THE EURO FATHERS: Stupid or cunning?

The evidence for wilful disregard of advice among the euro’s founders is there for anyone to see

I’m indebted to Greek friends for pointing out a persuasive article in the Swiss paper TagesAnzeiger , which I’d commend to all those who can read German.

In a nutshell, it accuses the multivariate euro parents of knowing exactly what they were doing when they formed and shaped the monetary union; they knew exactly what the dangers were and….they ignored the findings of the technocrats at the time. The most shocking realization is that the authors of the Delors-report did not think that a monetary union would come into existence in the foreseeable future: at the time – in 1989 – the economists wrote, under the auspices of Jacques Delors, that “The economic prerequisites for a monetary union that is characterized by immutably fixed exchange rates between the participating countries will probably not exist for the foreseeable future”.

If you want to know why they took this essentially pessimistic view, then the answers (in terms of extracts from the Paper) are as follows:

“If sufficient consideration were not given to regional imbalances, the economic union would be faced with grave economic and political risks”.

“This is especially important because the adoption of permanently fixed exchange rates would eliminate an important indicator of policy inconsistencies among Community countries and remove the exchange rate as an instrument of adjustment from the member countries’ set of economic tools”.

“A particular role would have to be assigned to common policies aimed at developing a more balanced economic structure throughout the Community. This would help to prevent the emergence or aggravation of regional and sectoral imbalances which could threaten the viability of an economic and monetary union”.

“Wage flexibility and labour mobility are necessary to eliminate differences in competitiveness in different regions and countries of the Community. Otherwise there could be relatively large declines in output and employment in areas with lower productivity. In order to reduce adjustment burdens temporarily, it might be necessary in certain circumstances to provide financing flows through official channels. Such financial support would be additional to what might come from spontaneous capital flows or external borrowing and should be granted on terms and conditions that would prompt the recipient to intensify its adjustment efforts”.

“…..the task of setting a Community-wide fiscal policy stance will have to be performed through the coordination of national budgetary policies. Without such coordination it would be impossible for the Community as a whole to establish a fiscal/monetary policy mix appropriate for the preservation of internal balance, or for the Community to play its part in the international adjustment process. Monetary policy alone cannot be expected to perform these functions. Moreover, strong divergences in wage levels and developments, not justified by different trends in productivity, would produce economic tensions and pressures for monetary expansion”.

“Rather than leading to a gradual adaptation of borrowing costs, market views about the creditworthiness of official borrowers tend to change abruptly and result in the closure of access to market financing. The constraints imposed by market forces might either be too slow and weak or too sudden and disruptive. Hence countries would have to accept that sharing a common market and a single currency area imposed policy constraints”.

“The economic prerequisites for a monetary union that is characterized by immutably fixed exchange rates between the participating countries will probably not exist for the foreseeable future. Even among the members who form the nucleus of the exchange rate system, tensions must repeatedly be expected for the foreseeable future owing to differing economic policy preference and constraints as well as the resultant divergences in their economic development, which will make realignments in the central rates of their currencies necessary.”

“…..monetary integration cannot move ahead of general economic integration, since otherwise the whole process of integration would be burdened with considerable economic and social tensions. Moreover, examples from history demonstrate that new nations did not confer a uniform monetary order on themselves until after the process of unification was concluded. Any durable attempt to fix exchange rates within the Community and finally to replace national currencies by a European currency would be doomed to failure so long as a minimum of policy-shaping and decision-making in the field of economic and fiscal policy does not take place at Community level. Without this prerequisite being met, a common European monetary policy cannot ensure monetary stability on its own. Above all, it cannot paper over the problems in the Community arising from differing economic and fiscal policies”.

“Isolated steps in the monetary field would overburden monetary policy in political terms and jeopardize the credibility of the process of unification in the longer run”.

Call me a wonk if you like, but I find this incredibly fascinating stuff – almost like reading Nostradamus, and suddenly finding a stanza that declares:

In 1999, 18 lunatics ignored the will / banks from West and East fanned the flames / A Trichet arose in Gaul / Disunity and disaster were the obvious outcomes

Is there any merit in assigning blame in this manner? Yes, I think there is. On liberating a Nazi concentration camp, Eisenhower declared that his staff should “get every goddamned photographer within a radius of a hundred miles, and film this obscenity…because sure as eggs are eggs, in forty years time people are gonna deny this ever happened”. And if truth be told, this isn’t assigning blame: it’s merely ensuring that Orwell’s Ministry of Truth has no wriggle-room when it comes to responsibility.

