Eurozone Sovereign Debt Crisis part 2 - Ireland

[RazorsEdge]

EU risks losing Germany if it picks a constitutional fight to the death, or the euro if it doesn't

 

[Jason]

EU risks losing Germany if it picks a constitutional fight to the death, or the euro if it doesn't

In this lockdown world stories which are not about coronavirus are getting minimal media attention. However this issue is huge and should be front-page of every newspaper for days. Of course if the EU loses Germany then the EU and the euro are toast, so this is an issue with the same outcome whatever happens.

The German Constitutional Court gave its ruling with a three month window of opportunity for the ECB to put its house in order. As such nothing has actually happened yet. The sky hasn't actually fallen down! However none of us should think it won't.

Germany cannot budge on this. It is a matter of basic law. It is possible for some details to be changed (by a super-majority of the German Parliament and Council, but this isn't a matter of detail. Rather it is covered by the eternity clauses in the German Constitution. There is no easy way to change these. A referendum would certainly be required, which takes months to call and requires a campaign period. And were such a referendum called it is most unlikely the German people would vote for change. The German position is absolute and will not change.

The EU presumably could change. Bluntly the EU makes up most things as it goes along, so the possibility of change must exist. It seems that the ECJ has over-reached its powers as set out in Lisbon, so there is a case for the EU finding a solution. However there seems to be no will to do this. The clock is ticking and no one seems to be working towards this solution.

The German Parliament and Central Bank will obey the German Constitutional Court. Presumably the EU will sanction Germany. We could be in a position where Germany has no voting rights on anything.

Back in 2008 people looking at how the euro could be unravelled decided that the only orderly way to do this would be for the strongest nation to float off first. It actually makes sense for Germany to leave EU and euro. This is fast looking to be the best solution for Germany and indeed for everyone else.

 

[dandelion]

1) The UK is actively negotiating other deals.has been for years, what with the amount of time the conservatives have managed to delay brexit. But no good deals with anyone have resulted.

[quotw]The UK is putting a lot of energy into UK-US agreement.

Last i heard, the congress and president are deadlocked on what sort of deal would be agreeable. So thats a non starter.

3) The key to the UK-US deal is alignment of the City and Wall Street.

Well, Trump does want to take over london business. There is a fundamental problem though, that US banks wanted to come to London bcause it was an entry into the EU. Absolutely no point doing that now. The americans would pobably be looking to buy out any UK financial institutions they can, and move them to the US.

5) The UK depends on EU for a lot of our food and manufactured goods. The key is proximity - containers as lorries (through Dover) and on ships (through Harwich) are crucial for the UK. There is a roughly equivalent volume of trade the other way. WTO terms won't help this but it is not the end of the world either.

Never mind WTO, there wasnt even an agreement to allow lorries to drive back and forth last I heard. EU suppliers o the UK have much more scope for alternative sales than the Uk does for alternative suppliers. Seems likely direct trade to ireland from France will develop one way or another.

I don't see how the UK can agree a deeper trade agreement as the EU will only do this with ECJ as the boss, so EU laws applying in UK.

Precisely. thats the only sort of deal the EU does. Ditto the US. Ditto China. The only way to get a good deal with the eu is to be part of their side, ie a member.

Frankfurt cannot handle the sort of financial products that nations need

Yes it can, and it will grow. The EU will make sure it grows now that London is no longer inside the EU. That basically means all EU countries are free to discriminate against London as much as they are able, whereas before this would have been banned.

Post coronavirus nations will need some fancy financial products in order to keep their nations afloat. These will be provided by London.

there is a big problem that London is committed to the US model of no devaluing bonds. This is a big problem which will essentially freeze it out of EU business. Yet London might have to abandon that position if the Uk ends up defaulting (if corona and then Brexit bankrupt us) Which would leave it as no mates.

We are getting little media coverage of the UK-EU trade agreement talks and even less comment. They are stalled.

