The Autism Spiral? (obligatory loluk thread)

[Nax]

Oh, well, as long as the French and German governments are the ones who will end up directing the new power then everything will be fine, clearly they are competent and know what they're doing. Let's have them run the EU monetary policy and see how well it turns out. Oh, wait...

You really have to address the fundamental problem that however you define the people in charge they clearly have been stunningly incompetent. Handing incompetent people more power is foolish and seems unlikely to draw widespread support from the people that they're supposed to be governing.

A single currency is a nice ideal but the EU functioned acceptably without it and would probably do so again eventually if the Euro collapsed. The EU governent, whether you lay it at the feet of the bureaucrats, the French or German governments, or the elected members, simply isn't up to the job.

" it makes sense to have a unified currency in the same way it makes sense to have unified fiscal and monetary policies."

In other words, not at all... As we are now witnessing?

[Zeekar]

So who caught newsnight tonight?



It's been a long time since Paxman demolished someone that thoroughly. I almost, almost felt sorry for her towards the end.

That's humiliating.

[Bartholomeus Crane]

The goal of the EU is, and always was, greater integration of the nations of Europe. But what that means has changed over time, although it never was, and never will be the creation of some sort of United States of Europe. Given the setup of the EU (as it now is) that should be quite obvious: a system of supranational independent institutions and intergovernmental negotiated decisions by the member states. That there's a level of loss of sovereignty to these supranational independent institutions is as obvious as that there is a limit to that through those intergovernmental negotiated decisions by the individual member states. In other words: without the individual member states' fiat, none of those supranational independent institutions can force anything. We've seen this happening all over Europe with referendums saying no. Unlike the US, the EU can not 'force' compliance on anything in the sovereign nations of the EU, and this I doubt will ever change.

As I see it, the aim has always been focussed on further economic and financial integration, under the working assumption that trade prevents war. This was the aim of the ECSC, the ECC/EC, and now the EU. Political integration, as such, was never the aim, because not just the populace resist it, the national politicians do so as well. And personally, I'm fine with that, and no more.

The problem with the Euro is that for it to work it requires a higher level of political integration within the EU as well (Actually fiscal integration, but without fiscal independence there's no political independence either). And since that is not acceptable, and intergovernmental agreements clearly don't do the trick, the possibility of the periphery countries having to leave the Euro is becoming quite real. So we're basically back to a 'two-speed' Europe again. Countries like Germany, France, the Benelux, Denmark, Austria, maybe Finland as well, will probably be able to stick to the Euro. The PIGS, and possibly Italy as well, may just be forced out/have to leave. Since I'm personally not convinced of the monetary domino theory, and since I doubt Germany or the other core EU countries will ever (be able to) put up the bailout money, I don't see any other way out.

So I wouldn't be surprised that quite soon, on some summit or other, there will be published some set of draconian rules for the PIGS (and others) to attain, with the rider that they'll automatically lose the Euro if they don't. Then it's just waiting around for the pins to fall.

Frankly, I'm not convinced that that isn't in the best interest of all involved as well, although the break-up of the EU is going to be very messy indeed ...

[Smuggo]

Bart, your posts might carry more weight if you actually knew which countries are in the eurozone.

[orcane]

Because that's clearly the most important part of his post. It also isn't possible at all to read that as "EUR countries minus PIGS and Italy" without getting really butthurt about him erroneously including Denmark.

[Smuggo]

Oh I understand the meaning, just find it amusing he doesn't know which countries are in the zone despite his many lengthy posts on the subject.

[Lallante]

Bart's posts might carry more weight if they were succinct and to the point.

[Bartholomeus Crane]

Yes, I know Denmark doesn't have the Euro, but it is financially and economically so closely tied to Germany that even though they don't have the currency, any effect on the Euro will translate almost directly to the DDK anyway. So we can just as well lump it in with the rest of those 'core' EU countries I mentioned. (Basically the same situation with the pre-Euro DM and the Dutch Gulden).

But well done on 'finding' the technicality. You do know that if I have to mention all of them, my posts will only get longer right?

Anyway (apart from countering the misconceptions about what the EU is actually setup to do) the point was that we're approaching the point that unless Germany's position on monetary policy changes (not likely), either the PIIGS have to let go of the Euro, or the Eurozone+ will have to get rid of the PIIGS. That will certainly be a messy process, but a total collapse of the Euro itself will be far messier still. So there might not be an option.

