Is the EU going to collapse?

[Divine Wind]

If the world's third largest economy falls apart, how will that effect the world's largest economy?


http://www.zerohedge.com/news/it-ju...too-big-efsf-save-refuses-carry-euro-bailout-


Analysis: Uncertainty surrounds Italy's deficit-cutting plan | Reuters

 

[Swagger]

A common currency that incorporated economies at various stages of development - some only just (at the time of admittance) realistically recovering from the effects of communism - was always going to be a recipe for disaster. It's federalism at its most blatant.

 

[Divine Wind]

Possibly. Not much different from the United States before the Civil War. Definitely before the American Revolution.

Still, if the EU collapses, the global economic effects will be devastating.

 

[Swagger]

Possibly. Not much different from the United States before the Civil War. Definitely before the American Revolution.

Still, if the EU collapses, the global economic effects will be devastating.

Before and some time after the American civil war, America was a largely agrarian economy and society. It wasn't interlinked with foreign economies or suseptible to the potentially extreme contractions of an economy that shared a common currency with more prosperous neighbours/partners, who were all subject to a central authority. It (the eurozone) is a completely different economic environment to mid-19th century America, in which you either worked or starved. I don't know how you can justify such a hypothetically unfeasable parallel.

 

[Divine Wind]

Before and some time after the American civil war, America was a largely agrarian economy and society. It wasn't interlinked with foreign economies or suseptible to the potentially extreme contractions of an economy that shared a common currency with more prosperous neighbours/partners, who were all subject to a central authority. It (the eurozone) is a completely different economic environment to mid-19th century America, in which you either worked or starved. I don't know how you can justify such a hypothetically unfeasable parallel.

Yes. I heard they didn't have television in those days too!

No, I was speaking in terms of autonomy and state sovereignty, not the exact nature of their economies. Obviously things have changed a tad in the past two centuries.

 

[California Girl]

France seems to be having a few 'issues'. It's bringing in austerity measures in order to try to keep its AAA rating.

Interesting concept, most EU countries are either voluntarily or with some encouragement from their neighbors, opting for austerity measures. What do the Democrats want to do? Yea, spend more money we don't have. If it wasn't so damned stupid, it would be funny.

 

[PeteEU]

France seems to be having a few 'issues'. It's bringing in austerity measures in order to try to keep its AAA rating.

Interesting concept, most EU countries are either voluntarily or with some encouragement from their neighbors, opting for austerity measures.

That is not exactly true. The austerity measures are being brought forward, and unlike the US, most European governments are some what forced to keep their budgets in somewhat balance. Large deficits over time (at least for most countries) is not seen on by the people as a good political move and the governments that manage to screw that much up are usually replaced.

Now the reason they brought the austerity measures forward was in large part due to the world markets being a bunch of teenagers who are having hysterical fits over nothing. Also the new big thing in the world seems to be austerity over growth and jobs for some reason... which is fine, but then dont come afterwards and complain that European countries have too high unemployment and low growth..

What do the Democrats want to do? Yea, spend more money we don't have. If it wasn't so damned stupid, it would be funny.

also not exactly true. Much of the overspending at present in the US, is related to previous administrations and congresses. Sure Obama and his administration and the Dems have big portion of blame, but lets not forget that even during the 100% control of the GOP years, the deficit was large and the debt exploded..... during boom years. At least Obama has the "excuse" of the economic melt down to explain in part the problem now... what excuse did Bush and Co have?

I am not saying it should not be delt with, but the amount of money and cuts required to even get close to a balanced budget are so huge in the US that such cuts would gut any growth for years and cause an economic crisis world wide. And especially when the US right is in their childish mood of not wanting any tax increases what so ever.

 

[Divine Wind]

That is not exactly true. The austerity measures are being brought forward, and unlike the US, most European governments are some what forced to keep their budgets in somewhat balance.

You are missing the point. The EU is like a tripod with countries like you mention holding up two legs and countries such as Greece, Ireland and Portugal holding up the third leg. If one leg collapses, the entire tripod falls over. The countries you mentioned will fair better, but the EU will be gone as we know it along with many of the economic advantages of the Union. It would be, as some Americans want, that each of the United States went their separate ways. Sure, there'd still be some trade, partnerships and less Federal taxes so the rich states won't be propping up the weaker, poor states, but, overall, there'd be a great economic upheaval and a loss to all concerned.

Another analogy for the EU, as this article mentions, is the Prisoner's Dilemma.

