Eurozone Sovereign Debt Crisis part 2 - Ireland

[dandelion]

There were hardline Brexiteers who wouldn’t support this, but also every single Remain MP Lab SNP LibDem PC Green opposed her. The Remainers got their least favoured outcome because they wouldn’t compromise.

Dont know why you think some sort of compromise would be a better outcome for remainers than a hard brexit. It was rather the point that any sort of compromise pleased absolutely no one at all to any degree.

Remainers such as myself think Hard brexit will have to be rolled back. Already people are saying it is totally insane that when Australia can make a deal with the EU so it accepts EU food standards, the UK refuses to do so. The UK right now is refusing to make deals with the EU which most other countries are willing to make. Is that sovereignty or insanity?

Brexiteers have got themselves into an awful fix in pretending there is any such thing as absolute sovereignty. To make a trade deal you have to limit your sovereignty. To make any trade deal, the Uk has to surrender sovereignty. Leavers seem set on surrendering UK sovereignty to the US for little gain, whereas we would gain much more making a similar deal with the EU. But they cannot on principle admit they were wrong. Doesnt matter how much harm this does the country, its all about keeping the 10% hard brexit voters on board to keep con in power.

 

[dandelion]

the UK has got vaccine roll out right,

No it has not. Lockdown should never have been imposed and Britain should have become immune naturally by infection. We have hardly any cases now because we became immune to the new strain, not because of being vaccinated. It is something of an irony that con have rolled out a massive vaccination program just after we had the third wave, which created high levels of natual immunity. Its more closing stable door after horse has bolted.

 

[Jason]

Dont know why you think some sort of compromise would be a better outcome for remainers than a hard brexit. It was rather the point that any sort of compromise pleased absolutely no one at all to any degree.

Remainers such as myself think Hard brexit will have to be rolled back. Already people are saying it is totally insane that when Australia can make a deal with the EU so it accepts EU food standards, the UK refuses to do so. The UK right now is refusing to make deals with the EU which most other countries are willing to make. Is that sovereignty or insanity?

Brexiteers have got themselves into an awful fix in pretending there is any such thing as absolute sovereignty. To make a trade deal you have to limit your sovereignty. To make any trade deal, the Uk has to surrender sovereignty. Leavers seem set on surrendering UK sovereignty to the US for little gain, whereas we would gain much more making a similar deal with the EU. But they cannot on principle admit they were wrong. Doesnt matter how much harm this does the country, its all about keeping the 10% hard brexit voters on board to keep con in power.

if you are right that Remainers prefer hard Brexit to soft Brexit then I guess everyone is happy.

The EU is facing an existential crisis. I doubt there will be anything left to join.

 

[ConanTheBarber]

The EU is facing an existential crisis. I doubt there will be anything left to join.

But Jason, this has been your view for more than 10 years on this thread.
Do you believe the EU is in as great an existential crisis as it was when you opened the thread?
Greater?

 

[Jason]

But Jason, this has been your view for more than 10 years on this thread.
Do you believe the EU is in as great an existential crisis as it was when you opened the thread?
Greater?

Greater.

The euro was an experiment which should have failed. A fiscal union is needed before a monetary union. The USA was a single nation before it had a single currency and that is how it usually is.

The euro was saved through an amazing political effort. The EU did whatever was necessary. Greece suffered. And others.

Now it is a perfect storm. There is no mutualisation of debt. Politically Germany and France and others couldn’t get agreement for this in their own parliaments. The unmutualised debts were high before coronavirus. They are now astronomic. Yet the legal framework is that nations have responsibility for them, without the tools of devaluation and default to tackle them. How does anyone think Italy and Spain will cope? How will Italians take to cuts in public sector pay, benefits, health, and hikes in tax? The reality is that It will hardly even be a decision of the Italian government as they will have no choice - they will issue minibots. Let’s call them lira.

The EU cannot get out of this mess. The tool needed to deal with the problems is something called the nation state. The EU is useless.

 

[ConanTheBarber]

The reality is that It will hardly even be a decision of the Italian government as they will have no choice - they will issue minibots. Let’s call them lira.

