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Talking of anniversaries… A year ago today I posted Discussion Point XXXVI
What will happen to the Euro? I am not asking “what should happen”, but what will happen. Take this opportunity to put your predictions on the internet, and later be hailed as a true prophet or derided as a false one.
Come, take your bows, or your lumps, and predict anew. The fat lady has not yet sung.
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Nor has the music stopped
Initially it will be renamed the Yoyo about 10 months before it gets its final name of the Zero.
(Long overdue).
A year ago I did not look at Samizdata as often as I do now, but I have published the following prediction in comments in a couple of other blogs.
A euroskeptic government will get to power in the Netherlands or Austria or Finland, and quit the eurozone to avoid paying bailouts (or to curb inflation). Once one of them gets out, the other 2 will follow, and at that point political pressure within Germany to get out might become unstoppable.
Just possibly, Italy (which has contributed to the bailouts without much hope of getting one), Slovakia, or Estonia will get out first. After which, I expect the developments to be just as above.
Germany will not get out first, because they do not have a large euroskeptic party and (or should I say: because) they still feel they must show that they are good Europeans. Also because Germany gets to dictate, or at least negotiate, the terms of the bailouts, while the Netherlands, Austria, and Finland just get to sign up to it.
An alternative scenario is one in which Greece defaults and a system of parallel currencies develops: the Greek state raises taxes and pays public sector salaries in New Drachmas (effectively cutting public sector salaries and pensions) while the private sector keeps using euros. If the contagion can be contained, then the rest of the eurozone could remain intact.
We need a time frame for the question! It will be replaced.
I made a prediction with a 5-year timeline, because I knew that they’d be able to keep papering things over for quite a while yet. I’ve still got time yet.
Like the last two attempts at creating a German Empire within Europe, the end will be messy: it will end after one country calls their bluff.
Will the Fat Lady sing in Spanish or Greek?
I wrote about this here about six months ago. I think my conclusion was that we would see hyperinflation before the Netherlands began the charge to the door.
I think a lot of English speakers underestimate the fanaticism of Europeanists. They seriously believe that European union is the only thing standing between the continent and another world war.
Some countries will leave the Euro.
More bureaucrats will be employed to administer the Euro.
And they will be paid more.
The Euro is vital to Germany to dump it’s excess production on markets which they prop up with their balance of trade and the Euro is vital to to subsidise the production of cheap food, what will happen, things will just keep bungling on and the central banks will keep printing money, no one wants the system to collapse.
The German economy is weakoning – but the Euro was not the reason for its strength. “Excess production”? Say’s Law deals with that idea.
Patrick yes – if people lie hard enough, and long enough, they start to believe their own lies. NATO (i.e. the American armed forces and allies such as the British armed forces) maintained peace in Western Europe.
The European Economic Community was created in 1957 and (became the European Union only a few years ago. It never had any real military role – and it was the SOVIET UNION (not some supposed comming back of the rivalry between France and Germany – neither of whom was a great power after World War II anyway) that was the threat to Western Europe.
However, the establishment elite (and those things they influence) are so submerged in lies that they have come to believe them – the lies have become part of them, they ARE the lies. They are the physical manifestation of the lies.
Still….
“What is the future of the Euro”.
The same as all other major fiat currencies.
The establishment elite (misled by their Keynesianian ideology – and their own lust for power) will create more and more Euros in a futile effort to keep their system going.
Their system will still fail – and the Euro (like all other fiat currencies) along with it.
A glut of Euros, Fiat Money is a ‘commodity’
Since we’re talking of anniversaries, this seems an appropriate place to wish everyone here a happy Guy Fawkes Day!
Once one of them gets out, the other 2 will follow, and at that point political pressure within Germany to get out might become unstoppable.