Archives for category: Do the Euro United States exist?

It has taken me nearly six years but I have now arrived at the conclusion that this European Union (EU) and the Eurozone have proven to be real failures and that if one went down to brass tacks it would show that having this “Union” (sic) and the euro did not really make a positive difference; that the “whole shebang” should be scrapped, leaving only “pieces” (to be defined) to regroup  differently and basically  keep a “customs’ union”.

I have spent six years trying to understand and analize in as much depth as possible all this, written sinceApril 2011 – 2 000 post in my blog:“”, written in 2014 / 2015 two books in self-edition with Amazon with self-explanatory titles: “Why Obsolete Macro Governance Is Killing the World Economy” and “Growth through Structural Reforms” (With Leadership and Competence Great Opportunities Exist).

I am not agreeing anymore with what I had written many times in this blog, the last one on 06/25/2016 in my post: “Eurozone Governance Radical Change Needed to get to a “2 Speed” Area Organization“, it will not work either…(please refer to this by clicking on above link).

In fact the last drop was when reading several times these last days that Greece’s situation was still being discussed by all “the powers to be” – re The Guardian‘s 02/11 /2017 article:No crisis’ on Greece bailout deal, says eurozone chief”…!!!
All these European/Eurozone “top officials” are such great techno bureaucrats that reality has totally  escaped from their pseudo “thinking” (sic), in six years they have not been able to decide on Greece’s situation which only represents 1 to 2% of EU’s GDP!!!

In this blog I have written since at least 5 years that Greece should leave or be exited from the Eurozone for its own sake, it would now be quite rich with a low valued drachma hugely expanding tourism, the number one wealth item, instead it has cost the Eurozone a “fortune”, protected corrupt local politicians who refused to exercise the results of the June 2015 referendum where the bailout conditions were rejected by a majority of over 61% , with the “No” vote winning in all of Greece’s regions, the Greek people wanting Greece out of the hands of the totally incompetent Eurozone leaders, IMF, ECB and German Chancellor Merkel, the real Eurozone leader.Greece has 180% indebtedness vs GDP!!!

Greece is just the tip of the iceberg, add Italy (3rd Eurozone economy) with a huge debt (135% of GDP) and only 1% growth, Spain (4th Eurozone economy), probably the most competent and growing (3%!) mediterranean country, still hampered with huge unemployment, with banks not passing on ECB’s continued  flow of printed liquidity to credit facilities to the biggest employer, the SME/TPEs, its indebtedness as % of GDP having grown to be 100%.

France 2nd biggest Eurozone economy, with miserable 1.1% growth, huge unemployment, is under great political stress and  the Number one, by far, Eurozone economy, Germany (1.9% GDP growth and “only” 71% indebteness as % of GDP) continues with is parochial self-serving Eurozone policy, nobody in Brussels will interfere…

The Eurozone has been conceived as an erratic type of puzzle / potpourri of countries with totally different mentalities and ‘usus”, great differences in social-economic macrostructures, no real EU / Eurozone “Governance and with Germany having benefitted from the euro creation in 1999 onwards with a 20-30%  favorable euro/DM parity which has helped considerably to boost their economy to the detriment of the rest.

There is, finally no way all this will work (what, in reality?)

Let each country solve its own problems, they are all countries with a long history which will serve as the backbone, they need to adapt far more rapidly to all the past, present and future innovations in “technology” and its meteoric evolution, in other words the entire political class needs to change ASAP, let each nation’s government be responsible for their own situations and not anymore EU / Eurozone “Governances” (sic) which have no power and are Germany’s slaves.

Belatedly, as usual, European Union (EU)’s President warns against US President elect divisive tactics to the detriment of the EU’s stability.

US President elect decrees are mostly unacceptable to the civilized world and a (very bad) first in US’s “governmental” (sic) policies, especially the now nearly universally decried anti-immigration decree which this blog is denouncing for the fourth day in a row.

EU has not managed to construct a “working” political, social economic and not even even financial area (the latter beacuse of the erratic policies of ECB) because it has done mostly everything wrong from the beginning of the instauration of the Eurozone and has also accepted totally disparate membership of 28 member countries who do not ressemble each other in mentality and usus and were prone to be a fiasco, which it is, being unable to agree on practically any important topic and subjecting some nations to undue austerity instead of pushing for badly needed structural reforms .

