Ok, some of you may recall that I've made posts in the past that stated that the "European Union" was a bad idea, and that in the long run, it will sow the seeds for an "ultranationalist" to rise in one of its member countries, who will blame the country's woes on the EU.

I ran across this article this morning:

http://news.yahoo.com/s/ap/20100301/ap_on_bi_ge/eu_greece_financial_crisis

Seems that the Greek government has got its butt in a massive crack over debt, and if things get really bad, a Greek default could cause havoc with the Euro currency.  So France and Germany are now contemplating a financial bailout of Greece, but they are also dictating to Greece that it cut its public spending.

As I see it, there are at least three seeds of discontent being sown here:


French and Germans who resent their tax $$$ bailing out Greece.
Greeks (especially unions that represent government workers) resenting foreign governments dictating public spending cuts.
Citizens of other EU countries resenting Greece if the Euro does indeed crash and an inflation spiral results.


I have not followed the whole Greece story so I don't know what caused their problem.  But what I do know is that this sort of scenario is exactly the kind of thing that can cause ultranationalist politicians to get popular support and cause problems on the Continent.

Thoughts, anybody? ???

The EU is definitely a mistake.  Then again, Greece needs a wake up call anyway.  Their bureaucrats have had very cushy benefits for a long time now, and it's time for Greece to cut the fat out of their government.

This should give you a brief idea of what's happening with Greece and world currency markets right now...

You'll notice that various other countries are in the same boat as Greece and rather worringly, so is Britain, who are not even within the Euro (gulp!)

You'll notice that various other countries are in the same boat as Greece and rather worringly, so is Britain, who are not even within the Euro (gulp!)

One of the arguments against being in the Euro was that if you get yourself into a pickle (as Greece has) you can't play with interest rates unilaterally, and your currency can't drop in value to help rebalance things.. though it looks rather like the Euro is doing the latter which is probably good news for Greece (having said that.. what do Greece actually export?).


The EU is definitely a mistake.

I'm in the rather schizoid position of being a Europhile who can't stand the way the EU is set up: one of those great ideas spoiled by dreadful implementation.

One of the arguments against being in the Euro was that if you get yourself into a pickle (as Greece has) you can't play with interest rates unilaterally, and your currency can't drop in value to help rebalance things.. though it looks rather like the Euro is doing the latter which is probably good news for Greece (having said that.. what do Greece actually export?).



Western civilization?
???

One of the arguments against being in the Euro was that if you get yourself into a pickle (as Greece has) you can't play with interest rates unilaterally, and your currency can't drop in value to help rebalance things..

The problem with that argument is that the default in Euro-denominated debts by countries other than one's own can very rapidly cause financial havoc at home.  The common courtesy puts "my" home country's finances more at risk to lack of discipline in other countries.

The fallacy of the Euro is the old "bigger is better" idea...

This should give you a brief idea of what's happening with Greece and world currency markets right now...

You'll notice that various other countries are in the same boat as Greece and rather worringly, so is Britain, who are not even within the Euro (gulp!)


What you said.

This is essentially the AIG problem writ larger; instead of corporations imploding, it's the governments imploding.  Unlike Iceland, a Greek default would do serious damage to the Euro, and if the Euro fails, that money will flood into US Treasuries.  Which would be great if you were into bonds, and not so great if you were betting on inflation and commodities (which are priced in USD) as an alternative to fiat curriencies. 

And no, I haven't made up my mind yet either.  But it is the reason the year-long US market rally has stalled out over the past month or two.

Zero Hedge is good for a trader's take on the situation, as well as biting commentary with occasional bursts of hilarity.

On a more serious note, Yves Smith writes a mean blog, and her guest bloggers are also covering the story.

Don't feel bad if you feel confused about how bad the situation is; everyone's confused, and because billions of dollars (to say nothing of political power) are riding on the outcome, everyone in a situation to do anything about it is keeping their mouth shut...

Western civilization?
???


Greece is one of those countries that rested on its laurels for far too long and lapsed into complete mediocrity.

Granted, that's basically the direction America is headed in as well.

I'm in the rather schizoid position of being a Europhile who can't stand the way the EU is set up: one of those great ideas spoiled by dreadful implementation.


I know what you mean, but I still think national sovereignty is a much better way of doing things.

If anything, the world should have more countries, not less.  For example, America is becoming too big for its own good.  We should probably split into multiple countries eventually.

I know what you mean, but I still think national sovereignty is a much better way of doing things.

If anything, the world should have more countries, not less.  For example, America is becoming too big for its own good.  We should probably split into multiple countries eventually.

One of the key ideas of the original EU treaties was "subsidiarity" - the idea that decision-making should be devolved to the lowest level at which things can be decided.  It was a big buzz-word for a while, except that national governments took it as meaning "power devolves to us from Europe", and the whole principle is often ignored completely by the EU parliament (largely because it would mean them having sod all to do) and especially the EU commission (which seems at times to have the misguided view that it's a policy-making body, especially under Barroso).

Quite often the talk is spot on.. yet the decisions made always seem to be a centralizing of power, frequently into corrupt, unaccountable bodies.


Western civilization?
???

I think I said "do", not "did" ;)

Modern day Greece doesn't seem to have a lot in common with the classical one.

OK, lads, I guess the warranty on Plato has expired.
:(

Anyway, I'm not too worried about Greece for I am not a Greek.  As an American, I am worried about America, which is the Titanic to Greece's capsized canoe!
:o

As an American, I am worried about America, which is the Titanic to Greece's capsized canoe!
:o

Yeah.. their problem has been for too long they've tried to have their kayak and eat it

Yeah.. their problem has been for too long they've tried to have their kayak and eat it


I hate myself for giving you a Karma for such a corny joke...but a Karma is warranted nonetheless!
:)