I've seen references to this without having any idea how likely it is that the League will proceed with this notion.
This alone would put (presumably) fatal strains on the Euro, wouldn't it?
And for you, their introduction is 100 percent predictable?

 

[Jason]

I've seen references to this without having any idea how likely it is that the League will proceed with this notion.
This alone would put (presumably) fatal strains on the Euro, wouldn't it?
And for you, their introduction is 100 percent predictable?

Soon the coronavirus amnesty on spending is going to end. Italy will draw up its national accounts. Before coronavirus it was barely afloat. Now it is a complete basket case. It is worse than Greece was.

A nation with its own currency could probably cope. Big devaluation. Default on some debt (to foreign creditors). Print the money needed to pay benefits and public sector. Okay it is messy, but a nation would survive.

within the euro the only option is austerity. This isn’t a little trim. It is massive cuts in salaries and pensions. The only way to cope is to pay say half in euro and half in minibot, pegged to the euro. The minibot can be used within Italy. It is in effect a massive QE programme. Of course the EU would say this is illegal. It is.

this is how the Latin currency union fell. A currency cannot survive QE by members, in effect once one prints its local euro everyone else must follow.

 

[ConanTheBarber]

A currency cannot survive QE by members, in effect once one prints its local euro everyone else must follow.

This is what I was asking.
We will see in due course.
My original point was that, while you can say that the heavens are falling for a day or a week, a decade seems a little long.
But the fall of Rome took centuries ... so I'll just sit here and watch, knitting all the while.

Do you ever sleep?

 

[dandelion]

The euro was an experiment which should have failed. A fiscal union is needed before a monetary union. The USA was a single nation before it had a single currency and that is how it usually is.

So just what currency did the US use before it was a nation? The pound? OK, during its history it expanded territorially and parts which were not within the US at the start used different currencies, but surely the actual US always used one single currency? At least as much as England or any other nation did.

it is a complete basket case. It is worse than Greece was.

So is the UK now. It has been argued that a lot of the deficit creditied to covid is in fact due to brexit. We would hav needed to spend the money even without covid.

Yo may also have noticed that whatever impact brexit has had on the EU, the UK is coming apart because we left the EU. It seems likely brexit will have been the final straw which destroyed great Britain.

On the KGB annual world report I am sure they marked it up as a major success.

 

[Industrialsize]

European Parliament Ratifies Brexit Deal
(CN) — The European Parliament has overwhelmingly approved the deal setting out the terms of the United Kingdom’s withdrawal from the European Union, a stamp of approval that formalizes Brexit.

The parliament voted 660-5 in favor of ratifying the deal, with 32 abstentions. The vote took place late Tuesday and the tally was released Wednesday morning. Still, the Brexit deal won’t be ratified in full until EU ministers give their token blessing at a meeting at the end of April.

It was largely a symbolic vote because the Brussels-based parliament made up of elected representatives from the EU’s 27 member states was bound to approve a deal that took about a year to negotiate and prevented a catastrophic rupture in relations. The U.K. officially left the EU on Jan. 1.

Although the parliament’s approval is the last major step in the Brexit process, the U.K. and EU are almost guaranteed to continue wrangling over the meaning and effect of Brexit for years to come and many aspects of their relationship remain uncertain.............
European Parliament Ratifies Brexit Deal

 

[Jason]

So just what currency did the US use before it was a nation? The pound? OK, during its history it expanded territorially and parts which were not within the US at the start used different currencies, but surely the actual US always used one single currency? At least as much as England or any other nation did.

So is the UK now. It has been argued that a lot of the deficit creditied to covid is in fact due to brexit. We would hav needed to spend the money even without covid.

Yo may also have noticed that whatever impact brexit has had on the EU, the UK is coming apart because we left the EU. It seems likely brexit will have been the final straw which destroyed great Britain.

On the KGB annual world report I am sure they marked it up as a major success.

The early USA used a mix of English, French and Spanish currency (mostly coins) plus the Continental, an early stab at a US currency (and which failed). The dollar followed.