When Will The European Union Collapse?

The core principle of the Prisoner’s Dilemma promotes that individual economic entities will act in their own self interest at the expense of a collective interest. We witness this dilemma at work within many economic circles in the world today.

 

[waltky]

Uncle Ferd says, "Yea...

... EU gonna implode from all dat Greek an' Portugese, an' Spanish an' Italian debt...

... an' den dey all gonna be out onna street corners sellin' apples...

... just like Granny."

 

[Toro]

No.

 

[percysunshine]

Whose idea was it anyway that the French and the Germans would agree on something?

 

[PeteEU]

That is not exactly true. The austerity measures are being brought forward, and unlike the US, most European governments are some what forced to keep their budgets in somewhat balance.

You are missing the point. The EU is like a tripod with countries like you mention holding up two legs and countries such as Greece, Ireland and Portugal holding up the third leg. If one leg collapses, the entire tripod falls over. The countries you mentioned will fair better, but the EU will be gone as we know it along with many of the economic advantages of the Union. It would be, as some Americans want, that each of the United States went their separate ways. Sure, there'd still be some trade, partnerships and less Federal taxes so the rich states won't be propping up the weaker, poor states, but, overall, there'd be a great economic upheaval and a loss to all concerned.

Another analogy for the EU, as this article mentions, is the Prisoner's Dilemma.

When Will The European Union Collapse?

The core principle of the Prisoner’s Dilemma promotes that individual economic entities will act in their own self interest at the expense of a collective interest. We witness this dilemma at work within many economic circles in the world today.

No I am not missing the point..... I understand fully you dont like the EU.

Fact is you are mixing up the EU and the Eurozone. Now the Eurozone may or may not fall apart or be changed, but it wont effect the EU in the way you think or hope.

The Eurozone is the tripod, but that tripod is standing in a large room called the EU, where there are over half the members who are not on the tripod. Now you can remove the tripod from the room, but that does not mean the room disappears.

The EU is a huge plus for all members and a majority of people know this. The EU has in large part kept the peace for 50 years and will continue to do so. The economic benefits for the members are so huge that anyone thinking of leaving the EU needs their heads checked and their finances checked as they must have some vested interest in destroying the EU.

Now I am not saying that the EU should not be changed, especially the CAP, but the benefits of the EU far far far out weigh the often fake issues the anti-EU people in especially the UK love to promote. It is ironic that so many in the UK are against the EU these days, when it was the EU that saved the UK in large part from bankruptcy in the 1970s...

 

[Colin]

That is not exactly true. The austerity measures are being brought forward, and unlike the US, most European governments are some what forced to keep their budgets in somewhat balance.

You are missing the point. The EU is like a tripod with countries like you mention holding up two legs and countries such as Greece, Ireland and Portugal holding up the third leg. If one leg collapses, the entire tripod falls over. The countries you mentioned will fair better, but the EU will be gone as we know it along with many of the economic advantages of the Union. It would be, as some Americans want, that each of the United States went their separate ways. Sure, there'd still be some trade, partnerships and less Federal taxes so the rich states won't be propping up the weaker, poor states, but, overall, there'd be a great economic upheaval and a loss to all concerned.

Another analogy for the EU, as this article mentions, is the Prisoner's Dilemma.

When Will The European Union Collapse?

The core principle of the Prisoner’s Dilemma promotes that individual economic entities will act in their own self interest at the expense of a collective interest. We witness this dilemma at work within many economic circles in the world today.

No I am not missing the point..... I understand fully you dont like the EU.

Fact is you are mixing up the EU and the Eurozone. Now the Eurozone may or may not fall apart or be changed, but it wont effect the EU in the way you think or hope.

The Eurozone is the tripod, but that tripod is standing in a large room called the EU, where there are over half the members who are not on the tripod. Now you can remove the tripod from the room, but that does not mean the room disappears.

The EU is a huge plus for all members and a majority of people know this. The EU has in large part kept the peace for 50 years and will continue to do so. The economic benefits for the members are so huge that anyone thinking of leaving the EU needs their heads checked and their finances checked as they must have some vested interest in destroying the EU.

Now I am not saying that the EU should not be changed, especially the CAP, but the benefits of the EU far far far out weigh the often fake issues the anti-EU people in especially the UK love to promote. It is ironic that so many in the UK are against the EU these days, when it was the EU that saved the UK in large part from bankruptcy in the 1970s...

