hanno



Which is why the euro sooner or later will seize up. It doesnt matter how it got there, its heading there. Transfer unions are everywhere there are functioning common currency areas. The UK has one with public spending varying on a regional basis from 35% (London) to 55% (NE and Wales). The US has one -Montana and Alaska to name two US state beneficiaries. That has never been put in place with the EZ, so for the argument to be Germany agreed and understood and others did not understand is ingenious. There was no transfer mechanism from the word 'go'. Furthermore the German government at the time may have understood what was involved but the German people did not and do not and refuse bailouts and debt write-offs. In short - EZ members are trying to have their cake and eat it when there is no cake. There is also the question of who you invite into the club , in fact new EU applicants are all supposed to adopt the Euro as a condition of membership. This is supposed to work with 5x differentials in wages in the same currency area, highly unlikely - money (debt and local interest rates), people (depopulation) and economic activity will all move and are not controllable (lack of real regulation). The reality is the EZ concept assumes states - which also means banks which are too big to fail and therefore heavily influence states behaviour - will self regulate and the evidence is there is a self regulation failure - that include the UK French German Italian and Spanish banks some of whom are still lobbying for taxpayer money to be used to buy toxic 'assets' at 'market value' when there is no market value because they have no offers in the marketplace(the EBA is also lobbying for this indicative of the size of the toxic swamp). In some respects democracy sovereignty and federalism are side issues the underlying fault is multinational bank (self) regulation failure. As for debt - there are some suggestions 35% of all expenditure is debt related, to whose benefit. This M Fratzscher article looks suspiciously like another smoke screen and like all smoke it means there is a fire somewhere. So is M Fratzescher a fireman and if he is is he a fireman from Ray Brdbury's Fahrenheit 451