← Autodidact Archive · Original Dissent · Bardamu
Thread ID: 18524 | Posts: 5 | Started: 2005-06-04
2005-06-04 02:08 | User Profile
[url]http://news.scotsman.com/index.cfm?id=611492005[/url]
[I]This could be the prelude a general nationalist' renaissance. [/I] :gunsmilie
Euro facing meltdown as Italy considers backing out
JAMES KIRKUP AND NICOLA SMITH IN BRUSSELS
EUROPE'S political crisis spread to the euro yesterday after Italy publicly discussed abandoning the single currency and reverting to the lira.
The Italian suggestion, once unthinkable to the European establishment, comes as a poll showed a majority of Germans want to pull out of the euro and revive the Deutschmark.
The threats to the future of the euro have disturbed currency markets already nervous about the growing crisis over the European Constitution.
In his remarks yesterday, Roberto Maroni, the Italian welfare minister, said it was no longer unthinkable that the country would abandon the euro and revert to the lire.
The single currency "has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis", he said.
The minister is a member of the Northern League, a minority partner in the coalition government of the prime minister, Silvio Berlusconi. Although several of his government colleagues dismissed Mr Maroni's call, the criticism was not universal.
Guido Crosetto, an economic spokesman for Mr Berlusconi's Forza Italia party, said that Mr Maroni had a point: "Maybe it would have been better not to join monetary union, but now it's too late."
Ottmar Issing, the European Central Bank's chief economist, warned Italy about talk of leaving the euro.
"Italy shouldn't just think about such a step three times; it should think about it 20 times. It would be economic suicide for them to leave the monetary union," he said in Frankfurt.
But in a telling admission, he added: "People's unease and unhappiness with the economic situation are understandable."
The euro fell this week to its lowest value against the dollar for eight weeks, as international investors calculated that the debacle over the constitution could only hamper the process of reforming the faltering European economy.
Despite the furious attempts of the euro's defenders, the single currency is becoming increasingly caught up in the wider debate over the future of Europe which was set off by the constitutional row.
Even Jean-Claude Juncker, the Prime Minister of Luxembourg, who also chairs the "euro group" of finance ministers from euro countries, admitted yesterday that the political crisis was putting the single currency under pressure. "As a result of the referendums, the euro is weakened," he said.
Much of the Dutch animosity to the European project was driven by the feeling that the euro has led to rising prices and a falling standard of living.
Even in Germany, the driving force behind the euro's creation in 1999, there are signs of doubt about the project.
German authorities were forced this week to deny a report that the finance ministry and the central bank have an emergency plan for the break-up of the euro, but the German people are certainly discussing that outcome. A survey for Stern magazine this week showed 56 per cent of Germans want to return to the Deutschmark.
Bert Ruerup, the head of chancellor Gerhard Schröder's Council of Economic Advisers, admitted this week that the predicted economic gains from the euro are "dreams that have never come true".
While few government officials or economists believe the dramatic break-up of the euro is likely in the short term, there are genuine concerns that the currency could die a lingering death as it loses international credibility.
One particular worry is that the poor performance of the euro economies and the political deadlock over the constitution could deter the new EU members from seeking to join the currency.
Countries like Poland and the Czech Republic have been actively seeking membership since joining the EU last year, but one official in a major European government told The Scotsman yesterday that there is now a "real danger" that their enthusiasm could wane.
Since the French and Dutch electorates decisively rejected the EU constitution in referendums this week, international money markets have been taking the prospect of a crisis in the euro much more seriously.
The doubts over the European project have exacerbated concerns about Italy's place in the euro.
The Italian economy is shrinking, but inflation there is still rampant. That in turn prevents the European Central Bank from making the cuts in interest rates that many say are needed to kickstart the French and German economies.
Independent economists said that Mr Maroni's idea could not be ignored. Julien Seetharandoo, an economist at Capital Economics, a London consultancy, warned that leaving the euro could worsen Italy's economic plight.
