Is the Eurozone now becoming a single state?

[RandBlade]

With all the crisis and panic over the current eurozone crisis, the debates primarily being about the past and not the future, not actually discussed much the consequences of what is unfolding before our eyes. All the talk now is about "fiscal union" as well as the "monetary union" that the eurozone already was: the latest I've read is that budgets would be submitted to Brussels for approval before going to national Parliaments. There seems to be a clear shift now then to the 'centre' of economic power.

Depending upon how the power gets used, he who controls the purse strings calls the shots. To have national Parliaments lose control over their own budgets, not just in a time of crisis while seeking a bailout (that already happens if the IMF get involved, but that's merely a price paid for the help) but in ordinairy times too, seems a big step towards unifying the nations into a single nation-state.

Even before this crisis, the odds were now well stacked against the UK ever joining the Euro. Largely due to fears over sovereignty and fears about a mere monetary unions becoming more ... now those fears are being realised I can not imagine the UK in the next few decades not just years joining the Euro. If the Eurozone becomes a single country that'll have interesting consequences then upon us.

[agamemnus]

I think maybe it's more the bailout nations that would have to submit their budgets in order for the bailing-out nations to approve them?

[RandBlade]

No, that is already happening. What is being proposed is that in future ALL Eurozone governments budgets would have to be scrutinised and approved, in order to prevent nations from in the future reaching a point where they need to be bailed out.

Question for our American cousins - does the US Federal government even approve States budgets, let alone before they're sent to the State's congress?

On a specific and political level, I think the one nations electors who'd be insane to ratify this - except that they have no alternative but to do so - is the Irish who have been remarkably quiet over the whole thing and will have to have a referendum for any treaty change. I find it almost inevitable that someone would try ultimately to use this treaty change to force the Irish to hike their corporation tax rates for the benefit of the Franco-Germans, not the Irish.

[wiggin]

The Federal Reserve doesn't, but IMO the ECB wouldn't in this case either, yes? The federal government (through Congress and various agencies) have a lot of say in state budgets - things like Medicaid and welfare spending, infrastructure programs, etc. Pretty much anything that either runs afoul of federal law or involves matching federal funding is largely controlled by the federal government.

The Federal Reserve, though, being an independent entity, does not not have any role in state budget decisions. That's largely because there's a clear fiscal transfer union in the US from rich states to poor states, and no one really thinks about it.

[Hazir]

The funny thing is that the central scrutiny you are writing about is nothing new. What is new is the power to actually intervene. What you will see is a situation a lot closer to that in the US complete with transfers, even though they won t be called that and the process will be more public. That also tells me there is greater potential for conflict.

I don't think the ECB will get a real bugettary role, though it may put hard budgettray conditions in front of governments that want to use it as a lender of last resort.

What I see as the most likely victim of the present crisis is the principle of unanimity; I think unwilling participants are going to be listened to a lot less. That means a very much reduced role for the UK in the decission process and I think that also means that the UK will have less say in its own policies. Sort of like a bigger Norway; living by EU rules but not writing them, in order to keep access to the single market.

[Hazir]

Oh, I also think any Irish referendum will be treated as an in-out choice which will not really stop the other countries ratifying and the treaty coming into force. If the Irish will vote no then they will be free to try fixing their economy all by themselves.

[RandBlade]

It would take us agreeing, or an abandoment of the existing EU, to lose unanimity. The key about unanimity is only one can block a change. Norway has no unanimous rights to anything, never has done. The UK has and has veto rights to block any changes to the status quo.

If the Eurozone were to be harmonised while maintaining the EU, then it is majority voting that will cause a Norway-style situation. Either the UK would have to agree to lose unanimity, or potentially the Eurozone may choose to leave the EU.

[Hazir]

It would take us agreeing, or an abandoment of the existing EU, to lose unanimity. The key about unanimity is only one can block a change. Norway has no unanimous rights to anything, never has done. The UK has and has veto rights to block any changes to the status quo.

If the Eurozone were to be harmonised while maintaining the EU, then it is majority voting that will cause a Norway-style situation. Either the UK would have to agree to lose unanimity, or potentially the Eurozone may choose to leave the EU.

A EU without the eurozone is not unlike the old free trade association where pretty much all members saw that as the waiting room for real membership. In the end only Norway and Iceland remained and Switzerland got the same deal by different means. Cancelling the EU would not be a big deal for a federal eurozone, it would be a disaster for the UK.

[RandBlade]

The EU does not belong solely to the Eurozone. The treaties as they are do not give the option to expel recalcitrants like the UK, nor to remove the veto without our consent.