The eurozone launch was folly on a global scale. As such, it is having global consequences. Let no person step forward now and call these consequences ‘unforeseen’.

Earlier at The Slog: The changing status of gold

61 thoughts on “THE EURO FATHERS: Stupid or cunning?

    • Mostly cunning, but with a drizzle of stupidity. I am still unable to see clearly the path to one of the two possible outcomes of this dangerous experiment: partial or complete disintegration of the currency area or complete integration of the fiscal, monetary and transfer policies of the current membership of the Euro currency.

      • From the greek point of view definitely cunning .It takes a terribly cunning person to destroy you while pretending he is saving you .The only unusual thing about the euro-cunningness is that the cunning the most of the time are artful and charming , with a kind of sunken beauty . I find the euro-cunning unattractive and ugly .

  1. Spain is about to enjoy a surge in car production, thanks to the stability and commonality introduced by the EU and the Eurozone, which then immediately take advantage of the dropping costs in Spain.
    The essential point concerning industrial management,
    rather not monetary management:
    1. http://www.nytimes.com/2012/12/28/business/global/car-factories-offer-hope-for-spanish-industry-and-workers.html
    2. http://www.telegraph.co.uk/finance/financialcrisis/9768067/Spains-house-prices-to-fall-another-30pc-as-glut-keeps-growing.html

    • You may also find the involvement of J. Almunia in the alleviation of the fine given to Greece for it’s shipbuilding industry to be along those lines. Check and see why the fine was erased and what it meant for Spanish shipbuilding.

  2. I also predicted the Euro crash back in 2000. I was at my parent’s place with my brother-in-law (employed by a German company) and stated categorically that the Euro would crash due to the imbalances between the northern economies and the Latin ones and that the entry criteria (fiscal discipline) had not been met. I gave it 10 years.

    There was much hilarity as the others pointed out that the key members (Germany and France) would go to extraordinary lengths to ensure the survival of the Euro. My brother-in-law challenged me to a wager for £100, that the Euro would not fail in 10 years. We agreed that I would win if just one of the Euro countries pulled out by 31 December 2010.

    I had to pay up.

    I have the perverse satisfaction of knowing that I was right and for the correct reasons. Unfortunately, my family was also right in believing that Germany and France would do anything to ensure the currency’s survival, however foolish those attempts might be.

    There are now 2 countries on the brink of crashing, Greece and Spain. 2013 will be the critical year for both. If America falls over the Fiscal Cliff, then the end maybe hastened. If Germany and France persist in trying to keep these countries in the Euro, then Italy may go as well.

    In the end, it might be a (Middle East) war that shocks all the economies back to life, but even this would have long term consequences for Europe in general, especially power blackouts, millions of unemployed and destitute, starvation and crime in all (first world) European nations, including the UK.

  3. This brings rise to some intriguing questions regarding the motivations behind the creation of this chamber pot, the euro.

    Any chance the union was put in place to enable the WallySt to financially comandeer all EU nations together?

    More importantly, what made Goldman Sachs and Co think this charade would go on forever?

  4. The EU[SSR if you wish to add that suffix] is a political construct. It was never going to work or come about naturally, so even the founders [Monnet in particular] admitted it had to be done on the basis of lies and subterfuge. The idea of the Euro was an attempt to force the pace, by people who viewed any disastrous collapse as merely another opportunity to force another move forward.

    So in their view, it either would work, in which case they win, or it would eventually cause a collapse, in which case they could attempt to force political union, in which case they win again. What they don’t account for, is the possibility that the collapse would cause the whole edifice to fail. It seems to be a central concept of Common Purpose types, that chaos is as welcome as any other outcome, because this is an opportunity for “progressive forces” to move the project onward.

    And the Germans were very quick to spot the built-in export advantage they would achieve; the same as the Spanish and French were delighted to hoover up the fish and agricultural subsidies. Only the British were stupid enough to (1) play by the rules and (2) not recognise how utterly evil Heath was, lying through his teeth whenever he spoke on the EU subject.

