The Fall of the Euro Currency

[Armenum]

There have been recent developments with problems in the Eurozone, mainly around debt-ridden countries such as Greece. In my view, there are two things that can come out of this: one, the Euro survives, but only with the strengthening of the EU government and thus making EU more like one country than loose union, or the Euro falls and with it possibly the weakening of the European Union structure as a whole. In the long run, I would like the latter over the former, as having EU be "squeezed" into one country would be unnatural at best. Though, obviously the economic consequences would be great. What do you think, which scenario may happen (or one not highlighted here), and which one you think will be better for the EU as a whole?

France stakes future of EU on fate of euro currency

CANBERRA: France on Sunday staked the future of the European Union on the fate of the euro, saying the economic and political union at the heart of Europe would be at risk if the single currency were allowed to be torn apart by the region's sovereign debt crisis.

French Foreign Minister Alain Juppe gave a frank assessment on Sunday of the consequences of a disintegration of the euro, telling reporters on a visit to Australia that EU mainstays France and Germany were both committed to preventing this.

"We certainly cannot allow the sole currency to fall apart because falling apart would apply also to Europe as a whole," Juppe said through his own interpreter in Canberra.

"The sole currency cannot really function unless there is economic power and European government as such around the euro zone."

France and Germany, Europe's economic powerhouse, are struggling to present a united front to shore up confidence in the 17-member euro zone, because of growing public unease over propping up weaker member states, especially Greece.

Stock markets tumbled on Friday on news of the resignation of a German executive board member from the European Central Bank. And on Saturday, a sister party of German Chancellor Angela Merkel's conservatives said heavily indebted states should be threatened with ejection from the euro zone.

France's Juppe said debt-laden Greece needed to meet its commitments to put its finances on a sustainable footing, in order to access the latest 109 billion euro ($150 billion) euro-zone bailout package unveiled in July.

"Greece has made some mistakes. They have to correct these mistakes. They also have to honour the commitments that they have made," he said.

Some economists believe Greece should exit the euro to give it more control over its crippled economy, but Juppe was adamant the euro should not be allowed to unravel.

"France and Germany are agreed as to this objective. The 17-member countries of the euro zone are also supportive. It is true that outside the euro zone some countries are not of the same view, but we will be able to push this through."

LOOKING FOR a STRONGER YUAN

Juppe also suggested a stronger yuan would help reflate the euro zone, and said he would raise the issue in Beijing where he is to stop en route back home to France.

"We believe that the yuan is undervalued at present. We will certainly discuss this with the Chinese," he said.

He added that the level of the yuan, in so far as it causes imbalances in the global economy, would also be a main topic for discussion at the G20 summit in France in November.

Beijing has allowed the yuan to gain 2.6 percent since it scrapped a 23-month dollar-peg on June 19, quickening the appreciation in recent weeks as pressure mounted.

But the United States and the European Union want faster appreciation, with the U.S. administration facing a deadline on Friday to decide whether to formally label China as a currency manipulator.

Juppe appeared to link China's export-orientated economic model to the mountains of debt accumulated in Europe.

"We believe today that there is an issue appearing. It is not a European issue and it is not an American issue. It's a world-wide issue therefore we have to try and rebalance the economic situation worldwide," Juppe said.

"China has chosen a development model focused on exports which is really something that we could all learn from. In fact, it was advantageous to us because we were able to purchase consumer goods at very good prices, but we have not really thought the matter through in terms of the effect that it would have on our own competitiveness.

"We incurred rather a lot of debt and in particular we owe a lot of money to China, so really this system that we have in place is not long-term sustainable." ($1 = 0.729 Euros)

http://economictimes.indiatimes.com/...ow/9942682.cms

[nemgod]

There have been recent developments with problems in the Eurozone, mainly around debt-ridden countries such as Greece. In my view, there are two things that can come out of this: one, the Euro survives, but only with the strengthening of the EU government and thus making EU more like one country than loose union, or the Euro falls and with it possibly the weakening of the European Union structure as a whole. In the long run, I would like the latter over the former, as having EU be "squeezed" into one country would be unnatural at best. Though, obviously the economic consequences would be great. What do you think, which scenario may happen (or one not highlighted here), and which one you think will be better for the EU as a whole?

I would have to disagree. The former in the long term would be more beneficial for Europeans and humanity as a whole. Free travel and single currancy is a good things for most, a unified europe gives europeans a bigger shout in international affairs which could benefit the people of Europe instead of becoming parts influence spheres of the bigger powers (US, Russia, China, India etc).

Plus a more united Europe as a whole will make it even less likely than now that any kind of fighting between european powers flair up anytime soon.

[saglam2000]

The Euro wont fall apart, Germany is just going to use it a method of consolidating economic control over the rest of Europe

[Treize]

I, for one, will dance at the grave of the Euro and the eurofederalist project.

[il padrino]

I, for one, will dance at the grave of the Euro and the eurofederalist project.

That's two of us then.

[NotYetRegistered]

I, for one, will dance at the grave of the Euro and the eurofederalist project.

Death to all the benefits it has given us.

[Treize]

Death to all the benefits it has given us.

Yea, no freedom, no soveignity, no economic security and no innovation.

