EU referendum are you in or out

[pogo]

No time is right for joining the euro as it is broken and doomed.

This is something I’ve gone into in the other thread but it’s worth restating. You can’t have monetary union without fiscal and political union. Fiscal union means countries can’t run up debt like they now have, it all happens centrally. Whether that happens through transfers or through centralising all taxation and spending, or some combination, is a political decision. Which is why you need political union, i.e. new or much stronger central political institutions able to take the necessary decisions.

Look at Britain. The sovereign debt is British, not Scottish or English. Taxes are raised centrally, much spending is done centrally, but there are still transfers through the Barnett formula. Or the US.

But it’s impossible to imagine EU leaders agreeing to the same, or even to a fraction of what’s needed. So the euro will fail. Arguably it has already. The massive debts between countries will never be repaid, Countries will never agree to write off the debts. So the only way they will be resolved is through countries leaving and the breakup of the euro. Maybe not for decades but then they have decades to think about it: Greek debt repayments are already scheduled into the middle of this century.

[gravy]

You keep saying that.

But the euro still seems to exist

[Darkflame]

If your talking about scales of half a century, that seems long enough for everyones economy's to be fucked up with automation anyway.
I don't buy the "robots will replace all our jobs" argument as such, but its pretty clear the tech trend is for much more to be possible with much less people (over those sorts of timescales) - and while it might not be a zero sum game, there's also no logical reason to think "humans will want more stuff in exact proportion to the rates at which jobs vanish". That's a wishful assumption from what I can see. "It never happened before so it will never happen" style thinking.
More likely there is a few soft limits (how much media can a human consume in their lifetime? how much physical stuff we don't really need can we afford to dig up from the earth?) which will get increasingly hard as time goes on. Selling more and more stuff is not a option that will forever on the table imho.

Put simply, I think one way or another all countries will need to be adapting, and god knows what will emerge or survive out of it.

[pogo]

If you accept that you cannot have monetary union without fiscal and political union then the euro never was a proper monetary union. With hindsight is is now clear it was flawed from the start. It’s not that it was working fine until 2008 then suddenly went wrong. The problems, both debts and imbalances, started with the euro’s creation, and only came to light with the financial crisis. I.e. the euro was broken from the start.

It cannot continue like this forever. They could fix it with fiscal and political union, but that seems impossible in the current climate, maybe impossible ever. The imbalances are not symmetric and some countries benefit from them, so would significantly lose out if they were addressed. Or the crisis drags on until the euro breaks up, either by accident or design.

[gravy]

So when is it going to collapse?

It's 17 years old now, so how much longer?

[pogo]

Predicting the precise date is impossible, but here is one indicator. The schedule for Greek debt repayment:

How close they came last year is hard to tell, but there was a real chance that they could have defaulted and left the euro. And there are many opportunities for it to happen again, as each election could elect someone willing to tear up previous “immoral” agreements.

Even that is optimistic. The reason the schedule stretches decades into the future is it keeps being extended as Greece misses targets. Hard to believe that won’t happen again, and again, so paying off the debt never gets closer. And Greece is only one country. The worst at the moment but it would only take an election elsewhere to tip another country into crisis. Populist anti-EU movements are only growing stronger in the current climate.

[gravy]

How about picking a decade

[KlaxonCow]

Also, though the UK never bought into it, the EU plan does have "ever closer union" written into it.

They were ultimately aiming for more and more fiscal and political union to back up the currency. So you say it was doomed from the start because they didn't have fiscal and political union written into it. But, actually, you're wrong there, that entirely was written into the plan for Europe going forward.

The mistake, perhaps, was starting with the currency first and then bringing in the union to back it up afterwards. Maybe that was the wrong order. Or you could argue that they didn't do it fast enough, as the financial crisis fucked up the plan before they could fully implement it and they were perhaps naively optimistic to think that they had the time to do it all by this gradual incrementalism - but then who was predicting hitting something as catastrophically large as the Great Recession, only ever beaten by the Great Depression before it, that would throw things into such disaster for the Grand Plan?

But the EU plan does have exactly what you're asking for in it - "ever closer union" - just as the long term ultimate objective, not the immediate concern.

[Absolute_Zero]

Friedman notably warned that the 'Zone' would lead to misery for many within. It would be naive to suppose that the guiding lights were oblivious to the intrinsic stresses created by a common currency in the absence of fiscal union.

So here's the medicine, Eurozone: something you wouldn't have otherwise swallowed so readily, in order to correct the problems created by something that was seemingly easier to imbibe. Whoops, so sorry!

Likewise, it never occurred to Germany that they'd be able to export like crazy on the back of a weaker Euro [€<D-Mark]... at the expense of the weaker economies [€>Drachma]. No siree.

