European Splintering Escalates: Dutch Government Falls; Slovakia Government Collapsed In March; Czech Government Collapse Coming Right Up

[MrPin]

The Third Reich lasted only twelve years!

[RichM]

Yeah, but what's the bad news?

[RufflesTheGuineaPig]

In the future, the near future, people will look back at the EU and the European governments and ask... "was everybody high all the time?"

[Snugglybear]

But what happens if austerity is inevitable (as many on here say) and nation state and regional governments have to impose it? Who are they going to blame if there's no EU to finger?

[Sir Harold m]

But what happens if austerity is inevitable (as many on here say) and nation state and regional governments have to impose it? Who are they going to blame if there's no EU to finger?

They can blame their own governments, get rid of them and then elect another who may or may not succeed. This may result in cyclical blame etc but eventually the natural mechanics of their economy will rebalance, recession, soft default, inflation, depression, recovery.

What they will avoid is the imposition from abroad of a hand picked unelected leader who will ensure the sub prime lenders who lent the money to their predecessors get their return at all costs.

Sovereign lending is ok but lenders must realise the risks involved. There is no such thing as moral hazard in sovereign lending. You simply can not expect unborn to be morally culpable for grandads debts .

When people get this they will stop bleating about morality of defaults , inflation etc etc . Lenders (ie holders of paper) are subject to risk just as much as borrowers, if they don't like it buy assets instead !

Personally, I think people running countries should balance inflation with credibility rather than putting all eggs in one basket either through total default or massive austerity.

You gave to be out of the euro straitjacket to balance this act

[Mr. Miyagi]

Farage did say that the collapse of the EZ could come from an unexpected source, perhaps the Dutch will be the catalyst.

[stormymonday_2011]

But what happens if austerity is inevitable (as many on here say) and nation state and regional governments have to impose it? Who are they going to blame if there's no EU to finger?

Foreigners, Jewish financiers, global capitalists, immigrants, neighbouring countries etc.

You know the script.

How far it will go and how extreme it will get.is anyones guess.

What is unusual is that the current hatred of pan European institutions is almost a mirror image of some of the things seen prior to the fall of the Soviet Union (ie Euro puppet regimes such as in Greece facing crowds on the streets, sullen populaces etc). However, I don't agree with those who think this is just a crisis of European 'socialism'. It is centre right governments that practise both social and economic liberalism that are feeling the heat.

The irony is that what is likely to kill the EU is the Euro, the very thing that was supposed to have guaranteed the future of the European super state. Plus. of course, eye watering levels of corruption but then the UK is well down that road too.

Edited April 23, 2012 by stormymonday_2011

[Guest Control]

There is no such thing as moral hazard in sovereign lending. You simply can not expect unborn to be morally culpable for grandads debts .

This isn't actually true or anything new. We have always expected the next generation to pay the debts of the previous ones. It happens with all sorts of things. For example we didn't pay off world war 2 debt until 2006. http://www.independent.co.uk/news/business/news/britain-pays-off-final-instalment-of-us-loan--after-61-years-430118.html

Germany didn't finish paying reparations for World War 1 until 2010.

http://www.telegraph.co.uk/news/worldnews/europe/germany/8029948/First-World-War-officially-ends.html

Which means every one of us has been paying off grandad's debt all our working lives. Paying off debts of previous generations is actually a non issue unless the reparations become onerous.

Edited April 23, 2012 by Control

[marceau]

This isn't actually true or anything new. We have always expected the next generation to pay the debts of the previous ones. It happens with all sorts of things. For example we didn't pay off world war 2 debt until 2006.

Germany didn't finish paying reparations for World War 1 until 2010.

Which means every one of us has been paying off grandad's debt all our working lives. Paying off debts of previous generations is actually a non issue unless the reparations become onerous.

Rubbish.

Key word is structural - those debts weren't, our debts are. Please take 2 minutes on google to understand the difference before spouting any establishment party line bilge.

You'd have thought that after this long people would have picked up on the difference between debt and deficit.

[fluffy666]

But what happens if austerity is inevitable (as many on here say) and nation state and regional governments have to impose it? Who are they going to blame if there's no EU to finger?

There is Austerity and Austerity..

Deflationary Austerity is where you try to cut nominal spending to balance the budget. This is the 'Canada Approach'; it works fine if you have low unemployment to start with and significant growth; i.e. in the good times. It also appeals to the 'shrink the government whenever' types. If you already have issues with a lack of demand, high unemployment and a shrinking economy.. then this approach is simply economic suicide; cuts mean higher unemployment and less demand, so less private sector activity and higher welfare bills. Meaning yet more cuts and more unemployment. So you end up with 50% youth unemployment and wonder why you still can't balance the budget..

