Text 23302, 134 rader
Skriven 2011-12-06 14:35:58 av Roy Witt (1:387/22)
  Kommentar till text 23292 av Robert Bashe (2:2448/44)
Ärende: See what I mean...
==========================
06 Dec 11 07:31, Robert Bashe wrote to Roy Witt:

 RB> [The EU and the Euro]

 RB>>> Nobody really knows what's going to happen, Roy.

 RW>> As you probably remember, I subscribe to Deutsche Welle and I'm
 RW>> reading about all of this happening there. It's scary at times since
 RW>> Wall Street stock values rise and fall at any news of the Euro in
 RW>> decline.

 RB> It's scary here, too, particularly since most of us have the
 RB> impression that the politicians don't know what to do either.

Or at least, they cannot all agree on what to do...

 RW>> On the other hand, the EU could expel those high-debt countries and
 RW>> let them fend for themselves until they go under.

 RB> Can't be done. The treaties only allow Eurozone countries to
 RB> _voluntarily_ withdraw. There is no way to legally exclude them, and
 RB> any attempt would mean the end of the EU, not just of the Euro.

This kind of thing has been discussed here with California on the verge of
bankruptcy. Should the other 49 states come to their rescue, they would
then have a vested interest in the state and could or should make
California a USofA territory, so that they cannot get into the same rut
governing themselves.

 RB> The original idea was that the Euro, a common currency, would
 RB> automatically lead to alignment of the fiscal and tax structures of
 RB> the participating countries. No provisions were made to _ensure_
 RB> that, however, and it simply didn't happen. As a result, you have a
 RB> large number of different fiscal and tax structures in the Eurozone,
 RB> but a common currency. Naturally that only works as long as times
 RB> stay good - we're now experiencing what happens when times are not so
 RB> good.

Interesting that the fiscal/tax structures of the 50 states is tied
to a common currency and it works so well in comparison.

 RB> In contrast to single currencies such as the Dollar, the Yen and the
 RB> Renminbi (Yuan), all of which are subject to a _single_ fiscal and
 RB> tax system, the Euro has this fatal flaw, and has had it from the
 RB> beginning. The question is whether it can be eliminated or at least
 RB> reduced at this point in time. Nobody really has an answer to that at
 RB> present.

There is an answer, but it won't happen. Restructure the EU to something
like the USofA and make the Union states model their tax structures the
way our tax is done.

 RB>>> People are worried - and as we have seen, not without justification
 RB>>> - about the "domino effect" that would have on other Eurozone
 RB>>> countries such as Spain and Italy, and possibly even France.

 RW>> I thought that France was about as stable as Germany...I guess not.

 RB> Unfortunately not. For one thing, France isn't economically as strong
 RB> as Germany, although the difference isn't great - and for another,
 RB> France is much more exposed to Greek, Portuguese, Italian and Spanish
 RB> debt than Germany. So the present weakness of those countries also
 RB> affects France. One of the rating companies - I think it was Fitch,
 RB> but which one isn't really important - recently downgraded French
 RB> debt by mistake for a few hours, and the markets went crazy before
 RB> the mistake was corrected, with many apologies.

That happened again yesterday, as Standard & Poors threatened a mass
downgrade of the EU in general. That caused quite a stir among EU
leaders.

 RB> And in today's newspaper, I read that the rating agencies are now
 RB> observing even Germany with some concern, seeing a "negative" outlook
 RB> and a possible recession of the entire EU for 2012. News could
 RB> definitely be better.

Absolutely.

 RB>>> Then there's the suggestion that Germany could leave the Eurozone
 RB>>> and introduce the "new" DM. The problem there is that the new DM
 RB>>> would presumably appreciate so fast, so much that German export
 RB>>> industries - the backbone of the economy - would probably go down
 RB>>> the tube, with a major recession in Germany as a result. Then who
 RB>>> pays the bills?

 RW>> Germany, with the 'new' DM...

 RB> Which the Germans would naturally reject even if they had the money,
 RB> which they wouldn't in case of a major recession.

Well it seems that Merkel and Sarkozy have come up with something that
they wouldn't even have given a second thought a year ago.

"Countries that rack up too much debt should be subject to penalties that
they will not be able to fight, they now say."

 RW>> It's making some Belgians so nervous, they're seeking dual
 RW>> citizenship with Luxumberg. That is, if they can prove that they
 RW>> have at least one living or one ancestoral relative born in that
 RW>> country. The way the talked about it was as though there is no
 RW>> future for Belgium.

 RB> That's another matter, Roy, and has more to do with the lack of a
 RB> government in Belgium - something that originally didn't bother the
 RB> Belgians much, if you remember back to what Ward was writing a year
 RB> ago - but is meanwhile becoming pretty unsettling because of the long
 RB> duration.

And procrastination. It was in the news again today.

 RB> Anyway, for all practical purposes, Belgium and Luxembourg are one
 RB> country (with few exceptions in lower denominations, Luxembourg even
 RB> used Belgian Francs before the Euro was introduced), and Belgians -
 RB> like all EU citizens - have the right to establish residence in
 RB> Luxembourg and live there with no more restrictions than Luxembourg
 RB> nationals. So I don't really see any advantage to something like a
 RB> dual citizenship.

Well, they can rest in peace for now. Belgium announced that they have a
new PM and Cabinet...

 RB> Possibly Ward can add something to this, but the above is my
 RB> understanding.

Maybe.


                R\%/itt


  ,,,By the time you find greener pastures, you can't climb the fence!

--- Twit(t) Filter v2.1 (C) 2000-10
 * Origin: SATX Alamo Area Net * South * Texas, USA * (1:387/22)