That said, I will vote to remain in the outer tier of this duplicitously evolving superstate. But please people, not so naive and credulous.

[pogo]

Friedman notably warned that the 'Zone' would lead to misery for many within. It would be naive to suppose that the guiding lights were oblivious to the intrinsic stresses created by a common currency in the absence of fiscal union.

Thatcher too described what would happen in some detail in parliament, though she was no economist and probably got it from him. And yes, Germany are the main architects of the crisis, both from their [lack of] leadership in creating the euro and their disruptive behaviour after it was created.

Who is responsible for the eurozone crisis? The simple answer: Germany

The gross imbalances in prices and wages between countries in the eurozone arose because from 2000, i.e. from the start of the euro, Germany pursued a policy of strict wage control. Normally that would have led to a strong DM and other countries devaluing relative to it. But that is not possible in the euro. And that is at the root of both the competitiveness problem and the debt problem (all the excess saving in Germany had to go somewhere).

[k345y]

she was no economist

Yet, she was prepared to decimate whole societies based on her ideologist,economy.


Rewind 20 years ago and tell me Thatcher was no economist.
Bull-fucking-shit.

[Absolute_Zero]

Friedman notably warned that the 'Zone' would lead to misery for many within. It would be naive to suppose that the guiding lights were oblivious to the intrinsic stresses created by a common currency in the absence of fiscal union.

Thatcher too described what would happen in some detail in parliament, though she was no economist and probably got it from him. And yes, Germany are the main architects of the crisis, both from their [lack of] leadership in creating the euro and their disruptive behaviour after it was created.

Who is responsible for the eurozone crisis? The simple answer: Germany

The gross imbalances in prices and wages between countries in the eurozone arose because from 2000, i.e. from the start of the euro, Germany pursued a policy of strict wage control. Normally that would have led to a strong DM and other countries devaluing relative to it. But that is not possible in the euro. And that is at the root of both the competitiveness problem and the debt problem (all the excess saving in Germany had to go somewhere).

The main difference between us, seemingly, is that I fully expect the Euro to survive... on the back of ever-increasing fiscal union. The EU has a venerable track-record of more-Europe to fix problems created by more-Europe. Crises present opportunities. One might suspect that it's in-part deliberate superstate engineering.

[pogo]

The main difference between us, seemingly, is that I fully expect the Euro to survive... on the back of ever-increasing fiscal union. The EU has a venerable track-record of more-Europe to fix problems created by more-Europe. Crises present opportunities. One might suspect that it's in-part deliberate superstate engineering.

Not going to happen. In theory that is the best way out of the crisis, as they get to keep the euro and benefit fully from it. But the EU is not about to agree to “every increasing fiscal union”. There is little appetite for ever more Europe now. Even before the crisis this had reached their limit, with some countries putting in place mandatory referendums to make sure politicians could not agree to integration without public approval.

And fiscal union is special in that the benefits are very uneven. However you do it the net effect is transfers from surplus countries like Germany, Austria, Holland to deficit countries like Spain, Portugal, Greece. Transfers, not loans, and not one-off put permanent like the Barnett formula here. Not small transfers but very large ones, accounting for a large fraction of GDP.

Can you imagine Germany agreeing to that? I can’t. Their leaders surely know what is really needed, but German voters have been lied to and told that the problem is one of irresponsible spending by other governments. A “no bailouts” clause has been written into EU agreements, to prevent such fiscal union. I think they would let the euro fail before they went back on that.

[(o)(o)]

Friedman notably warned that the 'Zone' would lead to misery for many within.

Friedman was also notably a dumbass charlatan economist who spat out catchy soundbites, that would have been wicked if they were true, but were based largely on baloney and just sounded great. A dangerous man really as he catalysed generations of dumb-ass neoliberal fucks with his "free markets manage themselves" fuckwittery.

[merman]

If you accept that you cannot have monetary union without fiscal and political union then the euro never was a proper monetary union. With hindsight is is now clear it was flawed from the start. It’s not that it was working fine until 2008 then suddenly went wrong. The problems, both debts and imbalances, started with the euro’s creation, and only came to light with the financial crisis. I.e. the euro was broken from the start.

It cannot continue like this forever. They could fix it with fiscal and political union, but that seems impossible in the current climate, maybe impossible ever. The imbalances are not symmetric and some countries benefit from them, so would significantly lose out if they were addressed. Or the crisis drags on until the euro breaks up, either by accident or design.

Rubbish.
Economies the world over freely co-operate and trade using different currencies. Having a large trading bloc using the same currency is incredibly possible. After all, British tills are reprogrammed regularly for changes in coinage, how hard is it to change over to the Euro?