Inflationary Austerity is where you quite deliberately spur inflation to double digit levels, whilst keeping tax bands in place (or only slowly raised), and restricting consumer/housing credit. So you effectively raise taxes, at least in nominal terms, whilst keeping unemployment low and demand high. Not fun for the retired or those sitting on large cash savings pots. Danger is that inflation goes completely out of control..

[Guest Control]

Rubbish.

Key word is structural - those debts weren't, our debts are. Please take 2 minutes on google to understand the difference before spouting any establishment party line bilge.

You'd have thought that after this long people would have picked up on the difference between debt and deficit.

My aren't you het up. I have no party line, but your knee jerk reflex is keenly tuned to the monetarist propaganda channel it seems. Perhaps you could take fifteen seconds to read the the statement I was responding to and then re-read my response before blustering your own dogma. It makes no difference whether the debts are structural or not. We have always handed debt on to the next generation. It's the scale of the debt that matters. But that aside we've passed structural debt on for generations it is not a new thing.

[Georgia O'Keeffe]

My aren't you het up. I have no party line, but your knee jerk reflex is keenly tuned to the monetarist propaganda channel it seems. Perhaps you could take fifteen seconds to read the the statement I was responding to and then re-read my response before blustering your own dogma. It makes no difference whether the debts are structural or not. We have always handed debt on to the next generation. It's the scale of the debt that matters. But that aside we've passed structural debt on for generations it is not a new thing.

generally via the stupidity of wars as you allude to but to manage it on the back of nothing more than i want more, im entitled is no mean historical feat to be scoffed at

[Democorruptcy]

My aren't you het up. I have no party line, but your knee jerk reflex is keenly tuned to the monetarist propaganda channel it seems. Perhaps you could take fifteen seconds to read the the statement I was responding to and then re-read my response before blustering your own dogma. It makes no difference whether the debts are structural or not. We have always handed debt on to the next generation. It's the scale of the debt that matters. But that aside we've passed structural debt on for generations it is not a new thing.

Have EU governments always paid billions to US banks then demanded their people have austerity and work longer to pay for it?

Sub prime, interest rate swaps...

When Morgan Stanley (MS) said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates.

http://www.businessweek.com/news/2012-03-16/italy-said-to-pay-morgan-stanley-3-dot-4-billion-to-exit-derivative

[Guest Control]

Have EU governments always paid billions to US banks then demanded their people have austerity and work longer to pay for it?

Sub prime, interest rate swaps...

When Morgan Stanley (MS) said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates.

http://www.businessweek.com/news/2012-03-16/italy-said-to-pay-morgan-stanley-3-dot-4-billion-to-exit-derivative

No, but I wan't responding to that, my response was to the related idea that it's somehow immoral to ask the unborn to pay garandad's debts when it's something that has happened regularly to many generations. I also made the point that it's the scale of the debt and or deficit that is the issue.

[Democorruptcy]

No, but I wan't responding to that, my response was to the related idea that it's somehow immoral to ask the unborn to pay garandad's debts when it's something that has happened regularly to many generations. I also made the point that it's the scale of the debt and or deficit that is the issue.

This time it isn't just structural debt though is it? It's grand scale theft.

[thecrashingisles]

Belgium once again leading the way. Who needs governments?

[campervanman]

In the future, the near future, people will look back at the EU and the European governments and ask... "was everybody high all the time?"

Alternatively they might ask 'why did we allow ourselves to become part of a race to the bottom'

Edited April 23, 2012 by campervanman

[stormymonday_2011]

Have EU governments always paid billions to US banks then demanded their people have austerity and work longer to pay for it?

Sub prime, interest rate swaps...

When Morgan Stanley (MS) said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates.

http://www.businessweek.com/news/2012-03-16/italy-said-to-pay-morgan-stanley-3-dot-4-billion-to-exit-derivative

This is the point I was alluding to above.

The European super state may be a fantasy dream that has now been rumbled but the assumption of some that it will inevitably be replaced by the Anglo-Saxon liberal capitalist internationalist model is equally deranged.

Of course, none of this is helped by the confusion of terminology which has arisen in the English speaking world, particularly in the USA, where the term conservative really means economic liberal while the term liberal has come to mean quasi socialist. Now in America only people like Pat Buchanan are aware of the difference. Similarly in the UK, the current Conservative party under David Cameron is far closer in economic ideology to 19th Century Liberalism than it is to its own true conservative King, Church and Country nationalist roots ( the same is also true of the Labour Party on the left which long ago ditched Kier Hardie for Lloyd George). This is why the UK parties are constantly alienating their core voters who naively believe the parties represent what is said on the tin. One thing the Europeans do have is more genuine choice at the polls. There are no true left wing or right wing populist parties left in the UK apart from possibly UKIP. Instead, we have loony tune fringe parties, probably funded by the secret sevices, whose sole purpose is to discredit the idea that there is any alternative to the current crooked status quo.