In the 2000 posts I have written in my blog from April 2011 until October 2016 and my two books I have consistently proposed and described the change from the current EU “mammoth” to a radically new compact European Guidance Unit with a division between Northern countries and Southern ones who have nothing in common, with France somewhat in the middle, and due to huge past erroneous political expansion policies continuing with the inadequate integration of ex-satellite Communist countries which have created havoc with totally different remuneration, taxation and social protection “policies”.

I now, finally, feel that this renewed construction of Europe is also doomed and that it is preferable to go back to a customs’ union and abandon the euro, thus leaving each country to devise its own political and social economic systems, own deficit and indebteness ratios to GNP and be able to take its own eventual financial corrective actions.

If individual countries are having such a hard time governing themselves, blocs of countries will not be able to do their job plus a comprehensive “area” job with an umbrella as the euro which was devised far too early and totally unprepared with countries who had no harmony whatsoever in basic social economic policy structures.

The world has changed enormously and in a meteoric way technologically / innovationwise.

Governances need to adapt to these formidable changes which is very difficult for what seems to be a “lost political generation”.

Lets’count on and turn to the current young one who is in phase with these changes, it’s  a worthwhile bet I believe (as a “senior”…)

Please read below, under More,  NYT‘s 01/31/2017 article:”Trump Threatens Europe’s Stability, a Top Leader Warns”

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I am referring to my 06/25/2016 post: “Brexit not End of “World” but Hopefully End of EU Non Governance”, I am herewith repeating a concrete proposal made X times in my blog for a two-speed Eurozone to be installed instead of the past and current obsolete Eurozone Commission “organization (sic) of a 19 countries potpourri and a not decisive anymore Germany-France axis.

This “radical change proposal” is not due to the Brexit but to the decades’ long inefficiency and indecision of the EU and Eurozone’s “Governance.

The Brexit now happened and long exit negotiations will start on October 2016 and will last for 2 years at least and more. We will once more see how all the already announced  meetings will come out with zilch since everything is based on improvisation as usual.

Several forms of partnership with the EU exist, with varying degrees of integration. But none really are suited to the new situation created by the Brexit

The European Economic Area is not interesting for the UK since it would have to comply with EU legislation, neither is the “Swiss Compromise” and falling under WTO rules is not acceptable to the UK.

Therefore long negotiations might end with a revised free trade area scheme and other important mutual cooperation items  to be included in a series of bilateral country agreements.

In my blog and my September 2014 self-edited Amazon book on Eurozone “Governance” (“Why Obsolete Macro Governance is Killing the World Economy”) I made concrete proposals on how the Eurozone  could gradually reach social economic integration and accordingly  function efficiently. I will only include here the call them highlights:

I formulated my proposals by including a “modus operandi”, like with private corporations’ organization and inter functional “instructions”…

This Eurozone restructuring proposal needs to be understood as referring “only” (sic) to the social (including education and training) – economic and financial topics in Eurozone “Management”.

It does not extend to all the other ”regal” governmental areas, such as the major areas of health, defense and military, interior, foreign affairs, etc…

Instead of being an Organization which gives “Directives” to member countries, the Eurozone “Governance” should be reflexive, pro active, involved in “the “field” with local governments, in summary act as an executive counseling unit.

 From an “operational” standpoint, the 19 Eurozone countries should be divided, at the beginning, into 2 categories of countries:

–  “Speed 1 “ countries, these being the most performing countries, which are Germany, The Netherlands, Finland, Austria, including Luxembourg which is very ”atypical”.

 –  “Speed 2” countries, these being Belgium, Cyprus, Estonia, Greece (*), Ireland, Italy, Latvia, Lithuania, Malta, Portugal, Slovakia, Slovenia, Spain, to which I add France, the 2nd biggest Eurozone country, but whose future is quite uncertain for the time being.

(*) I have felt for a long time that Greece should have exited the Eurozone long ago, this would have been beneficial and far less costly to both the Eurozone and Greece itself.

