A beneficial crisis. Or is it?

When does a crisis stop being beneficial?

The package to rescue the euro zone cobbled together last weekend did not have the lasting effect many had hoped for. After a brief spike of the markets on Monday the rest of the week saw the European stock market and the euro continue their slide downward. Dr. North of EURef is illustrating his thoughts on the euro (in a post aptly titled 'Crash and Burn?') with a picture of a plane in a rather dire state.

A report in the Financial Times(via Euro Intelligence) has it that at first 'the growth implications of the austerity packages ha[d] not yet filtered through to the financial markets'. The FT reports that investors are getting scared by two factors – the prospect for economic growth in view of the austerity programmes, and the now prevailing assumption that the ECB is likely to keep lose monetary policies irrespective of inflationary developments.

This state of affairs does not prevent the EUrocrats from trying to get the maximal benefit from what they evidently view as yet another of those 'beneficial crises', that provide an opportunity to further centralize political powers in Brussels, while the citizenry is preoccupied with the drama of the moment.

Bruno Waterfield warns us that Herman Van Rompuy, the EU President, has set up a task force to build a new "gouvernement économique" to cover all 27 member states of the Union. This new body, with strong support from France and Germany, holds its first meeting on May 20.

First among the more infuriating aspects of the plan is the stipulation for EU powers to vet budgets of the 27 member states before the draft laws have been presented in the parliaments of respective member states.Says Ambrose Evans-Pritchard: "Fonctionnaires and EU finance ministers will pass judgement on the British (or Dutch, or Danish, or French) budgets before the elected bodies of these ancient and sovereign nations have seen the proposals. Did we not we not fight the English Civil War and kill a king over such a prerogative?"

Rather surprisingly, given the Germans opposition to handing over money to delinquent governments like the Greeks,  Angela Merkel seems to be in full support.
"If the euro fails, not only the currency fails. Europe fails too, and the idea of European unification. We have a common currency, but no common political and economic union. And this is exactly what we must change. To achieve this - therein lies the opportunity of this crisis."
Or, in other words: Never waste a good crisis.

But the acquiescence of Mrs. Merkel is all the more puzzling in light of the (apparently successful) attempt at naked extortion by French president Nicolas Sarkozy, who, according to the Australian, threatened to pull France out of the euro zone last weekend, if Germany would not agree with the monstrosity delivered late last Sunday.

Back to the question that started this post. It would seem to me that a beneficial crisis is one that is in essence contained, but is allowed to rage within such parameters as our leaders deem necessary to meet their objectives. But what if the crisis grows beyond the control of even the leaders?

Even in the Netherlands the call to bring back the guilder (NL) is growing stronger every day. And slowly it is dawning on the financial markets that, despite the rescue-package, Greece will probably not be able to repay her debts (it really is a measure of the total and utter irresponsibility of the entire Greek apparat to have let it get this far). Thus leaving the 'colleagues' between a rock (increasingly unwilling citizens) and a hard place (increasingly skeptical markets).

I find myself strangely optimistic these days. Yes, there is a financial storm heading our way. And it will be a bad one, leaving many (possibly including yours truly) without a meaningful job. We probably have to prepare ourselves for some hard times ahead. But if we have to suffer that to be rid of the anti-democratic and rather tyrannical cabal roaming around Brussels, it will be worth it.

The EUnion was built on the foundation of strong economies in Western Europe, and the promise to adhere to the 'stability pact'. Or rather, it latched on like the parasitical bloodsucker it really is. While I am aware the cost in human misery my deepest wish entail, I do hope that the economic crisis deepens to the extent that the EUnion collapses under its own weight. Only then will we be able to rebuild our nation and our continent in a manner the EUnion so utterly falsely claimed it would: Prosperous, free and sovereign.

And as to Napoleons retarded nephew threatening to leave the euro: F..k you! I dare you, you miserable schmuck. Ever since the even when we were a 'Community', rather then the EUnion that is holding us in a death grip right now, we have been handing you money to prop up your agricultural sector. You think you can do it by yourself? By all means, go and piss off and leave us to spend our money on our own stuff, you bug-eyed midget!

(With my apologies to my regular reader for this sudden outburst of rather blue language).

Related reading:
Financial Times: Europe’s missing foundations
Business Week: Euro Breakup Talk Increases as Germany Loses Proxy

11 reacties:

DP111 zei

This is also an interesting read along with EURef

Saving Denmark from Greece

EuropeNews 11 May 2010
By Henrik R Clausen

DP111 zei

This is also an interesting read along with EURef

Saving Denmark from Greece

EuropeNews 11 May 2010
By Henrik R Clausen

http://europenews.dk/en/node/32031

Durotrigan zei

If this crisis precipitates the collapse of the EU enabling its constituent nations to become free and sovereign once again, then it will have been a price worth paying. As free sovereign nations, we will be able to build a better future for our peoples and stand a stronger chance of reversing the tide of Islamisation.

