New Perils Facing the Eurozone
http://thedianerehmshow.org/shows/2011-11-07/new-perils-facing-eurozone
People read the front pages of the Greek daily newspapers at a kiosk in central Athens, Monday, Nov. 7, 2011. The leaders of Greece's two biggest parties are due to resume talks Monday to agree on who should be the country's new prime minister, after reaching a historic power-sharing deal to push through a massive financial rescue deal and prevent imminent bankruptcy. Headlines at the main newspapers Ta Nea, first left, ''At last'' Eleftherotypia, second left, ''Room-mates for harsh measures'' and Ethnos, third left, ''Historic deal for national unity.''
(AP Photo/Thanassis Stavrakis)
Greek Prime Minister George Papandreo has agreed to resign after ironing out the details of a new unity government. The move is expected to help facilitate a debt agreement with the European Union to save Greece from default. Greece’s financial crisis has threatened to spread to other E.U. countries, like Italy. Italian Prime Minister Silvio Berlusconi is also facing pressure to resign though he says he won’t go. The IMF has agreed to monitor Europe’s third biggest economy as fears mount over Italy’s finances. Diane and her guests look at new concerns over the future of the Eurozone.
Guests
Rachel Donadio
Rome Bureau Chief for the New York Times
Jacob Kirkegaard
a research fellow at the Peterson Institute and a senior associate at the Rhodium Group, a New York-based research firm.
Sudeep Reddy
economics reporter, The Wall Street Journal.
Robert Scott
is an international economist and director of international programs at the Economic Policy Institute.
Comments
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Our Greek future
gbloper wrote: "I am not one who favors compromise, unless it is by the extreme right. So, three cheers for partisanship in this corner."
Liberal democrats have been winning the argument over social engineering since our grandfathers father was born. Yet they claim they are on the losing end. Vilification of anyone who apposed them has been completely successful and it's never enough. The "extreme right" has been compromising for a hundred years with liberals and look where it's got us. Trillions in debt, an out of control socialist government, unsustainable welfare schemes. 40 cents of every dollar spent by the federal government is borrowed. Why isn't the 1.4 trillion dollars in borrowed money this year to patch the massive canyon between tax revenues and government expenditures considered stimulus. Were looking at similar deficits as far as the eye can see and the size of the debt reaching totals no one can wrap their head around. Yes compromise is not an option, those lunatic Tea Party maniacs, they call for restraint, how quaint. The left wants more and will always want more, the road to hell is expensive indeed. Occupy, how noble, a makeshift element of failed seekers, the spoiled fruit of prosperity. Those that never earned anything demanding more from the shriveled dried up teet of the federal government. The "extreme right" never had control of the federal government, the pretenders and their supporters have. Libertarians are the true conservatives and they have been successfully vilified to the point where they are not even considered a viable alternative. A pack of lies is always more appealing to the dim witted.
Why can't Americans who want socialism learn a lesson from what it did to Europe? We're following the same course, yet fail to see the "handwriting on the wall". Socialism - the "fatal conceit" as Hayek said - that governments can run up debts to give people stuff by borrowing. Eventually you run out of other people's money - as Greece has done.
Why can't Americans who want socialism learn a lesson from what it did to Europe? We're following the same course, yet fail to see the "handwriting on the wall". Socialism - the "fatal conceit" as Hayek said - that governments can run up debts to give people stuff by borrowing. Eventually you run out of other people's money - as Greece has done.
You harp on Socialsim and Communism (neither of which has ever been completely implemented anywhere, ever!) and yet Capitalism by its very founding is a failure. Capitalism requires, by its basic tenets that people fail. That is how some succeed and others don't. It is a system the requires that there always be a permanent underclass of workers who are unemployed. Failure is built right in. It is requred.
The system continually collapses under the weight of over production in one form or another, tons of people are thrown out of work creating a huge pool of labor which the bosses can use to beat the remaining workers over the head with, pummeling their wage earning abilities.
It has always been this way. That Capitalists can't admit to the failure of their system which is no mystery..... then they would have to admit that the entire thing is a sham.
Bo-
Why is it that all of the European nations suffering today have followed the US model of allowing excess debt, outsized banks and unenforced regulation, while those who have followed the opposite path like France and Germany are in good financial shape?
IMF warns France on budget deficit
By James Boxell in Paris
The International Monetary Fund has warned that France will miss its target of cutting its budget deficit to 3 per cent of output by 2013 unless it carries out more spending cuts.
In a yearly review of the French economy, the Washington-based fund said it expected economic growth and tax revenues to be below the government’s own forecasts. The country’s economy will expand by 2.1 per cent this year and 1.9 per cent in 2012, it said.
As a result, Nicolas Sarkozy’s government should prepare “specific contingency” measures for meeting deficit targets in case growth falls short and limits tax receipts. Paris expects gross domestic product growth to accelerate from 2 per cent this year to 2.25 per cent next year, but some analysts have warned that those forecasts look generous.
The IMF said the fact that the country’s tax rates were already high meant the French president had little choice than to target spending, particularly in pensions and healthcare.