If a corporation had kept a product which did not “make it” for years, it would have suffered considerably, and would have had to sacrifice putting adequate resources on their existing “good“ products” and eventual projects on ”new” products, running also the risk of lacking adequate financing for the whole corporation, this goes back to the famous and still actual BCG method of the 60’s of the ”golden cow and the rest  of the ”animals” (products) and what to do  with them…

Instead of having lost all this time and money, the Eurozone Governance (?) should have had positive discussions with the UK, second biggest country in Europe and 5h biggest economy worldwide which has been increasing its GDP and decreasing unemployment substantially.

1. Operational Social-Economic decision making organization and modus operandi

“Speed 1” countries will commit to transitionally financing “Speed 2” countries, under certain conditions, and mainly under a totally different reciprocal communication “methodology”, under the supervision, control  and follow –up of a new and compact Eurozone Central Governance Unit.

– All countries must prepare short (1 year), medium (3 to 5 years) and long-term term (above 5 years going up to 10 years) strategies, clearly defining priorities.

– All countries need to define Operational plans – short and medium term (see above)

– All countries need to determine their Financial Needs plans – short and medium term, based on operational plans

The Eurozone Central Governance Unit needs what private corporations call a “Controller”, which in macro terms should be called a Eurozone Minister of Economy, who reports to the “General Manager”, that is the President of Eurozone‘s Central Governance Unit.

This Eurozone Minister of Economy will head the Social-Economics Council, where the main responsibility is furthering job creation and reducing “official” unemployment and even more so under employment.

In private corporations, the Controller has reporting to him/her a “Planning Manager” who is knowledgeable of all “functions” of the corporation, to accordingly coordinate the various activities, and enable this function to plan effectively on a corporate basis to help build Operative corporate planning.

In every Eurozone member country’s government this function should be filled by the Budget Secretary reporting to the country’s Minister of Economy.

The Eurozone Economy Ministry includes under the Eurozone Planning Manager’s supervision: “country social – economic counselors” assigned to specific Eurozone Member countries.

In private corporations, there exists a “Human Resources Director” who reports to the “General Manager.”

In every member country’s government this function is that of the Minister of Labor, who reports to the Prime Minister.

This Minister of Labor function needs to be far more liaised with the Minister of Economy, and be closely related to the Budget Secretary, who needs to prepare, analyze and follow up on the country’s budget/plan. This is necessary in order to integrate the analysis of Job Creation and various forms of Unemployment and Underemployment, which are the top priority factors to be improved, into the Operational Planning of the country.

2. Financial modalities and decision making which are required to finance agreed upon strategic and operational plans.

The Eurozone Central Governance Unit needs what private corporations call a “Treasurer”, which in macro terms could be called a Eurozone Minister of Finance, who reports to the “General Manager”, that is the President of Eurozone‘s “Governance”.

The Eurozone Minister of Finance will head the “Finance Council”.

The Eurozone Finance Ministry includes under its supervision: “country financial counselors” assigned to specific Eurozone Member countries.

This pragmatic social economic and financial Eurozone Central Governance Unit organization is what will make for a dynamic, hands on, pro active, ”in the field working” and “managerial” relationship between the Central Eurozone Governance Unit and the various Eurozone’s countries ’governments.

It will have the great advantage of implicating – constantly – and giving responsibility on an individual basis to Eurozone’s countries’ Prime Ministers: Economy, Labor and Financial Ministers, and to their Governments obviously (Prime Minister and President).

This whole organization is extensively developed in my above cited book.

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The text below is not by me, but is a 12/16/2015 article by Yves De Kedrel, one of the weekly Le Figaro’s main coeds:“Europe is dying – Europe is dead”, it took them a long time to “understand”…, still they do not offer any “revival” possibilities, are “tired” and resigned…

De Kedrel repeats what my blog has been commenting upon for 4  four and a half years with no results whatsoever, having offered concrete alternatives which is more than most economists and analysts do, reason why I decided to abandon my daily posts since 2 months precisely, because the EC, EU and most country Presidents will always find  (bad mainly) reasons for not doing …

Quotes – Le Figaro’s Yves De Kedrel’s 12/16/2015 article:“Europe is dying – Europe is dead”

Whether in industry, the economy, security, Europe no longer shines in the world. Blame it on a bureaucracy whose sole purpose is to impose standards.
There brutal disappearances like that of Henrietta of England, sister of Louis XIV, Bossuet has immortalized with these beautiful words: “O disastrous night! O dreadful night when suddenly sounded like a burst of thunder, this amazing news: Madame is dying! Madame is dead!

