[Mikes]

I railed against it because of its lack of democracy, that is, what is being proposed is that a non-elected intergovernmental body have the final say on what each country decides to do in their own budget (which would be akin, realpolitically, to give up democracy on every peripheral country to Merkel and, by a lesser degree, Hollande).

Political Union, as mentioned earlier, would of course not mean the abolishment of democracy. (That's some crazy line of thinking, seriously.)

What political union ultimately means is of course a unified Europe with some kind of federal system for its membership states - why would you think that this would/should be anything else but an European democracy? /shakes head.

Perhaps before calling people crazy you'd do better by actually reading what they are saying. I have little against a "politically unified europe". This is not what is at the table right now. Right now, what is being discussed is a bureaucratic comittee nominated by the "EU" (much like the european commission right now) which will have powers over the national budgets. The lack of democratic oversight over these kinds of comittees and commissions means they have zero de facto power, and the leaders of Germany, France and a few others are who actually develop the policies. But the problem is, those leaders are elected by their own electorate and owe nothing to everyone else.

So TL DR: your pipe dream of a "of course it would be democratic" EU is far from what is actually happening.

I guess the part where everyone acknowledged the difficulties and reasons why - of course - a political union did not happen yet kind of eluded you?

The fact that it will not happen anytime soon is however in no way or form an argument against why it is needed. A political union is needed if the financial union is to succeed in the longterm and anything but a democratic elected government is simply out of the question. The mess we have right now is more or less a result of the EU not really being able to *quite* decide yet, organisationally speaking, whether it is a collection of autonomous membership states or an actual political body for the whole Union... to some extents it is both right now, which leads to all the mess.

I actually quite agree with you on that the status quo of the EU is not really optimal in regards to being transparent, democratic or efficient.
What you do have to keep in mind is that you are observing a process that is quite literally trying to fit dozens of square pegs through round holes.
The only alternative that history offers to this process, up to now, is shooting all the ba*tards that disagree with you - and no one in the EU appears to want to go back to that, naturally.

In other words... sometimes people just need enough time to find out that the status quo really does not work and something else (i.e. a true political union) is really needed before they are willing to truly consider implementing it... and as said earlier... the financial crisis appears to be rather good at teaching people what does not work right now.

[SpardaSon21]

In the long run Germany will just run the EU, anyways, since nobody else will want to put in the effort necessary to keep Europe running smoothly.

[Luis Dias]

I guess the part where everyone acknowledged the difficulties and reasons why - of course - a political union did not happen yet kind of eluded you?

It must have eluded me. I haven't seen a good argument on why the people should be excluded from the political effort to unify europe anywhere. The implicit argument there is that "peoopl r stoopid" and untrustworthy, but you know what? I trust the politicians even less.

The fact that it will not happen anytime soon is however in no way or form an argument against why it is needed. A political union is needed if the financial union is to succeed in the longterm and anything but a democratic elected government is simply out of the question. The mess we have right now is more or less a result of the EU not really being able to *quite* decide yet, organisationally speaking, whether it is a collection of autonomous membership states or an actual political body for the whole Union... to some extents it is both right now, which leads to all the mess.

Well thanks for that captain obvious. I'm still oblivious to what extent that has anything to do with anything I've said (that prompted your "your line of reasoning is just crazy"), but yeah roses are red and the sky is blue and so forth.

I actually quite agree with you on that the status quo of the EU is not really optimal in regards to being transparent, democratic or efficient.
What you do have to keep in mind is that you are observing a process that is quite literally trying to fit dozens of square pegs through round holes.
The only alternative that history offers to this process, up to now, is shooting all the ba*tards that disagree with you - and no one in the EU appears to want to go back to that, naturally.

Problem is that historically, the EU has never been democratic. The whole process has been decided top-down, "trickle-down-politics" (ah, I owe that to Romney sleazy line!), where referendums are repeated ad nauseum until the "people" vote "the right way", the executive powers are not elected, etc.

So while we can all go kumbaya and sing the all goodies that have stemmed from an unionized europe, we must confront the baddies and realise that because of the latter, we are in a political vaccuum, where no one really wants to build a federalized europe (and by no one I mean the people). This means we are far, far behind the utopia you are portraying here. Everyone loves utopias, but we do live in the present.

In other words... sometimes people just need enough time to find out that the status quo really does not work and something else (i.e. a true political union) is really needed before they are willing to truly consider implementing it... and as said earlier... the financial crisis appears to be rather good at teaching people what does not work right now.

Go tell the greeks about your vision and listen to what they are saying. Their answer is the Golden Dawn. It is a disease spreading quickly and viciously. And evidence that probably it is too damn soon for a "political union". There are far too many cultural differences in Europe for such a thing to occur. And I see no politician with enough insight and popular backing that can drive everyone to your paradise. All are mediocre hacks who bow down to interests and popularism.

