Spexit or Spanic?
Posted on 6/4/2012 by Don Creech
After two years of can kicking, Greece is really a fly on the wall. Spain on the other hand is a threat to European demoncracy. After WWII, the US guided the construction of the German constitution. If Chancellor Merkel caves in to the continuous brow beating from fellow Eurozone members to finance a new Euro bond, she will be defying both the German citizenry and the German Constitution. There is no lender of last resort for the Euro. There is no federation. There is no common constitution as a basis for agreement on the future.
Neither breaking up the currency nor the economic zone will be pleasant or easy but kicking the can down the road will be less effective. It will continue being the first chice for politicians.
The beneficiaries of wealth transfer will not (are not) going merrily away to face the reality of local, much less, global trade and the related risks and rewards.
The wealth generators are only tolerant of wealth confiscation while they can asuage imposed guilt and still persue their own economic goals. There is a limit to their tolerance. It is rapidly being reached.
"Now the “socialist” and the “democratic” sides of this utopian vision are heading for a collision: the EU can embrace wealth-redistribution wholeheartedly – with the full works of a central bank, fiscal uniformity and no nonsense about the will of the people – or it can accept the separate, and morally defensible, differences between its member states which will mean thinking seriously about other options than browbeating Germany. Generally, when given a choice, Europe ditches the democracy and keeps the socialism – so I wouldn’t get your hopes up." -The Telegraph