“There are also disappearances that nobody perceives overnight but are the result of successive cowardice of knife strokes and leadership loss.

This is the case in Europe. Like it or not, in the space of a year, the European Union has become a sort of headless duck continues to run, without knowing that it no longer exists.

The ayatollahs of competition were able to prevent the formation of large groups able to cope with the American giants.

Industrial Europe is dead, murdered by the Brussels antitrust officials. By dint of repeating that the European Union should be an area that benefit its 500 million consumers, the ayatollahs of competition were able to prevent the formation of large groups able to cope with the American giants. In the space of a month, no less than three mergers to over $ 100 billion have been announced and will lead to the creation of industrial titans. Meanwhile Brussels officials continue to review rapprochement projects with the alpha

Omega and the notion of “relevant market” exceeded at the time of globalization and emerging markets.
The European Energy and Transport which was however one that existed before the Treaty of Rome, with Ceca, is dead, too, murdered by Angela Merkel after the tragedy of Fukushima in March 2011.
In deciding brutally net halt the use of any nuclear power, German Chancellor killed in the bud any ability of Europe to implement a common energy policy. A policy all the more necessary to meet the climate challenge, the challenge with our geopolitical dependence on Russian gas and industrial challenge, since the energy costs were previously in Europe a competitive advantage undeniable.

Financial Europe is dead too. She died in Athens last June with the intention of imposing any cost to a bankrupt country a doxa in stone there over twenty years and can not be the same for each country in the euro zone. The rule of the 3% budget deficit to gross domestic product has no more meaning than the will of the European Central Bank to limit inflation to 2% at the time when Jean-Claude Trichet was the bagman. Only managed to get by countries that were beyond such standards. As Britain or Sweden. And having let slip its budget deficit does not prevent London today to anticipate 2020 a return to balance its public accounts.

Only remains today a political Europe, a parliament become a machine to produce standards.
Indeed the growth of Europe is dead. The wealth of the euro area is expected to grow this year by 1.6% on average, against 2.5% in Britain, and more than 3% in the United States. Since the introduction of the euro, the “Old Continent” is one that displayed fifteen year the lowest growth rate of the entire planet. While at the same time the European countries had implemented the Lisbon strategy to make Europe “the most competitive economic area in the world (sic).” And when there is no more growth factories are closing, businesses go elsewhere. So that Europe has more than 25 million … of unemployed, twice the population of Belgium and a double unemployment in the United States.

The internal security of Europe also died with the demise of Schengen. It is not France that killed Schengen and the free movement of European citizens. It is with this senseless Angela Merkel will which decided unilaterally to open the doors of Germany to all migrants. Result: by bringing into its territory 950,000 refugees since the start of the year, it has forced its neighbors to restore their borders.

It remains today a pseudo political Europe, a parliament that has become a machine for producing standards, which feeds 30,000 Commission officials, a starry flaghship everyone has forgotten the meaning of the fired Apocalypse of St. John – which is normal for Eurocrats who did not want to admit the Christian roots of Europe – and Ode to Joy should be quickly replaced by a funeral march. Especially if Britain takes its independence in June 2016. De Profundis!


“Here we go again”…, like the song, I am referring to the latest example of political inadequacy (to use polite wording): the French “regional” (new) elections.

But this, for the time being, “one-time”post will not restrict itself to France nor its elections, but use them as a sort of “case study” object.

The first tour of French regional elections on Sunday – 12/06/2015 – showed an even higher than expected triumph (it is the right word) of the  traditionally called extreme right party, the “Front National”.

I watched the news on TV at 8 pm European time, for about a quarter of an hour, and decided that I had seen enough. After trying to provide the closest possible estimate it turned out that “Front National” ( FN) was the first party in France with over 27% of voices (later increased to 30%?) – (abstention was a 48.7% high!).

When the “discussion session” started with representatives of the 6 most voted parties, where the first three ones had come close, at 8 pm, to 80% of total “net of abstention (which is the first “party” in France”) votes, the old themes were used again.

The first ones “allowed” to speak were the biggest losers, the Government party (Socialists as they call them), then the other loser – the now called “Republicans”.

