Posts Tagged ‘Euro’

Pat Condell on the European Union

Friday, August 15th, 2014

Have another Pat Condell rant, this one on why Europe needs a revolution against the anti-democratic EU:

Walter Russell Mead Visits Europe

Thursday, October 17th, 2013

The indomitable Walter Russell Mead has been traipsing around Europe, and has much of interest to report from various countries there regarding the continuing slow-motion Euro crisis.

The Italians? Not happy.

The Italians feel caught in a cruel trap; the euro is killing them but they don’t see any alternative. When a German visitor gave the conventional Berlin view (the southern countries got themselves into trouble by bad policy, and austerity is the only way out; budget discipline and cutting labor costs are the only way Italy can once again prosper), a roomful of Italians practically jumped on the table to denounce his approach.

The Italian position is basically this: it’s crazy to blame Italy or the other southern countries (except Greece, which nobody seems to like very much) for the euromess; Germany played a huge role in designing the poorly functioning euro system in the first place and remains its chief beneficiary. When German banks lent billions to Spanish real estate developers and hoovered up the bonds of southern countries, where were the German bank regulators? German politicians, say the Italians, don’t want to admit to their voters that incompetent German bankers and incompetent German bank regulators wrecked the German financial system by making stupid loans worth hundreds of billions of euros. In a “normal” world, German politicians would have to go to their taxpayers to fund a huge bailout of insolvent German banks thanks to their cretinous euro-lending. Pain would be more equitably distributed between borrowers and lenders.

From an Italian point of view, much of Europe’s austerity isn’t the result of German moral principles; Italians think that a cynical absence of moral principles led the German political class to scapegoat garlic-eating foreigners in a desperate attempt to prevent the voters from noticing just how recklessly incompetent the German elite really is. Germany is using the mechanisms of the euro to force southern governments to bail out German (and French and other northern) banks at immense social pain and economic cost. The Italians, even sensible and moderate ones who want to cooperate with Europe, totally reject the logical and moral foundations of the German approach to the crisis, and they feel zero gratitude or obligation to make life easier for Germany as the drama unfolds.

The French? Not happy.

In France, the people I spoke with worried about the rise of the National Front. According to some polls the ultra-right could emerge as the biggest party in France in the next round of regional and European elections. The French Socialists under the increasingly unpopular President Hollande don’t seem to have much idea about how to move forward; their most popular politician at the moment is a Minister of the Interior who is trying to compete with the National Front for the anti-immigrant vote by breaking up encampments of Roma and denouncing them as immigrants who don’t want to assimilate.

Also they, and the rest of Europe, seriously misunderstand the Tea Party:

One of the reasons Europeans are so fearful of the Tea Party is that they assume that because it is right wing and populist it is like the National Front in France or Golden Dawn in Greece. Today’s small government American Tea Partiers are much farther from Huey Long and Father Coughlin in their political views than some European right wingers are from the darker demagogues of Europe’s bloody past, and until the European establishments understand this, they will likely continue to misjudge the state of American politics.

The Germans? It’s complicated.

There are Germans who sympathize with the Italian critique of EU austerity policy, but Germans on the whole seem to feel that in pushing a tough reform agenda in Europe, and linking further payments and bailouts to that reform agenda, they are doing their neighbors a favor. They sincerely believe that their own relatively strong economic performance is the result of their willingness to accept some liberalizing reforms coupled with a commitment to fiscal prudence. They think that by exporting this model they are helping other European countries on the path to lasting prosperity, and they believe that with some patience, the other European countries will soon begin to experience the benefits of German-style economic reform.

Europe, of course, has a very unhappy history with things labeled “German-style.”

Mead feels that Europe is rich enough to continue subsidizing it’s Euro-folly for the immediate future, but it comes at a cost:

The bitter public feelings generated by the euro crisis and its long, painful aftermath are still working their slow and ugly way through the European political system. In country after country we are seeing steady gains by political movements that bear a superficial resemblance to the American Tea Party, but in fact flirt much more with the kind of dangerous nationalist and chauvinist ideas that have proven so destructive in Europe’s past.

