Euro in Crisis


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Like America’s dream of unending boom and the reckless creation of an entitlement society, Ireland, Greece, Portugal, and Spain have been seeing their economies totter. Greece suffered riots again.  And Ireland this month finally was forced to accept an EU-IMF (International Monetary Fund) bailout for its banking industry. Moody’s investment Service cautioned Dec. 15 that it is reviewing Spain’s economy with the prospect of downgrading its bond rating again.

At the summit in Brussels, a closing communiqué said:

The heads of state or government of the euro area and the European Union institutions have made it clear that they stand ready to do whatever is required to ensure the stability of the euro area as a whole. The euro is and will remain a central part of European integration.

Junker’s e-bonds idea was shoved down the road of the future. But, according to The Washington Post story, he “insisted it would return to the fore later.” Also put off was a suggestion from the International Monetary Fund’s managing director, Dominique Strauss-Kahn, to stop dealing with the crisis county by country”  and inject more money into the emergency fund to bolster confidence until the permanent fund, the European Stability Mechanism, can be set up in two years.

The European Council president, Herman Van Rompuy, said the European Union was making itself “crisis proof” and, the Post story reported, “there was said to be no need for an increase” in resources for the emergency fund, the European Financial Stability Facility. Van Rompuy maintained that only 4 percent of the fund had been used, so plenty of money remains if another country gets caught in a financial vice. He said if the problem arises, “we will do whatever is necessary.” With Greece, Portugal and Spain under financial stress, his words had the ring of bravado.

The permanent rescue fund has been agreed upon in principal. But there’s no decision as to how much each country will put up or the conditions for loan granting. Germany’s Merkel pushed for tough criteria, arguing that Germans are sick of paying for fiscal legerdemain in other EU countries.

Long negotiations still loom over the questions over how much funding and the conditions under which loans will be granted. Nicola Vernon, an economic analyst with the Bruegel research institute in Brussells, commented “I think it’s normal that the euro crisis is difficult to deal with. The European Union has always put the cart before the horse.”

Because there is no federal European government, there is no way for the EU to create an overall tax policy or budget. Each EU nation is sovereign and stuck with its own political dynamics. Therein surely lies the EU impotence and today’s euro’s crisis.

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  • USMCSniper

    Give me control of a nation's money and I care not who makes her laws. This was said by Mayer Amschel Rothschild, the founder of the Rothschild family international banking dynasty that became one of the most successful financial families in history. The decades long conspiracy to steal the sovereignty of Europe's nation states by cotrolling their currency therefore its debt and its politics) is now beginning to reveal the devestating costs of this terrible tragedy in human terms in Greece, Spain, and Ireland – and will spread across Europe in less than a decade.

  • jgreene

    The New Republican House of Representatives must begin leading America out of its current state of near insolvency by stopping the bleeding and profligate spending of our political class.

    The rise of American Citizen activists and the Tea Parties have given us a second chance. Let's not blow it, America! Get rid of as many socialist-Marxists in Congress and the White House in 2012.

    Let's Roll, America! We are NOT Europe.

    • http://www.mysapce.com/freddawes1776/ Fred Dawes

      it will never happen open your eyes.

  • WilliamJamesWard

    Governments can not give their populations a free ride on the
    back of the few who create wealth by high taxes. Intrusion
    into business with the exception of worker safety and sane
    environmental issues is as far as government should interfere.
    The mind set of voting for public officials because they will
    open public coffers for all of one's wants and desires is the
    path of destruction. Once in the grips of the consequences of
    Socialist philandery the opening for dark side influence by
    way of bribery with large sums of money make for the potential
    of nasty bed fellows of penurious Europeans and Arab
    oil wealth. To the detriment of Israel and the spread of Islam
    on new toll roads that dead end at the last vestiges of sanity,
    Israel will be sold for a shekel………………………William

  • Theo Prinse

    I think the crisis is not caused by nor can be solved by monetary policies. US quantitative easing, Chinese money press, European Security Markets Programme, Japanese debt ratio all accrue to world wide Weimar inflation, burdening the younger generation with lower buying power and loss of pension fund security and a Third World War for minerals.
    The crisis is – since the end of the arms and space race – caused by liberal redistribution first, industrial investment later policies stagnating labor productivity and stagnating innovation.
    That’s why the Tea party must choose for an long term Nuclear Energy program and substantial Electric Automobile industry, that will liberate the US from islam-oil. (Prinse – the Netherlands)

  • http://mypage.direct.ca/l/lbouchar/ SeaMystic

    Countries must start issuing their currency for Government programs directly from the Mint at an administration and production fee, and not the through the Central and Chartered Banks, then borrowing their currency from the Banks at Compound Interest as a perpetual Debt Growth, developed through the Bank of Englnd in 1694 during the Protestant reformation under William of Orange.

  • Patrick Henry

    People are raised on the idea that they have a "right" to other people's money because they need it more than the creator of that wealth. Politicians and activists amass power and prestige accommodating this experiment in the redistribution of wealth. The wealthy are too few to stop it. Its premised on the idea that labor is exploited (Marx), which von Mises and others thoroughly refuted. Keynes created clever formulas to show how counter-cyclical spending can revive a faltering economy, without revealing what the accumulation of debt would do to private saving and investing.

  • Patrick Henry

    The idea that one can create social justice by redistributing the wealth from allegedly oppressive owners to exploited workers remains a powerful force because it offers a form of redemption to the ruling class. But Keynes makes a fundamental error by assuming that borrowed money spent by the government is superior to saved money invested by individuals. Likewise with the idea that fiat currency can ever be a trusted store of value, and that manipulation of the supply of money and credit can do anything other than create artificial booms and busts.

    These fallacies must be corrected before we can reverse our course down the road to serfdom. I fear we're too far gone because how does one take back entitlements in a democracy raised on these ideas? They will vote themselves money until its worthless. That's when things get ugly.

  • http://www.mysapce.com/freddawes1776/ Fred Dawes

    the end is here.