the Euro IS the paycut. It's being directly paired with policies that hold back wages, while inflating the cost of living.

Present and upcoming generations, will never have the same opportunities you had, because of the effects of the Euro and the policies paired with it - your generation made it, and has now pulled the ladder up on the generations coming behind you (making them work and provide for you, while giving them less) - and those upcoming generations are going to be the majority of the voters someday.

All that is doing, is fomenting significant political instability, which is only at the very earliest stages of coming home to roost in Europe, now. It's not going to last - the deteriorating political situation, will force change.

You make a an awful lot of assumptions, and it seem pretty clear you haven't a clue what your talking about on that basis.

:rolleyes: I belong to the generation that got screwed over by the financial crisis. The previous generation pulled up the ladder on me. This happened all over the world, people from my generation in North America have gotten hit by this as well, and guess what there outside the Euro as well. Trying to pin the blame on the Euro and if we just got rid of it, and all things will be magically solved is absurd.

Leaving the Euro would exacerbate the problems you talk about a 1000 fold, and ignoring that lot of issues are caused locally, and trying to pin the blame a 100% in the euro is silly.

Now, I am no fool, the euro is not perfect, and there certainly needs to be some structural changes and easing off of austerity (still doesn't mean we should go nuts and start borrowing like maniacs again), to try and stimulate economies, but you are being overly simplistic, and not to mention making assumptions that you seem to have pulled out of thin air.

Also, the political instability which certainly has a lot to do with economic issues, are also exacerbated hugely by the misuse of technology for example cambridige analytica using pilfered personal information to help Trump and Brexit, far right extremists radicalizing people via fake news etc. Also, people claiming things are far worse economically than they really are, also plays into political instability.

**EDIT**
Also, I forgot about the UK, outside of the euro and also had years of austerity, and was actually doing rather well until they decided to leave the EU, and there growth has take a massive hit, and they haven't even left yet.

KyussB

Sorry for some reason I had the idea you were from a different generation - I don't like the intergenerational narrative that I used anyway, it is just useful to provide a certain perspective, but misleading also.

I don't want the Euro gone, I want the reintroduction of national currencies - or, better yet, a reform of how the EU operates fiscal policy and the single currency. I think I've gone into a lot of detail in my posts, without it being simplistic.

I don't view the way things are currently run, as sustainable - something will give, because it's going to keep on causing significant political instability - I find the technological arguments used to excuse the political instability, as not very convincing, and as a kind of media narrative used to mask the real political instabilities that are being created, which are rooted in economic policies that are being undertaken.

EDIT:
Actually, I view a lot of the UK's malaise as being based on years of austerity - they haven't left the EU yet, after all.

wes

KyussB wrote: »

Sorry for some reason I had the idea you were from a different generation - I don't like the intergenerational narrative that I used anyway, it is just useful to provide a certain perspective, but misleading also.

I don't want the Euro gone, I want the reintroduction of national currencies - or, better yet, a reform of how the EU operators fiscal policy and the single currency. I think I've gone into a lot of detail in my posts, without it being simplistic.

I don't view the way things are currently run, as sustainable - something will give, because it's going to keep in causing significant political instability.

All of the issue you refer to have happened to countries outside the Euro as well. I just don't see how it can be the problem.

KyussB

wes wrote: »

All of the issue you refer to have happened to countries outside the Euro as well. I just don't see how it can be the problem.

There aren't any analogies in the world, to the Euro though - I think the last time there was something similar, was in the early history of the US - when they had the dollar, but had not yet centralized fiscal policy to the extent they have today.

The Euro creates very unique economic problems, that do not happen to other countries. As I said in one of my first posts on the thread, it creates a situation where most countries trade competitiveness is harmed, by the Euro being artificially inflated in value relative to a countries previous national currency - with primarily Germany being at a trade advantage, as the Euro will have been artificially deflated relative to their previous national currency.

That's just one aspect among many. The EU treaties regarding austerity, have also removed national democratic control over many aspects of fiscal policy from countries - and made it much, much harder to reverse these policies - and that's another major factor.

A single shared currency without a single federal government. It creates enormous unique problems, that haven't been seen in well over a century and a half.

wes

Again, I am seeing problems the world over, and some of the worst performing economies with far right governments (political instability) in Europe are outside of the eurozone.

Ignoring local factors and placing the blame solely on the Euro is problematic imo. You remove the Euro you still have those local issues, which are the cause.

The worst you can for the Euro is that it removes some options that were there previously there.

Now, there certainly needs to be improvements, but I am not convinced of throwing the baby out with bath water just yet.

ancapailldorcha

Wanderer78 wrote: »

ah yes, alan greenspan, the man that believes, 'increasing worker insecurity is good for the economy'! really alan, really!