It’s a sobering, moderately lengthy read, and I commend all of it to your attention.

European Debt Crisis Update for July 22, 0213

Monday, July 22nd, 2013

It’s shaping up to be another busy week, so here’s a quick update on the European Debt Crisis front:

  • EU Debt burden hits an all-time high.
  • Greece shuts down its bloated, money losing ERT public television/radio network. “Problems with Greek democracy are not the reason that ERT was shut down. ERT was an extravagant public company. Many, though not all, employees were hired under suspicious conditions, due to favoritism and nepotism, and receiveddisproportionately large wages (8000 Euros per month through the financial crisis and 13000 Euros per month before).”
  • Taki (who is Greek) offers some pungent assessments of his home country’s continual crisis.
  • In Europe, the law is seen is “an obstacle rather than a foundation.”
  • Spain steals from tomorrow’s retirees to pay for today’s retirees.
  • Portugal refrains from blowing up for a little while longer.
  • Germany’s finance minister tours his vassal state.
  • Don’t expect the EuroZone to explode before German elections on September 22. Plus calls for an “EMU Truth and Reconciliation Commission.”
  • First review of UK’s relationship with EU comes to the conclusion that everything is just hunky dory.
  • European Debt Crisis Update for July 10, 2013

    Wednesday, July 10th, 2013

    The ongoing European Debt Crisis hasn’t ended, it’s merely undergoing a summer hiatus while the various bankers and Eurocrats involved in the shell game take their customary 8 week vacations. As such, expect a new round of crisis headlines to come rolling in during the fall.

    Remember: The purpose of the shell game is to let insiders unload their bad debts onto taxpayers. (Look how it was done in Ireland for pointers.) The shell game will continue as long as the insiders can get away with buying off restive electorates with an unsustainable cradle-to-grave welfare state.

    Europe’s present is our future.

  • Once again, Greece is being given money to pretend to reform. Look for more fake austerity, and another bailout in six months.
  • “Greece will never repay the money it’s been lent to ‘save’ it. The current debate over whether Greece has done enough by way of reform, tax hikes and spending cuts to have earned the next tranche of bailout funds is largely beside the point. If Greece is cut loose, or walks away, its euro-zone creditors will lose their money. The Greeks and the Germans are surely both aware of this. They’re also aware that Greece’s external debt position is far worse than when the bailouts began—when its debt stood at a mere 129% of GDP—and that any talk of debt sustainability in Greece has become a joke.” It’s now at 157% of GDP.
  • Predictably, Greek unions respond to more fake austerity and staff cuts by extending strikes.
  • Europeans realize that their governments are corrupt. Those who think they’re not corrupt? “In Spain that number is just 8 percent. In Italy, it’s 13 percent. And Greeks and Portuguese have the least trust in the world regarding their governments’ efforts: Just 1 percent of respondents say their government is making strides against corruption.”
  • And just how corrupt is Greece? “Politicians and journalists are viewed as on the take by most Greeks with 50 percent also saying they’ve had to bribe public officials to get services.”
  • Eurozone unemployment hits all time highs.
  • The EU is preparing a banking union bill. No word on whether it will require depositors to take haircuts like those in Cyprus in the event of a bank failure.
  • And speaking of bank failures, there are rumblings that Slovenia will require a bailout.
  • Portugal is still trudging through their own bank bailout…
  • …despite which they may still need another bailout.
  • Italy could be forced to beg for a bailout in six months.
  • UK actually proposes to roll back some 35 EU laws. This may be the first sign that Cameron’s wet Tories have actually noticed how effectively Nigel Farge’s UKIP is eating into their base…
  • UKIP itself says it’s a threat to the entire political class Well, let’s hope so…
  • Latvia is now set to join the Euro on January 1, 2014.
  • LinkSwarm for June 28, 2013