The basic “slogan” was that the FN had to be destroyed since it was a danger for France and then the classic solution came – how to avoid that FN gets to “govern” 3 regions out of 13, two of them being second and third largest ones in France, by uniting votes by fusion or some other political gimmick.

Finally, the FN representative, the “bad guy” was given a few minutes…

I should not even talk about elections in a country where I have been a “guest” for some 40 years, on and off (I was born in England), I do so because I love this country and have seen it lose ground for 30-40 years.

This blog (created in April 2011 – 2000 posts to date), plus having written two books: “Why Obsolete Macro Governance is Killing the World Economy” and subsequently:” Growth through Structural Reforms”, has been mute for several months, since I got fed up writing about the same “old themes” and writing about concrete alternatives: obsolete governance, dominant central banks taking over setting economic / financial policy, absence of real and complete social-economic structural reforms, etc…

All I want to “say” now, is, that to “ignore” 27 -30% of an electorate is offensive to all those people, who, for one reason or another, voted for it, we are supposed to be a democracy!

Is it really a vote coming out of “Anger”(?), and, if so, against Whom: The French Governance, the European (non) Governance, Migration, Others???

If so, it is an anger that comes from afar.This anger started in earnest under François Mitterrand (1984, first electoral success of FN), has grown under Jacques Chirac and Lionel Jospin, first declined and then grew even more under Nicolas Sarkozy, but Francois Hollande will hold before history the sad privilege of it having detonated it even further.

What has been achieved to improve the situation in France (and in Europe, mainly Eurozone)? Very little, if any.

Because to “combat” anger is a “mirage” and not exactly “constructive”, whereas a motivational and realistic  – implemented – social-economic policy can do miracles.

In order to obtain you have to give (“donnant, donnant”). Not done – This is why “political” Europe is a fiasco, there is no “social-economic” Europe, and there is not even a “financial” Europe (true – ECB ? – the “creative” (sic) Eurozone central bank).

No wonder that “the people” do not vote massively, they are lost, there is no credible (Local – National / European) governance any more and this has lasted too long.

Europe must return to its foundations: ensure that the European identity is not “sold out” and aggressed by terrorism which in the meantime has infiltrated European nations also, this meaning that the regal functions of Defense, Justice, Migration, “Intelligence” (without becoming”Big Brother”) should be kept in a Central European Unit.

Since, obviously, there has not been and there will not exist a “give and take” approach, each European country will do better by assuming their own responsibilities in terms of social-economic policy setting (job creation – by truly fighting unemployment – “official” plus underemployment improvement) and required complementary financing policies, not allowing financial policies to come before setting social- economic guidelines.

Since tradition, history and mentalities diverge greatly from each country to another, each nation should also assume responsibility for setting – affordable – Education, Health and Social Protection, Cultural policies.

But, from what I very briefly saw on TV yesterday, the “old themes” prevail once more and we are going nowhere…

Reason to make out of this one-time post an intermediary one, hoping that some time in the future a great political figure appears to start getting to the “origin of evil”, which is not difficult to assess, but very difficult to improve without the political “will” to do so.



My blog has been repeating “ad nauseum” since its creation in April, 2011, that the whole Eurozone structure was extremely badly conceived and since Mr. Blanchart, a permanent “number two” and good “pro” at IMF having achieved retirement age left his job with IMF at age 65, he now comes public with all his accumulated disagreements with all the “policies” (sic) of supranational organization, his “own” IMF,  the European and Eurozone’s EU and EC respectively, et al… 

When one thinks that Olivier Blanchart’s last “boss” (sic), Christine Lagarde, a mere PR figure at IMF, is now being considered as a possible Presidential candidate for 2017 French elections, you really see how bad “politicking” is in Europe…and elsewhere

I am referring to The Telegraph‘s 10/10/2015 article: “Fiscal union will never fix a dysfunctional eurozone, warns ex-IMF chief Blanchard”, which I will quote entirely and precede with my own very short comments (trying not to repeat myself all the time).

My – short – Comments

Mr. Blanchart‘s comment show how impotent he was to have IMF take the “right” decisions, since IMF is really “governed” by US interests and like all supranational organizations, including mainly Central Banks – FED / ECB – has as a primary mission to Boost Markets – the FED finally conceding that no rate hikes would be made in 2015, acknowledging – indirectly – that 2015 growth would be insufficient and that the labor market’s total unemployment (including Under Employment) was still way too high with over 10% of US civilian working population.