I know that Elizabeth Warrens Consumer Financial Protection Bureau is not in full swing. But is there an equivalent world financial protection bureau to regulate banks business around the world?
And can your guest explain why the very same rating agencies whose faulty rating systems were very much apart of the financial crisis are not being ripped apart and restructured?
Why would anyone trust these ratings groups?
HOW MANY EU MEMBER NATIONS- VIA REFERENDUMS- VOTED FOR AN 'EU SUPER-STATE'??
To suggest that the EU would 'explode' if the euro ceases to be or is rejected by one or more of the 17 countries that currently use it is preposterous nonsense...
For many decades previous to the adoption of the euro by 11 of the EU's 15 member nations in 1999, the EU and its predecessor- the European Economic Community (EEC)- existed and functioned just fine with member nations using their own, separate, currencies....
Following the adoption of the euro by 11 EU member countries in 1999, and following Greece's adoption of the euro in 2001-
- the lack of adherence to the EU's stability and growth pact"* by most euro-using countries; along with
* http://www.civitas.org.uk/eufacts/FSECON/EC10.htm
http://www.guardian.co.uk/world/2003/nov/27/qanda.business
- profligate, short-sighted, transparently un-sustainable borrowing and spending policies...
are the main factors behind today's problems...
--------------------
Why wouldn't a simple solution (to the euro problems and EU member nations' debts) be:
devolve the EU politically, administratively and in bureaucratic structures ways to what it was around the time of (or previous to) the 1997 Amsterdam treaty (before the introduction of the euro)...
and start again??
Once devolved to an Amsterdam treaty type of status, EU member countries could 'start again' with discussions regarding potential VOLUNTARY fiscal and/or monetary alignment of EU member countries and what would be required for this in terms of the establishment of (new) EU structures and what would be required of EU member countries wishing to join such an association- in order to bring this about...
From a functional perspective** why couldn't EU member countries that did not not want to join a fiscally and monetarily integrated EU, remain members of the EU???
Countries that wanted to join a fiscally and monetarily integrated EU could do so, provided that they met whatever conditions were established- via a new EU treaty- for this...
Why shouldn't EU member nations that choose to exit a fiscally and monetarily aligned sub-group of EU member nations remain part of the EU??
More common sense and less poorly acted dramatics need to be practised by EU member nations' politicians and bureaucrats when commenting on Greece's and the euro's difficulties...
There are no reasons why an EU that is stable, constructive, human-rights-upholding and economically fertile would not continue to function well, even if the euro was scrapped entirely and member nations regained much of their previous decision-making abilities over domestic monetary and fiscal policies....
Roderick V. Louis,
Vancouver, BC, Canada
Unemployment rates are misleading because the way they are calculated. Using the same approach to calculate it as in Europe, US unemployment is about 18% or higher.
Who is this personified "market" that you Greek reporter and others are constantly referring to when they say " the markets" demand this or that or the "markets" approve or disapprove of certain responses by the Greek people or government. (the reporter made 3 - 4 examples of responses the personified "Market" made.)
I know that "the Market" goes up or down based upon certain events or decisions, but this idea that the "Market" is like a person with knowledge, emotion, intelligence and wisdom, etc is absurd. Yet we are constantly being told that the "Market" is a "Person" and that we should trust the "Markets" and the "Market" certainly not be regulated or all that intelligence and wisdom would be thwarted.
Amazingly, I have never heard that the "Market" has a moral quality or component.
It is high time that someone like you, Diane, pushes back the market curtain and gives us a real view of who the Persons are that are manipulating the strings of this "Market Puppet Person".
Is the European debt crisis, along with the U.S.'s own debt issues a precurser to a global currency?
The reason Euro is higher than $ is the fact that most of European countries are heavy exporters. Germany by itself almost matches exports of US (with much smaller population).
Per capita revenue from exports is much higher in many of original EU countries than in US.
Europe is a great study of the confederate system. For these with nostalgia about state rights, this is how we would look if this vision prevailed in US. Europe is a good argument for the strong federal government.
The one currency (Euro) idea isn't working ~ it was a flawed economic idea from the beginning. So isn't it easier to just get rid of one currency idea than decide how to try and fix it? What is the benefit of having one currency in this region?
Burlesconi is out! now! he can go home and watch his own TV but that too much be dismantled immenently. Greece needs Turkey [read "bitter lemons" written by an [ang] irishman, who was also in that "mexico fantasy" mode]
Just like Greek restaurants are mostly in broken plate ghettos, there needs to be a private! German Island where actual philosophy can be pursued.
Turkey LIBYA and EGYPT can absorb that multi-cultural fantasy... and if they "won't" they'll get less than nothing, as there are wealthy minorities who need a home where they can pursue their greater fantasies/cultural poverty, you'll love it and be loved inn arrival,
Northern Europe needs to wash it's hands [like health culturally cares not phantasiezes] . Example; go to California and then directly by land to Mexico and you'll see what low quality people are capable of and how many cannot be trusted or valued. The ones who can need to make lemonade out of corrupt liability.