The UK right now has a debt which in an ordinary world would have caused the markets to turn against the UK and would have caused a currency crisis. In this coronavirus world the debt is like debts everywhere. The UK can issue the bonds it needs and let the markets set the price, so it can get its bonds away in bond auctions. Much of the debt has been put into ten year bonds and is away. We don’t really have to worry about it for a decade. The pound floats at the rate determined by the UK market. It is reasonably comfortable for trade. No, I don’t see a UK financial catastrophe. The UK has very many new trade agreements and in effect is doing the rebalancing away from EU under cover of these agreements.

 

[dandelion]

The UK right now has a debt which in an ordinary world would have caused the markets to turn against the UK

Um, well no. The bank of England has electronically printed billions of pounds which it handed over to government. All money is printed by the state. Except that which is created by private banks. Not nowadays as actual currency but as securities or loans. Too little is a bad thing because business cannot operate. Too much causes inflation. All things considered, reality tells us that in the 70s we had rampant inflation beause of too much printing. Whereas if anything the 90s and noughties had too little printing and failed to take advantage of the ability of governments to create money by printing. Which they can spend for the good of the state. Instead we left it to private banks to mint securites and keep the profit from them.

In this coronavirus world the debt is like debts everywhere.

Thats true, just as it was true in 2008. In 2008 Greece was seen as the country borrowing too much, and importantly without a plan how to recover their situation. Right now its the Uk which has no plan for its future.

The UK can issue the bonds it needs and let the markets set the price,

Oh No. The bank of England rigs the market by buying up bonds to stabilise the price where it wants it. All fine while the debt remains within the UK. Bond holders for the most part are legally obliged to buy them.

 

[Drifterwood]

Drip drip drip. 2% inflation pretty much wipes out debt in a thirty year generation.

The U.K. economy is actually quite well balanced at the moment and a 2% wealth tax on the richest 2% would pay for Covid.

The problem is that people with cash should realise that it won't be worth much in thirty years.

 

[Freddie53]

So just what currency did the US use before it was a nation? The pound? OK, during its history it expanded territorially and parts which were not within the US at the start used different currencies, but surely the actual US always used one single currency? At least as much as England or any other nation did.

So is the UK now. It has been argued that a lot of the deficit creditied to covid is in fact due to brexit. We would hav needed to spend the money even without covid.

Yo may also have noticed that whatever impact brexit has had on the EU, the UK is coming apart because we left the EU. It seems likely brexit will have been the final straw which destroyed great Britain.

On the KGB annual world report I am sure they marked it up as a major success.

"So just what currency did the US use before it was a nation? The pound? OK, during its history it expanded territorially and parts which were not within the US at the start used different currencies, but surely the actual US always used one single currency? At least as much as England or any other nation did." Dandelion

Basically true. The currency was the pound. When independence was declared the currency in the 13 former English colonies went to hell in several baskets!

There was each state's currency plus the currency of the Articles of Confederation which was the government until 1789 when the present republic's constitution became the law of the land.

The present Constitution has since 1789 made any currency other than the currency of the federal government illegal. Only the US currency is legal in any territory, colony, dependency, etc.

The US Constitution which changed the US from a confederation to a federation happened because the US was collapsing under the Articles of Confederation. Some currencies required a wheel barrow of currency just to buy a loaf of bread inflation had been so rampant.

Under the Articles of Confederation there was to be a US mail service and the now 13 states were considered to be as one nation in terms of foreign policy.

I suspect that in many ways the EU is more one nation as was the US Articles of Confederation. While under the A of C it could print money. There was no provision for taxing. The A of C "asked" the states to give it money so A of C could fund what little operation it really had.

With the US on the brink of total economic collapse, a constitutional convention met and the present Constitution (without all the amendments) was written.

No provision of rights was in it. Some states said they would not ratify it without rights being written in. Ten amendments were then written and were added. Called the Bill of Rights. The US Bill of Rights is based on the English Bill of Rights.

Freedom of religion (No state church) may be the only part in the US Bill of Rights that is not in the English Bill of Rights. This is what I remember from school several years ago, make that many years ago!

