


All hope not lost


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Joshua Tree

Comic relief!

Milovan: "The euro crisis is all Deutsche Bank's fault (with the help of some Greeks."

Pedrolx2: "I agree." (Read: blame anybody but my country, Portugal.)
"And by the way, we are not peripheral, even if we entirely depend on countries labelled 'central' for financial assistance."

Sanmartinian: "It is even better than that - Portugal is one of the euro zone's top three perfomers in terms of financial stability, and I even got proof: my own calculations. The EU, the ECB, the IMF, the rating sagencies, Wall Street, the City - they all got it wrong. Trust me. I've got it all figured out."

Meanwhile in the real world, ALL southern european countries are deep in the red, owing a grand total of about 1.5 trillion euro to their northern euro zone peers, and would have crashed into bankruptcy without their help.

Super-pedrolx2 in reply to Joshua Tree

Meanwhile, and just for comic relief.

Ho much does your own country owe.

Grand total is fine.

You can also add random groups of countries for comic relief purposes. How much do, say, Japan+US+Germany+The Netherlands owe,

In terms of GRAND TOTAL?

Just so we can all have a jolly good laugh about it!

sanmartinian in reply to Joshua Tree

ex orient... on comic relief

Correction to your comment: Portugal, with Italy were the among the three top financial performers up to, say, 2010 as the EU, the ECB, the IMF and even the Economist (the sources of all my figures) had it all figured out.

Both the City (with its 37% share of the worlds forex trade) and Wall Street (17%) are not data providers and their actions do not provide reliable indications because criminal operators have taken over a large share of their operations.

Without going into the not yet public malfeasance that will come into the open soon or later, need I remind you of the LIBOR, UBS, Morgan- Stanleys, Barclays.........scandals?

To be honest, I prefer how I have it figured out. It far more reliable.

As for rating agencies, have you any idea what the Australian Federal Court did to their reputation and how they have already accepted the demise of their influence?

Remember how MF Global went belly up and Paulson's fund almost did by following the positions you support?

Any idea that Soros seems to have lost about half his assets, the Financial Times seems to be trying hard to get somebody to buy it, the Pearsons group still its owner, seems to be "threatening" to confine itself to educational publishing, McGraw Hill (main shareholder of Standards & Poor) is blowing hot and cold whether to stay in financial analyses or not and so on?

I'm afraid it's me who's having some comic relief over your lack of knowledge on these matters.

If you are a paid poster to provide support for the criminal operators on the finance industry, accept my advice: jump ship while you still can.

If you are a bona fide poster, just instruct yourself and don't try to make fun of those who know a lot more than you.

Whatever the case I won't lose time or electronic pulses with you any longer.

We've had our share of John Saul Partres, Sherry whatever, Schadefreude (sic), Mahlers and on and on to put up with you any longer.

Joshua Tree in reply to Super-pedrolx2

Yes, southern Europe (and Ireland) owe a grand total of around 1.5 trillion to their mainly northern european peers, via the EFSF, the ESM and the ECB. The two worst cases, Greece and Portugal, are in for around 500 billion euro combined, or about 100 % of their annual GDP each. Both countries are effectively broke.


New article in ZeroHedge on LIBOR manipulation, especially from Swiss UBS bank:

From Bloomberg:

If in the United States, these considerations are being published against the Swiss gnomes, I believe we should begin discussing the same measures here in Europe against Deutsche Bank, which has almost single-handedly (with a bit of help from incompetent and corrupt Greek bureaucrats) plunged our continent into a financial and currency crisis.

Super-pedrolx2 in reply to MilovanDjilas


After a billion rabanadas( which the alfacinhas=lisboetas have the nerve to call 'fatias douradas') my sister's fantastic wine (the other version too, and yes I mean white), arroz doce, leite creme, cod, cod cakes, turkey, aletria, general cakes, chocolate, more wine, for two days in a row, I'm stuffed.

I can't debate,

But I'll say this to you and I shall say it only once.

You are absolutely right.

Buon Natale.


To Junor, Pedro, Viva, Samartain, Emma, la.výritý, and the other nutters.

Happy Xmas and all the best for the new year!

May the fanatical 'europhiles' get their dream for the main land and the UK go its own way!

sanmartinian in reply to Cutters.

To Cutters on good wishes

Having been away fro computers for a couple of days I've just read your Xmas wishes.

Thank you and I hope you have had a good one too and that your personal wishes for 2013 will be fulfilled.


While technically the ECB has by definition an unlimited supply of euros, in reality the ECB cannot fund countries singlehandedly without a Weimarian disregard for monetary stability; therefore it is entirely dependent on luring back private investors to fund countries themselves, by this bluff. If bond prices begin drifting upwards significantly, say somewhere over 6%, just like every time in the past, the cycle of high yields, scaring off investors, driving yields higher is back on, and the ECB will ether back down, or be forced to monetize the entire debt load.
Right now Spain seems to have a fixed structural deficit of 7% of GDP, and Italy (after Monti’s hollowed out “reforms”) seems to have a permanent growth rate of 0% (if not lower).
There is plenty of room for the ECB to have to put its printing presses where its mouth is!

la.výritý in reply to Jintelo


This is, basically, true for -more or less- all excessive money supply or QE, no matter where the Central Bank resides. One (temporary) exception is the US Dollar, which is still, up to a certain degree, swallowed up by the global markets as the world's sole trade currency and main reserve currency. If the Euro would try to take the route of the dollar, it would commit suicide within months ... not years.

This is why there is NOT "plenty of room for the ECB to put its printing presses where its mouth is" !

newphilo in reply to la.výritý


I don't see how or where from you pulled this one out.
USD must be offering some advantages in markets where local currency is not credible - and hence local access to USD denominated goods. As an aside and of little impact, there are also a few small countries that use USD outright as their currency.
A binary system of global currencies would bring down some 'market reality' on both issuers (U.S. and EZ). I can type a list of counterarguments also, but the binary seems to be the lesser evil.

la.výritý in reply to newphilo

By "route of the dollar" I referred to endless monetary expansion through simply expanding money supply by any means.

This monetary policy still works for the greenback, because since Bretton Woods the dollar made it to the top of the world currencies' 'food chain'. Ever since central national banks gave up their gold reserves in exchange for dollar reserves, the greenback has been absolutely dominant in international trade, especially in the oil and commodity markets. This role has created immense demand for US dollars, and that international demand constitutes a huge part of the dollar's valuation.

Not only did the global-currency role add massive value to the dollar, it also created an almost endless pool of demand for US Treasuries as countries around the world sought to maintain stores of instant "petrodollars". The availability of all this credit, denominated in a dollar supported by nothing less than the entirety of global trade, enabled the American federal government to borrow without limit and spend with abandon.

This dominance of the dollar gave the United States incredible power and influence plus the capability to acquire prime goods from around the world for actually nothing other than 'thin air' – this is 'thin air' artificially stabilized by the world-demand for those "petrodollars".

This is also why the USA keeps a jealous (even hostile) watch over natural-resource-producing countries that have 'affairs' with other currencies (such as the Yuan or the Euro).

Admittedly, as the world's emerging economies gain ever more prominence, the US dollar is slowly losing hold of its position as the world's only trade-currency. But globalization isn't there yet, especially since there is no alternative in sight. (Yuan? Not yet!)

However, the Euro never achieved this position. It could have, maybe, but the Euro crisis, allowed to happen by imprudent 'socialist' Eurozone members, peed on the Euro's parade. As fewer and fewer European economies are able to offer enough goods to the world (with the exception of Germany and a few others) the Euro becomes less and less attractive to countries outside the Eurozone (as contrasted with the Euro’s original goal).

newphilo in reply to la.výritý

I thought you meant that if EUR becomes a largely held world reserve currency, it will "commit suicide within months ...."
Hence, I was somewhat intrigued since presently, from $11 Trill foreign exchange reserves held throughout the world, USD accounts for 62%* (down 10% in the last ten years) with EUR at about 24%.
Since EUR is still alive and ECB does not mimic the FED, I could not identify any sound reason for the demise of the EUR based on its increased weight as a reserve currency.

* www.imf.org/external/np/sta/cofer/eng/cofer.pdf

Also: articles.marketwatch.com/2012-11-19/commentary/35251403_1_reserve-currency-reserve-assets-central-banks


to ex oriente ... on Euro causing over indebtedness

1- Clarification:

-I did not get the idea you were against the Euro, in favour or indifferent. All of them respectable opinions. You didn't say and I try avoid second guessing as I believe it is a subtle form of stereotyping, a mental process I abhor.

-I don't believe the crisis is over. Of this, more below.

- I disagree with the idea that the Euro caused some countries to borrow more than they could. I have ample statistical proof of this. More later.

-I never objected, on the contrary, to the initial name of PIGS which I always found amusing and innocent fun. I've stopped using it because some found it offensive.

Continues to beat the 5000 character rule.

sanmartinian in reply to sanmartinian

continuation to ex oriente... on Euro causing over indebtedness

2 Technical.

This is a very condensed sum up of my opinions on the matter written all over some ten years, the second half of which is in my post history. I don't advise you to read it. As I am a chatterbox my post history covers some 100 pages...

- The present world financial crisis was triggered around 2002 when CDO's were invented. CDO's were a mathematical impossibility and for people like me they spelt trouble within ten years. I was wrong. It took five.

- By sheer coincidence,the physical Euro started circulating in 2002 and consequently a lot of otherwise discerning people confuse the ills of the global financial crisis with the ills brought by the Euro.

- Since Nixon cut the last link between the dollar and gold in the 70's, all world currencies previously based on the material worth of the dollar became linked to outer space and later to cyberspace.

- The financial instruments invented from that date on, with particular emphasis in the CDO's, created an accelerated snow ball of debt. Paul Krugman says his practically single truth calling his column "Nobody really understands debt". No wonder.

- As a result all countries in the world are today over-indebted, the two worse being Britain and Japan. Britain has the advantage (for the time being) of high debt maturity; Japan has the advantage (for the time being) that most of its debt is domestically held.

- Likewise (pardon, junoir..) all Eurozone countries are over-indebted too.

- This was a serious mistake: with organized crime over active in big finance, over-indebted Euro countries were opening their flank to a concerted attack by the same organizations that had attacked so successfully the pound in 1992.

