Who is responsible for the Eurozone crisis?

Generali

http://www.independent.co.uk/voices/who-is-responsible-for-the-eurozone-crisis-the-simple-answer-germany-a6771536.html

Turns out HAMISH was right, according to The Indie anyway.

The wrong economic model of the crisis led Germany to insist on tighter fiscal rules which created a second eurozone recession. German influence on the European Central Bank also led it to delay QE for six years, and raise rates during 2011. Finally we saw how the actions taken much earlier by German employers and employees helped to protect Germany from the consequences of all this.

HAMISH_MCTAVISH

Generali wrote: »

Turns out HAMISH was right

Another one to tick off the list then...

mwpt

What it really says is that the single currency was and still is a terrible idea. The problem that the article presents (not saying I agree with it) would not have materialised if member states retained their own currencies and central banks. Of course, we may have had a different set of problems in that case.

Anyway, as usual and as always, underlying it all is the problem of bad debt. We just don't seem to be able to price risk correctly (which is no surprise).

EDIT: Oops, I read the article further and realise that what I stated above was stated in the article.

CLAPTON

the situation was
- a single currency shared by very different economies
- a low single interest rate suited to Germany
- easy (and cheap) borrowing based on the EURO countries being jointly responsible
- floods of cheap imports from China so low inflation

the issue is not who is responsible for the crisis, but who could possibility have thought it could work in the first place even if there hadn't been a global melt down?

purch

Hamish is always right.

I thought all new members were given this information as part of the welcome pack.

I cannot remember any "crisis" within the Basket, ERM or now Eurozone that didn't have it's roots in a stance or decision taken by (West) Germany and /or the Bundesbank.

The ramifications of the reunification and the political decisions taken by Herr Cabbage are still evident even 25 years later.

But back to the original premise.

I agree with Hamish :eek:

Thrugelmir

Though everyone trys to avoid the issue. The concept of the EU is fundamentally political in nature rather than fiscal. Hence why it's been driven along with rules being bent as necessary to achieve the goal. The current global readjustment maybe the breaking point though.

michaels

So if Hamish is always right...is there anyone who is always wrong?!

michaels

Thrugelmir wrote: »

Though everyone trys to avoid the issue. The concept of the EU is fundamentally political in nature rather than fiscal. Hence why it's been driven along with rules being bent as necessary to achieve the goal. The current global readjustment maybe the breaking point though.

Funnily enough the answer to any European crisis is always more Europe not less - the architects of the Euro did not think it would stop economic crises taking place - but they knew that when crises did occur the only solution would be more European integration and less power for National parliaments. Greece is now a precident, the next big 'event' will be the chance to humble Spain, Italy and France at which point national parliaments will be left with the power to legislate on what kit the National football team wears.....

Thrugelmir

michaels wrote: »

Funnily enough the answer to any European crisis is always more Europe not less - the architects of the Euro did not think it would stop economic crises taking place

No one foresaw the current chain of events. Like the push for Scottish independence. Everything was rosy in the garden. Now it appears to be unravelling at a fast rate. Nationalism will ultimately trump any allegiance to one Europe once people are given stark choices. .

prosaver

yeah,whats happened about greece?
..thats gone all quite

mayonnaise

purch wrote: »

Hamish is always right.

I'm wearing my 'Hamish and the Perma Prop Bulls' t-shirt with pride.