Thoughts about the European Union.

[BeardofPants]

(serious giggle)

LOL

[Lief Erikson]

Lol!

[GrayMouser]

The High Representative for Foreign Affairs and Security Policy of the European Union Catherine Ashton condemned "unreservedly the attack against innocent Copt worshipers", stating that "there cannot be any justification for this attack" and that "the right of Christian Copts to gather and worship freely must be protected."[55]

Seems to mention Christians.

From an anonymous diplomat in the Telegraph article:

"She cannot even finesse a statement from Christian Europe condemning attacks on Christians."

Perhaps Baroness Ashford does not see her role as a spokesperson for 'Christian Europe', particularly as she represents a country where Christianity is a minority religion.

[GrayMouser]

On a vaguely related note, I was teaching an elementary-school age class from an American-published ESL text-book. ESL is "English as a Second Language" so this was a book aimed at immigrant children in the US.

The book had a lesson on Holidays/Festivals; they taught about Mother's Day, Father's Day, Thanksgiving, Halloween, Independence Day and Valentine's- but no Christmas.

It seemed strange to my ten-year-olds, since even in this decidedly non-Christian tropical country we're everywhere assaulted with Santa Claus, Christmas trees and snowmen, usually culminating in a party and a small gift.

One kid asked "I know they don't have (Chinese) New Year, but don't they even get Christmas in America?"

[GrayMouser]

Originally Posted by inked

(serious answer)

Tunisia, Egypt, Jordan, Turkey, Russia, Africa, ... .

Not to mention Pakistan, Bangla Desh, Afghanistan, and in the latest atrocity, Indonesia

– Indonesia's president ordered an investigation Monday into an attack on members of a minority Muslim sect after a gruesome video emerged of a mob beating several victims to death with machetes, sticks and rocks.

About 1,500 people stormed a house in Banten province on Sunday to stop 20 Ahmadiyah followers from worshipping.

They killed three men and badly wounded six others, while destroying the house and setting fire to several cars and motorbikes.

Following repeated attacks on Christians, in a country that was always fairly tolerant (religiously, anyways).

These days I'm feeling somewhat inkish about our Muslim brethren myself.

[Valandil]

As many of you would know, the economy in Europe is struggling right now (along with the rest of us), but the EU has some peculiar situations stemming from its nature as a union of sovereign states. And now some very interesting things are developing, with the economy of Greece in particularly bad shape, an EU plan to assist in place, requiring 'austerity measures' for Greece, the apparent rejection of these austerity measures by the Greek populace at large, and now, today - the announcement by the Greek Prime Minister that he will seek a referendum on the implementation of this plan, with its austerity measures.

What do you folks think of this?

Do you think the long-term outlook of the EU as an entity is precarious, or do you think it will last a long time? Do you think Greece might get kicked out of the EU if they continue to struggle economically and do not accept the conditions for assistance required by the other EU members?

What do you see the future of the EU to be?

[GrayMouser]

Best 'short' summary I found on the whole thing.

Here's a cleaned-up version of a conversation I just had about Greece's sudden U-turn on the rescue deal negotiated just last week. Enjoy.


Are the Greeks crazy?

No, they're just at the end of their tether. Europe is asking them to adopt more austerity than they're willing to bear.

OK, but they're spending too much money. Surely they know they have to cut back?

Sure, but the deals on offer are pretty unattractive. Europe wants to forgive half of Greece's debt and put them on a brutal austerity plan. The problem is that this is unrealistic. Greece would be broke even if all its debt were forgiven, and if their economy tanks they'll be even broker.

But that's the prospect they're being offered: a little bit of debt forgiveness and a lot of austerity.

Well, them's the breaks.

But it puts Greece into a death spiral. They can't pay their debts, so they cut back, which hurts their economy, which makes them even broker, so they cut back some more, rinse and repeat. There's virtually no hope that they'll recover anytime in the near future. It's just endless pain. What they need is total debt forgiveness and lots of aid going forward.

That doesn't sound like a very attractive option for the rest of Europe

No, it's not.

So maybe they should just let Greece default and wash their hands of them.

