5 ms·

At the end of the day, the Europeans can't have their cake and it eat, too. Either the Eurozone is a truly integrated, multinational superentity, or it's a mean

At the end of the day, the Europeans can't have their cake and it eat, too. Either the Eurozone is a truly integrated, multinational superentity, or it's a meaningless construct on top of a group of wholly independent nations. It can't be the former when things are going well, and the latter when things are going poorly. A fairweather EU / economic zone doesn't work, because it's built on a foundation of quicksand. How can these countries rely on a cooperative economic superstructure when, beneath it all, they still see each other as competitors? Transnationalism doesn't work when you're secretly a nationalist.

gizmo 15y ago
I agree that a fairweather Eurozone is not sustainable and that at least a fiscal union is needed (through good times and bad times, till war do us part). Luckily, many young people like the idea of a stronger united Europe, so hopefully it's just a matter of time until the public perception shifts. If the Euro just survives for another decade or two it's probably going to turn out OK.
- cynicalkane 15y ago
  The idea of a united Europe scares me, actually. Whenever there is fiscal union comes the notion that there should be some control over how money is spent. Germany and Greece and Spain and Sweden and Italy and every EU country will want a say. After all, it's "their" money. So there are going to be fundamental game theory problems unless all these different places can agree how money should be spent--and ideas about how money should be spent are a big, deeply embedded part of culture. If a fiscal union happens I would venture to guess one of the following will happen: one, eternal squabbling; or two, a partial homogenizing of European culture. I don't like either outcome. Differences are good. No, no amount of high hopes or good feelings will save you from this. I don't understand the urge to yoke societies together in unhelpful ways any more than I get why incompatible people enter bad marriages. It's always been obvious to me that takes more than love to work together, and often people work better together if they intentionally keep their independence.
  - jsnell 15y ago
    I doubt that Norway wants or has any chance of getting a say, due to minor reasons like not being a member of the EU.
    - cynicalkane 15y ago
      Thanks, edited. Not sure why I said Norway... probably was thinking of Sweden. Actually, they'd hopefully be smart enough to step out of a fiscal union. Edit: to downvoters: Sweden is part of the EU and so far has been avoiding monetary union through a loophole.
      - deleted 15y ago
        [deleted]
      - jarek 15y ago
        Incidentally, Sweden is not obligated to join the eurozone due to a neat loophole.
  - LaGrange 15y ago
    Uh, Switzerland, anyone? Quite a lot of culture difference in a country that has a lot more than just fiscal unity. I'd say, more than in most countries that are a lot bigger, both geographically and by population size. Actually, here in Poland, EU slowly (too slowly) forces us to accept our own cultural diversity. Stop panicking. If our culture was defined by our banking system then we wouldn't have that much of a culture.
    - kolinko 15y ago
      Switzerland, but also US. Some Europeans tend to see U.S. as a monolith while in reality they're quite diverse - the difference between New York and Nevada is as big as between Poland and Spain.
      - LaGrange 15y ago
nl 15y ago
It's hard to know exactly what a truly integrated, multinational superentity is, though. For example, in this case Spain did everything right. They even regulated their banks so they wouldn't make risky loans. But they couldn't stop German banks making the same loans - so does this mean that regulatory authority over banking should be seceded to the EU too?
- pdelgallego 15y ago
  Spain did a lot of mistakes. I.e. not to take any action to stop the real state bubble, create unnecessary infrastructure, or the fact that a plenty of youngster stopped their education in order to work as construction workers.
  - nl 15y ago
    My understanding is that they did try and stop the real estate bubble (to some extent anyway) but regulating bank loans, but the German banks stepped in to fund riskier projects.
    - pdelgallego 15y ago
      Unfortunately, many Spanish commercial banks and saving banks bet the farm on the real state market. For example the Sabadell Bank just bought the CAM (a saving bank) for one euro.[1] The were some talking about burst the bubble in 2004, but Zapatero's government never implement the reforms. The Spanish prime minister regret later about not bursting the bubble earlier.[2] Spanish banks are well protected against loans because, the asset pledge as collateral" clause is rarely use in Spain. [1] http://www.businessweek.com/news/2011-12-08/sabadell-buys-cam-for-one-euro-as-spain-banks-bail-out-caja.html http://www.businessweek.com/news/2011-12-08/sabadell-buys-ca... [2] http://www.elmundo.es/elmundo/2011/06/28/suvivienda/1309274989.html http://www.elmundo.es/elmundo/2011/06/28/suvivienda/13092749... (Spanish)
      - oelewapperke 15y ago
        And the alternative was a readjustment to previous levels. Which would have meant a 10-15% decline in the euro in the matter of months, with loads of people losing their life savings. Like in America. It actually looked like Bush was actually going to do that for a while, when he decided not to save Lehmann brothers. The only way not to bet the farm was to let every bank go broke.
7952 15y ago
Doesn't the USA try and have its cake and eat it? Is federally decided economic policy a good fit for all areas?
- ajross 15y ago
  Yes, undeniably, as proven out over the past century of growth. Is there a serious argument to the contrary? No, federal policy isn't "equal", but pretty much everyone (even the "losers" in wealthy states like California) agrees that the country is economically stronger as a union.
- jonnathanson 15y ago
  Yes, but the key difference is that the states that comprise the USA don't act as their own, sovereign nations. Imagine if California and Texas, for example, were independently represented in the United Nations, had independent economies linked only by a shared currency, and listened to the federal government only when they felt like it? That's more along the lines of what the EU is. The USA made the conscious decision to be a unified, federalist nation. The EU is "trying to have its cake and eat it, too" in that it won't go that far. It wants the benefits of federalism with the benefits of independent national sovereignty. What it gets, instead, is neither one nor the other.
  - sp332 15y ago
    Agreed, and I'd like to point out that the USA did attempt a form of loose federation under the Articles of Confederation. It didn't work very well, and although it took a lot of cajoling to convince the various states to submit to a federal authority, it has worked much better.
  - 7952 15y ago
    But state debt varies widely across the country. US states can issue bonds, and have individual credit ratings.

