[Aberlour10]

The idea of the common European currency came on agenda already in 70's and 80's, but there was no chance to realize this project. It would never pass the german parliament to those times. And then came suddenly and unexpected the chance for a fast reunification of the country. Chancellor Kohl met following situation:

Gorbatschov said YES

Bush said YES

Mitterrand said "Depends On"

Thatcher gave a "silent" NO

Today we know, the french president was the deciding player,he got Euro for his YES. No official agreement has been signed, but its sure. that was the price. Ms Thatcher was all alone.

[kenberg]

Aberlour10, on 2015-July-18, 12:47, said:

The idea of the common European currency came on agenda already in 70's and 80's, but there was no chance to realize this project. It would never pass the german parliament to those times. And then came suddenly and unexpected the chance for a fast reunification of the country. Chancellor Kohl met following situation:

Gorbatschov said YES

Bush said YES

Mitterrand said "Depends On"

Thatcher gave a "silent" NO

Today we know, the french president was the deciding player,he got Euro for his YES. No official agreement has been signed, but its sure. that was the price. Ms Thatcher was all alone.

It's been five years since you started this thread and I am wondering how your thinking has evolved since then. At the time i had the naive view of "Oh, a bump in the road, they will take care of it". The truth of course (and I never hid this) is that I had not thought much about it.

The last few weeks have made me pessimistic. I don't have any real opinion on whether the Euro will survive or not, but it is really hard for me to imagine that the Greece will still be in the Euro Zone a few years down the road, I could give reasons, but really I think everyone knows the reasons, it is just (just?) a matter of trying to see what conclusions to draw. I remain hopeful that I am wrong, but I just don't see how it is all going to work.

[Zelandakh]

kenberg, on 2015-July-18, 17:16, said:

I don't have any real opinion on whether the Euro will survive or not

The Euro is worth an unbelievably large amount to Germany and its export economy. This is the reason why Merkel was prepared to invest such a lot into holding it together in Ireland, Spain, etc. The change has come at home with voters upset at their money being "wasted" abroad and that has led to her hard-line stance with Greece. But that value means that it is very unlikely that the Euro itself will fall. Germany will fight tooth and nail to keep it together and, in general, what Germany wants in Europe it gets.

[Aberlour10]

Zelandakh, on 2015-July-19, 02:42, said:

The Euro is worth an unbelievably large amount to Germany and its export economy. This is the reason why Merkel was prepared to invest such a lot into holding it together in Ireland, Spain, etc. The change has come at home with voters upset at their money being "wasted" abroad and that has led to her hard-line stance with Greece. But that value means that it is very unlikely that the Euro itself will fall. Germany will fight tooth and nail to keep it together and, in general, what Germany wants in Europe it gets.

Its another masterpiece of Merkels ability for balancing acts. To show german voters and tax payers, she is hardliner, she stayed and stays hard, giving Germans the illusion their money is not completely lost. But she is willing to pay and will pay every amount the 3rd bailout package needed. This leads to the paradox: the anger about financial bailouts grows rapidly in Germany but Merkels popularity nowdays is best ever.

[Al_U_Card]

“Forget the politicians. The politicians are put there to give you the idea you have freedom of choice. You don't. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations that've long since bought and paid for, the senate, the congress, the state houses, the city halls, they got the judges in their back pocket, and they own all the big media companies so they control just about all of the news and the information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else. But I'll tell you what they don't want. They don't want a population of citizens capable of critical thinking. They don't want well informed, well educated people capable of critical thinking. They're not interested in that. That doesn't help them.”

― George Carlin

Comic(?) genius.