I find it laughable when people like you claim that the EU has kept the peace in Europe. Bullshit! It's NATO who kept the peace! And the EU saved Britain from bankruptcy did it? Britain has always been a net contributor. We've put in billions more than we've ever got out. Not something a bankrupt nation would be expected to do. You of course speak from one of the net recipient countries who were funded by the British, French and Germans...and now because of the idiocy of the EU and its drive to monetary union, find themselves bankrupt and expecting the rest of us to bail you out!

 

[PeteEU]

You are missing the point. The EU is like a tripod with countries like you mention holding up two legs and countries such as Greece, Ireland and Portugal holding up the third leg. If one leg collapses, the entire tripod falls over. The countries you mentioned will fair better, but the EU will be gone as we know it along with many of the economic advantages of the Union. It would be, as some Americans want, that each of the United States went their separate ways. Sure, there'd still be some trade, partnerships and less Federal taxes so the rich states won't be propping up the weaker, poor states, but, overall, there'd be a great economic upheaval and a loss to all concerned.

Another analogy for the EU, as this article mentions, is the Prisoner's Dilemma.

When Will The European Union Collapse?

No I am not missing the point..... I understand fully you dont like the EU.

Fact is you are mixing up the EU and the Eurozone. Now the Eurozone may or may not fall apart or be changed, but it wont effect the EU in the way you think or hope.

The Eurozone is the tripod, but that tripod is standing in a large room called the EU, where there are over half the members who are not on the tripod. Now you can remove the tripod from the room, but that does not mean the room disappears.

The EU is a huge plus for all members and a majority of people know this. The EU has in large part kept the peace for 50 years and will continue to do so. The economic benefits for the members are so huge that anyone thinking of leaving the EU needs their heads checked and their finances checked as they must have some vested interest in destroying the EU.

Now I am not saying that the EU should not be changed, especially the CAP, but the benefits of the EU far far far out weigh the often fake issues the anti-EU people in especially the UK love to promote. It is ironic that so many in the UK are against the EU these days, when it was the EU that saved the UK in large part from bankruptcy in the 1970s...

I find it laughable when people like you claim that the EU has kept the peace in Europe. Bullshit! It's NATO who kept the peace!

And why did wars start in Europe over the last thousands years? Land, trade and money, especially between France and Germany. So yes, the EEC/EU have had a huge part in keeping the peace in Europe by providing a platform to discuss issues between countries with words rather than bullets. Ignoring this fact is just as idiotic as saying that NATO kept the peace in Western Europe.

And the EU saved Britain from bankruptcy did it?

No the EEC did along with the IMF. The UK economy in the 1970s was horrible, with massive strikes and worse. The debt was huge and the growth was non existent... The IMF bail-out the UK in 1976 and because of the EEC access to markets for British companies the wheels of production and export started to grind up in the late 1970s and early 1980s after the unions were crushed by Maggie Thatcher.

Britain has always been a net contributor.

and that is a good point... but also a false one. Yes you have contributed more to the EU than received on paper.. as in what the government paid the EEC/EU and what the EU paid back to the UK in CAP and development aid. And why is that? Because the UK does not have the farming industry size compared to other EEC/EU nations and most of the payments are part of the CAP.

But what is never part of that calculation is the net gain UK companies and peoples have gotten from having access to the EEC markets. For example, would the UK have any farming industry at all if it had not been for the EEC markets? Do you think that the average UK farmer could compete on world market prices? Would you be fine with importing all your food stuffs from possible hostile areas of the world? You are already a net importer on many food stuffs (from the EU), and that would be much worse if you had to compete on world market prices...

We've put in billions more than we've ever got out.

That is a load of bullshit. The UK got a lot of development aid to Wales, Scotland and Northern Ireland, money that the English part of the UK would never ever have spent since it had not done so for the previous 300+ years. Cardiff would be a dump still if it had not been for the EU...

On top of that there are the access to European markets and of course the survival of your farming industry. You got far more out of your membership that you dare admit... simply because it is hard to quantify in monetary terms.

Not something a bankrupt nation would be expected to do.

You need to look up on your history in the 1970s. The UK economy was in a horrid state and was tinkering on the brink of bankruptcy for a decade plus with high debt, low growth and massive strikes and in fact had to ask for an IMF loan in 1976... that is a bail-out in today's terms. Yes the loan was made in 1976 but the discussions with the IMF started long before that and the IMF encouraged the UK to join the EEC.