-Lack of geographic knowledge and unawareness of stats made them make a silly mistake that allowed the silly Euro war to end in March 2011 with massive losses and a couple of bankruptcies among predator speculators (MF Global the best known; Paulson's nearly there)

- When I talk of end, I talk of end of the idiotic Euro war a minor factor in the present turmoil. I repeat I have some 100 pages of posts repeating humankind is repeating the thirties, repeating the same stupid mistakes that may lead to a repeated same tragedy.

Hope I'm very wrong but so far I've only erred on small details.

As a final point of eventual interest: what was the big mistake made by the predator speculators?

In reality they were two: attacking the largest currency in the World (size matters) for which they hadn't enough funds contrary to what had happened with the attack on the pound in 1992.

The other was that rightly they attacked Greece first, a very over-indebted unsecured financial unit, but when it wasn't enough they attacked Portugal.

The only similarities between the two is their size (ten million apiece) and lots of sunshine in Summer. Portugal is not even on the Mediterranean; Germany is closer to the Mediterranean on all counts than Portugal...

Had speculators attacked a North Sea shore similar sized country they just might have been lucky.

Around July 2010, I did a Borda ranking on 13 European economies and the USA for comparison.

I thought of applying a MOLP and /or DEA analysis but my eldest son (not unknown in this international esoteric post PhD world) dissuaded me saying it would take so long, by the time we'd finish it, the world would have already recovered from the big crisis to come.

Anyway, the much simpler Borda ranking left no doubt that the financially most endangered nations in Europe were Britain, Ireland (Greece excluded for lack of data) and the three least bad were Italy, Germany, Portugal.

Te Borda ranking is very useful but not very accurate so I was hoping something would come soon to prove me right or wrong.

In September 2010, Allianz produced its first class study on the subject , that allowed me to produce a much more reliable table.

To my delighted surprise the ranking, with the exception of USA, because of a statistical quirk, was identical to the Borda I had done.

To sum up: the Euro never had anything to do with over-indebtedness of PIIGS (apologies to sensitive folks), mostly Portugal that structurally hardly needed it.

Markets thought otherwise but as anyone of common sense knows, markets are the most efficient tool we have to run economies, but, by Golly! they are as stupid as revolving doors and as easily manipulated as wet clay.

If you are unaware of what Borda, MOLP and DEA mean I shall be pleased to explain in a shorter post.

la.výritý in reply to sanmartinian

While the Euro wasn't the sole reason for the over-indebtedness of the peripheral countries, it's a fact that it lulled many member states as well as (domestic and European) investors into a false sense of security ... for too long. Either they hadn't read the Maastricht criteria - or they simply ignored what they read.

The European interbank (overnight) lending system did the rest. The 'attackers' merely spotted the flaws before anyone else (officially) did, e.g. when Goldman Sachs cornered Papandreou early 2010.

The GBP is a bit of an exception. It's still a "currency in demand" from outside financiers, and it's also still used for commodity trade. This is why the Bank of England can 'print' to a much greater extent without risking monetary stability than, e.g., Greece, Portugal or Ireland could, if they still had their domestic currencies. Their borrowing interest rates would have 'gone through the roof' much earlier, functioning as an early warning system.

Such 'early warning system' was absent in the eurozone until late 2009. . . . And, as we know, most politicians and governments don't see beyond their own 4-years legislative period when making campaign promises.

Super-pedrolx2 in reply to la.výritý

People really do have a short memory span.

Portugal's high interest rates in the 80s and etc had nothing to do with profligacy (it has been shown a thousand times over that over the past 100 years many countries up North, including Germania were far more profligate) but to the revolution and ensuing crisis, and ensuing economic growth.

The spending everyone attributes to the profligate Portuguese can be attributed to what sammy just described

- bad banks that went bust (10-20 bn)
-bad control over tax havens (Madeira -10 bn)
- money that had to be borrowed to provide state guarantees for bank loans (32 bn)

Sum that all up, and check whether the vale doesn't add up to the amount which corresponds to the increase in Portuguese state debt from 2008 till 2010.

No dur.

Super-pedrolx2 in reply to la.výritý

Peripheral in relation to what? Germany? ;)

This whole peripheral thing is just another one of those memes. It's not as offensive as Piigs but it surmounts to the same 'we're superior, you're inferior' attitude. The most laughable bit was when this very publication was considering the 3rd and 4th largest economies in the eurozone as 'peripheral'. They stopped since I mentioned the ridiculousness of the fact.

Over the past 100 years Germany has been one of the most profligate nations in Europe!

(to Accrux - the Netherlands had to borrow money to fight the war in Indonesia, in which they were helped by the Uk and the US. Easy that he. I thus am correct!)

Time to come down from the pedestal again. All of yous

la.výritý in reply to Super-pedrolx2

So, what term would be appropriate in your opinion to describe countries that can't raise the money they need to pay their bills?

PIIGS is offensive, GIIPS is offensive, 'peripheral' is offensive as well in your opinion.

If a person spends more than he can earn or legally borrow he is called 'profligate'. What should we call a whole country which does the same?

Junoir in reply to Super-pedrolx2

May I humbly suggest that if Portugal had never sought to be a member of an organisation (the EZ) to which she is totally unsuited by temperament, tradition, history, geography and geo-politics, then there would have been no talk of 'bail-outs', 'PIGS', 'GIPS' ‘peripheries’ and ‘superior Northerners’, at least as far as Portugal is concerned.

Imagine, no more being lumped with ‘Club Med’ and ‘Southern Rim’ countries.

You, for one, would have a much saner and more detached attitude to the whole question.

la.výritý in reply to Super-pedrolx2

'Bad banks' usually go bust if they are over-leveraged. It's a country's banking supervisory executive's job to prevent this, in time, from happening. Country's where this happened what you portrayed above in the case of Portugal, don't do a 'good job' in enacting appropriate laws (or executing existing laws) . . . no matter where it happened, in Portugal, Germany or the Netherlands.

And it's a different story all together if governments that didn't enact appropriate laws in time or failed to execute existing laws properly, now ask those governments (and, thus, the taxpayers of these countries) for 'support' who did a much better job to protect their financial system.

What governments like Germany's did was to take measures, e.g., by forcing domestic banks to create a compulsory common bank insurance fund, so that the failure of one bank doesn't result in a domino effect. To supplement the enacted law, the German government had implemented the so called SoFFin fund. The fund's purpose was and is to stabilize the financial system in Germany.

SoFFin's goal is and remains the restoration of mutual confidence among German banks and the outside confidence in Germany's financial system. What all mentioned 'peripheral' or 'profligate' states have in common is that they lack similar financial security programs or failed to execute them (in time). This is haunting them now.

The German "Finanzmarkt Stabilisierung Sonder Fonds" (Special Financial Market Stabilization Funds" was created when it became apparent that the American financial crisis of 2007 will eventually hit Germany (Europe) as well. October 20, 2008, the German Parliament enacted the necessary law . . . but as usual in Germany, the law wasn't merely "enacted", it was executed highly efficiently as well.

The execution of laws, once they are enacted, is actually the prereq of a functioning state, as I wrote in another post about American gun laws. Many countries in Europe passed similar financial laws as Germany . . . but failed badly putting them into functioning programs.

This is also the reason why some states in this world become 'failed states': Not because the don't have laws, but because the respective executive branch of the government fails to execute them or is incapable to enforce them. Most of the time the reason for this 'failure' is that the 'elected governments' are bound by special 'clientele-interests' and/or by cronyism.

In some cases, even if these laws are executed by enforcement authorities (such as prosecutors and police), the judicial system is too corrupt to render severe enough punishing verdicts or the judges simply fail to sentence the culprits all together (as it often happens in Greece and Italy). These are the typical symptoms of 'failed states'.

The failure to take appropriate measures in time resulted in the case of all mentioned 'profligate' countries in their current demand to create a 'banking union', well with whom? . . . With banks in those countries, "of course", that executed bank supervision more effectively.

Countries like Germany seem to be willing to help . . . but only after guarantees are given and put in place (meaning 'properly executed') that these EU states that are on the verge to become 'failed' are turning away from the paths that took them there in the first place.

For those who don't know this: It's the German governments FIRST duty to assure that their own people aren't -by the will of the failed 'profligates' - turned into mere lemmings who foolishly follow a visibly wrong path, regardless of the consequences.

Broke Back Josh

Please keep in mind, the following is not necessarily exactly what I believe, but being that I have an ability to argue either side of an issue as effectively, call me a shyster attorney if you will, I will take the unenviable position of defending the Greek monied class:

Elite Greeks moved too much money offshore in a legal fashion (questionable premise of course), and let us say for argument's sake, that most paid a legal, but not quite "fair" share of their taxes on all concerned revenues, used the money to buy real estate abroad, contributing to those nations' economies, international commerce if you will.

So what should be done about this, what incentives and disincentives created this exodus of capital? I would argue that the much needed holistic monetary system, which was lacking, was the primary cause which created the exodus, and that a more holistic European monetary policy is being implanted as we speak.

You, see, we're discussing the very same thing here in the US, but with proactive counter-cyclical monetary policy to buffer the downturns in our economy, and of course we bailed out our banks directly on day one.

Many everywhere say the rich don't pay their fair share in taxes, but they do create jobs. Theft and global momentary incentive are not one and the same of course. You go and try to plug tax loopholes anywhere with too more BLINKERED legislation, and the wealthy will find a legal way to move more money off shore, and then that nation's banking system tanks.

Sound familiar? Well, that's what happened to Greece. Switzerland or the Cayman Islands, what's the difference? Whose nations elites should we crack down on first? What caused the exodus of working capital, and doesn't this need to be addressed?

I would argue that it is being addressed and Germany is on board. Or, are we to expect sound business people to make bad business decisions to benefit their nation's poor? Is this not the role of charity?

Money knows very few borders in our global economy. The unintended consequences of too much nation sponsored European legislation at the union's inception created this exodus of capital.

The LEGAL exodus of capital should not be an issue. Of course illegally should be, but does it really all boil down to the whole of Greece being a cleptocracy? I think not. We should all know better then this.

"Where there's smoke there's fire." Yes, more times then not. But who or what caused it. That's the question we should be asking ourselves.