Yep. EU said years ago what it would accept, and BJ says that isnt acceptable to him. So the logic of no deal is unavoidable. It is interesting that the conservative party rebelled against no deal before. Will it do it again?

What I think the UK is looking for is a way to collapse them entirely and therefore jetison the WA

I think the EU probably wouldnt mind terribly if the Uk defaulted. The Uk has far more to lose, and will come round in the end, but its position simply gets weaker and weaker every year. So far the UK has not had any of the ill effects of leaving the EU, because while it has technically left, in practice nothing is changed. Defaulting on the WA would make the Uk something of an international laughing stock and liability in terms of any trade negotiations with anyone else.

 

[dandelion]

The German Parliament and Central Bank will obey the German Constitutional Court

Er, no. The court didnt give the central bank orders, it simply stood up for its rights. If the German central bank falls in line with the european central bank, dispute is ended and there is no longer a problem.

 

[Jason]

Er, no. The court didnt give the central bank orders, it simply stood up for its rights. If the German central bank falls in line with the european central bank, dispute is ended and there is no longer a problem.

If the German Central Bank does this then Germany no longer exists as a sovereign nation. The German institutions will take their orders from Brussels. The German Parliament becomes a local council. The fiscal policy of Germany will in effect be dictated by Brussels as the economic policy of the EU is imposed on Germany (as the one who pays the bills).

My belief is that this will not happen.

It is of course a fascinating situation. We really are going to see where power lies.

 

[RazorsEdge]

If the German Central Bank does this then Germany no longer exists as a sovereign nation. The German institutions will take their orders from Brussels. The German Parliament becomes a local council. The fiscal policy of Germany will in effect be dictated by Brussels as the economic policy of the EU is imposed on Germany (as the one who pays the bills).

My belief is that this will not happen.

It is of course a fascinating situation. We really are going to see where power lies.

Germany Takes Back its Sovereignty from the European Union

 

[Jason]

Germany Takes Back its Sovereignty from the European Union

This is a clear article containing lots of quotes from important people.

I don't see anyone setting out what happens next.

If the German decision is upheld then once the three month period is done:
* Germany will not be contributing to the ECB's scheme
* The ECB will be unable to support Italy and Spain and they will default
* Germany will face infringement proceedings
* Poland, Hungary and others will follow Germany in setting out that their courts trump the ECJ.

The assumption is that Germany will do just enough to save the EU and the euro. In this case I don't see what that just enough could be. And this is the problem.

 

[eurotop40]

Last i heard, the congress and president are deadlocked on what sort of deal would be agreeable. So thats a non starter.
Well, Trump does want to take over london business. There is a fundamental problem though, that US banks wanted to come to London bcause it was an entry into the EU. Absolutely no point doing that now. The americans would pobably be looking to buy out any UK financial institutions they can, and move them to the US.
Never mind WTO, there wasnt even an agreement to allow lorries to drive back and forth last I heard. EU suppliers o the UK have much more scope for alternative sales than the Uk does for alternative suppliers. Seems likely direct trade to ireland from France will develop one way or another.
Precisely. thats the only sort of deal the EU does. Ditto the US. Ditto China. The only way to get a good deal with the eu is to be part of their side, ie a member.
Yes it can, and it will grow. The EU will make sure it grows now that London is no longer inside the EU. That basically means all EU countries are free to discriminate against London as much as they are able, whereas before this would have been banned.
there is a big problem that London is committed to the US model of no devaluing bonds. This is a big problem which will essentially freeze it out of EU business. Yet London might have to abandon that position if the Uk ends up defaulting (if corona and then Brexit bankrupt us) Which would leave it as no mates.
Yep. EU said years ago what it would accept, and BJ says that isnt acceptable to him. So the logic of no deal is unavoidable. It is interesting that the conservative party rebelled against no deal before. Will it do it again?
I think the EU probably wouldnt mind terribly if the Uk defaulted. The Uk has far more to lose, and will come round in the end, but its position simply gets weaker and weaker every year. So far the UK has not had any of the ill effects of leaving the EU, because while it has technically left, in practice nothing is changed. Defaulting on the WA would make the Uk something of an international laughing stock and liability in terms of any trade negotiations with anyone else.

