I guess it's always going to be difficult to organise Economic Communities comprised of Nation States.



Individual Nations comprised of many states, the USA for instance, The USSR (previously) and of course Australia and India, for one or two more, all have difficulties enough; and that is when there is an already established common currency, and usually rough parity of Wage Labour rates between the member states, and free trade between them. Without which of course the Nation would have really difficult problems due to Industry always (Well, if not restricted by some Parent State not allowing the natural Free Flow of Investment to the Lowest Wage Labour Rate State) Investing in the State with the Lowest Wage Labour Rate (Cheaper Wages, Cheaper Materials, Cheaper land etc. etc. etc.).... It was this as much as anything else, that led to the successive crises that you mention in your article...The Asian Crisis, the South American Crisis, The Mexican Peso Crisis... in each Case the Global Capital Flowed to the next lowest Wage Labour State as soon as the one currently in favour started to have cost of living rises and wage labour rate rises, due to its rapidly improving economy.... If you don't have rough Parity of Wage Labour Rates between member states then that is what happens.... It would happen in Australia, and can be seen in minor ways happening due to climate differences between states bringing about price differentials in ripened fruit....and that is only a minor price differential in a single produce item, not a whole basket of goods, as is the case with National Disparity of Wage Labour Rates.... The exchange rates between currencies is of course the tool that is used to manipulate wage labour rates to give a trading advantage.



Ok? So, Is there rough Parity of Wage Labour Rates between the member states of the EU? ... Was there before the common currency was introduced? That's one aspect of the problem...Why then haven't the German Industrialists moved their operations to the Cheapest Wage Labour States of the EU? Surely they would have less difficulty in communicating with the Greeks , Italians, Spanish, Irish than they have in dealing with China? Certainly I think they would have a far easier job in achieving Quality Control?...



The other problem is the only recently developed ECB and its as yet unsound ability to be able to deal with the Equitable distribution of Federal (EU) Funding between the States.



This is in part brought about by the Problem of National Sovereignty.... and the differences in Culture and Climate between the Member States, particularly in the EU. Leaving the Cultural and climatic variable alone for the moment, and looking at National Sovereignty:



It was interesting, I noted when the Greek National Debt was first written about in the International Media it was written as just that "Greek National Debt Problem" or "Greek National Debt Crisis"; it was only some couple of weeks later that it became the "Greek Sovereign Debt Crisis"... a subtle but consistent change which led me to wonder why the change in terminology..... to explain....



When I was studying economics, many moons ago, I had a problem with the Major Text that was being used for the Oxford course in "Economic History of Great Britain"' or some such title, it was a Keynesian Text, and all the terms used in the text were well defined at the front of the book; all that is apart from one - National Debt - Now! It wasn't until I was half way through the Text that I realised that I obviously didn't fully understand what National Debt was.... I had thought that I did but I couldn't quite get how this "Bucket" was being used Money or Capital seemed to be able to disappear into it and come out of it at will and the Capital coming out was not related it seemed to me; with the money that was going in.... I went to the front of the text but lo and behold that was the Only Term that was completely Undefined!



A letter to the Faculty led to a reply a couple of Months later.... "National Debt is the Debt that a Nation owes to itself, for investing in its own Future" and that Further to this "Each Nation has a Sovereign Right to Fund it's own Development"... Or put more simply "Each Nation has a Sovereign Right to Forge its own Currency for the purpose of funding its own Development"... A right which you and I don't have, and something that if we do we would end up doing time for!...



However.... Why was there a change in terminology for this Greek Crisis?



A check with Wikipedia was interesting.... It led to the "National Debt" Page flashing up momentarily and then a divert to the "Government Debt" page and thus to Government Bonds and Sovereign Bonds the two forms of Government Debt/National Debt... Interestingly Sovereign Bonds were listed as Government Debt issued as Bonds that were guaranteed repayable in the National Currency of the Bondholder...... So! ... National Debt has by this subtle change of terminology gone from being "The Debt that a Nation owes to Itself for Investing in its own Future" To "The debt that a Nation owes to another Nation for investing in its own Future"



That is an Absolute Change in Definition and one that has extreme significance for The Sovereign Rights of Nations and for National Development.



It leads to many fundamental questions.... especially for Nations that are only now just starting to develop and which have never had a National Debt before, or for Nations that have only been developing for the last 60 years as compared to Nations that have been developing for the last 500yrs.



What is this National debt though...The money that is created should be amortized over the future existence of the State and being a bit of a Mathematician I like the idea of an Infinite life span which would lead to a rate of repayment of zero $ per annum or so close to it that I think I would use My sovereign Right to wipe it out completely..... However the Debt in Sovereign Bonds ... perhaps the USA and The IMF and Germany don't feel the same way about Amortisation of the Debt or "Loan"...Despite the Fact that the USA hasn't worked out their National Debt That way they are charging themselves Interest on the Moneys that they Lend to themselves.... Now that is really Something!



Quite frankly I think the whole issue is a whole lot of "Fabrication"...And as for "Austerity" well if there was ever to be an exact antithesis of National Debt I think that would be it.... As defined by the EU it might run something like "The Sovereign Debt that a Nation owes to some other Nation for sending itself into Penury"

