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It's not bizarre that it's happening - it's bizarre that the EU 'leaders' are taking the attacks at face value and assuming that this is about fiscal responsibility, or whatever other reason is being used as the pretext du jour. And also that Germany has gotten itself into a position where internal politics have become more influential than long term solidarity.
Neither of these things are bizarre either. Europe's politicians and economic policymakers have either been schooled in neoclassical economics and the efficient market hypothesis, or have been raised in market-worshipping conventional wisdom. They are cognitively incapable of understanding what's going on.

Also, Germany has been making xenophobic noises about the peripheral Euro countries since the 1990s. Now this crisis can be used by them to validate their claims back then that the Euro should not have incorporated the Mediterranean countries. Everyone is glossing over Germany's deficit and debt during the peak of the business cycle in the mid-noughties while unconstitutionally cutting the social safety net, and the fact that they used their muscle at the EU council to avoid being rapprimanded for their excessive debt.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Thu May 6th, 2010 at 09:02:46 AM EST
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In that case Europe really is doomed, because Germany has chosen to identify with the bullies - ultimately at its own expense.

If the Mediterranean countries go, the Eastern European countries will go too, and eventually the markets will pick off the survivors one by one, leaving who knows what.

This is all good news for the neofeudalists but very bad news for everyone else.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu May 6th, 2010 at 09:16:29 AM EST
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If the Mediterranean countries go, the Eastern European countries will go too

It appears the Eastern European countries are idiots, too (at least the first-in-class ones which successfully applied neoliberal shock therapy to get into the Euro).

As the Greek government awaits the first tranche of a €110 billion rescue loan, its Socialist counterpart in Slovakia has said it will not immediately contribute its share, citing doubts over Athens' ability to push ahead with necessary reforms.


The brainless should not be in banking -- Willem Buiter
by Migeru (migeru at eurotrib dot com) on Thu May 6th, 2010 at 09:20:56 AM EST
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In that case Europe really is doomed

I would love to be wrong. But even Jérôme is expecting

the utter humiliation of Germany by the markets


The brainless should not be in banking -- Willem Buiter
by Migeru (migeru at eurotrib dot com) on Thu May 6th, 2010 at 09:23:20 AM EST
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Not necessarily.

Spain is too big to fail.. no way the ECB allows it. They would buy debt, or do whatever it takes.

Europe is DE, FR, GB, IT and SP... if one falls, the other follow (maybe GB is a little bit more decoupled, but not that much). Therefore the big countries are not interested in accepting the attack.

They could fight over Greece, even Portugal, not Spain or Italy. The real tragedy would be not to take this as a clear warning that further financial integration is necessary.. and that reuglation of the European markets following the same structure of the financial regulation taking shape in the US is necessary here plus a serious reform of the bond market in Europe and credit default swaps in England.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu May 6th, 2010 at 12:35:50 PM EST
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