Berlin rejects attempts by Athens for six-month extension of EU bailout

[-:Undertaker:-]

http://blogs.spectator.co.uk/coffeeh...medium=twitter

If Greece leaves the euro could others follow?

The Greek Finance Minister, Yanis Varoufakis.

Germany wants nothing less than an unconditional surrender from the new Greek government. It is hard to draw any other conclusion from Berlin’s decision to reject Greece’s proposal for a six month extension of the current bailout, which counted as an almost total climb-down by the Syriza-led government. But it seems that the Germans—with an eye on the Spanish elections later this year —want to show that voting for radical, anti-austerity parties gets you absolutely nothing.

However, the Germans may well have miscalculated. The Greek Finance Minister wants Greece to leave the euro but, because the vast majority of Greeks wants to stay in the single currency, he has had to stop agitating for that. But, by refusing to acknowledge that the Greek election has any consequences at all, Berlin is making it far easier for Greeks to start making the case that they really have no choice but to leave.

Now so far, there has been no contagion effect from the latest Greek crisis—Spain is still borrowing at roughly the same rates as before. Yet, it is a mighty risk to imagine that the markets would react calmly to Greece leaving the Euro but if Germany continues in this uncompromising manner that is what it might come to.

Exactly what I said.

You can't deny the inevitable.
Death comes to us all.
The Euro cannot ever work because it has no country called Euroland to love it.
It was going to fail the moment it was formed as a little brainchild in someone's head.
You can't deny the inevitable.
It is simply a question of when and how and can we ease its passing.

Thoughts?

[FlyingJesus]

Does that mean the pound is only decent because of the existence of Poundland

[-:Undertaker:-]

Does that mean the pound is only decent because of the existence of Poundland

The Pound Sterling is backed by a single country and a single government: meaning fiscal transfers which make the currency union work (ie from the south/City of London to the rest of the country) are politically workable because people accept it being one country (a demos). The Euro doesn't have that.

[FlyingJesus]

We have like 4 governments

[-:Undertaker:-]

We have like 4 governments

Not sovereign governments, the Westminister Parliament has ultimate and complete sovereignty over all British law.

[FlyingJesus]

Isn't the EU's ultimate and complete sovereignty over EU law what you complain about

[-:Undertaker:-]

Isn't the EU's ultimate and complete sovereignty over EU law what you complain about

Westminster still has ulimate sovereignty which is why you have to enter Westminster to change law, as although it has submitted to European law in practice where EU law takes supremacy, the Commons and Lords still have the power to revoke the EEC Act tomorrow if they wished to do so just as it has the power to revoke any other act from the Acts of Union to the Devolution Acts. There's no limit on what Parliament can legislate on as it has ultimate power. Indeed that's another core reason why I oppose the European Union: it's so alien to our tradition of parliamentary sovereignty & democracy.

But the UK constitution is entirely another issue, as you can apply the rules of a demos/currency union to any democratic country.

[FlyingJesus]

That's all fascinating but back to the actual story before I started making jokes about discount stores, surely a weaker country leaving the project will serve to strengthen its overall position due to the law of averages. If it was Germany leaving this would be a blow to the system, but the situation as I see it is akin to clipping off that nasty hangnail that's been catching in your sock

[-:Undertaker:-]

That's all fascinating but back to the actual story before I started making jokes about discount stores, surely a weaker country leaving the project will serve to strengthen its overall position due to the law of averages. If it was Germany leaving this would be a blow to the system, but the situation as I see it is akin to clipping off that nasty hangnail that's been catching in your sock

Economically yes, but the Euro was never about economics... Germany (and by that I mean the political elite) didn't want the Euro in the first place, it was forced on them by the French & EEC who insisted on them agreeing to a single currency zone as the price to pay for French agreement to German reunification.

The problem now is if Greece leaves others like Italy, Spain and Portugal will follow and thus the EU political project will be forever halted.