    • I fully agree, Old Soldier. One explanation of Heath was that he was so unnerved by his wartime experience he was consumed by the need to ensure another European war could not happen. Whether true or not, I have no idea, this claim was made during a radio interview featuring the UK/EEC negotiators sometime in the 80s I believe. Even more frightening was their reported instructions to ensure negotiations were successful at any price, even to classifying North Sea Oil as a Common Community Resource like fish.

  5. It’s obvious what is going on in the EU. The ‘founding fathers and mothers’ of the EU are pushing hard for the long term goal and clearly care nothing for the problems they cause along the way. They quietly consider themselves the unchallenged and single-minded architects of a new federal EU and expect to achieve their goal within the next 20 years. Meanwhile, there will be (hopefully but not necessarily limited) collateral damage and at least one insufficiently communard country may have to leave rather than endanger the final outcome. C’est la vie. They have planned this from the start, and some of their fellow travellers, for example Edward Heath, were fully aware of that and saw it as some kind of divine legacy that they, as politicians with superior vision, would secretly provide for future generations. Thanks, Ted.

    Of course there’s a serious problem right now. It’s not that Greece etc are gravely corrupt and a good half century behind the northern countries, it’s that nobody has told those countries that will inevitably get poorer to support the south that their living standards will fall significantly and permanently in the process. That’s the federal way. Still, sufficient evasion and prevarication by northern politicians (and not just Merkel, see for example David Cameron and his hopelessly ineffective referendum spin), coupled with some of the most devious and non-transparent international financial schemes known to man, will – they hope – sustain the situation long enough for the general plan to prevail. Right now it looks as if the plotters are winning. Yes, the south is suffering but is that really important in the context of the prize of a federal EU? And the north has barely murmured in dissent. Even the French can’t make omelettes without breaking eggs, and there are already quite a few shells to be seen.

    • South it is not only Hellas and nobady in Europe would like a Federal EU with the Germans on the top.

      Economists always fail in predicting social behaviour and reaction and they will never do.

  6. If Cameron gets his speech WRONG next month about your relationship with the EU ……he could find that the Eurozone has already broken up by the time of the next election, and that alone will cost him dear.

    • @Gemz.: I’m not sure that I agree with you about it ‘costing Cameron dear’. He has until the May 2015 General Election to drag his feet on an actual UK Referendum, because that would be likely to cause a terminal split with the Pro EU Lib Dems and break up the Coalition Govt. Providing he satisfies UKIP supporters before the next General Election, he must reckon he is in with a fighting chance of keeping power in one way or another.

      My view is that Cameron will not want to risk a City of London being outside the EU (EZ) while the Euro is still rolling along, as that would bring a serious risk of a big move by major players off to Frankfurt. I think that he is ‘Betting the UK Farm’ on the Euro coming apart in the next 18-24 months to the point where many countries would be negotiating their EZ OR EU Exit positions at the same time. While I am very keen indeed for a UK Referendum, we could be very stupid to leave the EU by ourselves earlier, only to find that we would have been able to take a more leading role in setting up whatever follows as a European Trading Area by choosing our moment more carefully after the Eurocrash.

      Although the Sprouts and ECB have managed to achieve the survival of the Euro in 2012 (quite remarkably), I cannot see any way that Germans will happily back Merkel if there unlimted purchases of EUR 200B odd Spanish Sovreign and regional bonds by next September….let alone if Italy joins in the fray after February’s elections. ( I recall reading that their Bond redemptions are even bigger than Spain’s in 2013) and sooner or later it must surely occur to our Tutonic Taxpaying friends that it is all mainly using Their Credit Cards and that Buying Shares in Enron would be a better investment.

      So I expect a ‘Yes there will be a Referendum but not When’ speech from Cameron, with a view to keeping the UK Coalition together through 2013 and also keeping the threats of BREXIT up with the Sprouts. We will see !

  7. Sorry to disagree pf, but this article should be on the front of page of every news paper, but it won’t. Its good to see that someone had foreseen and warned. Those who ignored the obvious should be named and shamed, just to slow down the repetitive cycle of arrogance and stupidity.
    More worryingly it will never reach the MSM. Most people don’t seem to care and I don’t know how to reengage them?

