What We're Reading

ECB - Possible EuroZone Rupture

Posted by GT on January 18, 2010 at 9:41am

Ashraf Laidi tweeted this early Monday morning: http://bit.ly/5zrr33. In the article Ambrose Evans-Pritchard references a legal analysis issued by the ECB analyzing what would happen if a country tried to leave the monetary union.When the EU was first proposed many, myself included, wondered aloud how economies as diverse as Portugal and Germany could be expected to adhere to the same monetary policy. When I lived in Europe decades ago, Greece, Spain, and Portugal were essentially third-world economies. We vacationed there because everything was dirt cheap. I would compare it to Mexico in the 1950's. The EU consists of haves and have-nots. Can austerity measures designed for Germany and France be implemented in Greece and Portugal? It appears we will soon find out. I would appreciate your thoughts and feedback.Sincerely,GT Ichi-O(I've always wanted to have a hyphenated last name)

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GT January 18, 2010 at 12:07pm

The cultural point is a good one, even though, I would also submit that the economies are very, very different. When I was in Germany, Greeks, Portuguese, Spaniards, even Italians were "guest workers" in Germany. They were second class citizens, as we were, as American soldiers. Germans see the French, Italians and other lesser beings as lazy. French and Italians see Germans as boorish louts. I am reminded of an early
"Sopranos" episode which takes place In Naples. Pauly doesn't like the luscious seafood spread prepared by his hosts and asks the waiter for 'macaroni and gravy.' The waiter doesn't understand and one of the Italians explains that Pauly wants spaghetti and meatballs. Then the Italian turns to another and says,"..and you thought Germans were classless pieces of shit." My former French girlfriend used to complain that Germans had "such bad taste." The juices of Nationalism simmer most of the time and then occasionally come to a boil. This may be one of those times.
January 18, 2010 at 11:43am

Well, we've certainly talked about how big of a problem this is becoming because it is VERY German and French dominated. Im not sure if its as much economic divides as it is cultural though (which is even worse, because THATS even harder to change).

to "prove" this, ill ask: should California and Montana have the same economic policy? When home prices were dropping like a rock, CA needed 0% interest rates and guranteed money markets, municipals etc. Certainly MT might have needed "some" asistance, but not what CA needed.

These two probably should have different economic policies just as much as Greece and France.

And to spite the fact the cultures of Los Angeles and Yellowstone are worlds appart, the sharing of a language and the long held assumption (and reality?) that we are in it together---creates less of a conflict. A similarly shared history, language, and virtually always being part of the same federal govenment lets the U.S. bind together in a way that is just tough for the E.U.

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