Is the Euro well and truly buggered?

HAVE INVESTORS IN EUROPE USURPED NATIONAL SOVEREIGNTY FROM THE PEOPLE?

........... It remains to be seen whether the "technocratic" new governments of Greece and Italy will be able to command the political force with which to really apply the very likely wise economic remedies they will propose.

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...........What is at stake today is not only the stability of the European – perhaps the world’s – economy, but the survival of the most successful – and certainly most civilised – effort to unite Europe since the fall of the western Roman empire 1,535 years ago. As Walter Scheidel of Stanford University notes in a fascinating essay: “Two thousand years ago, perhaps half of the entire species had come under the control of just two powers, the Roman and Han empires.” Both collapsed. But the Chinese empire was repeatedly restored and enlarged, while the Roman empire divided irretrievably. Yet the dream of reunification never died. It was apparent in the claims of popes and “holy Roman emperors”. It was carried by Napoleon’s eagles. It is the aspiration embedded in the European Union.

The policies which it has been imposing on other countries are flawed policies,” said Whyte. “Germany wants to turn the euro zone into a larger version of itself. That is essentially going to push the block as a whole into a depression.”

This in turn could lead to growing hostility towards Germany, he said. “If you’re swallowing what is perceived to be German medicine, and that medicine is essentially forcing economies to contract by 20 percent, with sharp increases in unemployment — and on top of that the Germans are saying, well, you clearly haven’t gone far enough and you need to do even more — then it’s inevitable that anti-German feeling is going to increase.”

Teemu Lehtinen, a Finnish public-policy adviser living in Athens, said, “It currently seems like the EU is being run by a group of large states, and the head of those is Germany.” This does not go down well at home with ordinary Greek citizens, he said, and makes them feel that the decision-making power is taken away from them and their elected politicians.

“It’s not that the Greeks trust their government or their parliament that much,” he added. “But it leads to the question: Who is in charge of our future? And more and more it seems that the Greeks think their future is in the hands of Mrs. Merkel.”

Germans tended to lead from behind, and allow the French symbolically to occupy a major role,” said William Paterson, professor of German politics at Aston University in the UK. Now, however, the French economy appears increasingly shaky, with its banks deeply exposed to the debt of weak peripheral countries. Paris is desperately attempting to hold on to its coveted triple-A credit rating. The traditional relationship has tilted power toward Germany.

For all the talk of “Merkozy,” it’s increasingly clear that the German chancellor is in the driver’s seat.

“Germany does everything it can to portray an image of evenness, and a balanced relationship” with France, said Olaf Cramme, director of the Policy Network think-tank based in London. However “the relationship has become extremely one-sided, and Germany is calling the shots,” policymakers in France have told him, he said.

Then there was the elitism. Off the record, Europe’s technocrats would say the most blatantly condescending things: History had taught them that Europe’s peoples were not to be trusted and government should be run from the top by people like themselves.

As a consequence, European integration was opaque, and consisted of a long series of complicated fudges. When the European Union leaders were compelled to seek popular approval to get the Maastricht Treaty ratified, they sponsored a forlorn rally in a Brussels park. There were E.U. flags and booths and speakers. But the crowd was bored and sparse. At one point, everyone was asked to sing the new European national anthem to the tune of “Ode to Joy.” Dead silence. No one knew the new words that had been written to go with that masterpiece.

Yes, plan B might come sooner than we thought, but it only can work if the
(still) financially intact EU countries act fast.

....The Finanzagentur issued only 3.9bln cash. They gave 3.9bln bunds to the market and kept 2.1bln bonds on their books. In the future they can sell this retention amount into the secondary market, raising cash....