The European and mainly Eurozone’s (non) Governance want to even increase their useless techno bureaucracy by creating new and totally “obstructive” so called European integration organizations and new top jobs on top of already existing mammoths, where it is far more urgent to start implementing serious and comprehensive social-economic structural reforms, which is their job and for a decade at least they did zilch (only talk).


Deeper integration and EU superstate will be no “panacea” for ills of the eurozone says Olivier Blanchard

The euro will be consigned to a permanent state of malaise as deeper integration will bring no prosperity to the crisis-hit bloc, according to the former chief economist of the International Monetary Fund.

In a stark warning, Olivier Blanchard – who spent eight years firefighting the worst global financial crisis in history – said transferring sovereignty from member states to Brussels would be no “panacea” for the ills of the euro.

 “We should not think once fiscal transfers are done, the euro will work perfectly and things will be forever fine”, said Olivier Blanchard.
The comments – from one of the foremost western economists of the last decade – pour cold water on grandiose visions for an “EU superstate” being hailed as the next step towards integration in the currency bloc.

Following this summer’s turmoil in Greece, leaders from France’s Francois Hollande, the European Commission’s Jean-Claude Juncker, and European Central Bank chief Mario Draghi, have spearheaded the drive to create new supra-national institutions such as a eurozone treasury and parliament.

The plans are seen as essential in finally completing” economic and monetary union 15 years after its inception.

Olivier Blanchard’s comments are a departure from the views of his IMF successor

But Mr Blanchard, who departed the IMF two weeks ago, said radical visions for a full-blown “fiscal union” would not solve fundamental tensions at the heart of the euro.

“[Fiscal union] is not a panacea”, Mr Blanchard told The Telegraph. “It should be done, but we should not think once it is done, the euro will work perfectly, and things will be forever fine.”

Although pooling common funds, giving Brussels tax and spending powers, and creating a banking union were “essential” reforms, they would still not make the “euro function smoothly even in the best of cases”, said the Frenchman.

Any mechanism to transfer funds from strong to weak nations – which has been fiercely resisted by Germany – would only mask the fundamental competitiveness problems that will always plague struggling member states, he said.

“Fiscal transfers will help you go through the tough spot, but at the same time, it will decrease the urge to do the required competitiveness adjustment.”

The creation of a “United States of Europe” has been seen as a necessary step to insulate the eurozone from the financial contagion that bought it to its knees after 2010.

It is a view shared by Mr Blanchard’s successor at the IMF, American Maurice Obstfeld, who has championed deeper eurozone integration as the best way to plug the institutional gaps in EMU.

Mr Blanchard, however, said no institutional fixes would bring back prosperity back to the single currency.

Without the power to devalue their currencies, peripheral economies would forever be forced to endure “tough adjustment”, such as slashing their wages, to keep up with stronger member states, he said.

In this vein, Mr Blanchard dismissed any talk of a growth “miracle” in Spain – which has been hailed as a poster child for Brussels’ austerity diktats. He added he was “surprised” that sluggish eurozone economies were not doing better in the face of a cocktail of favourable economic conditions.

“When people talk about the Spanish miracle, I react. When you have 23 pc unemployment and 3 pc growth, I don’t call this a miracle yet.”

“I thought that the zero interest rate, the decrease in the price of oil, the depreciation of the euro, the pause in fiscal consolidation, would help more than they have”, he said.

Real GDP growth in the US and eurozone (base = 2000)  Photo: IMF

In a sign of the deep structural problems that still beset monetary union, growth in the eurozone is only expected to reach 1.5 pc this year, according to the IMF’s forecasts – far below the 2.3 pc average growth of the pre-crisis era.

Britain and the US are expected to expand by 2.5 pc and 2.6 pc this year respectively.

I think Brexit would be very costly to Britain and costly to Europe, said Olivier Blanchard

He now said he had a “gut feeling” a UK exit from the European Union would prove damaging for the economy and the financial sector.

“I think Brexit would be very costly to Britain and costly to Europe as well.

“I can see how some people are very fed up with Brussels, but that would be a very superficial reaction to just leave Europe because there are technocrats that you don’t like.”

For all his misgivings about the single currency, Mr Blanchard said the EU as a whole remained a “fundamentally good construction”.