You of course speak from one of the net recipient countries who were funded by the British, French and Germans...and now because of the idiocy of the EU and its drive to monetary union, find themselves bankrupt and expecting the rest of us to bail you out!

Yes Spain has been a net recipient since it joined but soon it will become a net contributor. However my home country of Denmark has been a net contributor for decades.... and has benefited from being part of the EEC and EU.

And lets not loose perspective here.. The UK pays the lowest portion of GNI to the EU than anyone else and hence gets access to the vast 500+ million market on the cheap. You are also the 4th most contributing country in the EU and yet the 3rd highest population, and the 3nd biggest economy (varies some what).... so yes you get your membership of the EU on the cheap.

 

[Colin]

No I am not missing the point..... I understand fully you dont like the EU.

Fact is you are mixing up the EU and the Eurozone. Now the Eurozone may or may not fall apart or be changed, but it wont effect the EU in the way you think or hope.

The Eurozone is the tripod, but that tripod is standing in a large room called the EU, where there are over half the members who are not on the tripod. Now you can remove the tripod from the room, but that does not mean the room disappears.

The EU is a huge plus for all members and a majority of people know this. The EU has in large part kept the peace for 50 years and will continue to do so. The economic benefits for the members are so huge that anyone thinking of leaving the EU needs their heads checked and their finances checked as they must have some vested interest in destroying the EU.

Now I am not saying that the EU should not be changed, especially the CAP, but the benefits of the EU far far far out weigh the often fake issues the anti-EU people in especially the UK love to promote. It is ironic that so many in the UK are against the EU these days, when it was the EU that saved the UK in large part from bankruptcy in the 1970s...

I find it laughable when people like you claim that the EU has kept the peace in Europe. Bullshit! It's NATO who kept the peace!

And why did wars start in Europe over the last thousands years? Land, trade and money, especially between France and Germany. So yes, the EEC/EU have had a huge part in keeping the peace in Europe by providing a platform to discuss issues between countries with words rather than bullets. Ignoring this fact is just as idiotic as saying that NATO kept the peace in Western Europe.



No the EEC did along with the IMF. The UK economy in the 1970s was horrible, with massive strikes and worse. The debt was huge and the growth was non existent... The IMF bail-out the UK in 1976 and because of the EEC access to markets for British companies the wheels of production and export started to grind up in the late 1970s and early 1980s after the unions were crushed by Maggie Thatcher.



and that is a good point... but also a false one. Yes you have contributed more to the EU than received on paper.. as in what the government paid the EEC/EU and what the EU paid back to the UK in CAP and development aid. And why is that? Because the UK does not have the farming industry size compared to other EEC/EU nations and most of the payments are part of the CAP.

But what is never part of that calculation is the net gain UK companies and peoples have gotten from having access to the EEC markets. For example, would the UK have any farming industry at all if it had not been for the EEC markets? Do you think that the average UK farmer could compete on world market prices? Would you be fine with importing all your food stuffs from possible hostile areas of the world? You are already a net importer on many food stuffs (from the EU), and that would be much worse if you had to compete on world market prices...



That is a load of bullshit. The UK got a lot of development aid to Wales, Scotland and Northern Ireland, money that the English part of the UK would never ever have spent since it had not done so for the previous 300+ years. Cardiff would be a dump still if it had not been for the EU...

On top of that there are the access to European markets and of course the survival of your farming industry. You got far more out of your membership that you dare admit... simply because it is hard to quantify in monetary terms.

Not something a bankrupt nation would be expected to do.

You need to look up on your history in the 1970s. The UK economy was in a horrid state and was tinkering on the brink of bankruptcy for a decade plus with high debt, low growth and massive strikes and in fact had to ask for an IMF loan in 1976... that is a bail-out in today's terms. Yes the loan was made in 1976 but the discussions with the IMF started long before that and the IMF encouraged the UK to join the EEC.

You of course speak from one of the net recipient countries who were funded by the British, French and Germans...and now because of the idiocy of the EU and its drive to monetary union, find themselves bankrupt and expecting the rest of us to bail you out!

Yes Spain has been a net recipient since it joined but soon it will become a net contributor. However my home country of Denmark has been a net contributor for decades.... and has benefited from being part of the EEC and EU.