Do not post in this thread again.

jimmycrackcorm

hatrickpatrick wrote:

Why is it that so many people refuse to acknowledge the stagflation the West has been experiencing since the age of third way neoliberalism began as an actual root cause of these problems? Is it not very, very obvious that if you plot the cost of living and the average income on a graph which shows the former increasing significantly more over the time period than the latter, resulting in an ever-growing gulf between the two, that this is a problem?

Did you just invent this "age of third way neoliberalism"?

The cost of living had increased due to economic growth where aspects of the economy can't or don't keep up.

E.g. you can rent an office building in a Dublin and take on 1000 workers very quickly but it would take a long time to add housing for those workers.

View

KyussB wrote: »

Sorry for some reason I had the idea you were from a different generation - I don't like the intergenerational narrative that I used anyway, it is just useful to provide a certain perspective, but misleading also.

I don't want the Euro gone, I want the reintroduction of national currencies - or, better yet, a reform of how the EU operates fiscal policy and the single currency. I think I've gone into a lot of detail in my posts, without it being simplistic.

As I pointed out earlier the use of the Euro throughout the EU is a mandatory goal of the EU, just like the FTA/CU old EEC stuff. Reintroducing the former national currencies is explicitly prohibited in the Treaties. That’s there to stop every currency speculator on the planet from targeting member states like sharks in a feeding frenzy.

Anyone arguing against the Euro is effectively making an argument that they want to terminate their country’s membership of the EU.

View

There seems to be a fundamental misunderstanding of why a country engages in austerity among many posters here.

Austerity is the process of a State balancing its finances though a combination of tax rises and/or spending cuts. This may involve annual routine minor adjustments in the budget or, more rarely, extraordinary major ones.

A State that does not make efforts to balance its finances runs the very real possibility that it will end up in a Greek style situation or worse. At that point the question becomes whether a State can provide ANY services to its citizens.

Contrary to the belief of some posters, neither politicians nor institutions such as the “Troika” (or the IMF acting on its own) get a thrill in seeing a country undergo severe austerity. They would much rather that a country avoids it since it is lot less hassle for both them and the country concerned.

By the time a country has to call in the IMF or the “Troika”, it has reached the stage where drastic action must be taken to resolve its problems. There is no point in pretending that there is an alternative “magic solution”, since were there a workable easy alternative available that resolved all current and future problems, that is the option that all countries would go for rather than trying to resolve their financial problems.

An Ciarraioch

According to the Guardian, a climbdown is on the cards:

https://www.theguardian.com/world/2018/may/31/italy-cancelled-league-rallies-signal-political-impasse-may-soon-end

johnp001

An Ciarraioch wrote: »

According to the Guardian, a climbdown is on the cards:

https://www.theguardian.com/world/2018/may/31/italy-cancelled-league-rallies-signal-political-impasse-may-soon-end

That might explain the flat markets this morning but something must have happened today as markets all turned down early this afternoon led by Deutsche Bank which is under serious pressure. A DB downgrade would have a knock on effect on the rest of the financial sector.

listermint

An Ciarraioch wrote: »

According to the Guardian, a climbdown is on the cards:

https://www.theguardian.com/world/2018/may/31/italy-cancelled-league-rallies-signal-political-impasse-may-soon-end

As i said, i dont believe these people are stupid or as radical as its let on. Sure there are extremes within them. But the majority are looking right at the UK now and saying to themselves. - no thanks!


So its with great thanks to Nigel Farage that in his want to destruct the EU for the last decade he is gluing it together. He must be delighted.

View

listermint wrote: »

An Ciarraioch wrote: »

According to the Guardian, a climbdown is on the cards:

https://www.theguardian.com/world/2018/may/31/italy-cancelled-league-rallies-signal-political-impasse-may-soon-end

As i said, i dont believe these people are stupid or as radical as its let on. Sure there are extremes within them. But the majority are looking right at the UK now and saying to themselves. - no thanks!


So its with great thanks to Nigel Farage that in his want to destruct the EU for the last decade he is gluing it together. He must be delighted.

Actually the Lega Nord is in the same EU political group as France’s Front National, Austria’s FPÖ etc. So they really are both stupid and radical.

KyussB

wes wrote: »

Again, I am seeing problems the world over, and some of the worst performing economies with far right governments (political instability) in Europe are outside of the eurozone.

Ignoring local factors and placing the blame solely on the Euro is problematic imo. You remove the Euro you still have those local issues, which are the cause.

The worst you can for the Euro is that it removes some options that were there previously there.

