I love it when someone tickles my predjudice.

Never having quite understood the logic behind the Euro, I laughed when I read…Why the euro is doomed to fall apart: it was an incredibly stupid idea in the first place

It would, in economic terms, have been better to have a new currency for all countries beginning with the letter M than for the eurozone. Or for all countries that have the 5th parallel North passing through them.

Yes, of course, we all know, the euro is the bright new dawn, the vital step in stopping Germany from invading France. Again. No one seems to have noticed it that they managed it last time and having experienced the place seem to have no desire at all to go back. So this might not be a problem that needs a solution.

Hindsight, as they say, is 20/20. (‘They’ lie. Hindsight is seldom 20/20 since folks continue to argue the matter long after relevance disappears, refusing to let facts hinder emotion.) Anyway, I seem to recall that one of the uppermost thoughts of Europeans of the last half of the 20th century was how to keep the Krauts from getting all tanked up at Octoberfest some year and overrunning the place again. Heh. Good times.


I love it when someone tickles my predjudice. — 1 Comment

  1. I saw this a few days ago. Here is another commentary from the Scary Guy:

    I think that what is going on is that northern Europe has discovered that their original plan of creating an economic union to facilitate the sale of goods to, and the purchase of cheap labor from, southern Europe turned out very badly. They are being drowned in a pool of immigrants who don’t share some basic values (like “do not steal”) and they are finding out that the credit they extended to finance sales is really a subsidy, which, when booked, results in a loss on the transaction.

    Now they are confronted with the horror of unwinding this thing. They have tried taking a page from the ostrich’s book (the cash infusion by the European Central Bank), but that was something of a short term fix that really did nothing except provide more deficit financing to the southern European governments. There are only two alternatives left – continue the subsidies or modify the union. The third – putting their collective heads in the sand (or elsewhere) – is now officially over.

    So is the Euro, except it’s not official. Yet.

    This pretty much sums it up, I think, and the observation that the credit extended to Greece et. al. amounted to a purchasing subsidy resulting in a net loss is probably the best way of describing precisely what has happened.

    The most interesting thing about this to me is the expectation of the borrowers that somehow the lenders are obliged to continue lending — because they demand it. Riots, angry speeches, bluff defiance — all these things will certainly persuade Germany that it has no choice but to pay, and continue to pay, someone else’s bills indefinitely. Won’t they?

    Part of this is the argument that, if the richer nations do not “stimulate” the eurozone, the lenders themselves will suffer. “Surely you understand,” the beggars say.

    But they underestimate the lenders, who willingly will suffer some weakness in their economies in order to make clear, and very convincingly clear, that they will not tolerate this kind of outright thuggery, which is no different from a mugger demanding that his victim not press charges on the grounds that unless the mugger is free, he cannot repay what he stole. Greece defrauded its borrowers with doctored accounts it knew to be false; if an individual does that, he should expect to go to jail. And that is precisely where the Germans will send Greece, no matter what small short-term damage it may inflict on the German economy. Would you do otherwise?

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