Of course it makes for good sensational press to say the elite Greeks found a way to not declare their swimming pools as a tax liability, or their yachts as taxable pleasure vehicles. But if their using the tax code on the books to save taxes, and it's perfectly legal, any good business person, would be a fool not to do it.

Now don't get any wrong ideas here, Zorbas is not doing this. Zorbas is posing a question for the sake of argument. Zorbas loves wisdom, honest dialogue, and laughter, walks in the rain, puppy's, Playboy pin up girls..., but I digress.

HERE WE GO, LET ME POSE THIS HYPOTHETICAL ARGUMENT THEN: Building swimming pools creates jobs, and yachts need to be fueled and manned. Servants who have paying jobs spend it on the Greek economy. Even if it's spent on the black market Greek economy, most of that money eventually finds its way into the real economy.

It seems to me at least that Brussels asked for the firing of nearly everyone, and then they all sat around wondering why it's going to take more money to bail Greece out. The little ditty about the Debt to GDP ratio? Well it meant a lot. Austerity was the wrong solution. The Markets rule.

Greeks are doing the heavy lifting here, and Greece's bond rating is inching its way up. Short term financing? Most successful. The buy back plan? Most successful as well.

I am arguing that good busniss people are suppose to make and save themselves money. Not ethical you say? Well push to change the tax code then, but take my word for it, you scare the monied class in any society too much, they're out of there, and the money's going with, and that nation's banking sector's going in the crapper.

That's what happened to Greece. The unintended consequences of a stupid half baked initiative to create a monetary union. Has to change, and is changing. Who says so? Not me, who am I to insist, the Markets said so when they attacked Spain's and Italy's ability to borrow, and it was a shot heard everywhere.

You see, it's not Germans against Greeks, or Eurobots against Euro-skeptics anymore, democracy against fascism..., blah, blah, blah. To limit the dialogue in this way, does too great a disservice to the participants

Going forward, it will have to be all for one and one for all. This is why the Greeks are still around. They have been around long enough to know how this will play itself out. Boring? I know, so let us find something else to laugh about, shall we?


@ Pedro

The authorities from the University of Fernando Pessoa in Oporto didn’t REALLY believe the French would allow them to open an annexe in France, did they? What’s more the UFP wanted to deliver diplomas or degrees in pharmacy and dentistry. The nerve!

The French minister of higher education, Geneviève Fioraso,soon intervened to stop this nonsense and is prosecuting UFP for daring to call itself a university. She also has doubts about the quality of teaching which will be dispensed.

So there!

The French Students’ Union has chimed in denouncing the high fees demanded by UFP, which were ‘incompatible with the democratisation of higher education’ (sic).

The National Association of Pharmacy Students is extremely worried. The opening of such universities may even lead to a ‘deterioration in the health of the French population’

Can’t be too careful with a Portuguese university when it comes to our health, can we Pedro?

The conference of French University Presidents has unanimously backed Mme Fioraso’s decision which ensures that there will be ‘no deterioration in the standard of future practictioners’.

Hell hath no fury like a French civil servant having to face a challenge.

What do the Portuguese think this is?! The Single Market? The free movement of labour? Mutual recognition of each other’s diplomas?

Fake_German in reply to Junoir

I read about that, too.

Who am I to challenge the wisdom of 'La République' ?

But here goes nothing:

From what I could gather in France anyone who wants to work in the Health business has to pass an exam which is called xxxx (can't remember the acronym). What happens is that Fernando Pessoa is offering French students the chance of getting a diploma without having to make that exam. Clever he?

I don't know what will happen to be quite honest with you.

Contrariwise to what is said here and there Portugal's market is quite free. We've had private universities , which have had their share of scandals here as well, but that's another story, for quite a while now and they compete with older better established institutions. One such example is the world famous faculty of architecture of Oporto (school of Oporto anyone?? Alvaro Siza, Souto Moura, etc), which has to compete, if not mistaken with Fernando Pessoa university itself, the same one the French now have to deal with , for diplomas in architecture,

shaun39 in reply to Junoir

As far as I was aware, mutual recognition of diplomas was a fact. Plenty of Brits go to the Czech Republic for medical/ dental study - it's easier to get in, and cheaper.

The NHS employs many doctors (both permanent and locum) from Germany & Netherlands (especially from these two countries - not sure why).

The actual location of a private university in France might be a problem (it shouldn't be, but could be). Yet, it doesn't seem that there would be any problem with Portuguese universities offering French language study in Portugal, recruiting French students and qualifying them to practice in Portugal. By right, those same professionals would be free to work in France - assuming French courts uphold the law.

Junoir in reply to Super-pedrolx2

Well, that's something I suppose.

Did you know that the University of Nottingham has an annexe at Ningbo in China, where the courses are identical to those provided in the UK? Same with Dulwich College in Beijing; British and Chinese students following a British curriculum.

Maybe the UFP should try its luck setting up its pharmacy and dental schools in more open-minded China rather than in the EU, where most members often do no more than pay lip service to the principles of 'mutual diploma recognition' and 'free movement of labour'.

Alternatively it could try the UK, where no-one would object to a private Portuguese university setting up business.

The reason they don't is probably the weather, something I can sympathise with. I'm up to my neck in water right now( a slight exaggeration, but I think you've got the picture)

So a happy Christmas to you too!

Junoir in reply to shaun39

Brits going to study in the CZ, the employment of other EU nationals in the UK NHS or "Portuguese universities offering French language study in Portugal, recruiting French students and qualifying them to practice in Portugal" don't present any problem.

What EU countries seem to balk at is allowing universities from other member states to open annexes or departments on their territory.


Anyway, they should have realised that after Orwell wrote Animal Farm the image of bankrupt pigs was a tiny bit self-defeating to begin with.

Lack of imagination?

Very likely


To sanmartinian,
Galicians, up till the late19th century, were famous for working as 'moços de fretes' in Lisbon and Porto. Long before telegraphs/telephones were created there were quick ways of getting your message across in Portugal. You'd just call the galego (there was one at each strategic corner of Porto/Lisbon) hand him a hand written message and have him deliver it at the requested address. There were hundreds of them doing this job.
I'm pretty sure they knew their way around, and climb/come down, a few flights of stairs.
Especially in places like Lisbon or Porto

sanmartinian in reply to Super-pedrolx2

to pedrolx

Nearly missed your comment.

Being slightly older than you (hmm! hmm!) I have vivid memories of galegos when my family had to live in Lisbon in war time.

They were some of the best loved immigrants in Lisbon during that time and among many other things they left as inheritance one of the best restaurants in Lisbon: the Gambrinus.

I tend to love most nations and peoples but Gallegos definitely have a special place in my heart.

Whether they are climbing up or down stairs, sometimes with pianos on their backs as they did in war times for newly arrived war refugees...

Hope enriquecost has a chance to read this. I'm sure he'll be proud of his fellow countrymen who during the poverty that hit Spain after the Civil War, had the courage to find work south of their land hoisting pianos or serving as human telegraph poles.

Wonderful people. And comical too...


William Buiter just wanted to save the Netherland's rear from collapse!

The netherlands have one of the highest external debts in the entire world.

Placing the blame on pigs was extremely clever, but it didn't work.

Perhaps they should try placing the blame on the mad cows next time!

Super-pedrolx2 in reply to Accrux

Especially what they did in Japan! Convincing the Japanese that the Portuguese were evil! How treacherous! The jesuit work in Japan was nothing short of amazing.

Just read the very first Portuguese-to-Japanese dictionary so you get the gist.

Or have a tempura.

And then the treacherous Dutch came (first on Portuguese ships) and badmouthed us to them!

The nerve!

How could the Portuguese be evil? You've met Portuguese people . We're not evil.

And the type of thing the Portuguese were doing in Japan (cultural exchange) is peanuts compared to the well-documented atrocities committed against catholics by the Dutch in Brazil, all in the name of religion (the same thing they accused, wrongly, the Portuguese of doing in Japan!!)

The Dutch should be trialed for Crimes against humanity, in The Hague!!!

Merry Christmas

Accrux in reply to Super-pedrolx2

"How could the Portuguese be evil? You've met Portuguese people . We're not evil."

Generally speaking, of course not. No country or people is evil per se. I would say that a few, especially in Africa and America, were pretty evil though.


"... compared to the well-documented atrocities committed against catholics by the Dutch in Brazil, all in the name of religion..."

Hmmm... that reminds me of this,


The Dutch never had something like this. As a matter of fact they welcomed Portuguese Jews like Spinoza and others.


"The Dutch should be trialed for Crimes against humanity, in The Hague!!!"

I trial, you trial, nous trialons, vous trialez... The Dutch? All the Dutch? Yeah, that would be great! The defendants could sleep chez eux!... ;-)

Super-pedrolx2 in reply to Accrux

You do know that the 'oficial' persecution of Jews was mostly due to a special request by the Spanish kings don't you?? King Manuel I still try to circumvent it by saying that they could stay if converted to Christianity. The Santo Oficio existed everywhere including France and persecution of Jews well I don't really have to explain that one to you do I? Thanks to king Manuel though more than half of portugal's population's got Jewish blood. :-)

Super-pedrolx2 in reply to Accrux

You should rea about the atrocities committed by the Durch in Brazil. In many cases an auto-da-fe would have been more favourable .

In any car the dark legend belongs to your side of the border not this one

Accrux in reply to Super-pedrolx2

"In any car the dark legend belongs to your side of the border not this one."


In any car and even in any bus...

Marie-Clear, you know, one of the shrews I had to tame, thought that I was Portuguese, telling me "Anyway, this is a French thread, why don't you look for a Portugese [sic] one"? and kept telling me how poor and miserable "you" Portuguese were, etc. I just told her that I am not Portuguese but Lisbon is one of the most beautiful cities in Europe and she replied very contemptuously "then go there and take a walk". I recently learned that she thought I was... YOU! Pedrolx2, using one of your sockpuppets...

For a long while you were absolutely convinced that I was Catalan simply because I kept defending Catalonia and Catalans against Spanish nationalists who insulted them and tried to belittle, distort or even negate Catalonia's history. When you addressed me as "you" (Catalans) I had to tell you that I am not a Catalan and I don't even live in Catalonia or am of Catalan descent or have Catalan relatives, etc, that I did all that gratis et amore. You were "shocked" because you really thought I was Catalan...

