In my opinion, the European Economic Community (EEC) now called the European Union (EU) in my opinion is flawed in many ways. I have covered this topic many times before and I do not want to go over old ground, if it really interests you, you can check out all the historical blogs on my website.
The original idea of the EEC was “free trade” to compete with EFTA (The European Free Trade Association). This I agree with.
What I cannot get my head around was all the talk years and years ago about: -
Currency Union
Economic Union
Banking Union
Tax Harmonization Union
Foreign Policy Union
Social and Welfare Union (The Social Chapter)
Agricultural / Production Quota Harmonization
Well… we have the currency union and that's a screw up.
Where are the rest? ….
Like I have said before: -
19 countries using the same chequebook does not work
It then becomes all about trust
A Central Bank (ECB) is a great idea but all country central banks are then in straight jackets unable to act independently.
So many different cultures in a meeting = no agreements
I can extend this list. The above is a poor recipe for problem solving. Not that politicians are problem solvers in any case, they are more like blame attributers.
Ask yourself, when has the Eurozone ever agreed on anything? Yes, I thought for a while and couldn’t come up with anything.
A great example of a union… not!!
Born out of a desire of France and Germany to work closer together on a broad range of subjects it really has flattered to deceive.
There is no trust in the Eurozone that's why it is what it is and that is why it is where it is…it defers all decisions by kicking cans down the road.
The only business to benefit since the inception of the Eurozone in my opinion is the hospitality industry. The amount of meetings in Brussels with Eurozone leaders and/or Finance ministers is overwhelming; sales of cheese, pate and fine wines are through the roof.
About a month ago the new Greek government formed by the Syriza party came to power on the back of a manifesto promising changes to the Greek population, who had been under the “cosh” of harsh austerity for a number of years, that frankly did not work.
The Germans who rule the Eurozone said austerity should have worked so that’s it…it should have. The fact it did not for whatever reason or reasons is totally irrelevant to the German mindset. Here is a trust issue where the periphery don’t believe or trust the “German” approach. So much for a Union!
Over the past month Alexis Tsipras (Prime Minister) and Yanis Varoufakis (Finance Minister) have both been backwards and forwards to meetings in Athens, Brussels, Berlin and Frankfurt trying to re-negotiate the best deal that they can as they simply cannot pay for the current deal (Bailout 2), they require ACT III in the Greek tragedy (Bailout 3).
The fact that these meetings have produced nothing by way of a settlement or agreement is in the eyes of the Greeks, just negotiation up to and beyond a deadline. This is totally foolish and completely crazy as far as the Germans are concerned. Where is the trust here?
It is widely published that the Greek government will run out of cash in April, I have read that it will be somewhere from the 9th to the 20th of April as dates.
In the interim, uncertainty rules, there are rumours about a “grexit”, there are rumours about capital controls being instigated to stop a “run on the banks”, and there are rumours that the printing presses are churning out the new Drachma notes ready for a launch.
At the same time we read that the Greek long awaited list of economic overhauls to satisfy the Greek creditors namely the Eurogroup, ECB and IMF will be with the Eurogroup tomorrow, Monday 30th March 2015 at the very latest.
Greece is in a corner
However, the Greek officials know that a “grexit” would really harm the single currency. If a member country left the ‘union” and was able to revalue with its own currency to get itself back on its feet by moving in the right direction with a little inflation to achieve growth, and was debt reduction free from the shackles of Germany and the ECB, it could prompt more countries like Portugal, Italy and Spain to think about a move away from the single currency too. If it is not the governments that are in power at the moment then it would be the opposition parties whether they are far left or far right that would jump on the bandwagon. There could be a groundswell of public opinion that is anti-European.
In addition, the French and German’s have the most to lose if there is a “grexit”, as they have most money invested in Greece if it defaulted, which, a “grexit” would include.
Not much of a union after such a long time… no trust between partners.
There are faults on both sides and there is NO trust at all. This is what you get from an ill-conceived alleged union that quite frankly has never acted as a union in its history.
As I said last week and very little has fundamentally changed: -
Austerity did not work; it is still not working and refinancing the Greek debt is just avoiding a default. No matter what is done, the Eurogroup policy on Greece, with or without the IMF (International Monetary Fund) hooked into the deal along with the ECB to form the Trioka to make it look like a wider base of support and aid was going to fail before it even started.
Greece needs debt relief.
The Eurogroup needs to suck it up and provide a “Cash Back” deal to Portugal, Ireland, Cyprus etc. in fact, any country that has effectively had a bailout of one sort or another from the Eurogroup since the 2008-9 crash.
It is so straightforward – if they do nothing they risk another financial crash, another run on the banks, negative growth Deflation… this list can go on for pages.
Suck it up….
Austerity was not the way. It has not worked, and for Germany to continue down this road with the same old same old is complete and utter bollo**s. There are 19 countries using the single currency, 19 vastly different cultures that approach all aspects of life and business from a different perspective. One size does not fit all.
These are high stakes. It has taken Mario Draghi at the ECB years to create some stability. This is the ultimate risk. The credibility of the German approach, I would say stubborn approach. They appear totally intransigent to an alternative.
The “union” is not at risk because there never was one from the perspective of a united front. However, the “union” is at risk if Greece exits and it is seen to be a really positive move for Greece moving forward. The fear would then be that other member countries of the single currency would also consider an exit.