gizmo 15y ago

I agree that a fairweather Eurozone is not sustainable and that at least a fiscal union is needed (through good times and bad times, till war do us part). Luckily, many young people like the idea of a stronger united Europe, so hopefully it's just a matter of time until the public perception shifts. If the Euro just survives for another decade or two it's probably going to turn out OK.

cynicalkane 15y ago
The idea of a united Europe scares me, actually. Whenever there is fiscal union comes the notion that there should be some control over how money is spent. Germany and Greece and Spain and Sweden and Italy and every EU country will want a say. After all, it's "their" money. So there are going to be fundamental game theory problems unless all these different places can agree how money should be spent--and ideas about how money should be spent are a big, deeply embedded part of culture. If a fiscal union happens I would venture to guess one of the following will happen: one, eternal squabbling; or two, a partial homogenizing of European culture. I don't like either outcome. Differences are good. No, no amount of high hopes or good feelings will save you from this. I don't understand the urge to yoke societies together in unhelpful ways any more than I get why incompatible people enter bad marriages. It's always been obvious to me that takes more than love to work together, and often people work better together if they intentionally keep their independence.
- jsnell 15y ago
  I doubt that Norway wants or has any chance of getting a say, due to minor reasons like not being a member of the EU.
  - cynicalkane 15y ago
    Thanks, edited. Not sure why I said Norway... probably was thinking of Sweden. Actually, they'd hopefully be smart enough to step out of a fiscal union. Edit: to downvoters: Sweden is part of the EU and so far has been avoiding monetary union through a loophole.
    - deleted 15y ago
      [deleted]
    - jarek 15y ago
      Incidentally, Sweden is not obligated to join the eurozone due to a neat loophole.
- LaGrange 15y ago
  Uh, Switzerland, anyone? Quite a lot of culture difference in a country that has a lot more than just fiscal unity. I'd say, more than in most countries that are a lot bigger, both geographically and by population size. Actually, here in Poland, EU slowly (too slowly) forces us to accept our own cultural diversity. Stop panicking. If our culture was defined by our banking system then we wouldn't have that much of a culture.
  - kolinko 15y ago
    Switzerland, but also US. Some Europeans tend to see U.S. as a monolith while in reality they're quite diverse - the difference between New York and Nevada is as big as between Poland and Spain.
    - LaGrange 15y ago

nl 15y ago

It's hard to know exactly what a truly integrated, multinational superentity is, though. For example, in this case Spain did everything right. They even regulated their banks so they wouldn't make risky loans. But they couldn't stop German banks making the same loans - so does this mean that regulatory authority over banking should be seceded to the EU too?

pdelgallego 15y ago
Spain did a lot of mistakes. I.e. not to take any action to stop the real state bubble, create unnecessary infrastructure, or the fact that a plenty of youngster stopped their education in order to work as construction workers.
- nl 15y ago
  My understanding is that they did try and stop the real estate bubble (to some extent anyway) but regulating bank loans, but the German banks stepped in to fund riskier projects.
  - pdelgallego 15y ago
    Unfortunately, many Spanish commercial banks and saving banks bet the farm on the real state market. For example the Sabadell Bank just bought the CAM (a saving bank) for one euro.[1] The were some talking about burst the bubble in 2004, but Zapatero's government never implement the reforms. The Spanish prime minister regret later about not bursting the bubble earlier.[2] Spanish banks are well protected against loans because, the asset pledge as collateral" clause is rarely use in Spain. [1] http://www.businessweek.com/news/2011-12-08/sabadell-buys-cam-for-one-euro-as-spain-banks-bail-out-caja.html http://www.businessweek.com/news/2011-12-08/sabadell-buys-ca... [2] http://www.elmundo.es/elmundo/2011/06/28/suvivienda/1309274989.html http://www.elmundo.es/elmundo/2011/06/28/suvivienda/13092749... (Spanish)
    - oelewapperke 15y ago
      And the alternative was a readjustment to previous levels. Which would have meant a 10-15% decline in the euro in the matter of months, with loads of people losing their life savings. Like in America. It actually looked like Bush was actually going to do that for a while, when he decided not to save Lehmann brothers. The only way not to bet the farm was to let every bank go broke.

7952 15y ago

Doesn't the USA try and have its cake and eat it? Is federally decided economic policy a good fit for all areas?

ajross 15y ago
Yes, undeniably, as proven out over the past century of growth. Is there a serious argument to the contrary? No, federal policy isn't "equal", but pretty much everyone (even the "losers" in wealthy states like California) agrees that the country is economically stronger as a union.
jonnathanson 15y ago
Yes, but the key difference is that the states that comprise the USA don't act as their own, sovereign nations. Imagine if California and Texas, for example, were independently represented in the United Nations, had independent economies linked only by a shared currency, and listened to the federal government only when they felt like it? That's more along the lines of what the EU is. The USA made the conscious decision to be a unified, federalist nation. The EU is "trying to have its cake and eat it, too" in that it won't go that far. It wants the benefits of federalism with the benefits of independent national sovereignty. What it gets, instead, is neither one nor the other.
- sp332 15y ago
  Agreed, and I'd like to point out that the USA did attempt a form of loose federation under the Articles of Confederation. It didn't work very well, and although it took a lot of cajoling to convince the various states to submit to a federal authority, it has worked much better.
- 7952 15y ago
  But state debt varies widely across the country. US states can issue bonds, and have individual credit ratings.