Saving the eurozone has come down to two countries, France and Germany. President Sarkozy and Chancellor Merkel are meeting today to try and craft a common proposal to save the eurozone and the EU,but their differences are fairly wide.
The Germans are desperate to preserve the eurozone because their economy depends on exports, and returning to the Deutschmark would create a rise in the prices of German products. On the other hand, German taxpayers are fed up with costly bailouts.
Merkel wants a 'federalized' eurozone to enforce budget discipline and to have euro zone states surrender the control of their budgets to a European authority with veto power and the ability to punish governments that step out of line.
France opposes this, and Sarkozy, with only five months to go before elections, is taking major criticism from his political opposition and the press over handing French sovereignty to unelected EU officials.
At that, a proposal along the lines of what the Germans want might necessitate a change in the EU treaty.
It'll be interesting to see what they come up with.
Meanwhile, Italy has joined Greece, Spain, Ireland and Portugal as another country whose debt is out of control and may need an EU bailout.
"The Germans are desparate to preserve the Eurozone because their economy depends on exports and returning to the Deutschmark would create a rise in the price of German products. On the other hand German taxpayers are fed up with the bailouts." Translation: Germany wants to control the EU nations and they want the benefits of such control but they don't want the cost that is associated with such control. A serious and sober people would carefully examine the costs of the bail outs and compare that to the benefit accrued through control of the Eurozone and decide if it is worth it or not.
ReplyDelete"Merkel wants a federalized Eurozone to enforce budget discipline and to have Eurozone states surrender control of their budgets to a European authority with veto power and the ability to punish governments that step out of line." Translation: Merket wants a federalized Eurozone controlled by Germany to enforce budget discipline and to have Euro zone states surrender control of their budgets to Germany who will have veto power and the ability to punish governments who refuse to bend to Germany's will.
Of course Mr. Sarkozy is taking criticism from the opposition. There are no doubt a great many Frecnh people who are understandably quite hesitant about surrendering their control of their nation to Germany.
"At that a proposal along the lines of what the Germans want might necessiate a change in the EU treaty." The question will be how much control Germany is willing to give up. How much control are the other nations willing to surrender. My best guess is the Germans are not going to be willing to give up much control and the other nations will give up quite a bit in order to have someone else pay their debts. Then again Germany wants the benefits of controlling the Euro zone but don't want the costs associated with it. Both sides are behaving like petulant children. On the one hand the PIGS and now Italy don't want to pay debts they accrued in good faith and Germany wants control but they don't want to take responsibility for the debts either.
"It'll be interesting to see what they come up with." Agreed. Ms. Merkel has all but threatened war if she and Germany don't get their way. If such reckless policies of trying to hold nations together who are not compatible is continued, it could well lead to war. Things like this attitude contributed greatly to major European wars in the past. The only way to prevent war is likely to abandon the idea of a Eurozone all together and to allow each nation to pursue its own interests independent of each other and each nation should work out arrangements with its creditors to pay off its debts on terms and amounts that are feasible for each country. In time with the proper leadership and financial prudence each nation in Europe and emerge from this stronger than they were before and peace and prosperity for all can be achieved but this is unlikely to happen until the powers that be abandon the idea of an EU or a Euro Zone.
In the meantime, the US certainly cannot afford to get drawn into another European war. We should immediately withdraw from NATO and redeploy those forces to places that enhance our national security. We have huge problems of our own. Trying to deal with Europe's problems is a distraction and uses precious resources that need to be used to address our own problems.
i think what they need, and/or, are looking for, is an economic czar.
ReplyDeleteif the EU can just eek out for about 12 more months, bawney fwank will be available.