Brexit What Happens Next Thread ---multiple merged threads.

[debtlessmanc]

26 minutes ago, erat_forte said:

Apart from the inconvenient fact that we haven't actually left yet... currently scheduled for 1 Jan 2021. Do you think we will actually leave then or will there be yet again another delay?

The only thing that is clear to me in this whole saga is (despite lots of stuff posted here and in the comments on national newspapers) is that the EU really, really would rather we did not leave. The only possible exception are factions in France, but those tend to be the factions that the rest of the continent is really really worried about.

Edited May 7, 2020 by debtlessmanc

[dryrot]

Any thoughts on the recent ruling by Germany’s Federal Constitutional Court, that  following a transitional period of no more than three months, the Bundesbank may no longer participate in the eurozone’s Public Sector Purchase Program (PSPP)?

All the court has done is remind EU politicians of the actual rules. There can be no sharing of debt between countries (Germany wont pick up the tab for Italy...).  

This has been a flaw in the Euro since Day 1. I just hope this ruling is taken on by Eu-pols, and they revisit the whole doomed Euro project before its too late. (As I see it, the ruling is binding on Germany unless they change their laws)

mainstream view: https://www.dw.com/en/top-german-court-says-ecb-bond-buying-scheme-partially-contravenes-the-law/a-53333374

Eurosceptic view https://www.continentaltelegraph.com/europe/germanys-constitutional-court-puts-the-boot-into-the-euro/

[crouch]

11 minutes ago, dryrot said:

Any thoughts on the recent ruling by Germany’s Federal Constitutional Court, that  following a transitional period of no more than three months, the Bundesbank may no longer participate in the eurozone’s Public Sector Purchase Program (PSPP)?

All the court has done is remind EU politicians of the actual rules. There can be no sharing of debt between countries (Germany wont pick up the tab for Italy...).  

This has been a flaw in the Euro since Day 1. I just hope this ruling is taken on by Eu-pols, and they revisit the whole doomed Euro project before its too late. (As I see it, the ruling is binding on Germany unless they change their laws)

mainstream view: https://www.dw.com/en/top-german-court-says-ecb-bond-buying-scheme-partially-contravenes-the-law/a-53333374

Eurosceptic view https://www.continentaltelegraph.com/europe/germanys-constitutional-court-puts-the-boot-into-the-euro/

The EU will bend the rules as far as they can for a very simple reason; there is no alternative. This is an existential matter not just for the Euro but for the EU. As AEP says in the DT article this issue is driving the EZ economies further apart, exactly what is not supposed to happen. One day they will run out of road and then the fun will start.

[dryrot]

19 minutes ago, crouch said:

The EU will bend the rules as far as they can for a very simple reason; there is no alternative. This is an existential matter not just for the Euro but for the EU. As AEP says in the DT article this issue is driving the EZ economies further apart, exactly what is not supposed to happen. One day they will run out of road and then the fun will start.

I tend to agree, but (although I haven read the 100pages of legal German) I think this ruling makes it illegal for the German state to fund any such Euro-bond.

Of course, a simple solution would be a German (and Austrian, Dutch etc) plebiscite to approve the sharing of debt and change the German law to allow such. 

But that would involve asking the people... Not something the EU is noted for,

Edited May 7, 2020 by dryrot

[crouch]

22 minutes ago, dryrot said:

I tend to agree, but (although I haven read the 100pages of legal German) I think this ruling makes it illegal for the German state to fund any such Euro-bond.

It does and this has been known for some time.

23 minutes ago, dryrot said:

Of course, a simple solution would be a German (and Austrian, Dutch etc) plebiscite to approve the sharing of debt and change the German law to allow such. 

But that would involve asking the people... Not something the EU is noted for,

There's very little prospect of this getting through if the people were asked; the German public have long since been against supporting te "feckless" South.

[debtlessmanc]

1 hour ago, dryrot said:

I tend to agree, but (although I haven read the 100pages of legal German) I think this ruling makes it illegal for the German state to fund any such Euro-bond.

Of course, a simple solution would be a German (and Austrian, Dutch etc) plebiscite to approve the sharing of debt and change the German law to allow such. 

But that would involve asking the people... Not something the EU is noted for,

Referenda are illegal in germany, Hitler used them to his own ends and that law is not going to change anytime soon.

Edited May 7, 2020 by debtlessmanc

[Dorkins]

5 hours ago, richmondtw said:

FGS are people really still saying the same thing after 4 years!  We have left - move on FGS.  