Our Continental neighbours are not quite so easily duped. I dont get the impression that they want to ditch the current European set up so they can replace it with the world of Obama or Cameron. Language differences alone means Europe is more likely to revert to nationalism than the English speaking world.

BTW worth noting that Le Pen's National Front appears to have polled quite well with the young. Those who imagine it just represents disgruntled old fascists may have to start thinking again.

http://www.csmonitor.com/World/Europe/2012/0411/Why-French-far-right-candidate-Marine-Le-Pen-is-attracting-youth

Edited April 23, 2012 by stormymonday_2011

[Guest Control]

This time it isn't just structural debt though is it? It's grand scale theft.

I agree. That is the real problem that is not being dealt with.

[Bloo Loo]

This is the point I was alluding to above.

The European super state may be a fantasy dream that has now been rumbled but the assumption of some that it will inevitably be replaced by the Anglo-Saxon liberal capitalist internationalist model is equally deranged.

Of course, none of this is helped by the confusion of terminology which has arisen in the English speaking world, particularly in the USA, where the term conservative really means economic liberal while the term liberal has come to mean quasi socialist. Now in America only people like Pat Buchanan are aware of the difference. Similarly in the UK, the current Conservative party under David Cameron is far closer in economic ideology to 19th Century Liberalism than it is to its own true conservative King, Church and Country nationalist roots ( the same is also true of the Labour Party on the left which long ago ditched Kier Hardie for Lloyd George). This is why the UK parties are constantly alienating their core voters who naively believe the parties represent what is said on the tin. One thing the Europeans do have is more genuine choice at the polls. There are no true left wing or right wing populist parties left in the UK apart from possibly UKIP. Instead, we have loony tune fringe parties, probably funded by the secret sevices, whose sole purpose is to discredit the idea that there is any alternative to the current crooked status quo.

Our Continental neighbours are not quite so easily duped. I dont get the impression that they want to ditch the current European set up so they can replace it with the world of Obama or Cameron. Language differences alone means Europe is more likely to revert to nationalism than the English speaking world.

BTW worth noting that Le Pen's National Front appears to have polled quite well with the young. Those who imagine it just represents disgruntled old fascists may have to start thinking again.

you can call it liberal this, democratic that, conservative the other...it doesnt matter what overspending is carried out by whatever colour/position/hue movement.....any fool can see this if they go into sainsburies with a £5 and try to spend £5.01.....you have to take something out of the basket OR use the credit card.

[stormymonday_2011]

you can call it liberal this, democratic that, conservative the other...it doesnt matter what overspending is carried out by whatever colour/position/hue movement.....any fool can see this if they go into sainsburies with a £5 and try to spend £5.01.....you have to take something out of the basket OR use the credit card.

True in the long term but Nationalist governments can buck the trend long enough to rearm and start the next war.

They can also restrict movement, impose trade barriers, nationalise industries, mobilise or conscript labour.

It has all been done in the past and not just in Nazi Germany.

Moreover, there is the third alternative to the credit card or cash in Sainsburies, You can simply steal the produce of others which after all is what most wars are about.

When a modern day Heinz Guderian sets the Panzers rolling I will look forward to the European members of the Von Mises institute stopping them with cries of 'You cant afford that tank' and 'Your deficit financed economic model is flawed '. Of course, the reality is that they will have legged it to the USA just like their boss did in 1940. He did not love Liberty enough to want to die for it.

Edited April 23, 2012 by stormymonday_2011

[ntb]

But that aside we've passed structural debt on for generations it is not a new thing.

True, but ponzi schemes always, without exception collapse in the end.

[R K]

generally via the stupidity of wars as you allude to but to manage it on the back of nothing more than i want more, im entitled is no mean historical feat to be scoffed at

War is but one mechanism for the re-allocation of resource 'imbalances'.

What we're living through now is yet another.

It may well also yet end in 'war' (i.e. wider than those we're already engaged in).

Imbalances must be 'rebalanced'.

It's the 'how' that is not yet clear.

[The Masked Tulip]

The European stock markets are selling off quite nicely this morning - if you are a casual observer.

Something happened this weekend in Europe re France and the Netherlands. What, I am uncertain. Is it a sign of growing impatient and anger from the masses resulting in a move to the Right? It looks like it is.

Is it just a passing blip or signs of something far more fundamental?

[marceau]

My aren't you het up. I have no party line, but your knee jerk reflex is keenly tuned to the monetarist propaganda channel it seems. Perhaps you could take fifteen seconds to read the the statement I was responding to and then re-read my response before blustering your own dogma. It makes no difference whether the debts are structural or not. We have always handed debt on to the next generation. It's the scale of the debt that matters. But that aside we've passed structural debt on for generations it is not a new thing.

Glad that you conceed that the scale of the debt is a problem. But my point remains, there is a critical difference between that war debt and our current debt. Comparing the two is disingenous. Our modern equivalent of 'war' debt is structural - that is the crux of the problem and the reason your original post was facile.