In order for the EU to survive, it has to implement Fiscal Transfers

More buggy patches that all it does is delay the inevitable. 50% of the debt needs to be forgiven, and stretching out a loan for the rest over 30 years.

That's what Germany got for WWI & WWII

Euro zone releases 2.8 billion euro loan tranche to Greece

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A street vendor displays Greek national flags for sale in front of the Bank of Greece headquarters during a student parade marking the ''Ohi'' (No) day, the country's rejection on Italy's ultimatum to surrender as the World War II flared up, in Athens, Greece, October 28,... REUTERS/Alkis Konstantinidis

The euro zone bailout fund ESM released on Tuesday a 2.8 billion euro loan tranche to Greece, following a commitment made by euro zone finance ministers earlier this month which was conditional on an assessment of the clearance of net arrears by Greece.

"The government has completed key milestones in the area of pension reform, bank governance, the energy sector, and revenue collection," ESM Managing Director Klaus Regling said.

"It has also taken further steps in making the new privatization and investment fund operational. If the government continues to implement the reforms agreed in the ESM program, growth of the Greek economy could accelerate next year and the government may be able to start issuing bonds again next year," he said.

http://www.reuters.com/article/us-eurozone-greece-idUSKCN12P13H
 
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nitro said:
Example: Fiscal Transfer
key terms

Assume there is a negative demand shock in Portugal, but a positive demand shock in Spain (the shocks are asymmetric). Portugal experiences a rise in unemployment and a worsening of budgetary positions because of automatic stabilizers. Spain sees unemployment fall and an improvement in budgetary positions (again because of automatic stabilizers). Had Spain and Portugal paid taxes and received welfare from a central European authority, that authority could have transferred some of Spain’s fortune to Portugal. As it stands now, however, Portugal is left on its own. The worsening budgetary position makes is harder for the Portuguese government to conduct discretionary fiscal policy because of the restrictions on its budgetary position by the Stability and Growth Pact.

Right now, these guys are part of the United States of Europe, except when it comes to money. The idea of Fiscal Transfer is that the union's welfare is an averaging over time of the total wealth over time averaged by booms and busts in individual economies.

Otherwise, why even bother with a EU?
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This is of course the great dilemma. You have a common currency but no common bond. It is as yet not a fully integrated monetary system, and this is why Soros said in Frankfurt that Germany must agree to the Euro bond or leave the EMU.
 
piezoe said:
This is of course the great dilemma. You have a common currency but no common bond. It is as yet not a fully integrated monetary system, and this is why Soros said in Frankfurt that Germany must agree to the Euro bond or leave the EMU.
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That is basically what Stiglitz says in this book:

The Euro: How a Common Currency Threatens the Future of Europe Hardcover – August 16, 2016
by Joseph E. Stiglitz (Author)

 
piezoe said:
Very interesting Nitro. Thanks for posting this interview with Richard Wolff.
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YW. I find the trio of Chomsky, Hedges, and Wolff to be the right trinity to understand the world we live in. Unfortunately, there isn't a black guy in there, or a Latino, or Asian, giving the discussion more breadth.

But I expect that will change.
 
I recommend this one as well. In fact, just watch all CH and RW videos. This one is interesting because it adds the voice of a black intellectual.

It made me go back and re-read Payne's Common Sense.

 
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