Funny how often you get this line from Leavers - 'I order you to change your beliefs, why can't you just conform?!' I guess it's that authoritarian (Leaver) vs liberal (Remain) mindset divide.

[Dorkins]

3 hours ago, debtlessmanc said:

The only thing that is clear to me in this whole saga is (despite lots of stuff posted here and in the comments on national newspapers) is that the EU really, really would rather we did not leave.

EU representatives saying repeatedly for the past 4 years that they would prefer the UK to stay in was a bit of a clue I reckon.

[Dorkins]

2 hours ago, dryrot said:

I tend to agree, but (although I haven read the 100pages of legal German) I think this ruling makes it illegal for the German state to fund any such Euro-bond.

Of course, a simple solution would be a German (and Austrian, Dutch etc) plebiscite to approve the sharing of debt and change the German law to allow such. 

But that would involve asking the people... Not something the EU is noted for,

The German constitution prohibits almost all referendums:

https://en.wikipedia.org/wiki/Referendums_in_Germany

[dryrot]

Just now, Dorkins said:

The German constitution prohibits almost all referendums:

https://en.wikipedia.org/wiki/Referendums_in_Germany

All right then, an election with the one of the major parties has a platform of sharing Euro debt. You know what I mean,.

The Germans must either fund the EU South, or leave the Euro. The German people should (IMO) be given a choice. This should have happened at Euro setup but, almost criminally, it was fudged. (Can they continue to fudge it? The latest German court ruling suggests not....)

[Dorkins]

2 minutes ago, dryrot said:

All right then, an election with the one of the major parties has a platform of sharing Euro debt. You know what I mean,.

German political parties are free to add such a policy to their manifesto. I doubt any of them will.

[Dorkins]

3 minutes ago, dryrot said:

The Germans must either fund the EU South, or leave the Euro.

Says who? There is a third option, which is that fiscal policy remains a matter for national governments.

[debtlessmanc]

11 minutes ago, dryrot said:

All right then, an election with the one of the major parties has a platform of sharing Euro debt. You know what I mean,.

The Germans must either fund the EU South, or leave the Euro. The German people should (IMO) be given a choice. This should have happened at Euro setup but, almost criminally, it was fudged. (Can they continue to fudge it? The latest German court ruling suggests not....)

 

7 minutes ago, Dorkins said:

Says who? There is a third option, which is that fiscal policy remains a matter for national governments.

Joseph Stiglitz ("The Euro and its threat to the future of europe") amongst other economists have written at enormous length why this will lead to disaster, and get this - they are pro-EU and suggest what reforms are necessary to save it, all fallen on deaf ears.

 

 

 

Edited May 7, 2020 by debtlessmanc

[dryrot]

6 minutes ago, Dorkins said:

Says who? There is a third option, which is that fiscal policy remains a matter for national governments.

??? Not with a shared currency. If the EU countries had their own currencies, they could manage their fiscal and monetary policies themselves. But - as you know - with the Euro they can't.

How glad I am that it wont be our problem (from 31/12)

[Dorkins]

3 minutes ago, debtlessmanc said:

Stiglitz ("The Euro and its threat to the future of europe") amongst others have written at enormous length why this will lead to disaster, and get this - they are pro-EU and suggest what reforms are necessary to save it. All fallen on death ears.

Mainstream macroeconomists have written at enormous length about lots of things and almost all of it is worthless.

[Dorkins]

6 minutes ago, dryrot said:

??? Not with a shared currency. If the EU countries had their own currencies, they could manage their fiscal and monetary policies themselves. But - as you know - with the Euro they can't.

How glad I am that it wont be our problem (from 31/12)

I guess it depends whether you think it's a good thing when governments fund their projects by stealing via inflation or if it's better if they have to raise revenue the honest way through taxes that people can see and vote against.

Personally I prefer it when people/institutions have to make clear decisions about what they are/are not going to commit resources to.

Edited May 7, 2020 by Dorkins

[debtlessmanc]

1 minute ago, Dorkins said:

Mainstream macroeconomists have written at enormous length about lots of things and almost all of it is worthless.

I do understand the the EU is operating on the "what are the alternatives?" philosophy of economic management. I kind of agree that is makes good entertainement watching it. I am also enormously glad we are not in the Euro (although as i have said i do not ultimately see the point of the leaving the EU). However, something will give and one only needs to look at the comments under continental newpapers to see the tensions.