Why would it be a disaster? I want to be in, but don't engage in such hyperbole. Is not being in the US a disaster for Canada? Or in Australia a disaster for New Zealand?

Or historically, not being in the UK a disaster for the Republic of Ireland? Is not being in Spain a disaster for Portugal?

[Hazir]

Sigh, the UK could maybe not be expelled but the eurozone could leave. To end the freedoms of the EU between UK and mainland Europe ends London as. Financial center for Europe. Not so long ago you said what is happening right now could not happen. I tell you it need not be the last step in the marginalisation of your country.

[RandBlade]

Sigh, the UK could maybe not be expelled but the eurozone could leave.

You're quoting me here, I said repeatedly the Eurozone could opt to leave. Be intriguing though then the ownership over EU buildings in Brussels etc

To end the freedoms of the EU between UK and mainland Europe ends London as. Financial center for Europe.

No it doesn't. Which was the financial centre of Europe in 1972?

The UK is the #1 financial centre in the world. There isn't even a single other European city in the top 10. In fact, even Sydney ranks higher than Frankfurt.

http://en.wikipedia.org/wiki/Financi..._Centres_Index

Not so long ago you said what is happening right now could not happen.

NO I DIDN'T! YOU DID!

You said this crisis was resolved months ago. I foresaw this as a risk years ago. You said that it was not true.

I tell you it need not be the last step in the marginalisation of your country.

Or the marginalisation of the Eurozone.

[Hazir]

You sure have a short term memory, NOW you are saying these things, I have consistently told you that this was what the EU and UK under its string of euro-hostile governments were heading for. You have an idiotic believe in the greatness of Briitain. The only reason why London was able to stay relevant was the free flow of European money. That is part of the EU deal that may be coming to an end now. For the simple reason that we no longer are very interested in keeping you on board.

I predict that this friday Cameron will come home with no consessions at all in return for a new EMU treaty. The eurozone will not let you take back powers and will not grant you immunity.

[earthJoker]

The UK is the #1 financial centre in the world. There isn't even a single other European city in the top 10. In fact, even Sydney ranks higher than Frankfurt.

Just because we aren't in the EU we are still a European city. And with Geneva there is even another European before Sydney.

[Crazy_Ivan80]

It would take us agreeing, or an abandoment of the existing EU, to lose unanimity. The key about unanimity is only one can block a change.

the key about unanimity is that it only works as long as the players are willing to play along. If the rest of the gang says "screw you" and goes ahead they can. If the others are no longer willing to listen you're shouting "veto" into an empty desert. the immideate effect is obviously that the one vetoing gets left behind (irrespective of the direction the others take)

[RandBlade]

Just because we aren't in the EU we are still a European city. And with Geneva there is even another European before Sydney.

But that's not possible, being in the EU is the only thing that matters so how can there be two Swiss cities in the top 15 as they're not in the EU and London is the ONLY top 15 EU city. How can that make sense.

Sarcastic obviously. Yes sorry I meant EU when I said European. Zurich and Geneva (as well as Hong Kong, Singapore etc) all kind of prove the point that London can and would keep its place.

the key about unanimity is that it only works as long as the players are willing to play along. If the rest of the gang says "screw you" and goes ahead they can. If the others are no longer willing to listen you're shouting "veto" into an empty desert. the immideate effect is obviously that the one vetoing gets left behind (irrespective of the direction the others take)

And if we don't want to go in that direction, hence the veto, what harm is there in being left behind?

[Hazir]

And again a major fail by Randblade who is oblivious of the bilateral agreements.

[RandBlade]

Bilateral agreements between the EU and Hong Kong?

[Hazir]

Of course in a conversation with two Swiss citizens about the EU 'bilaterals' would be about Hong Kong.

[earthJoker]

And again a major fail by Randblade who is oblivious of the bilateral agreements.

Both Zürich and Geneva were already big centers before the bilaterals. All three (London, Zürich and Geneva) aren't serving for the European markets only, they provide their services world wide. There are and will be shifts, but I don't see Frankfurt overtaking London that easily either.

Of course in a conversation with two Swiss citizens about the EU 'bilaterals' would be about Hong Kong.

LOL, over here they are really only called "the bilaterals" one should actually write them with a capital B to emphasis the status of a name rather than a noun.

[Hazir]

With all this talk about a veto seems like Cameron has given up on being relevant and is merely playing for the euro-hating crowd back home.

[RandBlade]

Don't be stupid: Cameron is only talking of using a veto if our requirements are not meant, very sensible talk. Hopefully there'd be no reason. Germany would also veto any deal it found unacceptable.