Now you refer to "your side of the border" implying that I am Spanish. Well, you are incorrigible, aren't you? You know, one of the main advantages of having not just one country but several ones is that I don't really belong to any of them, nor do I want to belong, because I am or consider myself a sovereign individual and I want to keep it that way, which is why I never refer to any country or nationality as "we" or "us", not even as "you" (plural), but as "they". Always. "We Portuguese", "we Dutch", "we Italians", "we Americans"... that's not for me, thanks, among other reasons because unlike other people here I do not represent anyone but myself and only speak on my own behalf.

Jews, Portuguese autos-da-fé, Spanish autos de fé, Dutch atrocities in Brazil... Look, Brazilian vs Chilean,


And Dutch vs Slovakian,


Super-pedrolx2 in reply to Accrux

Trying to confuse me with women he?

Well you certainly are native Spanish speaker. The rest I don care much.

Marie thought I was you? Or you were me?

Then 'we' might suffer from dissociative personality disorder, because I can't recall writing ' In your name'

Cars, thank iPad and its autocorrect.

Accrux in reply to Super-pedrolx2

It's an old trick. And it works! ;-)

Sorry, but you keep assuming things and jumping to conclusions and you keep... making mistakes! Even if were a native Spanish speaker, I remind you that Spanish is the, or one of the, official languages of at least 20 countries: Spain, Argentina, Uruguay, Paraguay, Bolivia, Chile, Peru, Ecuador, Colombia, Venezuela, Panama, Costa Rica, Nicaragua, El Salvador, Honduras, Guatemala, Mexico, Cuba, the Dominican Republic and Puerto Rico, plus Hispanics in the USA, etc, so your "In any car the dark legend belongs to your side of the border not this one" is meaningless, even adding—later—"The rest I don care much." By the way, I speak four languages and two of them are my mother tongues (i.e. I am bilingual).

Marie-Claude/Clear/Etc thougth I was you, pedrolx2, using a sockpuppet, hence her comments (more exactly: "Anyway, what are you doing here? This is a French thread", etc). At first I thought she was nuts, as usual. Apparently you had a number of conversations with her in the past and she will never forget you... Plus our common "X": perhaps this nutter though that Accrux is a Portuguese name (Accruxeiro, Accruxinho... ;-). I didn't say that you "wrote in my name", I said what I said, that she took me for you, and just I told you what she told me, and not just once, and what I learned later... I don't know, perhaps you used a sockpuppet before or changed your nickname, or maybe she's just paranoid, I don't care. Please don't make me explain it again.

Car, cars, case...

Autocorrect? How humiliating! I prefer to make my own mistakes than allow a bloody machine to "correct" me...

Accrux in reply to guest-iseiwaw

And you registered on The Economist a few hours ago with a guest automatic nickname just for this? Well, then perhaps you ought to:

1) Learn how to understand the context of a thread.

2) Learn how to read and interpret a post.

In which case you would know that I am NOT Portuguese, so you are addressing the wrong person.

Unless you are just a sockpuppet, of course, which you probably are.

Super-pedrolx2 in reply to Accrux

You do understand humour don't you?
The rest is meaningless.
Dyslexia is an illness.
Idiocy ought to be considered one.
I might suffer from both.
I don't care, because I like myeslf. just the way I am.
You make me feel as if we were in a relationship! I have to explain everything I say or do to you.
Jesus Christ, the Lord!

Accrux in reply to Super-pedrolx2


If you have read some of my posts you know very well I do.

No, the rest is not meaningless.

Dyslexia and part-time dyslexia are also a game some people like to play. A silly game, by the way.

And imbecility?

You might.

I am really glad for you.

Not everything. Anyway, if I make you feel that way we can always say goodbye and I won't bother you again, I assure you.



Super-pedrolx2 in reply to guest-iseiwaw

Worse was apartheid in South Africa. Black people's rights movements in the 60s! blacks not alalowed to vote!

Portugal abolished slavery earlier than in Brazil, which is the country I suppose you're referring to. (your country? )

Rather unfortunaltely slavery existed one way or another (still does today!!) in all societies of the world.

Racial segregation which is what I was sort of referring to happened more frequently in certain types of societies than in others, and perhaps the same can be said about slave trade.

Super-pedrolx2 in reply to guest-iseiwaw

Read Equador by Miguel Sousa Tavares, it is a good depiction of the situation of slaves (or ex-slaves) in Portuguese African colonies, and how the British played a double-edged game in regards to it
Like a sociologist friend of mine normally says, unfortunately, if we're to be pragmatic, slavery only really really REALLY ended in the West because of the Industrial Revolution. She might be right. It is rare that humankind is moved by anything other than greed

Accrux in reply to guest-iseiwaw

"Excuse me, did I reply to your message? You should change your glasses."


"Someone has replied to a comment you left on The Economist online. We attach their reply below. You can respond to this comment by clicking:


Yours sincerely,
The Economist online

guest-iseiwaw wrote:
The Portuguese were diabolical, not evil. Just the fact that you enslaved the Africans for centuries gives you a huge moral debt. Currently you ARE NOT evil!



guest-iseiwaw in reply to Super-pedrolx2

Apartheid in South Africa didn't even come close to 300 years of slave trade! How many people do you think died as a result of which? How many families were disrupted and broken up? Countries like Portugal, England, Belgium, Turkey and Germany have a huge moral debt.

Super-pedrolx2 in reply to guest-iseiwaw

Agreed but slave trade didn't start in the 16th century. Athenian democracy had its share of slaves. Slavs are called 'Slavs' because they were Europe's 'slaves'. china had saves, Japan too. Etc.
We all have a moral debt on slavery. mankind does. brazilians too, the true descendents of the slave owners come to think of it. Or do you think they came back after independence? No, they became 'Brazilian' and the great 'fazendeiros' lobbied for the slave trade not to end. Mostly because Brazil was under-industrialised.
That is the harshness of facts.
Brazil as a nation has as much of a moral debt as Portugal or Britain, or any other one of those nations you picked at random. (you forgot Holland)

guest-iseiwaw in reply to Super-pedrolx2

There was apartheid in America as late as the 60's BUT bringing Africans slaves to America and Brazil was England and Portugal's centennial practices. None of this despicable piece of history would have existed if they'd done it differently. Australia is a good example and so is New Zealand.

Super-pedrolx2 in reply to guest-iseiwaw

Australia and NZ is where Britain would send its criminals to exile. They were never thought of to exist as nations.
Where did you learn your history? I say you need to read more. Start with fellow countryman Gilberto Freyre perhaps.
Humanity as a whole has a moral debt towards : slavery, equality of the sexes, racial segregation, and other not less important matters.
Can't just pick countries at random and blame them.

Super-pedrolx2 in reply to guest-iseiwaw

After independence, Brazil inherited its vast territory, give or take (Acre, etc) .
There were 4 million 'Brazilians' - of which 1/3 was European (90% Portuguese) the other 1/3 African and the remainder mixed race.
These newborn 'Brazilians' accepted slavery and lived off it for far more centuries than those in mainland Portugal did. The 'navios negreiros' rarely made their way to Portugal. Where slavery had in fact been abolished.
since the 18th century Brazil functioned almost as an independent nation, in that sense (and others) . These newborn Brazilians constituted the vast majority of Brazilian elite and gave birth to some of the most important Brazilian families, as well as collateral lines, which share the blood, so to speak.
The moral debt is as much mine (I study genealogy and do not have anyone enforcing slavery in Brazil) as it is yours ( probably if you did you'd find some of your ancestors were slave owners).
I've had this debate with certain Brazilians before. I assume this exaggerated blame on Portugal comes from poor knowledge of your own rich history.
A huge part of my family on my mother's side is Brazilian, so go right ahead I feel comfortable debating this.

guest-iseiwaw in reply to Super-pedrolx2

Oh God, I can only hope it's your command of the English language that's kept you from understanding my point but I'll be as kind to explain it to you further. Australia and New Zealand are good examples because there was no slavery involved and yet despite having been prisons, both countries turned out to be highly developed countries. Do you understand that now?

Super-pedrolx2 in reply to guest-iseiwaw

No need to be rude. Weren't you given tea at home. Mind your manners. Or I'll assume you're unable to maintain a civilised debate .

I understood you perfectly but you're confusing matters.

a) Slave trade to Australia and NZ was impossible from Africa (for obvious reasons) But it still existed.

Here look:


b) The US is a highly developed nation, despite the slave trade

brazil far more important than Australia or NZ - which received quite a lot of help from the rest of the Anglosphere to be in the position they're at now anyway.

The world could have been different it is a fact.. But guess what History is a bloodbath. If you are to judge the distant past with today's knowledge, Athenians were sexist thugs, Romans were wreck less plunderers, etc etc etc.

That IS what. I am trying to make YOU understand.

You seem to work on cliches you were taught here and there with no real vision of your own.


guest-iseiwaw in reply to Super-pedrolx2

I'll be as kind as to explain it to you once more. Australia's too far from you and Brazil. The Spaniards did not introduce any slaves to Argentina, Mexico or Paraguay. Therefore not once did they resort to that hedious practice. Plus the Portuguese mindset that was inherited and engraved on the minds of those who resided in colonial Brazil was appalling.
History shows Portugal was only a navigation power and it stops right there.

guest-iseiwaw in reply to Super-pedrolx2

I wasn't being rude but following your lines and tone. Australia could have had massive slave trade and its geographical position would have posed no impediments for the British vessels. You should read more about their history before posting anything asinine. You forgot to include in your list of comparisons and explanations why Portugal seems to have never recovered from losing its bloodsucked colonies and remaining one of the poorest and most backward countries in Western Europe.

Super-pedrolx2 in reply to guest-iseiwaw

Oh so now you're going to try and hurt my national 'pride'.
Ok then. I should assume you're a rather young Brazilian who should read a bit more.
Debate is over. I despise having to argue with those who believe they already know it all and think they know more than those with whom they're debating with.
I was kind enough to leave you some clues here and there - which may help you in the path to true knowledge. It is harsh. You will suffer. Hopefully you'll be fine in the end. Start by studying your own family tree. That should bring you some surprises as it did to me. I discovered I descended from a mameluca who married someone who had to go into exile in Brazil in the early 17th century. Made me proud.
And learn your manners. I didn't attend school with you. From the looks of things though, I could have been your History teacher. it is only by accepting who you are that you will learn o like yourself.
Adeus, boa sorte.

guest-iseiwaw in reply to Super-pedrolx2

You should get off your high chair. You're not the only one I'm replying to plus I'm typing from a smartphone, not a computer. I know about the small Afro trade there but the African descendants there are on a par with their number of Portuguese immigrants. It's no wonder countries with the same population in Europe are better off than Portugal. You showed your contempt, ignorance and envy when you laughed at Germany's success. I'm wasting my time. You can't reason with a no-brainer. Go look for a decent university in Germany or England! Anywhere or do your major over!

