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Your narrative imply that the Euro works perfectly, what is ridiculous. The reason for the the debt crisis is that the Euro countries are working with what is,
by RobertoG 8y ago
Your narrative imply that the Euro works perfectly, what is ridiculous.
The reason for the the debt crisis is that the Euro countries are working with what is, essentially, a foreign currency. There is not fiscal capacity that will solve the possible problems, like, for instance, there is in the USA.
So, the Central European Bank is, against the spirit and probably the letter of the agreements, doing the work that a federal government should be doing. They are buying public debt in the secondary market and that is what have saved the Euro (for now).
The design of the Euro is flawed from the beginning and comments like yours show that fixing the issue is probably impossible, because it feels good to blame others instead of facing the issue, and because when we feel so above other countries, who would like to share a fiscal capacity with those losers? So, interesting times ahead.
That's the real lesson here.
- jevgeni 8y agoThe design of the Euro is intentional. This is why countries have to adhere to some pretty strict fiscal requirements to join the Euro: specifically to avoid BS like the one happened in Greece. Well, Greece lied about their compliance with those requirements (Goldman helped, but hey...), but now it's somehow Euro's fault?...
- RobertoG 8y agoThe point is that Euro is dysfunctional because there is not a enough fiscal capacity implemented in the design. Some of us think that it's probably politically implausible to implement that capacity because the narrative of the 'lazy neighbor'. Presumably some lands in Germany are deficitary (or states from the USA) why the population there don't experiment the same problems? Because they have a real union. Currently the ECB is covertly financing countries of the European Union buying their debt in the secondary market [1]. This is against the agreements [2], but if it's not done will be the end of the Euro. How is not that a dysfunctional currency area? [1] https://www.bloomberg.com/view/articles/2015-12-04/the-ecb-s-new-policy-sets-a-dangerous-precedent https://www.bloomberg.com/view/articles/2015-12-04/the-ecb-s... [2] https://elpais.com/elpais/2012/10/24/inenglish/1351097206_055104.html https://elpais.com/elpais/2012/10/24/inenglish/1351097206_05...
- throwawaymanbot 8y agoInteresting View point.. But not reality. the Reality is the concept of the Euro is being attacked rather than the currency which is surviving fine. (Minus US cowboy capitalism Economoy wrecking great depressions)