[Smuggo]

Yes, I know Denmark doesn't have the Euro, but it is financially and economically so closely tied to Germany that even though they don't have the currency, any effect on the Euro will translate almost directly to the DDK anyway. So we can just as well lump it in with the rest of those 'core' EU countries I mentioned. (Basically the same situation with the pre-Euro DM and the Dutch Gulden).

Sweden, the UK and Switzerland are also closely tied to the eurozone but you're not suggesting they're a part of it.

[Lallante]

I will bet money that everyone will "muddle through" somehow.

[Chrien]

The whole worlds economy is closely tied together. I think he should mention all 195 countries because its probably impacting on all of them

[Hast]

meanwhile in Norway:

http://www.frbsf.org/publications/ec...ter-2012-06-25

[Lallante]

What Hast hasn't told us is that those graphs show aggregate annual consumption of rotten fish products (Raake Orret)

[Smuggo]

meanwhile in Norway

Norway has a huge oil industry and has made a number of significant field discoveries in recent years so it's bound to be performing really well.

[Hast]

meanwhile in Norway

Norway has a huge oil industry and has made a number of significant field discoveries in recent years so it's bound to be performing really well.

Problem now is that unless you have parents who can provide collateral for your loan you literally can't save enough money to keep up with the price increases. And whats even worse is that I who own my own flat gets loads of tax deductions based on the interest I pay on my loan while people renting end up paying a lot more in taxes then me. And that is money that they should have been saving to afford to buy a place.

So unless you have wealthy parents or got in early you are basically fucked when it comes to the housing market. This is because you have rules saying you cannot loan more then 75-80%(can't remember exact value) of the value of the house. which in turn was put in place to make sure that people who cannot afford to buy didn't. While totally disregarding how much income the people actually have.

[GeromeDoutrande]

So house prices in Norway are not a problem because the country has discovered enough oil to burn down any surplus inventory?

[Smuggo]

meanwhile in Norway

Norway has a huge oil industry and has made a number of significant field discoveries in recent years so it's bound to be performing really well.

Problem now is that unless you have parents who can provide collateral for your loan you literally can't save enough money to keep up with the price increases. And whats even worse is that I who own my own flat gets loads of tax deductions based on the interest I pay on my loan while people renting end up paying a lot more in taxes then me. And that is money that they should have been saving to afford to buy a place.

It's also a big problem in the UK, still is to some extent though prices are largely stagnant but the cost of renting has gone mental recently. I just bought my first place but was only able to do that as my father-in-law came into a bit of money and helped us out. Most of my friends are just locked out or bought before the crash with 100% mortgages and are now stuck in their homes and can't move because of negative equity.

[Lallante]

meanwhile in Norway

Norway has a huge oil industry and has made a number of significant field discoveries in recent years so it's bound to be performing really well.

Problem now is that unless you have parents who can provide collateral for your loan you literally can't save enough money to keep up with the price increases. And whats even worse is that I who own my own flat gets loads of tax deductions based on the interest I pay on my loan while people renting end up paying a lot more in taxes then me. And that is money that they should have been saving to afford to buy a place.

I also got parental assistance but am glad to be on the ladder!
It's also a big problem in the UK, still is to some extent though prices are largely stagnant but the cost of renting has gone mental recently. I just bought my first place but was only able to do that as my father-in-law came into a bit of money and helped us out. Most of my friends are just locked out or bought before the crash with 100% mortgages and are now stuck in their homes and can't move because of negative equity.

[Aurora148]

Houseprices in the UK should drop much lower, but certain banking groups don't want that because a 5-10% drop would leave them insolvent.

Artificial bubbles yay

[Bartholomeus Crane]

Yes, I know Denmark doesn't have the Euro, but it is financially and economically so closely tied to Germany that even though they don't have the currency, any effect on the Euro will translate almost directly to the DDK anyway. So we can just as well lump it in with the rest of those 'core' EU countries I mentioned. (Basically the same situation with the pre-Euro DM and the Dutch Gulden).

Sweden, the UK and Switzerland are also closely tied to the eurozone but you're not suggesting they're a part of it.

Sweden, the UK, and Switzerland are nowhere near as closely tied to the eurozone as Denmark. Suggesting as much is one same level as suggesting the US is as closely tied to the eurozone as Denmark. It is basically on the same level as your earlier statement that the EU ultimate goal is to bring about a united states of Europe. Which is to say: pretty much retarded ...