I’m worried about the EURO’s M3 if a European version of the IMF (a EMF) is to be installed.
Nonetheless, I think the European community should do it just to strengthen Europe’s economy. I’m not satisfied by Europe’s economic strength: I want it to be undefeatable.
We must not let the IMF solve our problems. Europe might be a political dwarf, but we Europeans should show that we will solve our own problems. We’re an adult composition of cultures with vast amounts of experience. We know how to solve any imaginable problem. And let’s not, in our defeatism, pretend we don’t.
A EMF is a commitment to future member states: Europe often asks them fundamental changes; economic strength is what Europe offers in return. This needs to come at a highest price: Greece will have to fix their deficit problem. Even if their entire population goes on strike. Greece will be an example for countries like my own: Belgium has to fix a serious deficit problem, too.
An EMF comes at an equally high price, and that frightens me a bit: I don’t want the ECB to go as ballistic on money creation as the FED has been last two years. I want the EURO to be the strongest relevant currency mankind has ever created. No matter how insane the rest of the world thinks that ambition is: I believe that keeping the EURO’s M3 in check is a key to creating a wealthy society in Europe.
Politically I want European nations to negotiate more and more often. The European Union is a political dwarf only because finding agreement is hard. But in the long run will our solution be the most negotiated, most tested on this planet.
Together we can deal with anything. That doesn’t mean it’ll be easy; it has never been easy: just seventy years ago we were still killing each other. We’re all guilty of that one way or another. And before that it wasn’t any better. Today, not that many people still care: “it wasn’t me”, right? So stop being a bitch about it, then.
It’s time to let it be. It’s time to start a new European century that will be better. With respect for all European cultures, languages, nations, nationalities, values, borders and interests.
But also a European century with economic responsibilities for each member. It’s our strength: we figured out how to keep our population wealthy: let’s continue doing so in the future.
I have faith in the EU. In only 10 odd years we created a monetary union. At that time lots of people were sceptical, but now looking back we don’t even think about it, but the euro has succeeded.
Mistakes have been made, but I am sure the EU will solve them. Greece being the current prime example of that.
As far as I understand and know about the current sanctions or “agreements” with Greece, they are very strict. I’ve heard an international political expert describe them as greece losing a part of it’s sovereignty for as long as their economy is such a mess.
Which in my eyes is ok. While I am sceptical about plans to create a political/governmental union (basically recreating the USA in EU), I fully endorse strict consequences on countries failing in the monetary union. It is the only way to keep the euro strong, both in the real economy as well as in the perceived economy.
Wow, I had no idea bailouts were banned. That seems like a pretty scary weakness, and this begins to clarify all of the noise about Greece: without a bailout mechanism in place, small crises can have massive effects.
I also think an EMF is a great idea. You definitely do not want a European country – hell, any country – to be left with no choice but the IMF. While I think the IMF’s goals are right, their methods have caused more harm than good. An alternative to it, based on lessons learned in the 90s and more recently, would be excellent.
>> I want it to be undefeatable.
May I ask why? Why do you care what some aggregate statistics say? No matter what collectivist speak you use, you are just 1 human, not part of some invented grouping of millions, just because you’re all taxed and ruled by the same people.
“#1 plantation, baby!!”
@Eric: Yes, but I’d like to add (as a personal, stupid, opinion) we must also stay “aware” of the cultural aspect: I don’t necessarily agree on absurd versions of “socialism” in, for example, Greece. I do have respect for the cultural meaning of “being a Greek”. Finding a balance will be among the hardest tasks mankind has ever envisioned.
We Europeans actually can do it (I think): even if we don’t want it; we’re born with the ‘expertise’ — We’re punished to figure it out.
I don’t think that we’re already creating a “USA” in the EU. We’re doing something, that’s for sure. But it’ll be different. It’ll be better. I think.
@Jay: because, and I’ll be honest now: I think the some of the values of European culture are good. That’s it.
@Ian: I agree that an EMF is a good idea for Europe (which is what I wrote in the blog article). I have not much to add to your opinion. The IMF (if I look at the IMF’s historic record) has only created more shit for the countries that requested its help. Even if its goals were good, indeed.
I guess that with the IMF there has always been a huge difference between its philosophical goals, and its political goals. Its philosophical goals are the ones you probably call “good”, right? It’s a bit naive to not see (while not saying you aren’t seeing it) the difference between the IMF’s philosophical and its political goals. I think. I think it explains very well why their methods have caused more harm than good. Politics are very bad at defining methods. Any.
One thing I like about the monetary union, is that individual nations are less able/likely to try to cover up structural issues; this may mean more pain in the short term, but it also means a more solid base for the long term.
Thought it was hilarious that about a weak before greece announced how screwed they were they were bragging about having a better handle on their economic situation than Ireland.