Nonetheless, the question of a euro break-up is "definitely worth asking".
And Joachim Fels, a senior European economist at Morgan Stanley, warned that the pressure on the euro is growing. He said: "Increasing political and economic divergences imply that somewhere down the road it might all blow up."
The slow, chaotic death of the constitution has raised doubts about the political cohesion of the EU; cohesion that underpins the euro.
The impasse over the constitution - which may only be resolved at a Brussels summit later this month - deepened yesterday.
Ireland and Portugal joined Britain in hinting that they may suspend plans for referendums on the constitution, even as Germany pressed for the ratification of the treaty to continue.
Mr Schröder and Jacques Chirac, the French president, meet in Berlin today to discuss a strategy for keeping the constitution alive.
It also emerged yesterday that Mr Schröder had called for the meeting to be attended by the leaders of Belgium, the Netherlands, Italy and Luxembourg, the EU's six founding members.
That plan was rejected by the Dutch, but disclosure still raised speculation that Germany will press for a "core Europe" to push ahead with the constitution despite the objections of newer members.
By contrast, Tony Blair, the Prime Minister, is quietly trying to build alliances in favour of a lengthy and possibly indefinite pause in the constitution process.
Jack Straw, the Foreign Secretary, will tell MPs on Monday that legislation which would have allowed a British referendum has been shelved, but ahead of the Brussels summit, he will stop short of calling for the treaty to be scrapped.
The Tories attacked that reticence yesterday, insisting that Mr Straw must openly declare the constitution is "dead and buried".
HAS THE CHANGE DONE ANYONE ANY GOOD?
ANYONE wondering why the current storm has blown up around the euro should remember Bill Clinton's dictum: "It's the economy, stupid."
The single European currency is in many ways a remarkable achievement. To create a workable currency union from 12 economies as disparate as that of Germany and Greece is something of a modern miracle, no matter how well that union actually performs.
But there's the rub. Has the biggest and most ambitious economic project in modern European history actually done anyone any good?
The currency's defenders insist that the answer is a firm "yes", citing stable exchange rates and low interest rates.
That is of course true, but the people of the eurozone could be forgiven for asking in response: "Yes, but what have you done for me lately?"
Several euro countries, notably France and Germany, have double-digit unemployment, and have for years. Growth, meanwhile, is sluggish at best, and negative in countries such as Italy.
In Lisbon in 2000, the EU leaders claimed that the European economy would overtake the United States by 2010, and that the euro would drive that growth. Today, Europeans' income still trails Americans', and the Lisbon Agenda often seems a bad joke.
As for the euro, some of its users blame it for soaring prices, and others for painful tax rises and cuts in public spending. The evidence to justify that blame may be contestable. But so is the evidence that the euro has made anyone better off.
2005-06-05 01:37 | User Profile
A couple of points on Italy. I spent some time there Pre Euro Currency, may be a bit out of date.
Italy has a southern half with high unemployment, mostly agrarian economy. In the regiones south of Lazio, all the way down to the boot/heel, unemployment is at or above 20 %. ( My numbers are a few years old, it may have improved since I was last there.)
Northern Italy, by contrast, is an economic dymano. Bossi got nearly 15% of the vote against Prodi one year on a platform of Northern/Padonia secession from Italy, particularly by shedding the baggage of Southern Italy. (Compagnia, Puglia, Calabria, etc.)
Romano Prodi was PM when I was there, and he became a big wig in the EU for some years after that. He was "a moderate" as finance minister pre PM, and certainly a typical modern Euro-Bureaucrat.
Berlusconi is something else again, all scandals aside.
It should come as no surprise that moderate or Unionist sentiment should have decayed under Berlusconi. If Italy votes with their feet, it will reflect the stubborn pride and charisma that is so typical, and to be frank with you refreshing, in Italians on their native soil.
May their spirit prevail against the Eurocrats.