Now, there certainly needs to be improvements, but I am not convinced of throwing the baby out with bath water just yet.

There's an element of talking past each other a bit here. Focusing on the problems with the Euro, doesn't mean ignoring local factors or placing the blame solely on the Euro - neither does it mean wanting to throw the baby out with the bathwater, and get rid of the Euro.

The worst you can say for the Euro, is that its design is fundamentally flawed and can only be fixed in one of two ways: 1: Complete centralization of fiscal policy in the EU, or 2: Reintroducing national currencies (which can include keeping the Euro as an exchange currency).


Perhaps it's better to focus on the bits where we (kind of) agree: That there need to be improvements.
My view, is that if we don't see improvements soon, that we are running the risk of political instability that will threaten the Euro - especially when the next economic crisis hits.

My view also, is that the only room for improvements, consist of either option 1 or 2 above (introduced gradually or not).
I don't view the status quo, things staying the way they are now, as sustainable - yet I don't see people offering alternatives, to my options 1 and 2 above.


What way do you see things going, or would like to see things go, to improve upon the current situation with the Euro?

KyussB

View wrote: »

As I pointed out earlier the use of the Euro throughout the EU is a mandatory goal of the EU, just like the FTA/CU old EEC stuff. Reintroducing the former national currencies is explicitly prohibited in the Treaties. That’s there to stop every currency speculator on the planet from targeting member states like sharks in a feeding frenzy.

Anyone arguing against the Euro is effectively making an argument that they want to terminate their country’s membership of the EU.

Nothing is mandatory everything is negotiable. The EU can decide to change at any time - it's just a political matter.

It's pretty easy to blur the lines between e.g. specialized bonds that can be made to operate like a currency, without being a currency - creating a quasi-currency that can operate alongside the Euro, while sidestepping the treaties.

View

KyussB wrote: »

View wrote: »

As I pointed out earlier the use of the Euro throughout the EU is a mandatory goal of the EU, just like the FTA/CU old EEC stuff. Reintroducing the former national currencies is explicitly prohibited in the Treaties. That’s there to stop every currency speculator on the planet from targeting member states like sharks in a feeding frenzy.

Anyone arguing against the Euro is effectively making an argument that they want to terminate their country’s membership of the EU.

Nothing is mandatory everything is negotiable. The EU can decide to change at any time - it's just a political matter.

That’s a complete misunderstanding of the process of changing the EU Treaties. The EU Treaties are there so that the EU members can achieve specific goals - any country that no longer agrees with the goals of the EU is free to leave and it is completely unrealistic to expect every other country to abandon a core goal of the EU just because one country suddenly changes its mind about what it has previously agreed.

KyussB wrote: »

It's pretty easy to blur the lines between e.g. specialized bonds that can be made to operate like a currency, without being a currency - creating a quasi-currency that can operate alongside the Euro, while sidestepping the treaties.

Actually no it isn’t “pretty easy to blur the lines”. Apart from the fact that you open the door to every currency speculator going on a feeding frenzy like a pack of sharks, your idea suffers from the serious problem that it is basically “unconstitutional” under the terms of the EU Treaties (and indeed our own domestic constitution). “Blurring the lines” on constitutional matters is unsustainable since either you take the rule of law seriously or you don’t. And, the simple reality is, if a state goes down that dark road, the best solution for the average person is to leave as fast as they can.

KyussB

No you're reading me wrong - the EU treaties can be renegotiated, in co-operation with the rest of the EU - it's solely a political matter.

If you issue a new type of government bond, allow them to be used to cancel out an equivalent amount of tax due to Revenue, and make them transferable - then you've got a quasi-currency that blurs the lines between bonds/debt and a currency (legally equivalent to bonds, yet can act like a currency) - and that's pretty much all you need to sidestep laws restricting currencies, as it's pretty much impossible to apply the law consistently against that, in a way that doesn't also end governments ability to produce bonds.

An Ciarraioch

View wrote: »

listermint wrote: »

An Ciarraioch wrote: »

According to the Guardian, a climbdown is on the cards:

https://www.theguardian.com/world/2018/may/31/italy-cancelled-league-rallies-signal-political-impasse-may-soon-end

As i said, i dont believe these people are stupid or as radical as its let on. Sure there are extremes within them. But the majority are looking right at the UK now and saying to themselves. - no thanks!


So its with great thanks to Nigel Farage that in his want to destruct the EU for the last decade he is gluing it together. He must be delighted.

Actually the Lega Nord is in the same EU political group as France’s Front National, Austria’s FPÖ etc. So they really are both stupid and radical.