    • Marginally O/T, but Hey Ho!
      richard ended his comment with :
      “Most people don’t seem to care and I don’t know how to reengage them?”
      For me, this is the most taxing question, and I expect it has several layers to its eventual answer. But I open that angst ridden question just a little, with the point that a group of people did once care, and were once engaged, but then disengaged. And as a boomer myself, I acknowledge that reengaging after a 40 year lapse of attention is difficult. I threw the tie-dyed ‘T’ shirt and flares in the bin, took on a mortgage, and a career, and now find that my social, political and monetary wellbeing is embedded in the very corrupt structures that I now despise.
      WTF happened ?
      What then, is the difference between the ‘Ban the Bomb’, generation of young boomers, that eventually ditched LSD and free love, for an office job and mortgage for the next 30+ years, and, the Occupy movement?
      The Occupy movement seen to ‘get it’, and are engaged, but do not seem to have the ‘gravitational mass’, that the young boomers of the 60′s had.
      Why is this?

  8. The only way the EU will work(temporarily) is by fiscal transfers. Canada has been on that track for a while but now we know that it does not work because the irresponsible partners continue being irresponsible.
    Example: My daughter pays 40.00 dollars a day for daycare in Ontario.
    The net debtor of our country (Quebec ) pays 7.00 dollars a day.
    Oh those frenchmen.

  9. Once again, the only explanation is that those who WANTED to make it happen NEVER had the ‘public interest’ at heart. Those who see the Eurozone as the first ‘world region’ for a world government and debt-based world currency neither, after all.

    We need to get smarter regarding PREVENTION of what the 1% are up to, methinks.

  10. Pingback: John Ward – The Euro Fathers : Stupid Or Cunning? – 30 December 2012 | Lucas 2012 Infos

  11. In the meantime the >Old Nick Heavenly Prize for Hype of this year, yes..; it is last years winner…The Imminent Death of the Euro. Second prize goes to ‘It is all Europe’s fault that the World is in a mess” with special mentions to Catherine Carr and JJ Forest, my favourite native American Indian for services to the PR industry

  12. So the 1%ers along with Common Pupose care little if a bloody war erupts in the heart of Europe and our youth are sent to spill blood over a currency?I was called quite a number of names for demanding a return of the guillotine-who is evil now?

  13. You may be a wonk, John, but you’re ever so good at this monetary stuff, of which I don’t have a clue. I’m much more at home with Savile and McAlpine (completely innocent) – that’s what some guy on tv was required to say yesterday (twice) – and I’ll give anyone a run for their money on McCann. So keep it coming, and a Revealing New Year to you – best wishes on the family front.

  14. Take into account the move at this time to trickle down economics,For trickle down economics to work you must use protectionist economics,what goes down doesn’t stay down long it must come back,Taxes/Tariffs,Price fixing this stifles entrepreneurial & should you succeed they buy you out.
    But to have this control you must encompass has many peoples has possible, irrespective of what problems that courses those peoples this step though is the equivalent of Hitler turning on Russia,whilst leaving Britain to the west,exchange China for Britain

  15. The Euro was definitely a cunning plan. Baldrick would have been proud of it. I can just hear Blackadder now saying “brilliant plan Baldrick with just one tiny flaw….. Its bollox”.

  16. An interesting report, John, but as one of the posters says…”Nothing new here”. What you are looking at is/was the advice given about the formation of a monetary European Union. That monetary union project was NEVER the end in itself. It was, as many people are now realising, a fake objective. In reality it was a step on the way towards World Union.
    The EEC was originally promoted as a structure which would defend its member states against common enemies such as cheap imports, cheap labour, corporate takeovers etc. Some of the people involved in the creation of the EEC truly believed in this stated purpose. But there were others involved who saw the EEC as merely a stepping-stone to a one-world globalist structure. As happens so often in history, the idealists were outmaneouvered by the plotting fanatics. The plotters never intended the EEC to work in the way it had been envisioned. They saw it as an inconvenient but necessary step towards achieving their world plan.
    If you doubt this, cast your minds back a little and ask yourselves….”When did the EEC change from a protectionist trading zone into a promoter of globalised free trade?” Did anyone see it happen? Did anyone shout from the rooftops…”our project has been hijacked by the one-worlders?” No-one did. The one-world plan was always there, it was hidden in plain sight and just as the EEC structure was being assembled, it was hijacked and then was driven away in another direction by those who had access to a bigger roadmap. The current financial problems of the EU don’t matter. You should have realised this over the past four years of your anticipating “an imminent collapse”. IT DOESN’T MATTER. It’s just another distraction.