[kenberg]

I will try to put some items together in a narrative that I see as plausible:

1. Popularity of Merkel.
In post 377, Bernanke is quoted:
" Currently, the unemployment rate in the euro zone ex Germany exceeds 13 percent, compared to less than 5 percent in Germany. Other economic data show similar discrepancies within the euro zone between the "north" (including Germany) and the "south." "
I cite Clinton (or Emmanuel, oops I mean Carvilee, thanks Blackie):: It's the economy, stupid.
An over-simplification, sure. For example the UK has a fairly\y low rate also. But if your unemployment is four point something and the others nearby collectively have a rate of thirteen or so, you might well conclude that the Fraulein seems to know what she is doing.
I am not claiming that either blame or credit are always correctly placed in these matters, I am merely saying that the person in charge often is the one that is so honored.

2. Merkel objectives.
Several pages back, Krugman was quoted both as saying that the Euro was a mistake and that given it's existence it should be made to work as well as possible. This could match with Gerben's assertion that the Euro was forced on Germany and Zel's assertion that "The Euro is worth an unbelievably large amount to Germany and its export economy.". We have it, so let's save it.
That much is easy, but now I suggest something stronger. Merkel views saving the Euro as a much more important objective than saving Greece. In this view, the Geeks may or may not be able to cope with the plan, but the general course of Eurozone responsibility is being established in the direction that she believes to be right.


My above thoughts are not deep and presumably not all that original. But I try to put things together in ways so that I can say "Oh yes, I can imagine people making that choice". Tsipras calling the referendum made no sense to me so I assumed that it was a ploy to get Greece out of the Euro without him being seen as the primary mover of that event. I was wrong there. But the general story line above seems to me to be a pretty plausible explanation for Merkel's choices. It doesn't mean that she is right, but her behavior does not strike me as irrational.

[Aberlour10]

kenberg, on 2015-July-19, 07:34, said:

I
" Currently, the unemployment rate in the euro zone ex Germany exceeds 13 percent, compared to less than 5 percent in Germany.
.

Not all that gilitters is gold, Ken. Sure the german economy performs good, but this low unemployment rate results by far from the other factor, the radical, neoliberal reforms of the job market in last 15 years. With massive increase of the jobs in the low and lowest pay sector. Alone 1,5 millions have to stock up their wages with social benefits by the state to reach so the minimum subsistence level. A much higher number is payed very close to this level.

[Al_U_Card]

1929-1934
1974-1981
2009-201?
Bankers "harvesting" the system.
Glass-Steagle tried to stop it.
Bretton-Woods side-tracked it.
Quantitative easing re-enabled it.

The euro was an effort to contain (supplant) $US before China could exercise its financial muscle.

WW III is being fought in the fields of finance and we are all just collateral ( ;( ) damage.

[hotShot]

Funfact:

Germany is making money from transferring money to Greece, because it can borrow cheaper than it loans it to Greece.



Let us not forget that the reason for the state dept crisis was saving the banks after the subprime-crisis.

The reason to save Greece 5 years ago, was to save German and French banks and pensions-fonds who was massively involved with Greece dept.
Now all European taxpayer have to cover the loss.

Economists outside of Germany often wonder why Germany is such a firm believer in austerity.
I think the reason is that more than half of Germany's GDP is generated through export.
So if the German government is doing some saving, half of the GDP is uninfluenced by that.

[kenberg]

Aberlour10, on 2015-July-19, 08:29, said:

Not all that glitters is gold, Ken. Sure the german economy performs good, but this low unemployment rate results by far from the other factor, the radical, neoliberal reforms of the job market in last 15 years. With massive increase of the jobs in the low and lowest pay sector. Alone 1,5 millions have to stock up their wages with social benefits by the state to reach so the minimum subsistence level. A much higher number is payed very close to this level.

Data should be approached with caution, it has been known to bite. I agree. Still, the four point something unemployment figure could at least be some part of an explanation for Merkel's popularity. Without getting into too much personal detail, I will say that if Dad is working, if the bills are being paid, and you see that this is not true for everyone, you don't fret all that much about some people who vacation in Paris.

Don't get me wrong. We seem to be regressing, here in the U.S. and elsewhere. Survival is of course necessary, but in a rich country people should have a reasonable hope for better. We seem to be losing that.