    Friday, June 28th, 2013

    It’s supposed to hit a 106° in Austin today. Sadly, not all of these links will help you keep your cool…

  • 12 different IRS offices targeted conservatives.
  • Over 1,100 patients were starved to death at NHS hospitals in the UK. Funny, I don’t remember that being mentioned in the Olympic tribute to how awesome NHS is…
  • Marco Rubio aide: We need illegal alien amnesty because American workers suck.
  • Blue collar Americans having trouble finding jobs. I’m sure that has nothing to do with our ruling political elite’s decision to allow unlimited illegal immigration of unskilled workers…
  • Every Republican voting for amnesty better get ready for a primary challenge.
  • Obama camapign workers convicted of voter fraud in Indiana. This was for the 2008 Democratic primary, so it will likely be many years before see starting seeing convictions for the Obama campaign’s various 2012 voting fraud efforts…
  • Noam Chomsky attending the opening of Hezbollah’s “Death to Israel” theme park.
  • People told me that if I voted for Romney, the U.S. military would start blocking access to liberal news sources. And they were right!
  • The Atlantic says that Obama “succeeded” in Libya but is failing in Syria. If Benghazi was success, I’d hate to see what failure looks like.
  • And speaking of Benghazi, Libya just let one of the suspected attackers walk. Thank God we have Obama’s smart, sophisticated diplomacy in the Middle East…
  • Beer now unaffordable in Greece. And you thought they had riots before…
  • Second Colorado Democrat faces a recall election over gun control.
  • Magpul to give away 1,500 30-round magazines just two days before Colorado outlaws them.
  • By the way, there’s a Facebook page to show support for bringing Magpul to Texas. But most of the rumors I hear have them moving to Wyoming.
  • The Amarillo Globe-News has a message for gun manufacturers thinking of relocating to Texas: Come on down!
  • Texas executes its 500th murderer. Don’t mess with Texas. Or we will end you.
  • Speaking of ending you: Don’t try to commit armed robbery in a concealed carry state.
  • Nurse Bloomberg continues to underwrite anti-gun ads, shoot himself in the foot. (Hat tip: Alphecca.
  • In order to prove vegans aren’t a creepy cult, website seeks to out and harass lapsed vegans.
  • The Onion channels Jay Carney: “Well, Time To Go Out In Front Of A Bunch Of People And Lie To Them.”
  • The mystery of Lori Ruff, AKA Becky Sue Turner. No one know who she actually is…
  • LinkSwarm for May 10, 2013

    Friday, May 10th, 2013

    For a shocking change of pace, the Friday LinkSwarm will be on Friday:

  • “How can we ‘gun people’ honestly be expected to come to the table with anti-gunners when anti-gunners are willfully stupid about guns, and openly hate, despise and ridicule those of us who own them?” Read the whole thing.
  • Sheila Jackson Lee wants a National Gun Registry.
  • The lovely qualities of Jihadi Facebook pages: “The further I crawled down the extremist rabbit hole and the more caved-in skulls and headless corpses I saw.”
  • Union politics helped create the Baltimore Booty House.
  • “The Euro cannot be destroyed by any craft that we here possess. It was made in the fires of Frankfurt. Only there can it be unmade.” What does it say when Sauron wants the ring, er, Euro destroyed as well? Though once again: Austerity hasn’t failed in Europe, it hasn’t been tried.
  • “It was one thing to do amnesty during the white hot Reagan economy of the mid to late 80s. It’s quite another to do it in the midst of the Obama depression.”
  • Harry Reid unwilling to bargain in raising the debt ceiling? I say fine and dandy. Just cut government spending across the board until the budget is balanced.
  • “Detroit in worse shape than previously thought.” I don’t see how that statement can be true for any story that doesn’t include the word “cannibalism.”
  • London mayor Boris Johnson thinks it would be a good thing for democracy if the UK were to just walk away from the EU.
  • Travis County Democratic District Attorney Rosemary Lehmberg is out of the clink after serving half a 45 day sentence for DWI. A jury will evidently determine “whether her drunken driving was habitual or whether the recent arrest was the result of a one-time event.” Because lots of people without alcohol problems suddenly decide “Hey, I’m going to go cruising around town with an open bottle of vodka and a blood alcohol level of .239! That sounds like a great idea!” I might believe that…if Lehmberg was 21.
  • Ted Cruz 1, Obama 0:
  • Spain IS Beyond Doomed, But It’s Not Practicing Real Austerity