    What to do about it?
    Nothing. It’s too late now. The structure of the One-World is completed. The traitors of our Nation-States are all in place. The idealists have been disposed of, and while the Empire’s radio, TV, newspapers and cinema keep you distracted, the mongrelization of Nation-State populations continues apace. There won’t be any mass uprising or insurrection because there’s no-one out there who realises this. In the unlikely event of remaining pockets of small-scale opposition, it will be bought off, or killed off.
    It’s OVER, folks! We’ve lost the war because we never even heard the shots! And most of us are still in denial.

    Kennyboy.

    • Kennyboy , Nice attempt to mask the whole thing as a “Hegelian” idea that is moulding history , some kind of divine masters whose design can only be understood or even appreciated when it is complete. “The owl of Minerva ” wrote Hegel,” flies only at the dusk” and like you say “it’s OVER folks ” .
      You are wrong Kenny and i don’t think is over because from the ancient times humans were driven and nurtured by the ideas of freedom and happiness and every time were treated like cattle by righteous megalomaniac parasites it ended badly.
      I like JW and read him because he believes in reason and he tries to explain the world around us .If we lose faith in reason and start saying that is nothing much that anyone can say or do but to familiarize himself with the chains of bondage , accustom himself to trample on his rights and lose the genius of his independence THEN we will be the fit subjects to cunning psychopaths .

    • Too many think tanks and round table groups involved for this not to be a staged event. The Bilderberg group dont meet annualy just to catch up as old friends!

  17. But it was such a crap plan.
    Go for monetary union early, cos you can’t be bothered working out fiscal unity, and then try and put the pieces together once the souffle explodes?
    They gambled on being able to control the chaos, without an army?
    And keep the greedy bankers onside for the duration?
    There has to be more to it than that.
    .. or less to it, I suppose.

    I always worry about conspiracy theories which gives the despot no great prize, and tonnes of headaches forever. The only way that makes sense is if the despot is a loonie. (and who is our despot, there must be one surely)

    Can greed be that short-sighted?

    • Not without an army. They counted on having a huge international army. What they didnt reckon on is the soldiers they were counting on to do their filthy work having something that they don’t have – conciences. Psychopaths don’t have conciences, but brainwashed hired assassins often do. Most soldiers are also wanting a peaceful and happy family life. Most people are not wicked and arrogant enough to have the desire to wipe out most of the rest of the human race and grab grab grab. The greedy devils who have been pulling all the strings are going to find themselves all alone without any big guns apart from what they can hold in their own feeble hands pretty soon.

  18. One way to conceive the motive and strategy in the formation of the Euro lies in the evolving nature of credit itself. As credit came unhinged from traditional bank lending with debt securitization the ability to pledge the same debt asset over and over again lead to the belief that credit was unlimited. So with Greece or Spain for instance any problems associated with economic imbalances could be taken care of by simply letting them borrow more.

    I suppose one can say the jury is out as to if credit can be truly unlimited. History and common sense say no. Even if monetary credit can be boundless there is the matter of environmental debt. In the meantime bankers and the financial sphere gain ever more wealth and power.

    • And who will ensure that it does? There’s much wishful thinking, and somewhat optimistic predictions of hope, but this predicted downfall of the psychopaths is always spoken of as something that will just ‘come about’ rather than in terms of how we must bring it about.

      I’m afraid that until we stop thinking the cavalry will arrive then their plotting will continue unhindered

      • But that is part of the point……… we cannot plan for it, as they cannot plan to prevent it.
        When people run out of food (or the ability to buy it) and shelter (and start dying on the streets). Their children start suffering (especially)….. then a spontaneous mass eruption will happen……. one person demanding will be joined by another and another……… until the thousands and then hundreds of thousands stand up and say ‘no more !’.
        A tipping point will occur when the ‘powerful’ use force against ‘the righteous’……….. and then it will be game over……… it was always so.

        Mankind demands freedom and the ability to live freely. To obtain the basic levels of happiness for life to be worthwhile. Mainly (mostly) people are prepared to work hard for this, especially men. When those that are not discover that they cannot survive………. the rubicon will be crossed. It is from the basest levels of society where the ‘rebels’ will start but will be joined by those whose similar (but slightly and justifiably different) interests are thwarted – which is from where the numbers of the ‘rebels’ will flow. This second type are a huge majority of (mainly male) people in this country.