[Mikes]

There s a couple of things eluding you Luis Dias:

First... in the most unmistakable wording possible:

A political union at this point did of course not happen yet and it will not happen for quite a while.
But... again, that does not change the fact that a political union is needed if the financial union is to succeed longterm.

How... do you construct these statements of mine into "my" political union/paradise?

These two statements make rather evident the problem the EU currently faces... no more no less. That is what I said, no more, no less. So please do stop putting words about supposed utopias or paradise into my mouth, it's getting ridiculous.

The only thing I did say is that the financial crisis appears to teach people what does not work. Once everyone is truly convinced that the status quo is a deadend people usually do look for alternatives. But even if everyone was suddenly convinced that we really do need to have one European government, right now, tomorrow! ... then hammering out the details would still take decades of course.

I guess the part where everyone acknowledged the difficulties and reasons why - of course - a political union did not happen yet kind of eluded you?

It must have eluded me. I haven't seen a good argument on why the people should be excluded from the political effort to unify europe anywhere. The implicit argument there is that "peoopl r stoopid" and untrustworthy, but you know what? I trust the politicians even less.

There isn't a good argument for "why the people should be excluded from the political effort in europe"... and I certainly have never claimed that there was either. Implementing a true political union while at the same time abolishing democracy would be idiotic.

However, again, this does not change the fact that a political union is needed for the financial one to succeed. How you construe that fact to supposedly mean someone wants to abolish democracy is indeed crazy.

There is no easy solution...  but the requirement for a political union and the difficulty of implementing one is the underlaying reason for the difficulties the EU is currently facing.
That is the whole point I was making here you know ...   the root of the issue is an organisational/structural problem and you will never fix that by trying to fix single countries like Greece or slapping bandaid fixes on the symptoms.

On the upside... at least in comparison, globally, the EU is still in pretty good shape even with the issues it has right now.

 I.e. midterm, if the US doesn't go under financially, then it's gonna be a breeze for Europe.
On the other hand... if either the US or the EU can't, and financial meltdown really occurs, then both nations will be sh** out of luck. - and China as well lol.

[Luis Dias]

The only one misrepresenting things here is you when you stated I was being crazy, here:

Political Union, as mentioned earlier, would of course not mean the abolishment of democracy. (That's some crazy line of thinking, seriously.)

When I was being anything but, since I never said anything like that. So if you want to discuss on how a currency union is impossible without a political union, go and find out anyone who actually disagrees with that notion and berate him instead. If you want to discuss something with me, please make the small effort to actually read what I write first.

There isn't a good argument for "why the people should be excluded from the political effort in europe"... and no one has ever claimed that there would be an argument for it either. It would be horrible.

If there isn't, and if you didn't even try to make one, then I'm completely at odds to what you disagree with me. Call me crazy and then furiously agree with my statements. What the hell are you smoking man, I want some of that **** too.

[Al-Rik]

Sounds like Europe is having to deal with the same stuff we had to deal with when we were trying to make a unified American nation.

Well, speaking of the United States of America: The funny thing is that most Europeans don't understand the GOPs reason to fight against a bigger federal Government.
But at the moment and even for the near future they would never accept a unified social security system (unemployment, healthcare, retirement) in the EU, and the EU is often the scapegoat when national politicians  have to explain unpopular laws.
 

In the long run Germany will just run the EU, anyways, since nobody else will want to put in the effort necessary to keep Europe running smoothly.

A great part of the actual problem is that the German politicians don't want to run the EU.

Germany was one of the first countries to break the 3% deficit rule by the way. Then Merkel suddenly declared the rule to be cast in stone once Germany would clearly have no issue meeting that limit.

That's correct. The Socialdemocrates and Greens broke the 3% deficit rule in 2002 and this was criticised by the Christdemocrates (Merkels Party) and the Liberals.
So holding the line of the defict rules is for Merkels Party and the Liberals a must, otherwise they became unbelievable.

The reason for breaking the rules was a crisis in the German economy, a flood in eastern Germany, the bad policy of the former governments, the stupid rules of the EU, the recession in the US market, ect., ect., ect... (there is always a crisis that justify more public spending).

Well, breaking the rules wasn't helpful, the economy wasn't booming and so the Government of the Socialdemocrates and Greens started with evil neoliberal policy:
They raised the age for retirement to 67 years and ban the practice of early retirement ( employees were send with 50 or 55 to retirement "to make room" for younger workers ).
Welfare for the unemployed was cut: from 53 % of the former salary for unlimited time to 63% of the salary for one year. After that year there is a basic welfare for everyone.
And you can't refuse a work offer if the job is under your qualification without getting basic welfare cut.
Most of the people who work for minimal wage haven't any negative effect by those new rules (they were screwed before, but nobody gave a dam, and are still screwed now) but all the well paid engineers, doctors and other high paid specialists are still be upset because they will be now treated  as somebody once told me "Like Bums and Welfare Queens" (fact: most of the people on basic welfare have had bad luck: single mothers or chronically ill persons or workers without professional formation - sometimes all together ). 