Here's the thing, though: Greek debt is largely held by German banks that made the loans. [See update below.] If Greece has been irresponsible, so were the German banks that happily loaned out the money. So if Greece defaults, the banks go kablooey. But they're too big to fail, which means the German government would be forced to bail them out. And guess where the bailout money comes from? Tax dollars.

This means that German taxpayers have a bleak choice. They can shovel lots of money to Greece to keep them from defaulting, or they can refuse, and then shovel lots of money into German banks to keep them from collapsing. Either way, German taxpayers are going to foot the bill. They just haven't quite accepted this in their gut yet, and it's hard to blame them. They're pretty badly screwed no matter what.

Hmmm. Given that choice, they might decide they'd rather give their money to German banks than to Greek civil servants. What happens then?

Greece defaults. And that almost certainly means that Greece exits the euro.

Why?

It's the growth thing again. If Greece defaults, nobody will loan them any money. That means huge cutbacks, which means the economy will tank, which means even more cutbacks, etc. The traditional way out of this spiral is a massive devaluation of your currency. But Greece doesn't have a currency. It has the euro.

So if they want their economy to grow again, they have to (a) default, (b) exit the euro and re-adopt the drachma, and (c) devalue the drachma. This will cause massive amounts of pain, but it will also make Greek exports super cheap, which will eventually revive their economy.

So why not just let that happen?

It's just too catastrophic to consider. German banks, of course, would collapse and have to be bailed out. Ditto for banks in other countries that have lots of exposure to Greek debt. But that's not the worst of it. If Greece exits the euro, it will become terrifyingly obvious that other weak countries might exit too. Portugal, Spain, and Italy are the obvious candidates. Investors, spooked at the thought of their money being stuck in a country that might exit the euro and devalue all its bank deposits, would start huge runs on banks in those countries. The ECB would have to intervene and provide liquidity without limit. It would be a disaster.

So exiting the euro can't be allowed?

Right.

But if there's no exit, there's no devaluation, and Greece is pretty much screwed forever.

Right.

So who wins?

It depends on who blinks. Exiting the euro would be no picnic for Greece. But they could decide it's better than endless indenture, and threaten exit in order to get a better deal from the Germans. Then the Germans have to decide whether to call their bluff.

Wow.

Exactly. Wow. Everyone knows that somebody's going to lose a huge pile of money over this. What's really happening right now is a very high-stakes negotiation to figure out just how the losses are going to be parceled out. Stay tuned.

UPDATE: It's actually a little unclear just which country has the biggest exposure to Greek debt. Maybe Germany, maybe France, maybe Switzerland. See here, here, and here. And the ECB owns a lot of Greek debt these days too. But the general principle doesn't change much. One way or another, Europe's big countries have to decide whether to bail out Greece or whether to let them default and then bail out their own banking systems.

http://motherjones.com/kevin-drum

For the long term, there's basically two options. Either the southern tier drops out and the Euro essentially becomes a Deutsch-mark zone-plus-France, or Europe has to do what the U.S. did at their Constitutional Convention: decide to become the United States of Europe.

After all, nobody panics when there's a massive deficit in Alabama, right?

However, the citizens of Europe have been pulled into this by their elites, and are understandably disgruntled about what is happening, and so there is no way they are going to accept the second solution at the moment.

[The Gaffer]

That's a great summary, GM.

I am a Europhile, generally speaking, but I think this was always going to happen at some stage and I am glad that the UK did not join the Euro.

It can be misleading to draw parallels with the US states. The structural differences between European countries are huge. However, I think that greater integration will be the result with non-Euro countries being in the EU "slow lane".

[Mari]

Italy is actually the 2nd largest economy in the EU. I was surprised.

[Draken]

All of which opens up the old fracture lines (and crude generalisations) about the North/South divide in the EU, which can be paraphrased as "hard-working, sober-minded Saxons funding feckless and inefficient Mediterraneans." Unfair I know but I think that summarises many people's views.

Whether its propping up Greece directly or propping up the banks that kept lending and lending, this is going a suck gazillions out of a number of G20 economies, which will have a knock-on effect among all trading nations. Recession Part 2, anyone?