        No sexism meant here by the way………. it is just that it will be the men who suffer most and worst (as they will be ‘responsible’ for their families problems, also, they are as singles, looked after worst by ‘the state’, which becomes even more apparant during hard times) and are prepared eventually to fight for themselves and their families to survive.

  19. By Greg Palast

    ”The idea that the euro has “failed” is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.
    That progenitor is former University of Chicago economist Robert Mundell. The architect of “supply-side economics” is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell’s research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency.

    Mundell, then, was more concerned with his bathroom arrangements. Professor Mundell, who has both a Nobel Prize and an ancient villa in Tuscany, told me, incensed:
    “They won’t even let me have a toilet. They’ve got rules that tell me I can’t have a toilet in this room! Can you imagine?”

    As it happens, I can’t. But I don’t have an Italian villa, so I can’t imagine the frustrations of bylaws governing commode placement.

    But Mundell, a can-do Canadian-American, intended to do something about it: come up with a weapon that would blow away government rules and labor regulations. (He really hated the union plumbers who charged a bundle to move his throne.)

    “It’s very hard to fire workers in Europe,” he complained. His answer: the euro.

    The euro would really do its work when crises hit, Mundell explained. Removing a government’s control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.

    “It puts monetary policy out of the reach of politicians,” he said. “[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.”
    He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.

    As another Nobelist, Paul Krugman, notes, the creation of the eurozone violated the basic economic rule known as “optimum currency area”. This was a rule devised by Bob Mundell.

    That doesn’t bother Mundell. For him, the euro wasn’t about turning Europe into a powerful, unified economic unit. It was about Reagan and Thatcher.

    “Ronald Reagan would not have been elected president without Mundell’s influence,” once wrote Jude Wanniski in the Wall Street Journal. The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics – or as George Bush the Elder called it, “voodoo economics”: the magical belief in free-market nostrums that also inspired the policies of Mrs Thatcher.

    Mundell explained to me that, in fact, the euro is of a piece with Reaganomics:
    “Monetary discipline forces fiscal discipline on the politicians as well.”

    And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain.

    Thus, we see that (unelected) Prime Minister Mario Monti is demanding labor law “reform” in Italy to make it easier for employers like Mundell to fire those Tuscan plumbers. Mario Draghi, the (unelected) head of theEuropean Central Bank, is calling for “structural reforms” – a euphemism for worker-crushing schemes. They cite the nebulous theory that this “internal devaluation” of each nation will make them all more competitive.

    Monti and Draghi cannot credibly explain how, if every country in the Continent cheapens its workforce, any can gain a competitive advantage.

    But they don’t have to explain their policies; they just have to let the markets go to work on each nation’s bonds. Hence, currency union is class war by other means.
    The crisis in Europe and the flames of Greece have produced the warming glow of what the supply-siders’ philosopher-king Joseph Schumpeter called “creative destruction”. Schumpeter acolyte and free-market apologist Thomas Friedman flew to Athens to visit the “impromptu shrine” of the burnt-out bank where three people died after it was fire-bombed by anarchist protesters, and used the occasion to deliver a homily on globalization and Greek “irresponsibility”.

    The flames, the mass unemployment, the fire-sale of national assets, would bring about what Friedman called a “regeneration” of Greece and, ultimately, the entire eurozone. So that Mundell and those others with villas can put their toilets wherever they damn well want to.

    Far from failing, the euro, which was Mundell’s baby, has succeeded probably beyond its progenitor’s wildest dreams.”

    • Then Mr Mundell might like to witness his handiwork at first hand?

      It appears that he advocates a type of fiscal survival of the fittest. One could only hope that he is sunning himself at his Tuscan villa at the very moment hungry hordes of roaming unemployed (and very angry) Italians come to call. In this way he might also witness the Darwinian version of his policies enacted.

      • @Phil Good post ! Intersting and makes a lot of sense…….. all the ends tie up nicely…………..@Don equally good post……….. the peoples response to a starvation diet at the hands of the ‘self righteous’ would be ‘rulers of the univesrse’.

