Well, there is hardly any support for this idea. Germany knows that it benefits from the low Euro and for that it pays most in subsidies to southern members. Denmark is essentially in the union as the krone is linked to EUR but they don't have voting rights.
How do you assess François Hollande proposal to create the government of the eurozone? Will this structural reform introduction help?
It would help as far an monetary integration goes, of course. I can't imagine Germany wanting this however. Their might be a core of countries however that would join France in a new move for further integration of governments and currency. I would think chiefly the PIGS. If these countries pulled this off, they would become a significant economic force, as then they could far more rapidly excise themselves from recession. I don't think the time is right, however, for quite such a step forward. Most likely this would have to occur in baby steps, the first step being full monetary integration with a common bond and central bank. The two things that will most likely happen now are: 1. Greece will not be able to pull themselves out of recession because of austerity , too little stimulus, and unmanageable interest payments, despite some debt relief, and 2. Greece will return for further debt relief and further handouts. In other words, still another kicking of the can down the road (Meanwhile, recession is likely to continue in the other PIGS as well, though France will remain marginally better off.) . What is obvious to some of us -- mainly those of us who subscribe to modern monetary theory under fiat currencies -- is that under the current arrangement things can get better for the PIGS only very, very slowly and painfully. What the EU is doing, under the guidance and strong influence of the Germans, is plainly not working. It is amazing how long it can take for something obvious to neutral observers to be recognized by the participants that are in charge and more or less dictating the terms... The former Eastern Block countries that are in the early stage of the stepwise process of becoming full EU members, have, it seems, rubber stamped what Germany wants, and that has helped form the consensus that Germany needs. These countries apparently do not recognize that they are themselves vulnerable to the same fate that has befallen the PIGS. If you keep doing the same things but expect different results, you are making a mistake. How long will it take all parties to recognize that?
This we can agree on. However do not be too surprise to see support for full monetary integration growing among the PIGS, France, and the international community. Time will show, I believe, that without a common bond, the ECB does not really have the proper tools it needs to effectively respond to recessionary forces. What is killing Greece are high interest payments, which have the bad effect of making it too expensive to spend the kind of money they need to spend internally to pull their economy out of recession. You can see, in Greece, all the classic signs of economic retrenchment that occurs under an austerity program in a country whose debt has grown too large to be readily manageable. Insufficient help from the government and central bank (the ECB in this case) is not forthcoming, because the rules are set against what is needed.
2 piezoe: And how likely the dissolution of the eurozone is? Once we reject euro, lots of problematic issues just vanish in the air.
"Once we reject euro, lots of problematic issues just vanish in the air" I would disagree with you. Let us remember why eurozone was created?
As if anyone has wondering where Piezoe got his idea for this thread - his idol BB's blog. Why it's time for Germany to leave the eurozone Influential figures including Ben Bernanke have called on Germany to start pulling its weight to end the eurozone's dysfunction. The only alternative is a German exit from the euro Berlin has let the Grexit cat out of the bag. It is now having to bear the consequnces Photo: AFP By Mehreen Khan Germany's finance minister, Wolfgang Schauble, has drawn opprobrium and praise in equal measure for his suggestion that Greece takes a "time-out" from the eurozone. In proposing that Greece could be better off outside the euro, the irascible 72-year-old crossed a political rubicon: he confirmed that the single currency was "reversible" after all. But having broken the euro's biggest taboo, commentators have now suggested that it should be Mr Schaeuble's Germany, rather than Greece, that should now take the plunge and ditch the euro. To stay close, Europe's nations may need to loosen the ties that bind them so tightly Ashoka Mody, former IMF bail-out chief Figures as esteemed as the former Federal Reserve chief Ben Bernanke used last week's decision to press ahead with a new, punishing bail-out for Greece as an opportunity to remind Germany of its responsibilities to the continent. Mr Bernanke took to his blog to