Super-pedrolx2 in reply to guest-iseiwaw

When losing , resort to insult. Of course. Ad hominem works all the time.

Did you read the article. In the 19th century one half of the population of Argentina was black or mixed-race. As I said to you before READ.

Anyway, How do you know I'm not typing from a smart phone as well?

I don't laugh at Germany's ' success' - whatever you mean by that- i laughed at the innocent tirade you made. So innocent one can only laugh at it. Not even with it or about it.

Like this one on German and English universities.

Just the innocence of a boy who wants to make his points . Go right ahead. Just don't expect me to enable you. But you have serious potential to become just another one of the ignoramus trolls who abound, here and there

guest-iseiwaw in reply to Super-pedrolx2

You've done all that you have accused me of and shown difficulty in owning up to it. You're simply spying on your own sins. Your English is in need of improvement. And you've failed to carry out a debate as you've got sidetracked several times. Work on your English! Over and out.

la.výritý in reply to Super-pedrolx2

"The netherlands have one of the highest external debts in the entire world".

I didn't check the figures, but I assume you did. I would have thought so anyhow, since the Netherlands have also higher foreign assets than any other country of comparable size. The reason for this is that Holland's ports serve for the whole northern continental EU as hub for overseas trade.

Thus, there are constantly huge 'liabilities', but also assets in form of goods. Rotterdam is the busiest port in the world.

Find a BIS-link that shows the countries' balance sheets: Foreign Assets minus Foreign Debt. Only this is fiscal-diagnostically conclusive.

la.výritý in reply to guest-iseiwaw

I didn't read your posts ... and I don't know what your wider issue is, but you must realize that not everyone can type well, and for some here, English is not the primary language. Threads generally have become less formal than in the past.

That's why I'm seriously asking if "it bother (sic) you (as a blog-reader) to read all of the grammatical (spelling, capitalization, punctuation) errors on these threads?

If your answer is yes, then better stay away from these threads and read only editorials instead.

massel tov

the alarmist croakers of the economist wrong again! in the meantime i challange the ability of the "experts" to evaluate the developments in the currency markets, regarding both the € and the us $.

Pedro Macedo

"One day President Roosevelt told me that he was asking publicly for suggestions about what the war should be called. I said at once «the Unecessary War». There was never a war more easy to stop than that which has just wrecked what was left of the world form the previous struggle."
Winston Curchill in "Milestones to disaster"
We should honor Curchill and call this the "Unecessary crisis". One very simple and easy question is still ahead of us: More Europe or Less Europe? Perhaps we should take a clue from "Roger Fisher", athor of the method of principled negotation (negotiation on merits), developed at the Harvard Negotation Project, and create our own best alternative to a negotation agreement (batna). What is the best alternative for Europe? Letting aside "blaming issues", no keeping score of who did what to whom. What is the best way? I believe the end of the European Union, the end of the Euro is not a solution. I still think, despite the crisis, that the European Union is the best political idea (concept) that ever existed. Don´t throw out the baby with the bath water (" Das Kind mit dem Bade ausschütten.")
Merry Christmas for everyone

emmafinney in reply to Pedro Macedo

The unnecessary currency would be more apt.

To pharaphrase Churchill, never has one currency caused so much of misery and impoverished so many people.

When will the European people take their leaders to task for creating a currency union within the eurozone where first world economies co-exist with 2nd/3rd world economies?

The hubris of Europe's political elites is that they had come to believe their own lies about superior Europe and thought they could defy the laws of gravity by having a currency union without a fiscal union (transfer union).

MilovanDjilas in reply to Pedro Macedo

Well-said Pedro.

That is exactly the reason why Italians of both Left and Right are so furious with Germany.
The individual problems of various EZ countries were always going to come to light in a harsh recession or financial crisis - but those problems did not have to spread to the united currency itself, which was created to be a shield against foreign economic machinations.
But the Germans were determined to wrest control of that shield and use it as a weapon against other EZ members - rather than risk Germany having to contribute a single pfennig of its own money to a rescue package.
In the end, Merkel's insane policies have and will cost Germany a lot more money - not to mention what they have cost the peripheral countries, merely in excess and excessive interest yields.

Thank God Draghi was able to scare Axel Weber out of the running for the ECB Presidency. Had the Germans been able to foist the latter on the Euro-zone, it would have been the end of the united currency.

We are all paying for the Original Sin of the Euro - the fact that the Germans were the one country that DID NOT WANT the Euro.

It is not Greece that should not have been included in the Euro from the start - Germany should not have been included. Without the Euro-crisis (a speculator's paradise) there was no need for either Spain or Portugal to request assistance.

And finally, let's not forget one of the main culprits throughout the ENTIRE DAMM FINANCIAL DEPRESSION - a bank practically without a significant international presence 30 years ago, and now the largest in the world measured by assets: DEUTSCHE BANK.

The old poster Schadefreude - who apparently could not spell in German - was right. German banks are some of the biggest culprits in this crisis. If the full extent of Deutsche Bank's crimes and incompetence were known (when they become known) that bank should be legislated out of existence.

thepassing in reply to Pedro Macedo

The destruction of democracy at the hands of the Eurosoviet Union is the best political idea that ever existed?

The EU is the disease. It is a cancer eating away at democracy and now eating away our wealth for the benefit of a rich elite.

We want our democracy back and no more directives from Barroso's unelected undemocratic Eurosoviet Politburo. Our politicians must make our laws, not unelected and/or foreign politicians.

thepassing in reply to MilovanDjilas

Let's start with the elitist undemocratic Eurosoviet Union. It must be smashed like its predecessor the old Soviet Union.

Then we must get rid of the wealth-destroying Euro and hang the bankers (Goldman, JP Morgan etc) who forced it upon us by bribing our politicians.

guest-iseiwaw in reply to MilovanDjilas

The German banks are not to blame for anything. It's as simple as that: if you spend more than you earn, you have to borrow. Then if you've borrowed too much, you won't be lent again. Don't buy a Mercedes-Benz, if you only earn enough to buy motorcycle! It's bound to lead you into trouble at some point. The creation of the EU on such terms is utopic.

guest-iseiwaw in reply to MilovanDjilas

Germany is too perfect, too efficient ever to have been allowed to use the same currency as the other members, which prevents them from using currency devaluation to become more competitive as does China. It's obvious that if you spend more than you earn and borrow more than you can repay, you're bound to get into trouble. It stands to reason!

guest-iseiwaw in reply to Super-pedrolx2

And you find that funny.... well that says a lot about yourself. Just go through the stats. .. It's highly competitive, has a huge trade surplus, and powerful multinationals around the world. Of course, the Euro has helped them achieve that grandeur but there's much more to it.

la.výritý in reply to MilovanDjilas

Definition of a jealous-loser from internet dictionary

A jealous-loser is some one who craves to be like another being or entity that obviously possesses superior situation- and life-handling capabilities.
Jealous-losers often can't hold their breath, can't compete, can't earn a stand-alone living or can't even "tie their own shoes".
Jealous-losers are often found in groups with similar loser-handicaps; this is why they share the same wailing and gnashing of teeth about those that are apparently more efficient and prosperous.
Jealous-losers have an aversion to free thinking and success, usually work in discount outlets as toilet cleaners or have no job and pretend to work from home.


The euro has not survived, it’s just everybody does their best to deny it is already dead.

Moving the goalposts (sometime with lightening speed), aka the calibrating the criteria to judge "success" has been soo extreme, thus making a clear view on reality impossible.

Debt to GDP levels (state and private) all over the EZ are ludicrously high, and many multiples of any level recorded in history. EZ Banks (MOST OF THEM) are stuffed to the gills either with periphery debt, repo'd to the EZB, bad debt, some subprime mortgage bonds, Spanish mortgages.... and so on. And there is a snowball chance in hell that most or any of these debt will be repaid in real terms. If 2005 EZB rules were applied tomorrow, the banking sector would implode before year end....

The patient is dead - just the doctors have stopped the monitors and declared the patient to be on the route to recovery - does not change the real diagnosis.

Something will bubble up in 2013, some unintended and unforeseen consequence - which will force a closer look at reality. And the very irony, decision makers will be very surprised, as they have been the first to be deluded by their own spin.

Tomas Marny

One more thing about Euro this year is the recent surprising change of the opinion about Euro by current Polish government that has made agreement with "the French" and "the Germanz" at the summit last week that Poland will adopt € in 2016 in exchange for subsidies for the next budget period and increased influence (maybe even the Polish PM's bid for the next EC president).


Maybe Polish commentators could be more specific how this idea was accepted in Poland and how real it is (it would require entering ERM II in 2014)...

shaun39 in reply to Tomas Marny

Interesting framing.

My understanding is that the Polish government wants to retain & expand influence in EU institutions, and therefore wishes for Poland to join the euro.

I'm not sure how related Poland's requests for additional development aid are; but removal of trade barriers is good for Germany & others, so you might be right that talk of Poland joining the EU soon is a gesture to win wider support for more development funds to Poland. Certainly, development funds were crucial in keeping Poland out of recession, and have spurred extensive private sector investment (at exits of new highways, etc).

But besides that, almost all of Poland's most important trading partners (and sources of FDI) are in the eurozone or about to join (Lithuania, Latvia, Estonia, Slovakia, Germany, Netherlands & Austria). So there's a sound case to be made for removing barriers to trade & FDI by joining the euro - to boost investment, trade, GDP & employment. Slovakia's doing very well, after all.

thepassing in reply to Tomas Marny

Why would Poland want to join the financial suicide pact that is the Euro? If I was a Pole, I would do anything I had to to 'convince' politicians to stay out of it.

EU/Euro: good for the rich, good for politicians, good for corporations, bad for everyone else.