This might happen as well
Celtic Interconnector, connecting the electricity grids of Ireland and France

 

[Drifterwood]

When the Euro drops to a pre Brexit rate of over 1.27 to Sterling, then I'll take it seriously.

 

[RazorsEdge]

This is a clear article containing lots of quotes from important people.

I don't see anyone setting out what happens next.

If the German decision is upheld then once the three month period is done:
* Germany will not be contributing to the ECB's scheme
* The ECB will be unable to support Italy and Spain and they will default
* Germany will face infringement proceedings
* Poland, Hungary and others will follow Germany in setting out that their courts trump the ECJ.

The assumption is that Germany will do just enough to save the EU and the euro. In this case I don't see what that just enough could be. And this is the problem.

Macron loses parliamentary majority as 10 MPs quit his party over broken promises

 

[eurotop40]

Macron loses parliamentary majority as 10 MPs quit his party over broken promises

So what?

 

[Drifterwood]

So what?

It's impossible for market championing Tories to face the fact their beloved market continues to value the euro higher than the pound after the Brexit vote.

 

[eurotop40]

It's impossible for market championing Tories to face the fact their beloved market continues to value the euro higher than the pound after the Brexit vote.

Indeed, Tory logic is so corrupt and malicious and show all their nastiness:

The Euro goes up ---> The Eurozone has to be destroyed because its currency does not favor export.
The Euro goes down ---> The Eurozone has to be destroyed because the Euro is too weak.
Sterling goes up ---> The Eurozone has to be destroyed because this shows the strength of London as a banking hub.
Sterling goes down ---> The Eurozone has to be destroyed because Sterling was overvalued anyway.
EU states agree harmoniously ---> The EU has to be destroyed because it homogenizes cultures that we value being so different.
EU states disagree ---> The EU has to be destroyed because it cannot work for different cultures that we value being so different.
Scotland wants to go its way ---> The UK is such a wonderful union and England has done so much for Scotland over the last 300 years.
Scotland votes to stay ---> The UK is such a wonderful union and England has done so much for Scotland over the last 300 years.
... and so on. Obviously they do not use the word "destroyed" but fair play expressions such as "orderly unravel" etc. And the populace believes this BS.

You wonder why - after US Republicans - Tories and their manipulative press and influencers are the most hated party in the western world. Indeed, the vast majority of sane European continentals genuinely wish the UK - historically constantly meddling in Europe's own business - to orderly unravel.

 

[eurotop40]

BTW, after his SVP party has been fighting the EU for over thirty years...
Nobody says that Switzerland should join the EU but you do not saw off the branch on which you are sitting such as Britain is doing.
Could this be a lesson for inherently dishonest Tories? 'fraid not.

Swiss finance minister concerned about Covid-19 debt crisis in Europe

 

[RazorsEdge]

The EU would like Mrs May back I think.

https://assets.publishing.service.g.../886168/Letter_to_Michel_Barnier_19.05.20.pdf

 

[Jason]

The EU would like Mrs May back I think.

https://assets.publishing.service.g.../886168/Letter_to_Michel_Barnier_19.05.20.pdf

 

[Freddie53]

So what?

I have some questions about the French national government.

I am aware that Germany has a president which serves in basic the same capacity as does the Queen of the UK; that is a ceremonial position as head of state.

The chancellor of Germany like the prime minister of the UK is the head of government and is the leader of the majority party or group of parties.

How is the French president's duties similar to the US and how are they different?

The president of France is elected to fixed terms like the president here in the US and is not subject to changes in membership of the lower house.

What duties does the French premier have? How is the French premier's duties different from the chancellor's in Germany or the prime minister's in the UK?

Does the president of France or the lower house select the French premier?