And Five Star share a Eurogroup with UKIP. Anyway, it all appears to have calmed down with a compromise Cabinet:

https://mobile.twitter.com/FerdiGiugliano/status/1002224003623333888

View

KyussB wrote: »

No you're reading me wrong - the EU treaties can be renegotiated, in co-operation with the rest of the EU - it's solely a political matter.

I have just pointed out that renegotiating isn’t as easy as you think and that doing so would immediately open the doors to currency speculators going into a “feeding frenzy”. That alone should be reason to reflect on its desirability.

In addition, as the use of the Euro is an explicit goal of the EU member states, the member states do not want to do this. Other than your dislike of the Euro (and hence, ipso facto, of our EU membership), there is no reason for the member states to do this.

KyussB wrote: »

If you issue a new type of government bond, allow them to be used to cancel out an equivalent amount of tax due to Revenue, and make them transferable - then you've got a quasi-currency that blurs the lines between bonds/debt and a currency (legally equivalent to bonds, yet can act like a currency) - and that's pretty much all you need to sidestep laws restricting currencies, as it's pretty much impossible to apply the law consistently against that, in a way that doesn't also end governments ability to produce bonds.

And, again, why should the member states do this? The sole reason is the creation of a quasi-currency intended to destroy the Euro. It would be completely contrary to the EU Treaties to do this. This is the constitutional law equivalent of “never mind what the constitution says, we’ll just drive a coach and horses through it”.

View

KyussB wrote: »

wes wrote: »

Again, I am seeing problems the world over, and some of the worst performing economies with far right governments (political instability) in Europe are outside of the eurozone.

Ignoring local factors and placing the blame solely on the Euro is problematic imo. You remove the Euro you still have those local issues, which are the cause.

The worst you can for the Euro is that it removes some options that were there previously there.

Now, there certainly needs to be improvements, but I am not convinced of throwing the baby out with bath water just yet.

There's an element of talking past each other a bit here. Focusing on the problems with the Euro, doesn't mean ignoring local factors or placing the blame solely on the Euro - neither does it mean wanting to throw the baby out with the bathwater, and get rid of the Euro.

The worst you can say for the Euro, is that its design is fundamentally flawed and can only be fixed in one of two ways: 1: Complete centralization of fiscal policy in the EU, or 2: Reintroducing national currencies (which can include keeping the Euro as an exchange currency).


Perhaps it's better to focus on the bits where we (kind of) agree: That there need to be improvements.
My view, is that if we don't see improvements soon, that we are running the risk of political instability that will threaten the Euro - especially when the next economic crisis hits.

My view also, is that the only room for improvements, consist of either option 1 or 2 above (introduced gradually or not).
I don't view the status quo, things staying the way they are now, as sustainable - yet I don't see people offering alternatives, to my options 1 and 2 above.


What way do you see things going, or would like to see things go, to improve upon the current situation with the Euro?

The problem in your reasoning is that you perceive this as a binary choice (with your preference clearly being for the latter option).

That is a false dichotomy though. There is no requirement that the EU member states must opt for option 1 if they dislike option 2.

There are numerous examples around the world where countries and states avoid option 1. For instance, since 1945, the CFA has covered 14 disparate countries (technically there are two CFAs but they are used interchangeably) as also the CFP has covered 4 countries. This has been done without any need for any “complete centralization of fiscal policy” in the countries concerned. Likewise historically the Pound, Franc etc were the currencies of their respective empires but that didn’t mean they shared a centralised fiscal policy. Nor indeed, in the years 1922-79, did the existence of a 1:1 link between the Pound and the Punt mean that the Chancellor stood up in London and announced what our fiscal policy would be.

Equally, even in countries that are full Federations, it is not correct to assume that “the centre” decides fiscal policy since both taxation and spending are carried out at community level, state/province/canton level, and federal level. In the case of many federal states, taxation and spending are highly devolved, not centralised.

It is therefore incorrect to assume that a union of sovereign nations, which is what the EU is, would require a degree of fiscal policy centralisation that would be anathema to both countries that are Federations and those nations that share a common currency such as the CFA.

KyussB

View wrote: »

I have just pointed out that renegotiating isn’t as easy as you think and that doing so would immediately open the doors to currency speculators going into a “feeding frenzy”. That alone should be reason to reflect on its desirability.

In addition, as the use of the Euro is an explicit goal of the EU member states, the member states do not want to do this. Other than your dislike of the Euro (and hence, ipso facto, of our EU membership), there is no reason for the member states to do this.



And, again, why should the member states do this? The sole reason is the creation of a quasi-currency intended to destroy the Euro. It would be completely contrary to the EU Treaties to do this. This is the constitutional law equivalent of “never mind what the constitution says, we’ll just drive a coach and horses through it”.

