Could the EU break up?

[Mega]

http://www.telegraph.co.uk/finance/c...rds-slump.html

Note:- The writter is very ANTI EU!
Mike

[grapejelly]

Re: Could the EU break up?

The EU could break up but I would say the monetary union would break up first, and probably the EU would survive that.

There are the relatively strong fiscal countries (so far), aka Germany and France, and the weak ones, Italy and Spain for instance. I am not saying ANY of them are strong fiscally, just speaking RELATIVELY.

Fiscal policies are so different, the Italians and Spanish want to print a lot of money and the Germans do not want that to happen.

I think the Euro is overvalued right now, because of the USD being in the shitter. The Euro has worse problems and has not been discounted.

If there is a violent increase in the price of the USD, ther will be an equally violent decline of the Euro and I could see countries in the EU going off the Euro and this could happen in the next year or so.

[WildspitzE]

Re: Could the EU break up?

I've joked before that the only reason why the EU has made it so far is because the US has done such a great job at mismanaging the currency (and overall leadership situation) to justify their existence.

[unlucky]

Re: Could the EU break up?

The commitment to the EU in continental Europe is too deep now for it to break up. It would be similar to contemplating a break-up of the US. Commentators from the UK don't grasp this because the UK is the one exceptional case and probably the most likely to leave (thus realizing Britain's historical nightmare of finding itself isolated aongside a continental super-power).

The euro may be a different matter as it is less than 10 years old. For countries like Greece that have gone off the rails, the only solution short of leaving the Eurozone is to get bailed out by Germany. So it all depends on Germany's patience and their ability to extract conditions from the Greeks in some sort of "IMF-like" scenario. The operational obstacles for any nation wishing to leave the euro-zone are pretty formidable, i.e. create and issue a brand new currency at a time when your economy and your finances are shot to hell and your existing debts are and will remain euro-denominated.

They will make a deal ... for sure.

[Jay]

Re: Could the EU break up?

The operational obstacles for any nation wishing to leave the euro-zone are pretty formidable, i.e. create and issue a brand new currency at a time when your economy and your finances are shot to hell and your existing debts are and will remain euro-denominated.

They will make a deal ... for sure.

I would have to agree. The breakup of the Euro would cause all sorts of unwanted instabilities at a time when that may set off a chain reaction. The EU will do everything in their power to keep the currency intact. Sweet, that includes even more neoliberal policies! Can't have enough debt servitude you know.

[pwcmba]

Re: Could the EU break up?

I would have to agree. The breakup of the Euro would cause all sorts of unwanted instabilities at a time when that may set off a chain reaction. The EU will do everything in their power to keep the currency intact. Sweet, that includes even more neoliberal policies! Can't have enough debt servitude you know.

Does anyone have information/web links on technical levels (debt or deficit ratio to GDP, etc..) that get a country kicked out of the EU?

[unlucky]

Re: Could the EU break up?

Does anyone have information/web links on technical levels (debt or deficit ratio to GDP, etc..) that get a country kicked out of the EU?

Stability and growth pact:
http://en.wikipedia.org/wiki/Stability_and_Growth_Pact

You don't get kicked out if you breach it, which is very fortunate as you can see from the list of countries in breach (follow links for 2008 statistics on the above page).