[QUOTE=Bardamu][url="http://news.scotsman.com/index.cfm?id=611492005"]http://news.scotsman.com/index.cfm?id=611492005[/url]
This could be the prelude a general nationalist' renaissance. :gunsmilie
Euro facing meltdown as Italy considers backing out
JAMES KIRKUP AND NICOLA SMITH IN BRUSSELS
EUROPE'S political crisis spread to the euro yesterday after Italy publicly discussed abandoning the single currency and reverting to the lira.
The Italian suggestion, once unthinkable to the European establishment, comes as a poll showed a majority of Germans want to pull out of the euro and revive the Deutschmark.
The threats to the future of the euro have disturbed currency markets already nervous about the growing crisis over the European Constitution.
In his remarks yesterday, Roberto Maroni, the Italian welfare minister, said it was no longer unthinkable that the country would abandon the euro and revert to the lire.
The single currency "has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis", he said.
The minister is a member of the Northern League, a minority partner in the coalition government of the prime minister, Silvio Berlusconi. Although several of his government colleagues dismissed Mr Maroni's call, the criticism was not universal.
Guido Crosetto, an economic spokesman for Mr Berlusconi's Forza Italia party, said that Mr Maroni had a point: "Maybe it would have been better not to join monetary union, but now it's too late."
Ottmar Issing, the European Central Bank's chief economist, warned Italy about talk of leaving the euro.
"Italy shouldn't just think about such a step three times; it should think about it 20 times. It would be economic suicide for them to leave the monetary union," he said in Frankfurt.
But in a telling admission, he added: "People's unease and unhappiness with the economic situation are understandable."
The euro fell this week to its lowest value against the dollar for eight weeks, as international investors calculated that the debacle over the constitution could only hamper the process of reforming the faltering European economy.
Despite the furious attempts of the euro's defenders, the single currency is becoming increasingly caught up in the wider debate over the future of Europe which was set off by the constitutional row.
Even Jean-Claude Juncker, the Prime Minister of Luxembourg, who also chairs the "euro group" of finance ministers from euro countries, admitted yesterday that the political crisis was putting the single currency under pressure. "As a result of the referendums, the euro is weakened," he said.
Much of the Dutch animosity to the European project was driven by the feeling that the euro has led to rising prices and a falling standard of living.
Even in Germany, the driving force behind the euro's creation in 1999, there are signs of doubt about the project.
German authorities were forced this week to deny a report that the finance ministry and the central bank have an emergency plan for the break-up of the euro, but the German people are certainly discussing that outcome. A survey for Stern magazine this week showed 56 per cent of Germans want to return to the Deutschmark.
Bert Ruerup, the head of chancellor Gerhard Schröder's Council of Economic Advisers, admitted this week that the predicted economic gains from the euro are "dreams that have never come true".
While few government officials or economists believe the dramatic break-up of the euro is likely in the short term, there are genuine concerns that the currency could die a lingering death as it loses international credibility.
One particular worry is that the poor performance of the euro economies and the political deadlock over the constitution could deter the new EU members from seeking to join the currency.
Countries like Poland and the Czech Republic have been actively seeking membership since joining the EU last year, but one official in a major European government told The Scotsman yesterday that there is now a "real danger" that their enthusiasm could wane.
Since the French and Dutch electorates decisively rejected the EU constitution in referendums this week, international money markets have been taking the prospect of a crisis in the euro much more seriously.
The doubts over the European project have exacerbated concerns about Italy's place in the euro.
The Italian economy is shrinking, but inflation there is still rampant. That in turn prevents the European Central Bank from making the cuts in interest rates that many say are needed to kickstart the French and German economies.
Independent economists said that Mr Maroni's idea could not be ignored. Julien Seetharandoo, an economist at Capital Economics, a London consultancy, warned that leaving the euro could worsen Italy's economic plight.
Nonetheless, the question of a euro break-up is "definitely worth asking".
And Joachim Fels, a senior European economist at Morgan Stanley, warned that the pressure on the euro is growing. He said: "Increasing political and economic divergences imply that somewhere down the road it might all blow up."