Had the US Constitution not been ratified, many historians believe that one at a time, the former colonies would have reverted back to being English colonies.

People would remember that the colonies had the highest standard of living in the world including England. Being free and poor would not be a good mix!

 

[Freddie53]

Not being a citizen of any European country, it would not be my place to decide what Europe should do.

However, history has proven that currencies and sovereign nations go together. Sovereign currencies set somewhere else but used by other sovereign untidies don't turn out well.

The EU needs to decide what it wants to be. The eurozone part of the EU will need to become one sovereign nation with ability to set fiscal policy, determine taxes, declare war, as one nation sign peace treaties and other treaties if it is to succeed much longer.

Where that leaves the non eurozone nations could be one big mess, or perhaps not.

I lean to the idea that a new nation the Federal Republic of Europe needs to happen or the euro will need to be ditched.

Perhaps, the eurozone could become a nation while the non euro nations become a free trade association. The new FRE as one nation could become a member of the larger European Free Trade Association.

If done right, perhaps all European nations would want to become members of the free trade association.

The euro zone part of the EU is too unstable to last very long without some major changes. For several years, the growth rate for all the eurozone is lower than the rest of the rich nations. Even France is not booming economically. Germany seems to be doing the best in economic growth of eurozone nations.

I am writing of what I believe would mostly likely provide the best long term prospects for the eurozone, not what I might think politically as best for "Nation A" or "Nation B."

 

[Jason]

Not being a citizen of any European country, it would not be my place to decide what Europe should do.

The problem here is what you mean by Europe:
1) the EU institutions and the Eurocrats. They want a single EU sovereign nation. They want more Europe, They see unification as something to be done despite the will of the people of the EU, who are ignorant and need to be governed by them. They talk of a post-democratic form of government where it is institutions that hold ultimate power.
2) the people of the nations of the EU. Most identify with their nation states. However much they criticise their politicians (ask any Italian, Spaniard, Greek) they want to be governed by laws which reflect the needs of their nation and they want to be able to elect politicians.

I think you are right not to feel it is your place to decide what Europe should do. However the Eurocrats disagree with you. They believe (almost as a religion) that it is their right to decide what happens to Europe. They are certain that the decisions must not be left to the people.

There is an ethical issue here. Should support be for the Eurocrats or for the people of the EU?

For the UK there is a practical issue. The Eurocrats are acting as enemies of the UK. The people of the nations of Europe mostly treat UK as a friend. Right now UK is working with the Eurocrats, but this could shift, and shift fast. There is a body of evidence that the Eurocrats actively stoked the threat of violence and even violence in Northern Ireland. Government ministers are saying nothing on this, but if they come out and say that this has indeed happened then we have an act of aggression by EU against UK. It may soon be that the UK will support the people and nations of Europe and oppose EU.

 

[DiamondJoe]

For the UK there is a practical issue. The Eurocrats are acting as enemies of the UK. The people of the nations of Europe mostly treat UK as a friend. Right now UK is working with the Eurocrats, but this could shift, and shift fast. There is a body of evidence that the Eurocrats actively stoked the threat of violence and even violence in Northern Ireland. Government ministers are saying nothing on this, but if they come out and say that this has indeed happened then we have an act of aggression by EU against UK. It may soon be that the UK will support the people and nations of Europe and oppose EU.

Link pls, Jason.

 

[Drifterwood]

Thanks Freddie.

The obvious difference is that the US was new, young and full of opportunity. Without some fundamental revolutions, Europe is not.

Personally I blame the French.

 

[Jason]

Personally I blame the French.

Always a safe bet.

 

[Jason]

Link pls, Jason.

It came up when Varadkar advised the EC to change their tone. If you spend half an hour searching you will find it.

The key point is that we are going to have people picking over this allegation. The UK government will already have done so. If there is something in it, it may well be that the UK government sees no sense in acting now - but it may later. Or events may force it. NI seems set to have a right wing creationist nut job as leader of DUP, and this is going to stoke tensions in NI. If he can get hold of a bit of paper that says EU threatened to stoke violence then we can all be sure it will be published.