Klein Verzet zei

Yes, my sentiments exactly...

DP111 zei

KV

There is just one caveat I wish to add about the collapse of the EU and more importantly the Euro.

If the Euro collapses, then the US dollar becomes the only reserve international currency. This gives the US government total power to manipulate the currency, that is the dollar to its own convenience. As it is the only one allowed to print dollars, it will do if it thinks it can downgrade its debt to those who have exported real products to America. This can be lethal for all of us, particularly as America is no longer the manufacturing country it once was.

I would therefore like the Euro be an alternative reserve currency, thus keeping the Americans honest, and vice versa.

So we have a problem - To retain the Euro as a reserve currency, requires the EU, which we want to get rid of, as it limits the freedom of sovereign nations.

Is there a middle road. Can we limit the powers of the 'federal' EU, as in the US, retain the Euro, while giving freedom the nations within the EU? What I'm suggesting here is that we use the Euro as a common currency, but retain all our freedoms and sovereignty as national actors.

DP111 zei

What I'm suggesting is that we use the Euro as a common currency, but disband the EU.

Is it feasible?

DP111 zei

Richard North in EURef

The prospect of the euro collapsing is serious. Despite our willing it to happen, the impact on currency markets and the EU member state economies would be catastrophic – and prolonged. We could quite easily see Europe dragged into a depression, the like of which made the 1920s look like a rehearsal.

Yet nothing of this seriousness, of the danger, seems to pervade the British media. Even The Sunday Times writes of it in "tee hee" terms, as if it were a German problem, reporting in loving detail the difficulties that Merkel is encountering. There is no hint of the devastating effects that a collapse might have on the UK.

http://eureferendum.blogspot.com/2010/05/germany-falling.html

We should be very careful. The collapse of the Euro will trigger a catastrophe in Europe. That is the last thing I want.

For a start, how does one disentangle the Euro from each country?

Klein Verzet zei

BTW, I did read what Richard wrote earlier this evening. And I concur heartily. We may get our freedom and sovereignty back, but the price will be a steep one. A very steep one. It will probably end Europe as a leading region in the world for years and perhaps generations to come. This time there will be no Marshall plans to get us back on our feet.

Even as I wish the death of the EUnion, I lie awake thinking about what that wish would entail (at the same time it sends me into a towering rage to think that generations of politicians were so ideologically blinkered that they sent us down this bitter path).

Klein Verzet zei

Via Fausty's I just found an interesting article exploring the one scenario missing from the Euro Intelligence study: German Windfall Profits From Exiting The Euro. The writer of this article argues that Germany might even gain (in the longer term) from an early exit.

It completely ignores the geo-political implications though, so your mileage may very.

DP111 zei

KV

I linked "German Windfall Profits From Exiting The Euro" at EURef. Most foubnd it very informative.

As you know, I'm no lover of the EU, but after reading the the article, pure self-interest made me re-consider. The collapse of the Euro would be catastrophic for me, even though the UK is not part of the Euro zone.The reason is that the London financial markets are heavily exposed to the Euro. Which means all my investments are one way or other tied to the Euro. A German withdrawal would therefore affect the UK quite dramatically and me as well.

One question that the article did not address was how Germany could exit the Euro. If it did so publicly by giving a warning of say a week, then everyone with Euros would immediately flock to Germany and open a Euro account in a German bank, in Germany. Come the day, all Euros in Germany or in German banks will become new D-marks. In effect, all that would have happened is the Euro would still be there but as D-marks. Nothing would have changed except that Germany would be styck with an inflated currency.

Now I'm no financial expert, but this what I would do if I were Greek or anyone with lots of Euros. Fly or drive to Germany, and open an account in a German bank.

DP111 zei

Another good article

Why the Euro Is Doomed

Now a vicious conundrum has emerged: If Germany lets its weaker neighbors default on their sovereign debt, the euro will be harmed, and German exports within Europe will slide. But if Germany becomes the "lender of last resort," then its taxpayers end up footing the bill.

http://oilprice.com/Finance/Economy/Why-the-Euro-Is-Doomed.html

For individuals such as I, who have worked hard and saved, to see their investments and pensions vanish because of the utopian socialist fantasies of the political elite, is simply too galling to put on display. These bums have made sure that they get their huge index linked pensions and golden handshakes, while they leave ordinary people to carry the burden.

It is such events that cause revolutions, with all that entails for the political elite.

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