Seems like Merkozy aren't serious about getting a real solution good for all countries. Today's "deal" includes equalising corporation tax rates and introducing a Tobin Tax. Britain will not sign up to the latter and if Ireland acts in its own interests it would not agree to the former.

[Lewkowski]

No, that is already happening. What is being proposed is that in future ALL Eurozone governments budgets would have to be scrutinised and approved, in order to prevent nations from in the future reaching a point where they need to be bailed out.

Question for our American cousins - does the US Federal government even approve States budgets, let alone before they're sent to the State's congress?

On a specific and political level, I think the one nations electors who'd be insane to ratify this - except that they have no alternative but to do so - is the Irish who have been remarkably quiet over the whole thing and will have to have a referendum for any treaty change. I find it almost inevitable that someone would try ultimately to use this treaty change to force the Irish to hike their corporation tax rates for the benefit of the Franco-Germans, not the Irish.

Seems to me it would be less intrusive as long as you follow the rules. IE your deficits/debts fall in line then you can budget how you want. They don't... well then you get to be told what to do. Of course if I was a citizen in Europe and I actually liked my nation I'd tell the EU to go screw themselves. National sovereignty would be way more important to me than EU membership.

[Hazir]

Don't be stupid: Cameron is only talking of using a veto if our requirements are not meant, very sensible talk. Hopefully there'd be no reason. Germany would also veto any deal it found unacceptable.

Seems like Merkozy aren't serious about getting a real solution good for all countries. Today's "deal" includes equalising corporation tax rates and introducing a Tobin Tax. Britain will not sign up to the latter and if Ireland acts in its own interests it would not agree to the former.

Smell the coffee Rand? Nobody cares what the UK want or finds unacceptable any longer. The outcome will be what the eurozone core wants and then we'll turn around and start regulating the financial sector. Where QMV means you can't stop anything the people you just pissed off will decide.

Really smart to go to a meeting saying you will just look after your own interests only when telling all others they should sacrifice themselves for the common good.


P.S. An editorial in a leading dutch newspaper about today's meeting doesn't even mention the UK.

[RandBlade]

Smell the coffee Rand? Nobody cares what the UK want or finds unacceptable any longer. The outcome will be what the eurozone core wants and then we'll turn around and start regulating the financial sector. Where QMV means you can't stop anything the people you just pissed off will decide.

If the Eurozone core decides a treaty of 17+ rather than 27 I'd accept that.

Really smart to go to a meeting saying you will just look after your own interests only when telling all others they should sacrifice themselves for the common good.

Yes it is, you always go to any meeting starting with your highest point you want to negotiate from.

P.S. An editorial in a leading dutch newspaper about today's meeting doesn't even mention the UK.

Good. So we can't have pissed them off that much then.

[Hazir]

We don t really care what you do or don t agree with, what is certain is that you will get nothing relevant in return for agreeing with what you are told to agree with. You may get a statement that the eurozone recognises the EU's principles or something like that. And then yous PM will come back with the massege he dragged the EU away from the edge of the abyss. Then he will tell your parliament that he saved the world by saving the EU.

And I will be laughing my ass off.

[RandBlade]

And we avoided this catastrophe. And I told you so.

You can say what you like about us not having much say in how you sort out this shit-tip of a mistake you've found yourself in. I don't care.

[Hazir]

The stupidity of your last post is mind boggling.

[RandBlade]

You mean its better to be killed driving in the car wreck than watch it as a horrified bystander?

Funny thing is right now Amanda's watching World's Strictest Parents and always the young teens are going on "you can't tell me what to do!" Yes, maybe the UK can't enforce some common sense on the young Eurozone. Doesn't mean we shouldn't give some grown-up advice and nor does it mean that just because you can get high that you should.

[GGT]

And we avoided this catastrophe. And I told you so.

You can say what you like about us not having much say in how you sort out this shit-tip of a mistake you've found yourself in. I don't care.

Uhm, not only is the "catastrophe" not avoided...because it doesn't deal with structural flaws any more than our US "bail-outs" of banks did.....but saying you don't care sounds like an old throw-back to British Imperialism. Or something. We should ALL care what the hell is happening, because we now have financial markets that are globally and inextricably connected.

[Crazy_Ivan80]

Uhm, not only is the "catastrophe" not avoided...because it doesn't deal with structural flaws any more than our US "bail-outs" of banks did.....but saying you don't care sounds like an old throw-back to British Imperialism. Or something. We should ALL care what the hell is happening, because we now have financial markets that are globally and inextricably connected.

the only intersting post in the whole thread