This is not over… tomorrow is a big day and I think it will all end in tears very soon.
The original idea of the EEC was “free trade” to compete with EFTA (The European Free Trade Association). This I agree with.
What I cannot get my head around was all the talk years and years ago about: -
Currency Union
Economic Union
Banking Union
Tax Harmonization Union
Foreign Policy Union
Social and Welfare Union (The Social Chapter)
Agricultural / Production Quota Harmonization
Well… we have the currency union and that's a screw up.
Where are the rest? ….
Like I have said before: -
19 countries using the same chequebook does not work
It then becomes all about trust
A Central Bank (ECB) is a great idea but all country central banks are then in straight jackets unable to act independently.
So many different cultures in a meeting = no agreements
I can extend this list. The above is a poor recipe for problem solving. Not that politicians are problem solvers in any case, they are more like blame attributers.
Ask yourself, when has the Eurozone ever agreed on anything? Yes, I thought for a while and couldn’t come up with anything.
A great example of a union… not!!
Born out of a desire of France and Germany to work closer together on a broad range of subjects it really has flattered to deceive.
There is no trust in the Eurozone that's why it is what it is and that is why it is where it is…it defers all decisions by kicking cans down the road.
The only business to benefit since the inception of the Eurozone in my opinion is the hospitality industry. The amount of meetings in Brussels with Eurozone leaders and/or Finance ministers is overwhelming; sales of cheese, pate and fine wines are through the roof.
About a month ago the new Greek government formed by the Syriza party came to power on the back of a manifesto promising changes to the Greek population, who had been under the “cosh” of harsh austerity for a number of years, that frankly did not work.
The Germans who rule the Eurozone said austerity should have worked so that’s it…it should have. The fact it did not for whatever reason or reasons is totally irrelevant to the German mindset. Here is a trust issue where the periphery don’t believe or trust the “German” approach. So much for a Union!
Over the past month Alexis Tsipras (Prime Minister) and Yanis Varoufakis (Finance Minister) have both been backwards and forwards to meetings in Athens, Brussels, Berlin and Frankfurt trying to re-negotiate the best deal that they can as they simply cannot pay for the current deal (Bailout 2), they require ACT III in the Greek tragedy (Bailout 3).
The fact that these meetings have produced nothing by way of a settlement or agreement is in the eyes of the Greeks, just negotiation up to and beyond a deadline. This is totally foolish and completely crazy as far as the Germans are concerned. Where is the trust here?
It is widely published that the Greek government will run out of cash in April, I have read that it will be somewhere from the 9th to the 20th of April as dates.
In the interim, uncertainty rules, there are rumours about a “grexit”, there are rumours about capital controls being instigated to stop a “run on the banks”, and there are rumours that the printing presses are churning out the new Drachma notes ready for a launch.
At the same time we read that the Greek long awaited list of economic overhauls to satisfy the Greek creditors namely the Eurogroup, ECB and IMF will be with the Eurogroup tomorrow, Monday 30th March 2015 at the very latest.
Greece is in a corner
However, the Greek officials know that a “grexit” would really harm the single currency. If a member country left the ‘union” and was able to revalue with its own currency to get itself back on its feet by moving in the right direction with a little inflation to achieve growth, and was debt reduction free from the shackles of Germany and the ECB, it could prompt more countries like Portugal, Italy and Spain to think about a move away from the single currency too. If it is not the governments that are in power at the moment then it would be the opposition parties whether they are far left or far right that would jump on the bandwagon. There could be a groundswell of public opinion that is anti-European.
In addition, the French and German’s have the most to lose if there is a “grexit”, as they have most money invested in Greece if it defaulted, which, a “grexit” would include.
Not much of a union after such a long time… no trust between partners.
There are faults on both sides and there is NO trust at all. This is what you get from an ill-conceived alleged union that quite frankly has never acted as a union in its history.
As I said last week and very little has fundamentally changed: -
Austerity did not work; it is still not working and refinancing the Greek debt is just avoiding a default. No matter what is done, the Eurogroup policy on Greece, with or without the IMF (International Monetary Fund) hooked into the deal along with the ECB to form the Trioka to make it look like a wider base of support and aid was going to fail before it even started.
Greece needs debt relief.
The Eurogroup needs to suck it up and provide a “Cash Back” deal to Portugal, Ireland, Cyprus etc. in fact, any country that has effectively had a bailout of one sort or another from the Eurogroup since the 2008-9 crash.
It is so straightforward – if they do nothing they risk another financial crash, another run on the banks, negative growth Deflation… this list can go on for pages.
Suck it up….
Austerity was not the way. It has not worked, and for Germany to continue down this road with the same old same old is complete and utter bollo**s. There are 19 countries using the single currency, 19 vastly different cultures that approach all aspects of life and business from a different perspective. One size does not fit all.
These are high stakes. It has taken Mario Draghi at the ECB years to create some stability. This is the ultimate risk. The credibility of the German approach, I would say stubborn approach. They appear totally intransigent to an alternative.
The “union” is not at risk because there never was one from the perspective of a united front. However, the “union” is at risk if Greece exits and it is seen to be a really positive move for Greece moving forward. The fear would then be that other member countries of the single currency would also consider an exit.
This is not over… tomorrow is a big day and I think it will all end in tears very soon.