Specifically with Germany, I get the idea that they are better than we are at recognizing that not every child will grow up to be a computer scientist, and they help steer them in a direction where they can make a living doing something useful. But how good a living? That might be the rub. I confess to not knowing the details.

[blackshoe]

According to Wikipedia, "the economy, stupid" was coined by James Carville.

It's not the economy. It's the governments. And the bankers.

[kenberg]

blackshoe, on 2015-July-19, 15:29, said:

According to Wikipedia, "the economy, stupid" was coined by James Carville.

It's not the economy. It's the governments. And the bankers.

Oh right. Emmanuel was Obama's guide through the underworld of politics, Carville was Clinton's.No doubt both Carville and Emmanuel will demand an apology for the mis-identification. You seen one guru, you seen them all..

[blackshoe]

kenberg, on 2015-July-19, 16:16, said:

Oh right. Emmanuel was Obama's guide through the underworld of politics, Carville was Clinton's.No doubt both Carville and Emmanuel will demand an apology for the mis-identification. You seen one guru, you seen them all..

Okay!

[Zelandakh]

Aberlour10, on 2015-July-19, 05:04, said:

Its another masterpiece of Merkels ability for balancing acts.

I think she is an excellent politician and generally makes the right move at the right time. She is certainly completely dominant over here at the moment.

kenberg, on 2015-July-19, 07:34, said:

Merkel views saving the Euro as a much more important objective than saving Greece.

I think this much is clear. It is basically an accepted truth that Germany is the big winner from the Euro. Why would Merkel want to give that up?

I also think that she was upset that Greece used the Hitler card and brought up the subject of reparations. No German politician ever wants to be linked with this period and I suspect if she could save the Euro while also bringing down the politicians responsible, that would be the ideal solution from her point of view.

Aberlour10, on 2015-July-19, 08:29, said:

Not all that gilitters is gold, Ken.

The economy is biting in Germany too. I work in Germany for a very large and successful international company and we have had close to a freeze on hiring new external staff in recent times. Sales have also been difficult with some notable contracts lost. Compared with other countries Germany is still doing very well and even has a skills shortage in some tech sectors. Noone should pretend that the economy here is having an easy time of it though.

Without the Euro Germany would probably be in difficulty. Historically the money markets bought gold and DMs in difficult economic times. That usually meant that the DM was strong after a recession and badly affected the German recovery. Under the Euro, the German currency is kept nice and low through the smaller countries of the Eurozone. That helps keep the exports cheaper and will, when the better times come back, mean that Germany will probably lead the way. That is in stark contrast to previous recessions and highlights that the Eurozone is worth even more to Germany now than during good times; and it is worth plenty even then.

[mike777]

Zelandakh, on 2015-July-20, 00:45, said:

I think she is an excellent politician and generally makes the right move at the right time. She is certainly completely dominant over here at the moment.



I think this much is clear. It is basically an accepted truth that Germany is the big winner from the Euro. Why would Merkel want to give that up?

I also think that she was upset that Greece used the Hitler card and brought up the subject of reparations. No German politician ever wants to be linked with this period and I suspect if she could save the Euro while also bringing down the politicians responsible, that would be the ideal solution from her point of view.



The economy is biting in Germany too. I work in Germany for a very large and successful international company and we have had close to a freeze on hiring new external staff in recent times. Sales have also been difficult with some notable contracts lost. Compared with other countries Germany is still doing very well and even has a skills shortage in some tech sectors. Noone should pretend that the economy here is having an easy time of it though.

Without the Euro Germany would probably be in difficulty. Historically the money markets bought gold and DMs in difficult economic times. That usually meant that the DM was strong after a recession and badly affected the German recovery. Under the Euro, the German currency is kept nice and low through the smaller countries of the Eurozone. That helps keep the exports cheaper and will, when the better times come back, mean that Germany will probably lead the way. That is in stark contrast to previous recessions and highlights that the Eurozone is worth even more to Germany now than during good times; and it is worth plenty even then.

hmm all interesting all irrelevant.

