Is the Euro well and truly buggered?

At your service. "Right To Work" campaigning in the UK is just about job losses, and people trying to find work.
It is nothing directly to do with union membership, but of course trade unions are vocal in the campaigns, as their members are affected along with everybody else.

Right to work whether in unions or not isn't the solution; it's about job creation. When the regular joe's and jane's wages and benefits doesn't keep up with inflation while the CEO's and officers increase their salaries and benefits by over 200% during the past several decades - at profitable companies, there's something dramatically wrong. The middle class are the ones who keep our economy strong - not the rich and filthy rich.

All while the conservatives continue to advocate for lower taxes for the rich, and our deficit continues to grow. They want a strong defense, but they don't want to pay for it; they'd rather see the deficit grow to leave for our children and grandchildren to pay. Tax rates in the US are the lowest in all of the developed countries; conservatives want further tax cuts for the rich.

There's no cure for stupid.

Conservatives want governments to cut their spending; our infrastructure is in poor repair and getting worse, our schools are underfunded, and governments are laying off by the thousands. Conservatives want to increase jobs, but they do the exact opposite of what's required to keep our country secure. The private sector is increasing jobs, but laying off government workers makes it more difficult for our economy.

All government pensions must be adjusted, because that's the biggest problem with local, state, and federal budgets. It has to be more in line with the private sector benefits; some people only have social security. Why are governments paying full retirement benefits after 30-years on the job at 80% to 90% of the pre-retirement salaries (the most extreme), and lifetime health insurance coverage for themselves and their family members? Governments have never been good stewards of fiscal management even when they were aware of future problems facing them (such as the unsustainable social security and Medicare programs), and they have done nothing to mitigate those problems. Their ability to take action in the future on these problems also looks bleak.

Germany’s Denial, Europe’s Disaster



http://www.nytimes.com/2011/11/30/opinion/germanys-denial-europes-disaster.html?_r=1&hp

That's fascinating; as I said - and as you can tell from Cicerone's response - in the US "right to work" means right to work without any connection to any union, and it's the law in 22 states. Your UK "right to work" concept seems rather left-wingish to us, because the right to a specific workplace (einen Arbeitsplatz, sorry I only know the original in German because that's what Karl Marx was writing in) is one of the basic tenets of, you guessed it, Marxism. I looked for the expression in German news and the first link that came up was about..... our very own Jesse Jackson Jr. and Michael Moore; hilarious
http://infokrieg.tv/wordpress/2011/03/10/jesse-jackson-jr-und-michael-moore-wir-brauchen-kommunistische-verfassung/
(The linked video is in English, the German headline reads:
Jesse Jackson Jr and Michael Moore:
"We Need a Communist Constitution")

Not a specific workplace here, generally, although miners have fought to keep pits open when the mine was the only employer in an area, likewise steelworks, shipyards.
Right to Work here means the right not to be dependent on handouts, which is rather the opposite of left-wing, no? With a wage, you can have a better life (thanks to minimum-wage legislation) and a measure of self-respect.
It doesn't make you a bad person, being left of centre. The German government certainly, has kept open uneconomic coalmines because of the social (and financial) consequences of closing them, at least in the medium term.

I find it remarkable that the author of the NY Times Editorial you pasted here criticizes Chancellor Merkel for wasting time in pursuing the "obvious" (to him) solution (which may be no solution at all), after having as he terms it "more than fair warning of the disaster to come". The fact is the government of Greece also had even greater warning of the disaster that would inevitably follow its profligate spending and fraudulent misrepresentation of its finances. Even after all that, it has balked at relatively mild measured demanded by its European benefactors, and so far done very little indeed to reduce its continued deficit spending. We have recently seen the combination of political pressure and bond market response required to mobilize Italy out of its torpor and deial with respect to similarly long-standing economic issues.

The fact is the available evidence strongly suggests that critical reforms won't happen except in the face of impending disaster. Burdening currently well-performing European economies in countries, that face their own looming demographic/economic challenges, with the debts of southern European nations, that are moved to necessary action only by crisis, doesn't look much like a wise strategy to me.

Meanwhile, the cat is long since out of the bag. I doubt seriously that the bond market would treat the wished for ECB bonds any better than their recent treatment of German and Italian long bonds. It is also clear that if the wished for ECB bailout did occur the needed reforms would not follow.

Are you taking the position that there is no known solution to this mess? It sure seems to me that over the last 8 weeks the ranks in this school of thought have grown tremendously.

It depends on what you mean by "solution".

I no longer believe that there is a solution that would enable the Eurozone to continue as it is today. Greece alone demonstrates this quite effectively by their late, inadequate and very grudging response to a crisis of their own making. Ireland appears to have made effective efforts to both eliminate current deficits and restore real economic growth, but is not yet out of the woods. Portugual is in bad shape with no significant corrective internal action yet evident. These three countries alone will seriously strain the EU "Rescue Fund", leaving nothing nearly adequate to contain the contagion that has already affected Italy and Spain.