You're still talking as if I want rid of the Euro, when I've been talking of reintroducing national currencies or quasi-currencies alongside the Euro.

You can do this the 'nice' way through renegotiating, or you can achieve a similar thing through the unilateral way with quasi-currencies.

Being made up of a special type of government bonds, they are not subject to the treaties you discuss - because bonds aren't currency.

KyussB

View wrote: »

The problem in your reasoning is that you perceive this as a binary choice (with your preference clearly being for the latter option).

That is a false dichotomy though. There is no requirement that the EU member states must opt for option 1 if they dislike option 2.

There are numerous examples around the world where countries and states avoid option 1. For instance, since 1945, the CFA has covered 14 disparate countries (technically there are two CFAs but they are used interchangeably) as also the CFP has covered 4 countries. This has been done without any need for any “complete centralization of fiscal policy” in the countries concerned. Likewise historically the Pound, Franc etc were the currencies of their respective empires but that didn’t mean they shared a centralised fiscal policy. Nor indeed, in the years 1922-79, did the existence of a 1:1 link between the Pound and the Punt mean that the Chancellor stood up in London and announced what our fiscal policy would be.

Equally, even in countries that are full Federations, it is not correct to assume that “the centre” decides fiscal policy since both taxation and spending are carried out at community level, state/province/canton level, and federal level. In the case of many federal states, taxation and spending are highly devolved, not centralised.

It is therefore incorrect to assume that a union of sovereign nations, which is what the EU is, would require a degree of fiscal policy centralisation that would be anathema to both countries that are Federations and those nations that share a common currency such as the CFA.

Separate currencies with linked exchange rates - of predominantly colonies without full sovereignty, no less... - are not the same as a single currency.

The reason I view it as a dichotomy between the choices of fiscal centralization or the return of national currencies - is because I view any in-between situation, like we have now, as politically unsustainable in the long run, due to the economic imbalances caused by the current setup (and how that leads things to deteriorate politically, in a way that threatens the single currency).

What makes or breaks federal states or emerging federal states, economically, is whether or not they have strong redistributive powers - to use fiscal policy to redistribute significant double-digit GDP sums between different regions within the federation, to make up for the imbalances caused by sharing a common currency (imbalances that negatively affect trade competitiveness in most regions) - that's what the EU is missing, that's where the imbalance is, that centralization would correct.


What you seem to be arguing is that we maintain the current imbalances, seem to suggest that it's all working fine, and that we need not do anything about it - I think that's unsustainable, with political events in Italy being an early indication of that (and we're not even in a fresh economic crisis, yet...).

An Ciarraioch

KyussB wrote: »

View wrote: »

I have just pointed out that renegotiating isn’t as easy as you think and that doing so would immediately open the doors to currency speculators going into a “feeding frenzy”. That alone should be reason to reflect on its desirability.

In addition, as the use of the Euro is an explicit goal of the EU member states, the member states do not want to do this. Other than your dislike of the Euro (and hence, ipso facto, of our EU membership), there is no reason for the member states to do this.



And, again, why should the member states do this? The sole reason is the creation of a quasi-currency intended to destroy the Euro. It would be completely contrary to the EU Treaties to do this. This is the constitutional law equivalent of “never mind what the constitution says, we’ll just drive a coach and horses through it”.

You're still talking as if I want rid of the Euro, when I've been talking of reintroducing national currencies or quasi-currencies alongside the Euro.

You can do this the 'nice' way through renegotiating, or you can achieve a similar thing through the unilateral way with quasi-currencies.

Being made up of a special type of government bonds, they are not subject to the treaties you discuss - because bonds aren't currency.

Le Pen lost the French presidential election because Macron pounced on this suggestion by her during their last debate - in Ireland, for instance, when would individuals or businesses use An Punt Nua as opposed to the euro, and juggling between two currencies would merely serve to undermine confidence in both.

KyussB

If it's accepted by Revenue for payment of taxes, then anyone in need of paying taxes would have use for the special bonds - and if demand for the bonds was low, causing it to exchange at less than its original Euro value - lets say 90% - then corporations needing to pay taxes, could use Euro's to buy up the bonds from the private market, and get a further 10% tax cut when using those bonds to pay taxes - ensuring demand rises enough to keep the bonds roughly in parity with the Euro.

So yea, you can have a quasi-currency sidestepping the EU treaties, while simultaneously operating alongside the Euro - and if it's setup correctly, it's very easy to guarantee high demand for it, and that it would successfully circulate and be used widely.