And lets not loose perspective here.. The UK pays the lowest portion of GNI to the EU than anyone else and hence gets access to the vast 500+ million market on the cheap. You are also the 4th most contributing country in the EU and yet the 3rd highest population, and the 3nd biggest economy (varies some what).... so yes you get your membership of the EU on the cheap.

If you can forget your EU brainwashing for just a minute, pray do tell me how the UK benefitted from the EU. Forget your garbage about the IMF...you don't have to be a member of the EU to benefit from that, and as for trade with the rest of Europe, why did we need to join what was then the EEC? Ever heard of free trade agreements? And the fact is that Europe exports more to the UK than we sell to them.

Have we benefitted from the Common Agricultural Policy? NO! The EU pays some farmers not to produce food and pays others to produce food which is not worth growing. For example, the EU rules that we may only provide something like 85% of the milk WE need, while our farmers pour away milk to avoid exceeding their quotas.

Have we benefitted from the Common Fisheries Policy? NO! Fishing was the livelihood of thousands of British workers and indirectly of thousands more. The EU's CFP has destroyed this industry for us. The EU now tells US what WE can and cannot catch in our OWN waters.
The Brussels eurocrats who designed this absurd policy thought they could conserve fish by limiting the numbers landed in port. Idiots didn't know that most fish are dead when they come up in the nets so what happens? Millions of tonnes are thrown back in the sea every year in the name of conservation!

Have we benefitted in any other areas to compensate for the CAP and CFP losses? NO! The influence of Brussels has adversely affected so many of our interests including, waste disposal, herbal medicines, trucks, dairy farmers, whisky distillers, market gardeners, cheesemakers, boat builders, art market, etc etc.

Finally, do you really believe Britain would have been denied access to the European markets had we not joined the EU? Do you really think the Germans wouldn't have wanted to sell us their BMWs, Mercs, VWs, Audis and consumer durables, the French their Renaults, Citroens, wines and perfumes.

Is there really anything that has benefitted Britain that couldn't have been achieved oiutside of EU membership? I very much doubt it.

And if you wonder why the Britsih are so anti being a member of the EU, perhaps it's because we now know that our politicians, led by Edward Heath, intentionally lied to Parliament and the people about what EU membership would mean! And that was exposed when cabinet papers were released under the thirty year rule.

 

[waltky]

Granny says, "Dat's right...

... an' den the US gonna go bankrupt...

... from all dem big-spendin' liberals...

... inna Congress."

 

[Divine Wind]

So We’re Agreed: The European Union Is Falling Apart

As the Wall Street Journal reports, however, in EU Van Rompuy: Credibility Of Euro Zone At Stake Over Greece, the financial and political world(s) begs to differ– or is at least waffling in deciphering and understanding the clear warning signs that the European Union is NOT a sustainable economic and political entity (and will soon be forced to undergo, at the very least, a severe political and economic restructuring).

Look, the proverbial writing is on the world’s wall: Greece is falling apart, and, frankly, no amount of rescue financing (at least as much as is readily available through Euro-channels) can save it.

That's not all, however: for while Greece teeters (rightfully – and unsurprisingly - so) on the brink of financial ruin, nearly-insolvent member-nation Italy’s sidling up beside it, frantically elbowing Spain out of the way on the way to becoming the E.U.’s #2 most-f#cked nation-economy.

Read more: So We

 

[Baruch Menachem]

The EU is doing fine.

The Euro, not so much. There was an EU long before there was the Euro. They will have to try the Euro again later, but including Italy, Greece and Spain was a mistake. The Greeks lied when they applied and the northern tier let them get away with it.

On the other hand, most of the Euro zone is being responsible. And the Euro zone has been expanding all along, and now includes counties that didn't even exist 20 years ago.

What should wind up happening is that Spain, Greece and Italy should be dropped from the Euro. Maybe Slovenia and the Czek Republic added.

 

[Divine Wind]

Dude, the "EU" and the Euro are tied together. Yes, "Europe" has been around a long time, but the countries and their borders have changed greatly over the past couple hundred years. The concept of a "European Union" or "United States of Europe" is relatively new.

A key question is whether or not the German people will reelect a leader who is willing to use their nation's money, the People's taxes, propping up spend thrifts like Greece and the other weak links like Portugal and Ireland.

EU parliamentarians fear debt crisis damage to Europe | Europe | Deutsche Welle | 07.09.2011

 

[Toro]

The end of the euro would not mean the end of the EU.

But the euro isn't ending, though in five years it will probably look different than today. It's untenable as is.