  20. Pingback: 5 Star Blogging « Autonomous Mind

  21. Yes, but it does mean you can be served a full cooked English Breakfast, or a Pint of Beer for 1 Euro (88 pence) in Benidorm.

    How exactly does this work?

    Well Spain has over 50% youth unemployment…

    So Spanish Labour is extremely cheap (probably a few Euros in hand)

    This brings down the local costs of everything that is locally produced – despite the fact that they can’t do this at the national level and devalue their precious Euro.

    So maybe a fixed currency could work across completely different borders and zones.

    The US Dollar is used in many countries in the world – many of which are very poor.

    Tony

  22. What I just don’t get is exactly why so many of you – lets face a few facts here as I doubt many of you have opposed the whole wretched project from the very beginning – were taken by this crap ? The Euro can never, and could never, work. Why did so many think it could ? It was arrant nonsense from the start.

    So Wardy why don’t you read ‘The Rotten Heart of Europe’ by Bernard Connonly. Although a critic of the ERM it is spot on the money also re the Euro. He was a British EU Official whom the EU Fascist Machine sacked when he wrote the book !

    • Andy , why did so many think it could? the answer is the same like in so many cases in history and in our small lives too ( from Napoleon’s invasion of Russia to miserably failed marriages ) : they all looked like a great idea at the time !

      • True. Delusion knows no bounds. Trouble is the Euro has not worked as all the politicians and most economists predicted. If anything it has done the opposite of what they predicted. It is voices like Bernard Connolly and the Eurosceptics who have been proved to be correct. But what pleasure is there for people like me who have been proved right when we see the suffering being inflicted upon the Greek people ?

  23. Some of us are old enough to have voted against joining the (then) EEC. And we did. The desperate, fluff-filled propagandized campaign to join was sufficient for even some of the poorly informed populace to smell the rat back then.

    As Mundell (above) is quoted as saying “It puts monetary policy out of the reach of politicians”. And not just those tied to the Euro. As he finally gets to sit on his Monti-sanctioned Thomas Crapper he should not be too surprised then to discover his Cunning Plan resurface (see: “The Conversation”).

  24. Sir Alan Waters, Margret Thatcher’s Economic Adviser, warned back in the late eighties about the Single Currency (Euro), and in particular the ERM. I remember Thatcher herself, saying that, “You cannot have monetary union without political union.”

    Sadly, this is not new. We were warned about the EEC/EC then, and the EEC back in the seventies. We are being warned about the EU now but, things are different. In the seventies, eighties and early nineties we did not have the internet. Today we can get our new from a multitude of sources and a never ending array of languages.

    People, I hope, will now start to wake up to the danger that lies a head. For the UK their still maybe time, but I am not hopeful.

    I do not believe the Euro will fail. As mentioned above, better that the economies and the people suffer, as this will drive out closed-shop practices and the like. It will also increase competition, and drive down market rates without resorting to inflationary measures, a traditional method by the ‘Club-Med’ states when dealing with their debts.

    • It all depends on how you define ‘fail’ and how you define ‘succeed’. At the moment you have an unemployment rate in Spain of 25% and probably the same in Greece. Since the chickens started to come home to roost the Greek economy has shrunk by 25-33%. That contraction is not going to be rebuilt anytime soon. I don’t see the ‘depression’ in Greece, Spain etc being dispersed in the next few years. As Silvo Berlusconi pointed out the Euro has not been great: Italy has not grown much in well over a decade.

  25. Humans in any time of their history and in any part of the World fought and still fighting for their freedom.

    There always some who historically believe that freedom is exclusively their property causing to much pain to humanity and they still do.

    Certainly historically they have always failed and they will fail again.

  26. It was partly done because it was a necessary step to political integration and there’s always been a fear that if the process stalled or was reversed, the whole thing would fall apart. It was never envisioned to work right off the bat but to create a crisis within which further integration, impossible to achieve by consent, could be forced by means of a crisis which offered further integration as a more palatable alternative to total chaos.

  27. Pingback: 40 years after Solzhenitsyn, ‘We never make Mistakes’ is alive and well among the technocrats. | The Slog. 3-D bollocks deconstruction

  28. Pingback: 40 years after Solzhenitsyn, ‘We never make Mistakes’ is alive and well among the technocrats. | The Slog. 3-D bollocks deconstruction

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