BERLIN — As European finance ministers refused Monday to name specific measures to rescue Greece and the Continent’s common currency, opposition grew among Germans to bailing out what they call spendthrifts to the south after years of belt-tightening by workers at home.
The fiscal crisis, shaking the Greek government while driving down the value of the euro, is forcing taxpayers and voters across Europe to confront the fact that their fortunes are tied together more closely than their politicians confessed in the late 1990s, in the rush to create the common currency over public objections.
In the process it has revealed how deeply national identity, rather than a common European identity, remains the reality on the Continent. Solidarity, at least in the eyes of most voters, still stops at the border.
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Josef Joffe, a Fellow at the Hoover Institution, publisher-editor of the German weekly Die Zeit says : “Europe has become a huge welfare state for everybody, for states as well as individuals.”
The Euroweenies are caught between a rock and a hard place. If they don’t help Greece the Euro will weaken. If they do help Greece they put in motion a moral hazard that rewards bad government, excessive socialism and a bloated unionized civil service. They also start the slippery slope of having to bail out much bigger problems like Spain and Italy. This happens all because they have to protect the Euro which allowed economic riff raff countries to use it.
Canadians need to pay attention to this as Quebec, like Greece, runs up high ratios of debt to its GDP. We think we are not on the hook for Quebec’s debt. But just like Greece squandered the payments from Brussels, Quebec has been squandering the equalization payments Ottawa keeps sending them by allowing continuation of a bloated civil service and $7 Day Care. Quebec is a moral hazard that we’ll have to eventually face up to because they use the Loonie. The solution is: if provinces want access to the Loonie and to equalization payments then they have to run balanced budgets.
We need to face these problems before it gets really nasty as the posted article from the NYT says “in Germany, opinion surveys show that two-thirds of the people oppose financial assistance for Greece. More ominously, a survey released Sunday by the newspaper Bild showed that a slight majority of Germans, 53 percent, said they favored expelling Greece from the euro group entirely if its mountain of debt threatened the stability of the currency union.”
Why expell Greece? Let them stay and everybody else get out.
or…….”Greece would do everyone a favour by declaring a moratorium and forcing a rescheduling.”
http://blogs.reuters.com/great-debate/2010/02/15/greece-should-default-and-reschedule/
My view (for what it’s worth) is that the EU has been built like a house of cards. One goes down and the dream dies. We’ll all see in the days ahead but I will say this. Irish voters were far better off before they joined the EU.
Since then it has been a nightmare for the Irish and many other countries.
Thatcher was correct all along.
The EU is a classic case of government for the sake of government or bureaucracy for the sake of bureaucracy. There was no overarching reason for the EU’s being other than to better compete with the Americans.
To compete unsuccessfully against the Americans…