The slow, chaotic death of the constitution has raised doubts about the political cohesion of the EU; cohesion that underpins the euro.
The impasse over the constitution - which may only be resolved at a Brussels summit later this month - deepened yesterday.
Ireland and Portugal joined Britain in hinting that they may suspend plans for referendums on the constitution, even as Germany pressed for the ratification of the treaty to continue.
Mr Schröder and Jacques Chirac, the French president, meet in Berlin today to discuss a strategy for keeping the constitution alive.
It also emerged yesterday that Mr Schröder had called for the meeting to be attended by the leaders of Belgium, the Netherlands, Italy and Luxembourg, the EU's six founding members.
That plan was rejected by the Dutch, but disclosure still raised speculation that Germany will press for a "core Europe" to push ahead with the constitution despite the objections of newer members.
By contrast, Tony Blair, the Prime Minister, is quietly trying to build alliances in favour of a lengthy and possibly indefinite pause in the constitution process.
Jack Straw, the Foreign Secretary, will tell MPs on Monday that legislation which would have allowed a British referendum has been shelved, but ahead of the Brussels summit, he will stop short of calling for the treaty to be scrapped.
The Tories attacked that reticence yesterday, insisting that Mr Straw must openly declare the constitution is "dead and buried".
HAS THE CHANGE DONE ANYONE ANY GOOD?
ANYONE wondering why the current storm has blown up around the euro should remember Bill Clinton's dictum: "It's the economy, stupid."
The single European currency is in many ways a remarkable achievement. To create a workable currency union from 12 economies as disparate as that of Germany and Greece is something of a modern miracle, no matter how well that union actually performs.
But there's the rub. Has the biggest and most ambitious economic project in modern European history actually done anyone any good?
The currency's defenders insist that the answer is a firm "yes", citing stable exchange rates and low interest rates.
That is of course true, but the people of the eurozone could be forgiven for asking in response: "Yes, but what have you done for me lately?"
Several euro countries, notably France and Germany, have double-digit unemployment, and have for years. Growth, meanwhile, is sluggish at best, and negative in countries such as Italy.
In Lisbon in 2000, the EU leaders claimed that the European economy would overtake the United States by 2010, and that the euro would drive that growth. Today, Europeans' income still trails Americans', and the Lisbon Agenda often seems a bad joke.
As for the euro, some of its users blame it for soaring prices, and others for painful tax rises and cuts in public spending. The evidence to justify that blame may be contestable. But so is the evidence that the euro has made anyone better off.[/QUOTE]
2005-06-05 02:19 | User Profile
Wouldn't this be good news for the dollar and maybe upset Walter's expectations of an economic collapse in his worse is better?
2005-06-05 04:46 | User Profile
Many French voted non because they object to the pro-business leanings of the proposed EU constitution. What few conservatives there are in Europe would vote no becuase they object to the tyrannical imposition of social liberalism, as well as the general objection to bigger government and the loss of state sovereignty.
The proposed EU Constituion has done poorly when voters are given a choice. It has done well when the voters weren't given a choice. That reminds me of the disconnect in America, between the desires of the government and the desires of the people, especially on immigration.
Destruction comes not all at once, but bit by bit. If the governments of Europe want to destroy Europe, they should do it bit by bit, starting with something much less ambitious than the currently proposed Constituion. The should look at their track record of what has already been done to deminish the once great European nations, bit by bit.
2005-06-05 07:36 | User Profile
[COLOR=DarkRed][B][I] - "Many French voted non because they object to the pro-business leanings of the proposed EU constitution." [/I] [/B] [/COLOR]
And with "[I]pro-business lea[/I][I]nings[/I]" they mean cut-throat capitalists who would shut down factories that are making 20 % profits in Europe, and move them to China where they could make 40 % profits...
Corporations have played a great part in keeping borders open (to get cheap labor) both in America and Europe.
Petr