What if the president and the premier have different agendas for government?

The US president selects a chief of staff who has much more "on hands" duties that most Americans are aware.

I am wondering if the French premier is really a chief of staff who does what the president tells him to do or if he has some independent thought and power.

 

[Jason]

France is a bit of an oddity in European terms in that it has a president with substantial powers. In effect the president looks after defence and foreign, the PM after home. I know that is a gross simplification, but it gives an idea of the split of powers. The system is semi-presidential. The president does not have the powers of a US president.

The president appoints the PM but parliament can sack any PM. In effect the president has to appoint as PM parliament's choice. Power is split.

A perk of being president of France is that you are also made a prince of Andorra. I'm sure this is why may really want to be president of France.

 

[Freddie53]

France is a bit of an oddity in European terms in that it has a president with substantial powers. In effect the president looks after defence and foreign, the PM after home. I know that is a gross simplification, but it gives an idea of the split of powers. The system is semi-presidential. The president does not have the powers of a US president.

The president appoints the PM but parliament can sack any PM. In effect the president has to appoint as PM parliament's choice. Power is split.

A perk of being president of France is that you are also made a prince of Andorra. I'm sure this is why may really want to be president of France.

I read many years ago an editorial that the US needed two heads of government much like in France. One for defense and foreign and one for the home front.

I do remember that France was in its Fourth Republic and some wanted Charles de Gaulle to come back to head the French nation. I remember that the powers of the French presidency was enlarged, but I don't remember reading how except the name was changed to the Fifth Republic.

Thanks for your reply. I wonder about Russia if it is like France or an even different power sharing.

Also, I am aware that the ceremonial heads of state's actual powers do vary from nation to nation. The president of Israel has more real political power than does the president of Germany. Or even the Queen in the UK as far as public political power.

Having said that. The Queen is one of the most accomplished politicians in the world. She grew up her first ten years not knowing she would be queen. She was well schooled. Then during WWII her father was more than just ceremonial in leading the British people.

Looking at how the Queen at age 25 handled her mother, grandmother and even Winston Churchill shows a lady with tremendous political skill. Had Charles already been King when Diana died, the monarchy may have not survived.

That daily box that the Queen gets each day. The hour long weekly visit with the prime minister. The other phone calls with the prime minister. And in the Queen's case what is not said could move a prime minister to change his mind and the general public never know.

The Queen is head of the Commonwealth. As such she does more than anyone in keeping the UK in the top four nations in soft power and in some ways the UK is number two in soft power. The Queen sailed around the world several times building up the British Empire as it was transitioning to becoming a Commonwealth.

Here is two examples of state visits by the Queen to the US.

The first one was the dedication of the Washington National Cathedral which is an Anglican cathedral dedicated to being America's church. Even Muslims have had prayer services there.

The Queen was in attendance as the head of the Church of England to the dedication of the fifth largest Gothic Cathedral which in the world and only slightly seats more than the St Paul Cathedral in London. It is said to be the last cathedral built according to Gothic construction techniques that will be built. This cathedral is a part of the Episcopal Church in the US, a part of the Anglican Communion. The Archbishop of Canterbury is the spiritual head of the US Episcopal Church as well as the rest of the Anglican Communion.

The Queen was invited to a state visit in 2007 for the 400th anniversary of the first permanent English settlement in North America. She was here at least a week. She attended church at the Washington Cathedral. She went to Williamsburg the capital of colonial Virginia. She addressed both houses of Congress, something that is rare for someone other than the president of the US to do.

Then she went to Kentucky to view the Kentucky Derby, America's most elite race of the year with President Bush, the Younger. As I recall, the people sang the British Anthem. As you know, the Queen does love to watch the horses! And I suspect that President Bush made every effort to make the presidential box equal anything in the UK.

At the time, the Queen's approval ratings were two points higher in the US than they were in the UK at that same point in time. Both mid 80s.