Germany needs to be the sugar daddy, when it denies it is too blame. Germany denies it destiny...it gets blamed. It needs to be a kindly ...old sugar daddy....it expects and demands favors but only a few...it is old and kindly. Germany wants respect and yes now and then the favor...you understand...Sugar daddy
See Y66 posts

[Gerben42]

Aberlour10, on 2015-July-19, 08:29, said:

Not all that gilitters is gold, Ken. Sure the german economy performs good, but this low unemployment rate results by far from the other factor, the radical, neoliberal reforms of the job market in last 15 years. With massive increase of the jobs in the low and lowest pay sector. Alone 1,5 millions have to stock up their wages with social benefits by the state to reach so the minimum subsistence level. A much higher number is payed very close to this level.

Well, there is always income equality. And Germany has the lowest Gini coefficient of all large economies (according to Wikipedia). Of the G20, only Australia has the same number all others are higher. And this despite globalization, which has the effect that many traditionally low-paying jobs are often exported. Germany has managed to keep many of them in the country.

As for austerity, it is easy for Germany to demand this since it doesn't have a problem there. It has the highest tax income in history, and it's increasing every year. The government doesn't know what to do with so much money but with the socialist party also in the government, they have a partner who knows how to increase state spending on the wrong kind of projects. But it's apparently what the German people want since they voted the one party who wants to reduce government spending out of the parliament.

[mike777]

Gerben42, on 2015-July-20, 00:52, said:

Well, there is always income equality. And Germany has the lowest Gini coefficient of all large economies (according to Wikipedia). Of the G20, only Australia has the same number all others are higher. And this despite globalization, which has the effect that many traditionally low-paying jobs are often exported. Germany has managed to keep many of them in the country.

As for austerity, it is easy for Germany to demand this since it doesn't have a problem there. It has the highest tax income in history, and it's increasing every year. The government doesn't know what to do with so much money but with the socialist party also in the government, they have a partner who knows how to increase state spending on the wrong kind of projects. But it's apparently what the German people want since they voted the one party who wants to reduce government spending out of the parliament.

1) again all interesting
2) all perhaps true for sake of this thread
3) all not the question or issue or relevant.
4) It is clear at this point it is blamed.
5) to not get blame become sugar daddy for Europe
) see Y66


Germany is the sugar daddy for Europe or it gets the blame.

[Al_U_Card]

Once the "loans" are in place and ready to default, then the bail-ins can start. Meanwhile, there is always QE euro-style, should the ECB need to provide cash to those banks that are short of cash but want to loan even more.

Bail-ins are just another security blanket for the banks.

Here in Canada, The BoC has declared that they feel bail-ins are necessary, "liquidity injections" are necessary to stabilize structurally unsound financial institutions but that they will favour those institutions that have "recovery" plans in-place, if and when the situation arises.

Imagine that, the BoC will use my tax dollars to shore up wonky banks, but especially those that have a plan to get that money back from me, one way or another.

Here our banks are chartered. This means that they are regulated such that the shenanigans of the US are much less possible and deleterious for our financial system. This stopped our banks from over-leveraging and limited their losses back in 2009.

[hotShot]

Today "Greece" got a loan of 7,1 Billion €
They should be happy, shouldn't they?

I mean who cares that 4,2 Billion got to the EZB (intrests) , 2,05 Billion to the IWF and 0,5 Billion to other Banks.

[Aberlour10]

hotShot, on 2015-July-20, 10:50, said:

Today "Greece" got a loan of 7,1 Billion €
They should be happy, shouldn't they?

I mean who cares that 4,2 Billion got to the EZB (intrests) , 2,05 Billion to the IWF and 0,5 Billion to other Banks.

Business as usual ( for last 5 years and probably next 10)