    Tuesday, April 30th, 2013

    Take a look at these charts. Unemployment in Spain is up over 25%, and most have been unemployed more than 2 years. Matthew O’Brien is correct when he says that Spain’s inflexible labor laws contribute greatly to the unemployment, but errs when he says that “austerity hasn’t been the path to prosperity. It’s been the path to perma-slump.”

    Austerity hasn’t failed in Spain. It hasn’t been tried.

    Spain last ran a budget surplus in 2008, and since then it has engaged in deficit spending. In 2012, Spain’s budget deficit was 9.4% of GDP, and this year it will be 10.6% of GDP.

    Remember, real austerity isn’t trying to tax-and-spend your way to prosperity. Real austerity is cutting budgets until outlays match receipts. Estonia bit the bullet and balanced its budget, and its economy is now growing at a steady clip. Meanwhile, governments all across Europe continue to try the same deficit spending Keynesian pump-priming, and keep having the same recession. In most of Europe, “austerity” has meant digging their own graves more slowly rather that stopping digging.

    And European elites refuse to stop digging because their power and perks all stem from swaddling voters in an unsustainable cradle-to-grave welfare system.

    If all this sounds familiar, that’s because it is. Europe makes the same mistakes, gets the same results, and keeps doubling down on stupid, content to keep the farce running as long as they possibly can. Instead actually of solving the interrelated problems of debt, unsustainable entitlements, and the Euro, the Euroelite seem content to preside over the world’s slowest, most boring train wreck. Yes, it’s a pity the train is sliding inexorably toward the chasm, but there’s such fine vintages to be had in the saloon car, and it offers such a magnificent view of the coming crash…

    Greece: More Bailouts, More Fake Austerity

    Wednesday, April 17th, 2013

    While attention was focused on the Boston bombing, Gosnell, and gay marriage, Greece just got another bailout. This is in exchange for further “austerity.”

    What sort of “austerity” is Greece practicing? The sort that involves deficit spending at 10% of GDP, which is up from 9%. It was supposed to be cut to 7.5%.

    So Greece wants more money because it can’t even keep to its previous promises on its fake austerity goals.

    Let me explain it once again: Real austerity is cutting spending until it matches incoming receipts. Not reducing the rate of deficit spending. Not raising taxes so politicians can continue to spend.

    No country in the EU (at least outside the Baltics) has practiced real austerity. That Forbes piece on the Baltic nations includes a lot of good advice that EU nations are largely ignoring:

    Don’t run up big debts. It is a lot easier to manage when things go bad if you aren’t overextended to start. Observed Rosenberg: “Estonia’s experience shows that prudent policies during the boom may not avoid a bust, but they can put the country into a better position to deal with shocks.”

    Don’t engage in an orgy of “stimulus” spending. That will run up big debts without generating long-term growth. When budgets eventually are cut, as they will have to be, the economic loss and political pain will be even greater.

    Make tough decisions early. People typically are ready to act after the crisis hits. In the case of Latvia, argued Asmussen, by acting swiftly “most of the required painful budgetary decisions could be passed before the so-called ‘adjustment fatigue’ kicked in.”

    Maintain fiscal responsibility. Otherwise any progress will be transitory. Growth is the natural result of reform. Delaying reform exacerbates the problem while prematurely terminating reform short-circuits the recovery.