[Ahlerich]

Yea, no freedom, no soveignity, no economic security and no innovation.

if the eu would mean no freedom and no sovereignity the euro currency would not be messed up and taget of speculations now.
no sovereignity would have meant germany would have forced banking regulations on the countries that are in trouble now.
this is acually what germany still wants to do and whats unlikely to ever hapen as countries in deed hat to give up a bit of their soveignity.

collapse of the euro/zone would most likely mean that 90%+ of all european citizen would become as poor as a chinese farmer. i d like not to. its hard to give up "luxuries" once you got used to them.

http://www.zeit.de/wirtschaft/2011-0...hland-eurozone

very interesting blog from a greek professor in athen. he suggests that germany acually wants to let greece crumble and then leave the euro itself with "worthy/undepted" partners and create a new zone. i personally would be intrigued by a move like that but i am sure he is wrong as germany would not pull as shady and tricky unhonerable but smart moves.

i have a question to fellow european members. since last years its clear to most if not everybody that greece has to default but it was a unwritten rule to not say that in public by people of significance aka politicians/economists.
this week in germany that tabou has been broken and several politicians talk about a likely default of greece. do politicians in your country also talk openly about a default of greece? do they do that just now or have they been doing that all the time? (i mean politicians of main/traditional parties not the edge of the forum smaller parties(

[Mangerman]

very interesting blog from a greek professor in athen. he suggests that germany acually wants to let greece crumble and then leave the euro itself with "worthy/undepted" partners and create a new zone. i personally would be intrigued by a move like that but i am sure he is wrong as germany would not pull as shady and tricky unhonerable but smart moves.

So that would basicly be Germany, the Netherlands and Finland?

i have a question to fellow european members. since last years its clear to most if not everybody that greece has to default but it was a unwritten rule to not say that in public by people of significance aka politicians/economists.
this week in germany that tabou has been broken and several politicians talk about a likely default of greece. do politicians in your country also talk openly about a default of greece? do they do that just now or have they been doing that all the time? (i mean politicians of main/traditional parties not the edge of the forum smaller parties(

Dutch politicians (besides Wilders, who has been saying that for ages), like our PM have been openly mentioning the possibility it since last week (and from what I read, actually kickstarted the open discussion about letting Greece default in the rest of Europe/Germany).

[Condottiere 40K]

From what I heard, what Germany wants to avoid is being blamed for the collapse of the Euro, and is preparing contingency plans when it does.

[Treize]

collapse of the euro/zone would most likely mean that 90%+ of all european citizen would become as poor as a chinese farmer. i d like not to. its hard to give up "luxuries" once you got used to them.

Who told you such ?

We would bail out the banks again and be done with it. Still cheaper than bailing out Greece, which is impossible anyway.

Personally I believe the Greek people who are unwilling to enact the required reforms, who are unwilling to work for their money, who are chronically lazy and who belived that living off loans and EU handouts is sustainable asked, no begged for this to happen. Hopefully the collapse of their economy and the decline in living standards will teach them a lesson.

So either Greece, Portugal, Spain and prehaps Italy out of the Euro or we out of the Euro.

[a tw player]

I, for one, will dance at the grave of the Euro and the eurofederalist project.

Qft.

[Ahlerich]

Qft.

sure but only because you dont see the consequences it would have for the next decades.

[a tw player]

sure but only because you dont see the consequences it would have for the next decades.

I do see the consequences, the result will be economically dire (though I disagree with the time-scale; would probably be something like 5-10 years, though sure repercussions would last longer than that). Would be worth it though.

Anyway, I'm fairly sure that, sooner or later, Greece will be forced out of or be "obliged" to leave the Euro. It's clear that from then on contagion is a major issue, if it happens then the Euro will be forced into some sort of reform. What that may be I'm not sure (the logical one for me would be to get rid of it entirely and just go back to sovereign states with their own currencies), but my best guess is that the politicians will do everything they can to avoid admittance of defeat.

There won't be any USE as there would simply be far too strong an opposition to it which, as the OP correctly states, is probably the only realistic solution to "fixing" the Euro. So with that out of the equation, what else can be done? It's naive to believe that Germany will keep footing the bill of further attempts to contain the sovereign debt.

[Thorn777]

As a pro EU guy Im strongly opposed to the EU becoming a federal-state. Matter effect if it ever came to that, I'd be out there being trouble.

I have the feeling nation states are under attack all over. Not by wars this time but via accumulated private economic power. This issue can in my views better be handled when the nations in Europe are strongly aligned, but the nation state itself always needs to be a beacon of last resort, where the people of that nation have the right to determine their destiny as a people.

Also, admittedly, Im not to fond of the idea of Bavaria, Hessia and Baden-Würtenberg not only paying for federal-Germany, but in the ideas of some, hence also for the entire continent. It wont stick...

[Exarch]

if the euro is to survive, germany must be given greater control over all eurozone economies; all countries' gold must be stored in munich.

[Dubh the dark]

There is no reason we can't keep free movement of trade and people, whilst disbanding the Euro.

A federal EU would need to be agreed upon by all member states.

I don't know if I can see that happening.

[Exarch]

if the EU must die then so be it; but the dream of a united europe will never die; the story of european countries is always a tale of there being too many chiefs and too few indians; every middle ranking euro power wants to be top dog; when they should all recognise their individual inherent inferiority when compared to say, the united states. now i've said before that The only country that has what it takes to unite and lead europe was always, and has always been Germany.

if the EU is to survive then the entire EU must be germanised; starting off with the absorption of poland into german territory and half of france as well. with that out of the way, the common languages in the EU should be english and german

[Dubh the dark]

if the EU must die then so be it; but the dream of a united europe will never die; the story of european countries is always a tale of there being too many chiefs and too few indians; every middle ranking euro power wants to be top dog; when they should all recognise their individual inherent inferiority when compared to say, the united states. now i've said before that The only country that has what it takes to unite and lead europe was always, and has always been Germany.

if the EU is to survive then the entire EU must be germanised; starting off with the absorption of poland into german territory and half of france as well. with that out of the way, the common languages in the EU should be english and german

I sincerely hope that's some kind of surrealist joke.

[Their Law]

I, for one, will mourn at the grave of the Euro and the eurofederalist project.