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Germany tells skeptical UK: 'EU needs you'

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The Euro is doomed, but hopefully the EU can live on in some form or another.

-2 ( +1 / -3 )

No. The EU is a disaster, and brought nothing but troubles to the European people.

-2 ( +1 / -3 )

Bring back the Ecu!

-2 ( +0 / -2 )

Germany probably like to use the UK for occasional extra leverage over the French.

-1 ( +1 / -2 )

I think China can $$$ bail out Europe, IMHO

0 ( +0 / -0 )

I think China can $$$ bail out Europe, IMHO

But at what cost?

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More accurately, "The EU needs your financial support." Bwaaaa

-2 ( +0 / -2 )

German conservatives fishing for conservative allies among the Brits while the conservatives are still in power.

Italy's Monti has taken the lead in the creative problem solving efforts with respect to the EU's finances, and Germany is just trying to maintain its position by finding ways to counter the thrust coming from an increasingly smart, organized, and assertive southern contingency led by Italy.

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The ship is sinking and Germany needs more bailers. Frankly I'm not surprised that the UK has been trying to distance itself just as I can understand why countries that were previously trying to strengthen eurozone ties have cooled their ambitions such as Turkey and Ukraine.

Italy's Monti has taken the lead in the creative problem solving efforts with respect to the EU's finances, and Germany is just trying to maintain its position by finding ways to counter the thrust coming from an increasingly smart, organized, and assertive southern contingency led by Italy.

Yesterday Monti was in Spain pleading with his counterpart to ask for rescue funds so that the ECB would start a bond buying frenzy that would take some of the pressure off of Italy's volatile bond market. Southern eurpope's approach to the situation has been far from smart, organized, or assertive. They have acted in a short sighted manner and the governments of Spain and Italy are splintering over opposition pressure.

Since the French government changed hands this has been a German initiative and the German population is losing their resolve as they get tapped time and again for relief funds.

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Yesterday Monti was in Spain pleading with his counterpart to ask for rescue funds so that the ECB would start a bond buying frenzy that would take some of the pressure off of Italy's volatile bond market.

Good job. I think that shows he is still taking the initiative.

It doesn't sound like much has changed since the following article was published in August, which I found quite interesting.

http://www.reuters.com/article/2012/08/08/us-italy-monti-idUSBRE8770SS20120808

-1 ( +0 / -1 )

The Q,

"Frankly I'm not surprised that the UK has been trying to distance itself"

I'm sure they can only distance themselves to a certain extent, mostly to appease conservative voters, many of whom are Euro-skeptics and have been from the beginning. Even out of the Euro the UK would be affected greatly were/if/when the Euro-zone were to fall apart.

The title could be equally relevant saying:

"Germany tells skeptical UK - you need the EU".

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Good job. I think that shows he is still taking the initiative.

Thats not initiative, its the same old thing. Just asking Germany via the ECB to take on more debt so that Italy can take on more debt on its own. It's like telling a drowing man to take a deep breath. It's the same kind of short sighted response that we've been getting the whole way through. The problems of the EU are systemic and need to be addressed on the societal level, recovery, let alone growth, will not occur in any substantial way without addressing the most pressing problems facing EU members those being overspending and lack of a competitive workforce.

I'm not saying compete with US or Eastern European labor, just make their internal workforces more competitive. It's such a pain to start and maintain businesses it's no wonder why growth has been so consistently sick. Using debt to solve the problem is like pumping steroids into a dead horse, it might twitch a bit but it's not going anywhere.

I'm sure they can only distance themselves to a certain extent, mostly to appease conservative voters, many of whom are Euro-skeptics and have been from the beginning. Even out of the Euro the UK would be affected greatly were/if/when the Euro-zone were to fall apart.

Naturally. If anything it probably owes it's own relative financial strength to it's connections to the rest of the EU. I'm all for many aspects of what the EU represents but the ponderous regulatory agencies, the use of the common currency, and the poor fiscal responcibility of its member states are a big hangup for me.

I've even stated before that it might not be such a bad thing to for a kind of North American Union by expanding NAFTA and adopting some of the more usefull provisions that were established by the EU.

-1 ( +0 / -1 )

the most pressing problems facing EU members those being overspending and lack of a competitive workforce

I think that is a somewhat condescending an untrue statement. Italy, for example, is competitive in some industries.

The real problem is the irrationally high cost of borrowing that doesn't coincide with the market fundamentals, as succinctly spelled out by Monti.

That is presenting an artificial obstacle preventing these countries from working their way out of the debt crisis that was basically brought about because of the the finance crisis.

Greece has the other problem of a bloated public sector, but the conditions that brought about the spiraling debt cycle are not their fault, and they have implemented several rounds of austerity measures.

I believe that Germany wants the EU to stay together, and that means that Monti is leading the efforts to facilitate a transition to recovery by redressing the current dysfunctional state of the financial system.

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I think that is a somewhat condescending an untrue statement. Italy, for example, is competitive in some industries.

It's not condescending. European labor is expensive and highly uncompetitive. Employees are very expensive and considerably more difficult to fire in Europe than they are in other places like Eastern Europe, Latin America, the US, or Canada. The Germans and a couple other western European countries have made up for their expensive labor by making efficient use of machinery.

One might make the argument that the laws exist to protect the workers but I contend that workers aren't terribly well protected when they end up unemployed anyway.

The real problem is the irrationally high cost of borrowing that doesn't coincide with the market fundamentals, as succinctly spelled out by Monti.

Technically borrowing rates are being held artificially low both in the EU and in the US, the artificially low interest rates have actually been cited as one of the original causes of the financial crisis in the first place. There was so much liquidity in the global economy nobody should have been surprised when it tanked. If Germany hadn't made such a strong commitment to the bailout fund and markets were allowed to dictate the price of bonds Italy would already be bankrupt. Italy, Greece, and Spain have all entertained the idea of selective defaults. The whole point of a bond is that you get a low interest but high security investment, unfortunately Italy is far from highly secure.

I believe that Germany wants the EU to stay together, and that means that Monti is leading the efforts to facilitate a transition to recovery by redressing the current dysfunctional state of the financial system.

Italy barely has it's own house in order. If a hack like Berlusconi can still carry political weight in the national stage than the message that Italy is sending is far from that of a leader of anything let alone a transition to recovery.

I think that there are a number of things that the EU could be doing that it isn't, or simply wont. At this point the collapse of the common currency would be disastrous but the possibility does exist, especially if France keeps heading south and Germany keeps losing steam. Member states should consider taking precautionary steps and planning for every eventuality.

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