President Bush, the Younger, was raised Anglican, but joined the church of his wife, the United Methodist Church. The Holy Communion liturgies are almost identical. In general there is less pomp and circumstance around the liturgy in the UMC.

President Bush's father, the late President Bush and his wife were very devout members of the Anglican church here in the US whose official name is the Protestant Episcopal Church.

The United Methodist Church, then named the Methodist Episcopal Church, was formed just after the American Revolution because the King had called all the priests home. The United Methodist Church is more like the Protestant Episcopal Church in the US than the Methodist Church in the UK is like the Church of England. The United Methodist Church is not part of the Anglican Communion.

Even though I can not stand the man, Trump attends the Episcopal Church when he attends church according to press reports. President Ford from the 1970s was a devout Episcopalian.

There is a small Episcopal Church across from the White House. Every president has attended some services in that church since the city of Washington was established the capital of the US.

The churches formed out of the churches in Europe are called mainline churches. All except for the Lutheran Church which came out of Germany all originated in the United Kingdom or from the Dutch Reformed Church.

The Queen has had tremendous effect on American policy toward the UK during her reign.

All of this to conclude, there isn't really a way to compare her to the other ceremonial heads of state in Europe. Many of them are just that and nothing more.

Queen Elizabeth is different. She is a world leader of her own right and over time may have affected more that has happened in the UK than any one prime minister except Winston Churchill and Margaret Thatcher. The Queen most likely had more effect than any one prime minister on the world, in the Commonwealth and in the US.

Consider that when your prime minister went into the hospital, the Queen was giving a rare address to the nation giving encouragement. The Queen understands the power of being understated. That really works when you have the right cards in your hand which she has always managed to do.

Her address meant a lot to many Americans including several American TV anchors who gave slight pause. It would be the only encouragement that we Americans were going to get from a leader like her.

Trump has yet to address the nation and give us encouragement. Empathy is a word that he does not know nor will he ever understand its meaning.

The Queen's brief address gave both encouragement and empathy to all who heard her speak even though it was brief. Somehow even though she lives in Buckingham Palace and Windsor Castle, she makes us feel like she is one of us. That may be more innate than it is a skill.

When the Queen's time comes to an end, we may begin to understand just how important she has been to the UK, the US and to the Commonwealth.

The fact that she has reigned almost 70 years has been a major factor.

So yes, the Queen is a head of state quite like no other in Europe. She is the first of all the monarchs in Europe outside of Europe.

Note: The Queen of Denmark is as revered in Denmark as the Queen is in the UK. She is not as known throughout the world. Most Americans can't name any other monarch except the Queen.

The Queen's picture is on at least one tabloid in the checkout lane of any large grocery or discount store in the US. William and Harry both come in ahead of Charles. There are often four or more magazines with a story about the Royal Family with a spotlight on the cover page.

There is no tabloid picture of Macron or any European president in the check out lanes here in the US every week!

 

[Jason]

The powers of the Queen are ambiguous.

In theory the powers are huge. Taken as set out, the Queen can do just about anything on her own Royal Prerogative, including governing without Parliament. In practice however she has only exercised them with the consent of government (and even parliament) and as such she may be regarded as little more than a civil servant.

In 2019 we had a demonstration of the Queen NOT using her powers. She had the power to prorogue parliament (exercised) and also the power to uphold this prorogation (or re-prorogue) in the circumstance of a maverick ruling by a biased court. She had the power to prevent Boris Johnson sending his unilateral surrender letter to the EU. She had the power to dissolve Parliament and force an election. She had the power to insist the Privy Council step in and carry out many of the roles not carried out by a failed Parliament. The consequence of the Queen not using these powers was that we had months of Parliament unable to do anything (including routine business) and delays in Brexit which were a direct frustration of the will of the British people

So what are we left with? That the Queen does not have the powers? Or that she chose not to exercise them? Possibly the answer is the latter. A lady in her 90s drew back from exercise of powers, arguably at the very time when she should have done just that.