Hope for whom? Bankers? Hedge funds? Certainly not for the middle class and the poor.

Realize this: the Euro IS the disease. Not the cure. The cure is to get rid of the disease aka get rid of the Euro.

The Euro is our misfortune.

Sudhanshu Neema

"It helps that the temporary rescue fund used to help Greece, Ireland and Portugal has become permanent ... "

Can't help quoting Milton Friedman here, "Nothing is as permanent as a temporary government program."


What a surprise. The Economist cheers about a year where the rich were enriched at the expense of the middle class and the poor.

Massive profits for hedge funds who bought Greek bonds for a pittance and then got 35-40% courtesy of the buyback funded by the middle class and the poor.

Bailouts for rich bankers who awarded themselves undeserved bonuses and who manipulated interbank lending rates.

Millions driven into poverty and unemployment by the wealth-destroying Euro but the Economist keeps cheering the politicians on because it seems that only the rich count. Is that sociopathy or am I mistaken?

shaun39 in reply to thepassing

I share your egalitarian aspirations, but have a different understanding of the situation.

By what mechanism do you imagine that the currency destroyed wealth?

As I see it, vast bad debts in many places, plus governments making unfundable commitments then collapsing in instability (in places like Greece and Hungary) are the two dominant factors that drove wealth destruction.

If anything, the existence of the euro has prevented monetary collapse high- or even hyper-inflation from being added to the set of painful woes that typically accompany capital flight, state insolvency or deep financial crisis.

thepassing in reply to shaun39

The existenceo of the Euro enabled quite a few countries to run up higher debts than they otherwise would have done.

The Euro gave them the illusion of stability and low interest rates, but it looks to me that this idea has already been exposed to be as bad as it always has been. Without these artificially low rates they would never have borrowed as much as they did.

The Euro is already visibly impoverishing millions and driving them into unemployment. The effects I can see daily in my area of town here in southern Netherlands. Vast unemployment, people out of a job because companies rather hire some Pole or Estonian at a much lower salary, increase in crime, cuts to social spending, welfare, medicare all to fund Euro bailouts for rich bankers.

And they even dare to publish reports to say everyone's income increased by a month's salary because of the Euro. Well, tell that to the 60-70% of the population who have experienced relative if not absolute decline.

To simply put it: the Euro has made the rich richer, and the poor poorer. Not even mentioning here the dilution of people's savings by the artificially low interest rates which aid only rich banks which can borrow at 0-1% and then turn around and offer it to us at 6-8%, in other words, the middle class subsidizes profits for rich bankers.

I am truly amazed at the level of sociopathy displayed by politicians and bankers who just patently refuse to admit the obvious: the Euro is part of the problem. Their mantra is save the Euro at any price, just as long as our banker buddies don't have to pay for it.

The monetary collapse was not prevented, it was postponed. And because of the Euro, it will be far larger than it would have been without it. Now countries that were far more prudent will be dragged along in its inevitable decline.

I say decline because its so obvious that the anti-democratic Brussels apparatchiks and Politburo types will not let go of the Euro until every last middle class person is driven into utter poverty, and likely even then they won't admit they are wrong.
Because if they did, they'd have to admit that the construction of the Eurosoviet Union was a bad idea (and it was). And then their dreams of replacing national democracy with supranationsl soviet structures will collapse.

I mean, what politician doesn't like being able to bypass their own national parliaments by teaming up with Barroso's Politburo? There is no common 'European people' so therefore the EU is undemocratic in the same way the Soviet Union was undemocratic. No common identity except the one imposed by apparatchiks and nomenklatura from above.

shaun39 in reply to thepassing

The euro means low and stable inflation - the euro has a better track record than the Deutsch Mark, sterling or dollar for remaining in a tight band of its target over the past 10 years.

That fact has genuinely delivered much lower real interest rates for long term loans (it has allowed long term loans in Italy, Greece or Spain that previously didn't happen at all). A stable unit of account is fantastic for business - for making long term investment decisions, negotiating long term contracts and obtaining long term finance. And the additional investment this supports raises wider productivity and wages.

The problem in Spain, Italy and Greece has not been low interest rates (sustained lower interest rates are a god-send to economic activity anywhere: they make many new investments and far higher levels of output possible; they reduce the burden of legacy debt refinance).

Rather, the problem has been very high levels of financial leverage (in the Netherlands & UK every bit as much as Ireland or Spain), a massive miss-pricing bubble, accumulation of bad debts, massive maturity miss-match and reliance on international interbank short term lending to finance long term investments, and running of unsustainable fiscal positions. Higher interest rates would have been no solution to these problems - rather, we need more responsible fiscal policy (perhaps institutional blocks on politicians' spending?), a more integrated financial sector, better controls on leverage, better assessment of risk (somehow), etc.

The Netherlands has enjoyed rapid growth over the past decade: PPP GDP/ capita is up 9.6% (2001-2011), while in the US it only grew by 7.3%. The euro clearly can't be so awful.

2001-2011 PPP GPD/ capita growth (World Bank numbers) for eurozone countries, plus the UK, US & Japan as reference:

Estonia: ______ 45.5%
Slovakia: _____ 43.5%
Slovenia: _____ 23.1%
Finland: ______ 15.8%
Cyprus: _______ 11.1%
Austria: ______ 14.1%
Germany: ______ 12.1%
Netherlands ___ 9.6%
Belgium: ______ 8.5%
UK: ___________ 8.3%
US: ___________ 7.3%
Greece: _______ 7.1%
Japan: ________ 5.8%
Spain: ________ 4.7%
France: _______ 4.6%
Ireland: ______ 3.4%
Portugal: ____ -0.4%
Italy: _______ -4.2%



On widening of inequality, you are very right that this is a serious problem - but it is not a consequence of the euro. It is the combined effects of globalisation, technological developments and the preservation of professional cartels (pharmacists, etc) & rent seeking. Inequality has advanced every bit as rapidly in the UK, US, Canada, Australia or New Zealand.

(On the bright side, inequality is falling rapidly in Europe, thanks to rapid growth & convergence of Eastern Europe; a bigger market to prosper in.)

sanmartinian in reply to thepassing

to thepassing

who wrote:


There are basically two kinds of judgement: those based on facts that determine our liking or disliking and those of preconceived likings or dis-likings that make us analyse facts to suit them.

The most indebted overall indebted economies today, and well before the silly Euro war, are Britain and Japan. The former externally, the latter domestically.

Daily Charts published about a year ago an important measure of real indebtedness: how much should the primary surplus be to reduce government debt to half national GDP by 2050.

The "big" South EZ countries' position is this: Italy needs a primary surplus of approx. 2.5%, Portugal 3%, catastrophic Greece 3.5%, Spain 4.5%.

On the other hand, the countries that will need a much greater effort to sort out their huge debt problems are: Japan that needs a primary surplus of 12.5%, New Zealand 9.5%, United States 9.3%, Britain 8.5%.

Go to: http://www.economist.com/blogs/freeexchange/2012/04/sovereign-debt

All other measures of indebtedness confirm the much lower level of debt (public or private) of Euro countries with the possible exception of Holland that, not unlike Britain, got a bit over-excited with betting on financial markets.

It pays to study stats well (even if confined to the Economist) not to broadcast judgements passed by the popular or manipulated media.

By the way, let me take me 'at off to shaun39's good knowledge of stats and even better analyses. Sorry to lapse into my Mancunian.

Just by the way, too, I've never been a Euro enthusiast although I accept that getting rid of it now would be a disaster.

I repeat for 3rd zilionth time, currencies are just tools, they come and go with some advantages and some drawbacks, sometimes keep the name, sometimes they don't, but rarely do they last more than a three generations with the same real identity.

Besides the Euro, in my opinion, was introduced a bit too early, a bit too hastily.

But accusing the Euro of having generated high levels of debt is as serious as accusing Marilyn Monroe of promoting marital infidelity.

Yellow press stuff.

chrisinmunich in reply to sanmartinian

Well stated. I agree with everything you said.

I would see myself also as no eurofanatic but I increasingly like some features of it.

In comparison to national currencies it cannot be abused by politicians. Its weakness is somehow also actually a strength because it merciless forces politicians to reform to become competitive without devaluing the currency.

Without this crisis Italy, Spain, Greece etc would still have rigid labor markets. Though the unemployment is terrible in these countries it is a structural issue and was at comparable levels in the Nineties.

But ultimately it is just a currency. National currencies would not be an alternative. And as you rightly said on GDP per capita basis the Eurozone actually outperformed most developed countries.

sanmartinian in reply to chrisinmunich

To chrisinmunich on the Euro

Thanks for support and kind words.

We have to live with circumstances: we may like or dislike it but in the present world, size matters.

Twenty years ago, the DM was probably the best and safest currency together with the Swiss franc. But the DM was big, the Swiss frank small.

Twenty years later, the new DM (the Euro) is probably a little less good than the previous DM but, by golly! it's so big whoever messes with it burns its fingers.

And it made a lot of countries far more more efficient and in a not long future far more prosperous than they would otherwise have been.

Poorer and richer Euro zone countries alike.

MilovanDjilas in reply to chrisinmunich

Uhm, Chris...

Look, I do not want to nit-pick or get off to a bad start with you. But, before you group us together with Spain and Greece, please be advised that unemployment in Italy,

a) is still below the EU average
b) until January of this year (three years into the crisis) was still below that of the US and the UK - whose governments are spending 8-9% of gdp more than they collect in revenues to support their employment.
c) currently reported at 11.7%, Italy's real unemployment has traditionally been estimated to be at least a point lower by our own economists - due to the widespread phenomenon of under-the-table employment in the four mafia-infested southern regions (Sicily, Calabria, Campania and Apulia).

Please try to keep somwhere in the back of your mind, will you, that when we hear of 25% unemployment in Spain (or say, in Andalusia) it means there is 25% unemployment there.
When we hear of 25% unemployment in Sicily, it means most are working under-the-table. If you don't believe me, try taking a flight to Sicily - walk around the town squares, and tell me if you see large numbers of the unemployed milling about, scrounging for work or money...

d) the Italian national statistic is practically useless, since it describes two or three vastly different economies: North, Central and South. In my northern region of Friuli, we have all the same labour-market rigidities as exist everywhere under Italian law - and at 6% our unemployment is less than Germany's. Among other things, obviously the Italian South suffers from its relative distance from northern European markets.
e) Germany refused to integrate unemployment and other economic statistics from the Eastern Laender for a decade after reunification. In fact, Germany's unemployment was higher than Italy's for two decades, and only dropped below ours around the end of 2009/beginning of 2010.