I think that the only purpose of EURO is preventing individual states from running a honest monetary system, not based on public debt. In the long run this assures that those who control money creation get a significant percentage of everyone’s income through that portion of taxes that is spent to repay interests on the debt.
Is a modern feudal system and it’s going global.
Adding a new fund to lend money to states is just a way of screwing them even more, just like the IMF screwed many countries around the world. There is no way that you can help an economy by injecting money and then taking even more out of it.
I recommend to check out two documentaries before praising the EU and this monetary system: Zeitgeist (free download) and Money Masters.
> It’s time to start a new European century that will be better. With respect
> for all European cultures, languages, nations, nationalities, values, borders
> and interests.
>
Can’t you see that the best way to have those things respected is through government’s that represent them? The EU is built on compromise. The sooner the UK pulls out of it, the sooner we can go back to putting laws in place and taking measures for the people of this country, without bodging them because it doesn’t suit somebody else 100’s of miles away.
@pvanhoof: I guess that with the IMF there has always been a huge difference between its philosophical goals, and its political goals. Its philosophical goals are the ones you probably call “good”, right? It’s a bit naive to not see (while not saying you aren’t seeing it) the difference between the IMF’s philosophical and its political goals.
I guess I hadn’t really thought of it that way. The main problem with the IMF is they were wrong on the asian financial crisis in the 90s. And not just a little wrong, but disastrously wrong (“shock therapy”), to the extent that some the countries it worked with *still* have not recovered. It seems to me that, however decent your cause (smooth growth and financial stability) when an organization is that spectacularly wrong, it should not be trusted anymore.
We know that shock therapy fails, from the asian financial crisis. We know what kind of bailouts work from the crisis in 08. A new organization, with the same economic goals, that integrates the knowledge of those two crises, would be a boon to the world.
@Ian: How how, it’s too early to tell whether the bailouts of 2008 worked. For those banks surely the bailouts worked. But did it work in the long run for the U.S. economy? Not so sure yet. If all that extra cash hits the market, a devaluation of the U.S. Dollar or a quite high inflation might just happen. I think the U.S. Dollar’s M3 had to double in a single year in 2008 just for that. Something that usually happens over the span of ten years. Even during wartime government spending.
@Andrea R: I’m waiting for your solution on who should be creating money and for a replacement for fractional reserve banking. I guess you want everybody to be allowed to create his own currency, right? In fact, everybody is at this moment allowed to create a currency. Whether that currency will be worth something when you convert it to the currency the ECB or the FED create is another question. Those videos that you gave are very interesting documentaries, but they are also filled up with a lot of FUD, a lot of exaggerations and conspiracy theories and a bunch of accusations while offering very very very few solutions.
@Gareth Foster: I didn’t ask the UK to join the European Union. Its membership also isn’t really the topic here. If the UK wants to leave the European Union, perhaps it should do it then, yes. But if it’s part of the EU, the least it could do is not sending idiots as MEPs.
@pvanhoof: How how, it’s too early to tell whether the bailouts of 2008 worked. For those banks surely the bailouts worked. But did it work in the long run for the U.S. economy? Not so sure yet.
In the long run, the long run is important (heh). But when you’re on the cusp of a great depression, the short run matters a *lot*. It’s the lessons from the IMF’s handling of the asian financial crisis that informed our response to the crisis in 08, and by any definition this is a *huge* improvement over what the IMF did in the 90s. Is there a better way? No doubt. Does anyone, right now, know it for sure? Fuck no. This stuff gets learned empirically. In 10 years we’ll have a good idea.
You don’t need to PROPOSE an alternate money. Money is a market invention and the market will choose the money, but most likely precious metals like gold and silver, and paper or digital currencies backed by those metals.
>> In fact, everybody is at this moment allowed to create a currency
This is true in theory, false in reality. If you offer a serious alternative to the banker cartel, they pounce. See FBI raid on http://www.libertydollar.org for an example.
For Spain, the Euro has become a double-edged sword. Spain needed high interest rates in the last decade (our economy was growing at a 3-4% rate), but the ECB set very low interest rates (2%) because Germany and France needed it (and from that POV, it was the right decision). That’s why our economy created a huge house bubble and the reason why our private debt grown so much. The Euro adoption should have been much different, we were joining completely different economies with very different needs. We pretended that it could work without problems, but it didn’t.
I don’t think the Euro will ever become a very solid currency. We are not better than dollar (and politically, the EU will never become a solid nation like USA is). The european bank system is on oxygen right now. Banks are not borrowing money from other banks, as they should, they have been borrowing from the ECB (and the ECB has been accepting suprime crap in exchange for money). This is not better than what FED has done IMO. ECB has announced it will retire that oxygen at some point. It’s then when we will see how patient is doing.