highlight that Berlin's excessively tight fiscal policy has helped scuppered the euro's dreams of prosperity and "ever-closer" integration between 18 disparate economies. In its latest assessment of Germany's economic strength, even the IMF (seen in many German circles as chief disciplinarian against the errant Greeks) urged Berlin to carry out "more ambitious action... and contribute to global rebalancing, particularly in the euro area". • AEP: Germany's trade surplus is the biggest threat to the euro A rebalancing act Germany's record trade surplus is held up as the main symptom of its dangerously preponderant position in the eurozone. A measure of the economy's position in relation to the rest of the world, Germany's current account hit a euro-area record of 7.9pc or €215bn in 2014. It is now expected to hit more than 8pc of GDP this year, according to the IMF. The persistently high surplus in part reflects the strength of Germany's much-vaunted export industries. But other contributing factors are reasons for concern. The IMF has said such chronic imbalance also reflects a "reluctance by the corporate sector to invest more in Germany". Persistent imbalances are unhealthy, reducing demand and growth in trading partners Ben Bernanke As Mr Bernanke also notes, the surplus puts "all the burden of adjustment on countries with trade deficits, who must undergo painful deflation of wages and other costs to become more competitive." Southern economies such as Greece are chief victims of the cost of this adjustment. But as the chart below shows, with Germany in the bloc, the eurozone's rebalancing act is going nowhere. Rating's agency Standard & Poor's notes that the initial adjustment between debtor and creditor nations, which started in 2008, "has halted since 2012, and seems to be on the verge of reversing". The Black Zero The other problematic area of Germany's economy policy is the government's obsession over the "schwarze Null" or "black zero" policy to reach a balanced budget. Berlin managed to hit this magic target earlier this year. The "schwarze null" is held up as the cornerstone of German financial strength and stability in a perilous global environment, but has drawn criticism from as yet another symptom of the eurozone's dysfunction. Economist Paul De Grauwe has dubbed it an almost religious "balanced-budget fundamentalism”. The fiscal rectitude has also fallen foul of the IMF's recommendations for the German economy. The Fund has said Germany should have a 2pc increase in investment for the next four years, a target which Berlin is undershooting. Why a German exit would help Princeton economist and former IMF bail-out chief Ashoka Mody is among the most recent proponents of a German exit from the euro. Mr Mody notes that a return to the deutsche mark would provide a two-fold boost to the rest of the beleaguered eurozone: it would immediately cause the euro to plummet in value, stimulating exports in the southern periphery, and also cause far less disruption to the rest of the bloc than a potential Grexit. "A deutsche mark would buy more goods and services in Europe (and in the rest of the world) than does a euro today, the Germans would become richer in one stroke", writes Mr Mody. "Germany's assets abroad would be worth less in terms of the pricier deutsche marks, but German debts would be easier to repay." Outside the single currency, German industry would be forced to return to a pre-euro world, and continually adjust to the costs of an appreciating currency. But Mr Mody posits that such transition, although exterting a big initial shock, would hardly be new for German business. A less competitive currency could also provide a much needed-incentive for German industry to produce higher-quality products and improve sluggish productivity in the service sector, he adds. A design to shackle German strength Germany's economic prowess under the euro should not be over-estimated. One of the drivers behind its "fiscal fetishism" and the need to get their fiscal house in order derives from a deep insecurity about the country's longer term economic prospects. Germany is one of the fastest ageing economies in the world, in need of mass immigration, more women in the labour force and a substantial boost to its birth-rate. And for all its relative economic strength, the euro was at its heart a political construct designed to neuter a reunified Germany 25 years ago. Paradoxically, Mr Mody now says that a release from the shackles of the single currency will enable Germany to act as the hegemon a working monetary union now requires. "To stay close, Europe's nations may need to loosen the ties that bind them so tightly," he writes. Having let the Grexit cat out of the bag, Mr Schaeuble and co. are now having to suffer the full extent of the implication that the monetary union is no longer sacred.
we should just divide the USA up into importing states and exporting states, and each can have their own currency