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Which basically points to the other alternative - leaving the Euro...

As J. Edgar Hoover used to say: "The wish if father to the thought." There are obviously MANY other alternatives, starting with making the ECB a true EMU central bank, serving as lender of last resort and creating money as needed by the real economy. All of these things are normal functions of central banks, but the ECB, at German insistence, is a grossly deformed central bank.

Could somehow Germany be ousted from the EMU it could be run as a sane monetary union. My own recommendation has long been that France, Italy, Spain, Greece, Portugal and Ireland should form their own monetary union, a SEMU, with their own money, the Seuro, or southern euro, and an SECB, or Southern European Central Bank, that would implement a surplus recycling mechanism as Keynes advocated at Bretton Woods. Run along sane lines this could be a great boon for all members.

Were this to happen, then, one by one the remaining countries in the original EMU would find themselves now in the position of deficit countries WRT Germany and could opt to join the SEMU. This would, in the end, deprive Germany of the ability to rape its neighbors by controlling the monetary policy of a union that was conceived, at least by the non-German founders, as a mutually beneficial organization. Then your beloved Deutchmark would be so strong that your exports would collapse, but the rest of Europe would fare much better.

The non-German founders of the EMU thought that, in the face of necessity, Germany would come to accept as changes policies that would have brought about a much fairer monetary policy. Current events are clearly showing that these expectations were folly. As soon as the CDU became dominant politically in Germany the fate of the EMU was sealed. Those Germans in control do not appear to care one bit about the welfare of any but the financiers and uber wealthy and the majority of Germans are just being 'good Germans' and going along quietly, mostly, without realizing the price they are paying.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 18th, 2012 at 04:22:03 PM EST
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