The effect was what during the next federal elections the Socialdemocratic party lost many Votes and get a fame as traitors to the working class, and Merkel was elected as Chancellor.

[SpardaSon21]

Let me rephrase: eventually the German leaders will get angry, decide the people in the PIIGS nations are idiots, and try and conquer Europe... again.  50/50 odds say Britain joins them so they can rebuild the British Empire.

[Mikes]

Sounds like Europe is having to deal with the same stuff we had to deal with when we were trying to make a unified American nation.

Well, speaking of the United States of America: The funny thing is that most Europeans don't understand the GOPs reason to fight against a bigger federal Government.
But at the moment and even for the near future they would never accept a unified social security system (unemployment, healthcare, retirement) in the EU, and the EU is often the scapegoat when national politicians  have to explain unpopular laws.

And at the same time some American politicians are always pointing towards some of those European countries and their national social security/healthcare systems when ranting against the evils of socialism in general and especially when ranting against unified social security and healthcare in the USA. - despite those countries being very wealthy and doing very well.

Politics... hah.

Also... from a citizens perspective it does not matter whether their national government or the EU is responsible for their healthcare.
Fact is... as German I am able to enjoy a national healthcare systems... while Americans do not.

Anyways... lets not drag healthcare into an EU discussion. The two are separate issues. 
If the EU was a unified political body you could raise matters like that, but right now it really is not.
Discussing the lack of any kind of unified policies that a political entity, which has no power to implement them, did not implement, is rather pointless.

[SF-Junky]

The periphery would not have to depreciate their own currency if they had one. The markets would probably do that for them by themselves.

Germany was one of the first countries to break the 3% deficit rule by the way. Then Merkel suddenly declared the rule to be cast in stone once Germany would clearly have no issue meeting that limit. Italy has a primary budget surplus and even during Berlusconi it still maintained that. Financial mismanagement is an inaccurate diagnosis of the Euro crisis.

Yes, exactly. I completely agree with you. That is why this whole debate here between Luis Dias and MP-Ryan almost completely missed the point. The latter seems to think the most important condition for a monetary union would be low public debt. The Euro's creators, especially the Kohl government (which was nearly as incompetent as the current Merkel government is), also thought that, but that is completely wrong. Low public debt is an absolutely secondary, if not tertiary, condition for creating a working a currency union. The most important thing is that the national inflation rates do not differ too strong in the medium run.

I'll try to explain it right from the beginning: The Euro led to nominal interest convergence, meaning the economies in the south had to pay the same low nominal interest rates like the economies in the north. That's obviously the goal of a monetary union: You have one central bank that induces one interest rate for all member countries.
Now the southern economies had a higher inflation rate than their nothern counterparts, especially Germany and Austria, which had two effects:
First, it means they lower real interest rates (real interest = nominal interest minus inflation rate) which means a higher stimulus for making debt. Spain even had negative real interest rates between 2002 and 2006 or so. That explains mostly were the spanish house price bubble comes from.
Second, their goods became more expensive compared to goods from northern Europe, especially Germany.
Usually, we have national monetary policy  and exchange rates to counteract such developments. The Banco de Espana could've raised national interest rates and Greece could've devalued their Drachma in order to regain price competetiveness.

Now were do these different inflation rates come from? Germany has kept its wage increasments behind its productivity increasments since 1996 while in the South wages increased their wages above their productivity increasments. The german development did not happen by accident, but by deliberate political decisions and of course Germany is to be faulted for that as it aimed at having that absurd current account surplus which is nothing more than the counter entry of its trade partners' current account deficit. Of course countries like Greece are to be blamed for the far too strong wage raises, but that is only one side of the medal. I think most Southern Europeans pretty much realized what went wrong on their end of the bill and that they have to work to get it right. The only country that still didn't get it is Germany.

This is not a soverneign debt crisis! It is a debt crisis, however. As I said before the southern countries all have a current account deficit. They import more goods and services than they export. This means they consume more goods and services than they produce. The difference must, for obvious reasons, be paid by debts. This debt, again, must be supplied by someone, obviously someone who consumes less goods and services he produces. In this case: Countries with a current account surplus like Germany.

So to solve this crisis we ALL have to equal our current accounts by coming back to a wage policy where wages rise with productivity. Government debt does hardly play any role in there.