[debtlessmanc]

2 minutes ago, Dorkins said:

I guess it depends whether you think it's a good thing when governments fund their projects by stealing via inflation or they have to raise revenue the honest way through taxes that people can see and vote against.

Personally I prefer it when people/institutions have to make clear decisions about what they are/are not going to commit resources to.

But only if those people making the decisions are, at least to some extent, paying for it themselves...

[Dorkins]

1 minute ago, debtlessmanc said:

I do understand the the EU is operating on the "what are the alternatives?" philosophy of economic management. I kind of agree that is makes good entertainement watching it. I am also enormously glad we are not in the Euro (although as i have said i do not ultimately see the point of the leaving the EU). However, something will give and one only needs to look at the comments under continental newpapers to see the tensions.

All institutions composed of human beings will always exist in a state of tension, that does not mean action in a particular direction is required or inevitable.

[debtlessmanc]

3 minutes ago, Dorkins said:

All institutions composed of human beings will always exist in a state of tension, that does not mean action in a particular direction is required or inevitable.

The Germans and Dutch etc are not going to transfer wealth to other states without some kind of guarantee that it does not disappear into corruption or tax evasion. Do you think Southern states will welcome a visit from Roelof the incorruptible EU tax inspector?

[Dorkins]

1 minute ago, debtlessmanc said:

The Germans and Dutch etc are not going to transfer wealth to other states without some kind of guarantee that it does not disappear into corruption or tax evasion. Do you think Southern states will welcome a visit from Roelof the incorruptible EU tax inspector?

I think fiscal policy will remain with national governments.

[dryrot]

7 minutes ago, Dorkins said:

I think fiscal policy will remain with national governments.

I could refer you to Tim Worstall's piece again: https://www.continentaltelegraph.com/europe/germanys-constitutional-court-puts-the-boot-into-the-euro/

He's very good on the fuzzy line between monetary and fiscal EU policy

"To make it very simple indeed every wisher for closer economic union – thus the entire federast apparat – wants Germany to pay for everything. The Germans are rather less sure about this. Thus there is this line in the sand about what the ECB may or many not do in buying and issuing debt. The line, wide and fuzzy though it may be is that monetary policy may not stray over into fiscal and the monetisation of that fiscal policy. And every federast continues to hatch schemes to make exactly this line be crossed."

[...]

"The basic aim from the federasts is that there should be that common fiscal policy whether it’s gained through a common Treasury or the monetisation of fiscal policy. They don’t care how, getting Germany to pay for everything is the point. Certain parts of the German establishment demur. "

[thecrashingisles]

56 minutes ago, debtlessmanc said:

However, something will give and one only needs to look at the comments under continental newpapers to see the tensions.

Looking at the comments under anything is generally a bad idea.

[pig]

1 hour ago, dryrot said:

??? Not with a shared currency. If the EU countries had their own currencies, they could manage their fiscal and monetary policies themselves. But - as you know - with the Euro they can't.

How glad I am that it wont be our problem (from 31/12)

We're going to join the Euro ?

[Dorkins]

48 minutes ago, dryrot said:

I could refer you to Tim Worstall's piece again: https://www.continentaltelegraph.com/europe/germanys-constitutional-court-puts-the-boot-into-the-euro/

He's very good on the fuzzy line between monetary and fiscal EU policy

"To make it very simple indeed every wisher for closer economic union – thus the entire federast apparat – wants Germany to pay for everything. The Germans are rather less sure about this. Thus there is this line in the sand about what the ECB may or many not do in buying and issuing debt. The line, wide and fuzzy though it may be is that monetary policy may not stray over into fiscal and the monetisation of that fiscal policy. And every federast continues to hatch schemes to make exactly this line be crossed."

[...]

"The basic aim from the federasts is that there should be that common fiscal policy whether it’s gained through a common Treasury or the monetisation of fiscal policy. They don’t care how, getting Germany to pay for everything is the point. Certain parts of the German establishment demur. "

The ECB balance sheet is about 40% of eurozone GDP and over the last 20 years it has increased by 2-3% of GDP a year. Public spending in the eurozone is over 40% every year. Unless the ECB is going to suddenly start expanding its balance sheet by 10-20% of GDP a year monetary policy will remain tiny compared to fiscal policy.

Edited May 7, 2020 by Dorkins