On the plus side, I hear Estonia is doing roaringly well out of both the Euro and the EU.

[The Gaffer]

Depends how you define "roaringly"; I saw this on another forum:



Can't vouch for the accuracy of those stats, and clearly it should be "median" instead of "medium", but anyway, the point is made.

Things are changing by the hour on this one. Now the Greek PM is going to resign, so there may not be a referendum at all. Check back in half an hour to see if they have flogged the Parthenon to a timeshare developer.

On the north-south thing, it's important to characterise this in terms of "fully industrialised" and "until quite recently, agricultural subsistence economies". Italy exemplifies it: powerhouse northern industrial half, backwards southern agricultural half.

But this has been in the post for years. We kept writing "not known at this address" and bunging it back in the pillar box.

For me, the key question is, when are people going to realise that the fault is with the system, and the utterly clueless economists and financiers that administer it, not with lazy Greeks or venal speculators?

[Draken]

I based it on a Radio 4 item I heard. A quick check - yes the Estonian economy took a pounding in 2009, but that was after almost a decade of growth that sometimes topped 10% pa - and the 2011 estimate is a very healthy 6.5%. Plus national debt is about 7% of GDP compared to Greece's 120%.

[inked]

Well, everyone in the Tea Party and other conservative groups are complaining about the deficits, so I'm not sure the Alabama reference is germane.

Did you know that 49% of Americans pay no income taxes? They are the Greece of the American economy and they want bailouts in the form of social subsidies. Now perhaps conservatives in America will be better understood by liberal Europeans who want it all but just not to have to pay for it (Germany versus Greece, anyone?).

[The Gaffer]

So conservatives are in favour of more people paying their taxes? I must have missed that memo.

[Insidious Rex]

No, conservatives in america are in favor of the rich getting more tax breaks (did you know inked that quite a few of the richest companies in america pay no taxes either?) and the poor and shrinking middle class being forced to take on a flat tax so that what little spare income they have for buying things like gas and groceries is siphoned off in tax hits at the expenditure level because they are lazy freeloaders and all. They have even somehow managed to brain wash poor and middle class conservatives that this is a better idea then the rich paying their fair share. And when Warren Buffet complains about paying less taxes then his secretary they tell him to shut his commie mouth.

[inked]

Then again, maybe not.

Donate your Euros to Greece.

[Draken]

Originally Posted by inked

Did you know that 49% of Americans pay no income taxes?

Something which the remaining 51% aspire to

[The Gaffer]

I think there is an element of congruence between right and left on this. Here in the UK the "left" (well - heh - the Labour party, not exactly lefties, but compared to your lot they are raging communists) is opposing an IMF bail-out fund to supplant the European Central Bank. In this respect they are in agreement with the foaming-mouthed right-wing Eurosceptics.

There is a simple answer to all of the financial problems facing the world: get everyone to pay their ****ing taxes. In Greece there is tax evasion on a massive scale. In the UK, US and other major countries, there is an enormous industry based around tax avoidance, resulting in the ridiculous situation of these huge corporations and massively rich individuals paying hardly any tax. The fact that one is illegal and one is not doesn't affect the morality. It is immoral to avoid taxes. If you avoid taxes, you are a parasite.

[Earniel]

Originally Posted by inked

Did you know that 49% of Americans pay no income taxes?

But what about other taxes, surely income tax isn't the only tax to be paid in America? I can't tell from here but surely it isn't the only one? No VAT, property tax, community tax, recycling tax, registration duties, fuel tax and a boatload of others that I don't know the English term for?

- Eärniel, who lives in a country that has one of the highest tax pressures in the EU and who genuinely would like to know whether she should consider migrating. Certainly not to Greece, although that a meditteranean climate, a fourteenth month in wages, hardly any amenities to pay for, retirement before 60 sounds and letting somebody else sort out my financial problems sound pretty awesome...

[BeardofPants]

No, it's not the only one. They also pay things like payroll tax. It's very disingenuous to imply that they are tax dodgers. It's simply not true.