Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch. Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and â¬73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state. A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece's social fabric is unravelling before the pain begins, which bodes ill. Each is a victim of ill-judged economic policies foisted upon them by elites in thrall to Europe's monetary project â either in EMU or preparing to join â and each is trapped. As UKIP leader Nigel Farage put it in a rare voice of dissent at the euro's 10th birthday triumph in Strasbourg, EMU-land has become a Völker-Kerker â a "prison of nations", to borrow from the Austro-Hungarian Empire. This week, Riga's cobbled streets became a war zone. Protesters armed with blocks of ice smashed up Latvia's finance ministry. Hundreds tried to force their way into the legislature, enraged by austerity cuts. "Trust in the state's authority and officials has fallen catastrophically," said President Valdis Zatlers, who called for the dissolution of parliament. In Lithuania, riot police fired rubber-bullets on a trade union march. Dogs chased stragglers into the Vilnia river. A demonstration outside Bulgaria's parliament in Sofia turned violent on Wednesday. These three states are all members of the Exchange Rate Mechanism (ERM2), the euro's pre-detention cell. They must join. It is written into their EU contracts. The result of subjecting ex-Soviet catch-up economies to the monetary regime of the leaden West has been massive overheating. Latvia's current account deficit hit 26pc of GDP. Riga property prices surpassed Berlin. The inevitable bust is proving epic. Latvia's property group Balsts says Riga flat prices have fallen 56pc since mid-2007. The economy contracted 18pc annualised over the last six months. Leaked documents reveal â despite a blizzard of lies by EU and Latvian officials â that the International Monetary Fund called for devaluation as part of a â¬7.5bn joint rescue for Latvia. Such adjustments are crucial in IMF deals. They allow countries to claw their way back to health without suffering perma-slump. This was blocked by Brussels â purportedly because mortgage debt in euros and Swiss francs precluded that option. IMF documents dispute this. A society is being sacrificed on the altar of the EMU project. Latvians have company. Dublin expects Ireland's economy to contract 4pc this year. The deficit will reach 12pc of GDP by 2010 on current policies. "This is not sustainable," said the treasury. Hence the draconian wage deflation now threatened by the Taoiseach. The Celtic Tiger has faced the test bravely. No government in Europe has been so honest. It is a tragedy that sterling's crash should have compounded their woes at this moment. To cap it all, Dell is decamping to Poland with 4pc of GDP. Irish wages crept too high during the heady years when Euroland interest rates of 2pc so beguiled the nation. Spain lost a million jobs in 2008. Madrid is bracing for 16pc unemployment by year's end. Private economists fear 25pc before it is over. Spain's wage inflation has priced the workforce out of Europe's markets. EMU logic is wage deflation for year after year. With Spain's high debt levels, this is impossible. Either Mr Zapatero stops the madness, or Spanish democracy will stop him. The left wing of his PSOE party is already peeling off, just as the French left is peeling off to fight "l'euro dictature capitaliste". Italy's treasury awaits each bond auction with dread, wondering if can offload â¬200bn of debt this year. Spreads reached a fresh post-EMU high of 149 last week. The debt compound noose is tightening around Rome's throat. Italian journalists have begun to talk of Europe's "Tequila Crisis" â a new twist. They mean that capital flight from Club Med could set off an unstoppable process. Mexico's Tequila drama in 1994 was triggered by a combination of the Chiapas uprising, a current account haemorrhage, and bond jitters. The dollar-peso peg snapped when elites began moving money to US banks. The game was up within days. Fixed exchange systems â and EMU is just a glorified version â rupture suddenly. Things can seem eerily calm for a long time. Politicians swear by the parity. Remember John Major's "soft-option" defiance days before the ERM blew apart in 1992? Or Philip Snowden's defence of sterling before a Royal Navy mutiny forced Britain off the Gold Standard in 1931. Don't expect tremors before an earthquake â and there is no fault line of greater historic violence than the crunching plates where Latin Europe meets Teutonia. Greece no longer dares sell long bonds to fund its debt. It sold â¬2.5bn last week at short rates, mostly 3-months and 6-months. This is a dangerous game. It stores up "roll-over risk" for later in the year. Hedge funds are circling. Traders suspect that investors are dumping their Club Med and Irish debt immediately on the European Central Bank in "repo" actions. In other words, the ECB is already providing a stealth bail-out for Europe's governments â though secrecy veils all. An EU debt union is being created, in breach of EU law. Liabilities are being shifted quietly on to German taxpayers. What happens when Germany's hard-working citizens find out?
Germans are dumb. They will happily bail out entire Europe so there's a market for their car industry and then go back to working to drinking beer, eating bratwursts and paying 58% taxes.
No my friend, that's not the case... Germans are bailing out Europe for quite different reasons, they can't afford to let EU fail, read history..."All Germans within common border" And finally.. without a war, they have succeded, Germans in Germany, Austria, Switzerland, Poland, Chech republic, Slovakia, Hungary... are all living in the same country- EU.. Germans are not dumb, they are smart.. and they plan to go back and buy even more what was "rightfully theirs" during the third reich fatamorgana... they want to get back land in Slovenia, Croatia, Bosnia, Serbia.... and they will probably succed... There you go, you just got free history and future lesson.
That is a lot mouths to feed, with high unemployment rate in Germany, it will be a much bigger baggage to handle than USSR had used to.
USSR doesn't compare to Germany... Russians are lazy, Germans are industrious, smart, intelligent and capable of acheiving big goals over long period of time.. Russians want instant gratification.. and if its not there.. they go back to drinking.. They make best weapons and vodka in the world and that's about it. The next step in history will be the creation of Euro-Asian empire, with Russians and Germans running it... German talent and Russian vast resources.. And all those little pos countries(in between this two powers) who think they got away from Russian and German rule... will be very disapointed...
The author of this article has been bashing Euro for years now and screaming about it's comming collapse. British propaganda.
germans will be here after all as the big winners..... it takes only time, and germans are the right ones to support this time... hahahahaha