The Greek crisis was not enough to spark a Euro-crisis. The Euro-crisis has been CREATED by Germany to hurt the periphery of Europe - until that crisis, Italian unemployment had CONSISTENTLY been lower than Germany's.
And, Spain, Greece, Portugal and Ireland cannot challenge German exports as Italy does. Germany organised the speculative attacks on the "PIGS" to hurt Italian exports - particularly in Central/Eastern Europe, where we are the only international player to challenge Germany.

Joshua Tree in reply to MilovanDjilas

@ Miloman:

"Germany refused to integrate unemployment and other economic statistics from the Eastern Laender for a decade after reunification."

- Not true. The German labor office has always published all-German data since unificiation in October 1990. Believe me, I've been working on labor market issues for a while now.


- Italian denial at its very best. And how would they achieve that trick? By introducing reforms in 2003 that Italy has not put in place till today? That's indeed so very vicious. Someone in Europe really wants to stay competitive with Asia - what an insult!

Next thing you'll blame on the Germans is when Monti manages to cling on to power, outsmarting both Berlusconi and your man, Bersani.

Merry Christmas.

Joshua Tree in reply to MilovanDjilas

@ Miloman:



Maybe, but it's nearly twice as high as on the other side of the Alps, in the German state of Bavaria, from where "Chrisinmunich" apparently hails.

So if your region is the top performer in Italy, and Bavaria is outperforming the remainder of Germany, you still have to ask yourself why Bavaria has near-full employment and you haven't. (Hint: labor market rigidities.)

Joshua Tree in reply to sanmartinian

@ Sanmartinian:

"to thepassing

who wrote:




Yes, and "thepassing's" statement falls into the former category.

He was comparing debt run up by countries now having the euro with the debt they were able to incurr when they didn't yet have the euro - and not with the debt run up by countries outside the euro zone, as you suggest.

Greece, Portugal etc. were never able to allow themselves the kind of debt levels they've run up since being part of the euro zone, because before joining the common currency, there was nobody to bail them out eventually. That's just a fact.

Merry Christmas.

sanmartinian in reply to Joshua Tree

To ex oriente on being a fact that Greece and Portugal could not afford their levels of debt because there was nobody to bail them out.

You are not particularly well informed about about macro finance stats, are you?

Besides the fact of stating something is a fact does not necessarily make it one, does it?

The accounting Euro started in 1997. Reliable data ends in 2010

In 2010 total external debt for Greece was 171.5% of GDP, 410.5% for Britain. WOW!

Between 1997 & 2010 Portuguese gross general government debt (external & domestic) increased by 52%; 55% for Britain.

As this indicator does not exist for Greece I have to be content with the fact that total central government (external and domestic) increased 37% for Greece, 64% for Britain. WOW again!

Just to be sure we are not unduly getting twisted figures let's compare with another non Euro economy: the USA (I believe they are thinking of applying if the fiscal cliff negotiations keep on stalling...)

Total central Gov debt increased 38%, just 1 % more than Greece, about half the British increase; general Gov debt increased 47%, 5% better than Portugal, 8% better than the UK.

So figures seem reliable and normal.

Unfortunately for your thesis they prove that in the case of Greece and Portugal the Euro did nothing to facilitate these countries borrowing. It was Britain that borrowed with abandon.

I'd love to give a lot of other examples and I'm sure they'll confirm your point is absolute nonsense, to be polite.

Unfortunately digging these stats is very heavy on my 81 year old eyesight. Why don't you try it for yourself?

Try reading “This time is different, 800 years of financial folly” a book by Carmen Rheinart and Kenneth Rogoff.

My figures above were taken from there.

I have the feeling neither author is a great admirer of the Euro so you may get there ammunition for your argument.

Given the difference in what I call facts (hard data from independent, preferably hostile, sources) and you believe they are (blah, blah, blah from not serious media) I hope you'll excuse me for not responding further on this subject.

Besides, I have an itch advising me the old plague of payed posters is reappearing in Charlemagne's threads and I don't feel like feeding them.

If Charlemagne had any sense he'd remember that on four different occasions those posters favouring the Euro without transfers was about two thirds of total. In one case I seem to remember voters were close to 100 thousand or am I exaggerating?

Please keep these debates on a well informed basis, and particularly to those who keep calling names to what they call the undemocratic institutions of the EU, remember that some two thirds of opinions here are in favour of the Euro.

Not my enthusiastic choice, but I'll accept it and above all I am aware of the disaster that would ensue, particularly for the City if the Euro were to be replaced by the previous 17 currencies.

Merry Christmas to you too.

MilovanDjilas in reply to Joshua Tree

" Someone in Europe really wants to stay competitive with Asia - what an insult!"

Italy has a trade surplus with mighty Japan. We also have a trade surplus with all our other G7 partners - except Germany.

In 2010, we had a €15 billion trade deficit with Germany. In 2011, we had a €12 billion deficit. In the first eight months of this year, we had a deficit under €4 billion (August was a small surplus). In other words, our deficit with Germany is evaporating - and by next year should be a solid surplus.

The Germans are over-rated. Especially by themselves.

Joshua Tree in reply to sanmartinian

I'm not against the euro (where did yiou get that idea from?).

I'm against fooling ourselves into believing this crisis is over, as you are doing.

That will only be the case once structural problems in the countries representing 40% of the eurozone economy (code name: "PIIGS" - not my choice of words) will have been fixed.

chrisinmunich in reply to MilovanDjilas

Shame on me, you are of course right on the unemployment and Italy. What I wanted to state that the crisis caused necessary structural reforms.

Believe me, no one wanted the crises, and surely it was not a creation of Germany. Ireland has growing exports and can compete with Germany. Spains exports grow as well nicely though from a low level. The German export machine is a fact but its invincinility is a myth.

sanmartinian in reply to Joshua Tree

to ex orient... on two posts of mine having been deleted

Two posts of mine in reply to yours were deleted by someone who's not genuinely attached to freedom of expression.

The gist of my Ireply to Moderators as follows:
I would be grateful to know which part of my comments breaks your comments policy.........As this practice can only damage The Economist, of which I have been a faithful reader for some fifty odd years, I will repost the two messages expunged of any even subtle hint that may break your comments policy.(paragraph)I entreat you to look for the long time interests of The Economist the standards of which have notoriously gone down in the last half dozen years thanks, among others, to giving in to interests .....As for my personal feelings, I'm laughing my brains to concussion as my guesses have been proved right.(paragraph)About the Economist, among whose staff I've had many friends along the years, I'm worried....

Here are my two last expunged posts to you


to ex orient... as my last comment

In your quote you forgot to include the important bit of my information:

....that allowed both France and Germany to put their spoon in the soup as well. They ran afoul of Maastricht for a while.(paragragh)Obviously, I am not sure if this is true. I'm not even sure I believe it.(paragraph) It looks too damn
close to a conspiracy theory for me to let my guards down against of this type of rumour.....

Suddenly, ever since I mentioned Isandlwana and the present danger England now faces caused by the monoculture of finance gambling and the City's dominance, I am suddenly attacked en forceby previously friendly posters.

…..............(referrence to past posters)

With his inimitable wit Pumpernickel used to call them Morlocks.

…........(referrence to a comical trick played by me in response to a childish manoeuver of the above mentioned posters)

Never forget: the Devil knows a lot not because he is the Devil but just because he is too damn old.

Forget addressing me again directly or via other posts.

I'll just won't read you any longer. And even less reply.

Have a nice New Year.

2nd deleted post now expunged

Forgot to add that I never wrote Portugal is richer than many other European countries, a statement so idiotic (expunged).

What I wrote is that a Borda ranking (expunged) I drew in July 2010 showed out of 13 countries mostly European and the USA the three best managed financially were Italy, Germany, Portugal.

Only a (expunged) assumes better financially managed is the same as richer.

The very deep report of Allianz published in September that year provided a ranking fully coincident the mine except for the USA (curiously probably caused by a statistical quirk which is the object of many PhD theses).

I didn't study the results of the 2011 Allianz report but a quick perusal makes me believe changes may not have been highly significant.

That is obviously way out of (expunged) knowledge limits and I'll go into it with only bona fide reasonably well informed posters.

End of expunged posts

Needless to say the expunged bits have been for sometime in the hands of those who may genuinely be interested in them.

This is just for common posters who, thank God for their wisdom, won't even bother to read this.

Repeat: have a nice New Year.

Joshua Tree in reply to sanmartinian

@ Sanmartinian:

I simply don't agree with you and aren't won over by your rather clumsily constructed conspiracy theories, so what do you expect me to say when in response to my objections you declare me part of the conspiracy?

If for you, the euro crisis is the result of a vast conspiracy, and if your country, Portugal, a mere collateral damage, so be it.

For me, it's an economic crisis created by the vastly diverging competitiveness of the euro zone's member states, among whom Portugal is one of the structurally weakest, and barely ahead of Greece. The problem isn't exactly new, but has been brewing up for a decade and a half.


And yet the pulling together is killing more and more in Greece and Spain, it is technically 'genocidal' and yet TE and some commentators here applaud it.

It is a currency drenched in the blood of 'Europeans' for the sake of fanaticism, something that will not be forgotten quickly, if ever.

Yet the UK could well unshackle itself from this self-harming monstrosity, as the Conservatives will fight the next general election on a strongly anti-Europe ticket, David Cameron told his MPs on Wednesday night.

Tomas Marny in reply to Cutters.

I doubt that the UK leaves EU. One thing is political games, the other thing is economic situation: Even though the most hated fact about EU in the UK is that it brought immigration, the EU immigrants form so important part of the UK economy already that it would crumble if they were ditched en masse...

Cutters. in reply to Tomas Marny

Then you do not know the reason why the EU is disliked, the hint is in what is being proposed.

EU migration would come under the same controls as all others, and they are not so important that they would be missed if they all went away, it is not like there are jobs for them on the continent.


I'm guessing that people reading this will want a bit more substance on what's really changing in the eurozone.