    Emphasize budget cuts. Expansive and irresponsible public outlays usually contribute to economic crisis. Moreover, the state as well as citizens should sacrifice after a crash. The answer is to cut expansive and irresponsible public outlays. In fact, economists Alberto Alesina and Silvia Ardagna found that “spending cuts are much more effective than tax increases in stabilizing the debt and avoiding economic downturns. In fact, we uncover several episodes in which spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions.”

    Finally, don’t rest on one’s laurels. There always is more to do. Even nations which have implemented serious reform programs, like the Baltic States, could make further improvements.

    As far as I can tell, none of the core EU states (and certainly none of the PIIGS) has tried this approach since the 2008 recession hit. They keep trying Neo-Keynesian pump-priming and deficit spending to keep both the Euro and their unsustainable welfare state afloat, and they keep experiencing endless recession. Their fake austerity comes in slightly reducing the amount of their deficit spending enough to pretend they’re in compliance to keep the bailouts coming. Ireland hasn’t practiced real austerity. Neither has Portugal, Spain, or Italy (though Italy has come closest).

    The shell game of bailouts and fake austerity will continue as long as the Eurocrats can keep getting away with it.

    Mid-Day Cyprus Bailout Update for March 26, 2013

    Tuesday, March 26th, 2013

    News keeps on churning…

  • Your live Cyprus bailout tracker. Some tidbits: British ex-pats are pulling their funds from Mediterranean banks. Also, bank managers in Cyprus have been given EU documents specifying how much money they can allow people to withdraw, only the documents have €xx where it says how much they’re allowed to withdraw. (Or maybe they’re just using Roman numerals, and the amount is 20 euros…)
  • Switzerland: We’re not stopping any money flows from Cyprus
  • “Given what we know now we can safely say no European Bank, or Government issued debt is safe. It is time to flee any investments in the EU financial institutions, most of which are over loaded with the useless Government paper they were forced to buy to improve their capital ratio’s. If you have deposits in the EU, they are not safe from Government seizure, Greece, Italy, Spain, Portugal and Ireland are the front line risk, but the rest of Europe can not be considered secure. If you are a holder of any form of European Bank security, exit it fast. Many countries in Europe are on thin ice in terms of debt, and the ECB will not help.”
  • “No matter what the specific outcome from Cyprus over the weekend, Europe has now completely lost its ability to manage its debt crisis.
  • What it’s like to live in a cash economy with no cash.
  • The Euro bailout Hall of Shame. So far…
  • Lessons from the Cyprus Bailout

    Tuesday, March 26th, 2013

    So the Cyprus crises is “solved,” for values of “solved” that means “everyone but bankers and Eurocrats get screwed.”

  • “The message that stakeholders of all stripes can be coerced into helping a cash-strapped nation may make investors more skittish they’ll be targeted if Slovenia, Italy, Spain or even Greece again is next in line to need help. The risk is that bank runs and bond market selloffs become more likely the moment a country applies for a new rescue.” A funny definition of the word “helping.” Like “helping” a mugger holding a gun to your head.
  • And just in case you think I’m exagerating: Cyprus is seizing money from people at the border.
  • “Why would anybody keep more than €100,000 in a Greek or a Spanish or an Italian bank?…In short, the Dijsselbloem plan was a plan to bankrupt southern European banks and make southern European euros worth less than northern European euros. In case you were wondering, this is the farce stage of the euro tragedy.”
  • UKIP Leader: Get your money out of Spain while you have the chance:
  • “If we are seeing the limits of German willingness to support eurozone bailouts when the numbers don’t matter, what will happen when the numbers do matter very much?”
  • Legal Insurrection has a few more lessons.
  • The European cradle-to-grave welfare state is unsustainable. It’s only a matter of how many trillions will be destroyed before the world is willing to face that fact.