In normal times action by the European Central Bank to buy National bonds or issue their own (basically what the NY Times writer advocates) would do the job to stem the liquidity crisis. However, now that the chronic deficit funding problem of the Eurogroup of nations as a whole has become so evident, as has the extraordinary political difficulty the affected nations are already experiencing in dealing effectively with it, the situation is no longer merely a liquidity problem. In the absence of visible constructive internal action by Greece, Portugual, Italy and Spain (and perhaps even France) to reduce deficit spending; liberalize overregulated labor markets; and restore real economic growth; the bond market will continue to perceive the crisis as one also involving questions of solvency.

From her repeated remarks on the subject, it appears clear that Chancellor Merkel also believes this - namely that without the immediate pressure of economic catastrophy, the affected nations won't take the needed actions to correct their continuing problems. She has said so repeatedly, and the long ordeal with the Greek government and with former Italian PM Berlisconi would, I believe, be enough to persuade most reasonable people of this too.

Finally there is the underlying demographic problem affecting most of the European nations (The Scandanavian countries, the UK and France may be exceptions). Continuing very low birth rates have yielded ever smaller cadres of fertile women bearing ever fewer children. Nations with highly regulated labor markets, extensive and expensive social welfare programs and rapidly ageing populations cannot sustain themselves with ever fewer workers supporting ever more retirees and beneficiaries. Unfortunately the required corrective actions are very difficult to achieve politically, and that difficulty is all-too-evident in Europe today.

Potential buyers of European bonds are well aware of all these factors now, and will likely be no more attracted to new issues of ECB bonds than they are to those of Italy, they are merely designed to replace. The situation has devolved to a point at which newly printed money can no longer restore investor confidence.

There are other solutions to be sure. The core Eurozone countries could establish and agree to enforce renewed fiscal controls to replace the former financial stability agreement they foolishly abandoned several years ago, and make continued use of the Euro contingent on compliance. That would quickly drive Greece, Ireland, and Portugual out of the zone, and would make continued membership on the part of Italy and Spain contingent on prompt, effective political and economic action. It wouldn't suprise me to learn that is exactly Chancellor Merkel's intention.

I think so too! In essence they're trying to find a solution that lets everyone keep their face, yet omit certain countries by newly set financial accountabilities. My European heart is bleeding that it has come to this
very unfortunate ending for some members, but the EU in its former state was very successful and will continue to be so and I also think that it is not necessary for them to abandon the Euro per se and they probably wont.

Well she didn't do much for Silvio Berlusconi's face, however, he appeared, by his lack of seriousness, to be a barrier to any solution in Italy, and had to depart the stage for that to happen.

Even beyond that, I don't think her interest was so much to save anyone's face as it was to create enough political urgency to force constructive action on those who have been foolishly resisting it. Without that there would be no saving even the core the Eurozone.

Elise just gave a long accumulating collection of wooden nutcrackers (of varied styles) to our eight year old grandaughter who is now lovingly setting them up for the season's decorations (and scolding me to be extra careful around them).

Solution = path to avoiding both economic and social collapse.


All of the methods to avoid financial doom put enormous pressure on the social glue in nations and across Europe which is already weak, this of course after leaders for decades have been cavalier about their financial situation as they addressed their social dreams. It sure looks like now they are out of room to maneuver, that now we get to KABOOM!

Without any explosives. Must wonder who the real enemies are.

Not as moment for us to gloat. We are not all that far behind them; we are in as much political denial & paralysis as they; and we don't have an Angela Merkel

It is very clear who will be made the enemy, it will be the capitalists who took away control of what were believed to be democracies from the citizens. Every time people are told that they have no choice but to do what the markets demand revolution is a step closer. Once people are impoverished too forget about it, it will be 1933 all over again (the rise of the NAZI's).

Not me, it is a global economy...we blow up together, the US on a delayed fuse.

aawww, Christmas around children is so much more magic. I bet your nutcracker collection is beautiful. We have only one old German nutcracker here....(and it ain't me, hehe).
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Well, Berlusconi was beyond repair and Italy can only gain from his departure and hopefully Mario Monti will succeed in his persuasion to have Italians comply with a more frugal lifestyle.

As I've said some pages back, the 17 Euro zone countries will continue to have difficulties with agreements that conflicts with each country's interests. The US has problems to arrive at agreements with only two major parties about our economy; can you imagine how difficult it is to have all 17 agree?

That's not mountain climbing; it's way out in the stratosphere.

Chancellor Merkel this am in the Bundestag really put the fear of God into everybody - her speech is roughly summarized in this cartoon at the Economist:

Do you believe the core Eurozone countries will be able to agree on enforceable committments to more prudent fiscal policy in time to save the situation before Spain or Italy slide much further down the slope?

Well today's news suggests the core Eurozone countries and the ECB are hard at work trying to do just that. What isn't clear is will they move fast enought to correct their underlying economic problems for it all to work.

Many lessons here for us as well.