Well, competitiveness is shifting:

While nominal unit labour costs in the year to Q3 2012 are up 3.3% in Germany, 3.8% in Finland and are booming across low-cost Eastern Europe, nominal unit labour costs are growing far below eurozone inflation in Italy (0.5%), Portugal (1.1%), Spain (0.7%), Cyprus (0.5%) and Slovenia (-0.8%). The Greek numbers aren't compiled yet for Q3, but nominal unit labour costs were down 8.7% in the year to Q2 2012:

Eurozone exports (goods) are booming, especially from the most troubled eurozone countries:

Comparing first Jan-Sep 2012 with Jan-Sep 2011, Greek exports are up 12%; Portugal's are up 9%; Cyprus exported 5% more; Italy & Spain saw an ok 3% growth in export of goods (with imports falling to slash deficits). Across most of the eurozone, there was robust growth of both exports and imports even as GDP was flat, suggesting that economies continue to become more integrated (and suggesting that trade arbitrage has helped the present recession from being much worse than it is).

Certainly, "periphery" countries seem to be regaining competitiveness rapidly, and adjusting to capital outflows with structural adjustment to increased international earnings.

Note also that little Slovakia continues to be a bastion of prosperity in the eurozone, with exports up 11%, imports up 6% and very strong GDP growth.

The combination of austerity (the pace will now slow down; most of it has already been suffered, and the troika is becoming more tolerant); labour costs (there has been a massive competitiveness gain); restructuring to less reliance on foreign capital (structural export growth & import substitution in the most stressed countries) and with optimism if real progress is made towards banking union, mean there is real prospect for unemployment to fall and a little growth to resume in many peripheral countries (almost certainly in Italy; perhaps even Greece).

As Estonia, after the most horrendous and deepest of financial crises & recessions, has exceeded the level of per-capita income it had at the height of the bubble, so could Greece and Spain in 5 years time. For Estonia, this required Finish & Swedish banks to absorb write-downs on bad debt and resume providing capital & credit for Estonian business & consumers. Proper financial sector clean up is what Spain and Ireland need most for a good recovery. If banking union does eventually achieve this, then the future is bright (the uncertainty is political - and I'm optimistic regarding likely institutional developments).

While the first hit to growth was the financial system failure, capital dislocation and collapse of private investment in "periphery" countries, the second (short term) real drain on growth (most prominent in 2012) has been rapid austerity. As all of these factors go into remission, we can expect growth to recover (perhaps with a bit of a spring, as falling unemployment boosts consumption, and especially if capital again flows to higher yielding investment locations).

Longer term, so many great things have emerged from this "crisis": structural budgets are far more sustainable (retirement ages have risen across the board); there have been liberalising & pro-growth reforms in every eurozone country (even Hollande hasn't rolled back all that Sarkozy pushed through); even Italy is now on a sustainable debt reduction path, has raised pension ages and has somewhat liberalised labour markets.

Longer term, many great things have been going on in the background, and will boost growth in the eurozone over the next decade:
- the EU-South Korea free trade agreement that went into effect in 2011 means that small cars, SD cards and computer RAM are now substantially cheaper in the EU than in the US. EU goods & service exports to South Korea are up over 40% (especially luxury cars, industrial machinery, Tesco, financial & insurance services, etc).

- the EU-Singapore FTA is finalised, a conduit for many cheap consumer good imports, a great conduit for goods & service exports, and a basis for further free trade across the ASAEM (agreements with Malaysia & Vietnam are also soon to be finalised) http://trade.ec.europa.eu/doclib/press/index.cfm?id=855

- EU-Central America association & FTA (including Colombia & Peru coming into effect next year) http://trade.ec.europa.eu/doclib/press/index.cfm?id=851

- Canada-EU FTA is more ambitious than most so far; should be finalised in Spring. Rules of origin have been redefined to allow Canadian companies to re-export NAFTA imports with minimal value added in Canada, putting pressure on US competitors to lobby for US-EU free trade. US-EU negotiations should begin next year.

- Croatia is in; Euromed; etc

shaun39 in reply to shaun39

- productivity catch up in Eastern Europe means rapidly growing markets for eurozone businesses (and also means further expansion of the eurozone - Latvia, Lithuania & Bulgaria are likely to join in the next 5 years)

- rapid growth in Turkey & Egypt (both have free trade with EU; both are top outsourcing destinations for eurozone businesses; both are booming markets) support competitiveness, productivity and growth opportunities in the eurozone.

- Russia and Ukraine both present immense development opportunities. Russia's natural resource wealth and resulting consumption already contribute massively to the European economy. Both Russia & Ukraine have massive & well educated populations, and would present fantastic growth opportunities if both markets could be integrated with the EU. Some progress is likely to be made - it's in everyone's interest (even Putin's).

- online retail is booming across Europe, and cross-border online retail is also growing rapidly from a low base. Massive productivity improvements abound, as millions of workers are released from tedium (shop stocking; sitting at tills, etc) to do other useful stuff. Consumers will get better prices, and enjoy higher real incomes. Increased competition will drive out regional price disparities, killing less productive producers and allocating resources to increase real output. (The opportunities for arbitrage within Europe are larger than in any other coherent market - so the gains from that market becoming more coherent will be awesome.)

- where GDP in Europe has been somewhat repressed by green policies (very high fuel taxes, relatively expensive energy, tough emissions standards on industry, expensive green subsidies, etc), the cost of renewable energy is now collapsing. As solar and wind become cheap over the next 10 years, Europe will be increasingly competitive without subsidies and without reneging on green or CO2 objectives.


There is so much upwards impetus to productivity and GDP, from advancing technology to institutional improvements and market integration, the the eurozone will certainly see robust growth over the next decade.

The remaining questions are the form of banking union and speed with which it is implemented.

On "fiscal union", I strongly oppose Charlemagne's thrust - there is no need; no theoretical nor empirical justification. Large and permanent non-discretionary transfers between member states would be a disaster. Subsidy junkies (south of Italy; Wales; etc) are don't innovate and are rendered incapable of private sector success (all money comes from government...). While default or debt forgiveness may play a part in recovery from financial crises, large ongoing transfers are no solution. I would support something like the proposed "structural adjustment fund" (of modest size), with one-off payments made to struggling economies conditional on good structural reforms. But no liberal, economically literate or pragmatic person should support sustained transfers between states.

Overwhelmingly, people living in the euro area have a great future - all change is in the right direction; underlying structures & institutions are looking great. Many eurozone businesses are seeing very strong growth internationally. As austerity eases and the financial sector recovers, domestic growth will resume.

Murchu_an_tEacnamai in reply to shaun39

No problem with your overall narrative. You put the 'teenage scribblers' in The Economist to shame. The tradable, exposed shelters have shown remarkable flexibility in some EU member-states and are being transformed in others. It all augurs well in tandem with the progressive trade liberalisation you highlight.

But resistance to reform remains strong in the public sector and the private sheltered sectors in many countries - as well as a determination to hold on to pre-recession gains - in the face of the 'austerity' that, most likely, has been overdone in many countries. Any productivity or efficiency gains are hard-won and the political will to stay the course is often weak or absent.

The energy sectors - in particular electricity and gas - continue to impose excessive costs on households, businesses and economies. The wholesale price of gas is being kept excessively and artificially high by the external rent seekers and their counterparties among the big vertically integrated firms in the EU. High gas prices mean high electricity prices because gas-fired plants set the wholesale price of electricity most of the time in most national markets. Governments are not averse to this because it minimises direct subsidies for renewable energy - even if, as you indicate, the costs of solar and wind are falling. The renewable subsidy junkies also love these high electricity and gas prices - because they receive an implicit, but juicy, subsidy. And the 'save the planet at all cost' brigade of Greens also loves them.

So, as the pressure increases to reduce and eventually eliminate oil-indexation in gas supply contracts, there is an unholy coalition seeking to keep gas prices high. It will require concerted effort to defeat this unholy coalition. In addition this coalition is ensuring no sustainable incentive is emerging to develop CCS - a technology and activity where the EU should be able to develop an international and valuable comparative advantage (as well as meeting decarbonisation targets efficiently and effectively).

Float in reply to shaun39

Thanks for this, Shawn39... it seems there is still a place in TE for reading analysis based on data & facts. Too bad it has to be in the comments section and not in Charlemagne column directly.
Maybe you should offer your editorial services to TE.

MilovanDjilas in reply to shaun39

Hello Shaun,

Great posts. I wish we were so optimistic in the peninsula. The problem does not lie in the peripheral countries - the problem lies in Germany.
It's nice to show up Charlemagne (sorry dude, but you deserve this) but it's the Bundesbank that needs to hear the message, not London.


Charlemagne: you are definitely as stubborn as General Grant's old mule.

You never give up, do you?

The casualties of the silly Euro war were neither the Euro nor the bailed-out countries.

Remember the speculators' conflict that lasted until March 2011, not until Draghi's pronouncement half a year ago as you erroneously try to make us believe?

The one that led you proudly to boast about the longest thread ever in the Economist?

The casualties were not even the countries or taxpayers of the countries that funded the bail-outs. They seem to be doing a little better than those who had bet on the other horse.

The only casualties were the reputations of the rating agencies, of the hedge fund managers and those of column writers as that repetitive German gent in the Financial Times and yourself.

For the former, rating agencies reputations, ask the Australian Federal Court.

Maybe the Australian court decision has already made silly Standard & Poor reverse the course on Greece so fast that everybody is laughing about it.

Columnists in the Financial Times have already made the German version of the paper close down.

The repetitive rumours that a buyer for the FT is being actively sought, whether Bloombergs or someone else, confirm that column writers who predicted the Euro demise were exaggerating, as in the case of Oscar Wild.

Have you ever thought of the possible consequences for the Economist?

As for hedge fund managers, who in 2010 fully misread stats and attacked the wrong target after Greece, I suggest you read your colleague's piece in this issue on them: "Going nowhere fast".

Particularly, the sentence: Mr Paulson seems to be blaming his malaise on a bet that Europe would falter.

Doesn't that sum it all up nicely?

Not even the inhabitants of Spanish North Western region, Galicia, who according to you, never know whether they are climbing up or down a flight of stairs, would have any difficulty in making up their minds.

At least on this subject.


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