“It requires compromises, and sometimes countries don’t get exactly what they want. But the benefits exceed the costs – the European Union is more than Brussels.”

During his reign as chief economist, the IMF came under severe criticism over its handling of the Greek debt crisis. The Fund has yet to formally commit itself to a new €86bn bail-out as they push the likes of Germany to relent to significant debt relief for the battered economy.

Mr Blanchard maintained that IMF calculations show “some decrease in debt, whether through haircuts or long rescheduling, is absolutely needed”.

Should the Fund fail to gain guarantees that Greek debt is sustainable, it is poised to withdraw its involvement altogether.

During his final months as chief economist, Mr Blanchard made two personal interventions in blog posts which called for mass debt relief at the height of Greece’s woes. He said he was motivated to do so because the IMF’s position on Greece was being “misrepresented”.

But European creditors are set to ignore the Fund’s recommendations for repayment extensions of up to 40 years. They will instead propose to “cap” the amount the government pays to reduce its debt to 15 pc of GDP a year.

Once more Eurozone’s “Non Governance” fails to “manage” the Migration crisis and leaves leadership to Germany, who is then criticized as in Social-Economic Crisis matters.

I am referring to NYT‘s 03/09/2015 article: “Migrant Crisis Gives Germany Familiar Role in Another European Drama”, which I have quoted entirely and placed below “More” at the end of this post.

My own short comments follow:

For the”umptieth” and ad nauseum repetitive time in this blog, there is No European / Eurozone “Governance”, “only” (sic) a 35 000 manned techno bureaucratic mammoth which provides no governance nor guidance and leaves Germany to assume leadership, which is totally wrong because Germany’s style of government is fine for Germany, but not for Southern countries nor inefficient France, due to totally different mentalities, usus, tax and social protection structures, etc…

But when Germany takes measures it unvariably gets criticized by all “non doers”!

This applies even more strongly to social-economic matters than to this terrible Migration situation and crisis which will take “ages” to be resolved by implementing a feasible and practical European Common Policy on Migration, and not only talking about it and “politicking”!

The below quoted NYT article on this dramatic subject provides interesting data and illustrates well the dimension of this humanitarian crisis.

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Eurozone’s two largest countries – Germany (“de facto” Eurozone leader) and France – propose no Treaty Change for ,which is contrary to UK’s intended approach to the European Union future, re my today’s (05/26/2015) post: “UK’s postures show the inefficiency of EU / EC / ECB / IMF to adapt to XXI century”.

I am referring on this to NYT‘s 05/26/2015 article: “David Cameron takes hit as France and Germany agree closer EU ties”, which I will quote (colored lettering is mine) and precede with my own short comments.

My Comments

Germany is interested that the UK remains within the European Union (EU), because it is well aware that a dynamic partner like the UK is badly needed, so this “pact” is some kind of renewed “politicking”, a “habit” which will end by gradually destroying the biggest “trade union”in the world.

Germany’s “pact” with France will not be able revive the former – leading – Eurozone partnership, because France’s performance over the last decade has been poor and worsened over the last 3 years, this making  makers the second Eurozone economy a “non leader”, since this country has made no social-economic structural reforms since four decades at least and plans not to do any before 2017 (presidential election time), with the implicit consent of the European Commission.

This declaration of a “pact” between those two countries a sign of immobilism and if this holds at the next “summit”, it will be countered not only by the UK, but by other Eurozone and non Eurozone countries, because the Eurozone is showing increasing signs of weakness,which is basically reflected in its chronic inability to improve Employment in the Eurozone.

Also refer to its willful inability to deal with Greece because ” Nobody” wants to assume Paying for the great mess that all supranational organizations – EU / EC/ ECB / IMF et al, have made out of this now bankrupt country overt he last 5 to 6 years.

This immobilism is paving the way for extreme parties to gain more power -refer to the”Front National” in France ,”Podemos” in Spain, UKIP in the UK, and the Greek elections which brought Syriza to “power”(sic) is causing, with a very passive, as usual, European Union, European Commission and Eurogroup. 


Proposals to be presented at EU summit in June 2015 will come as a blow to David Cameron who will table British pre-referendum demands at same meeting.

Angela Merkel and François Hollande shake hands in Berlin.

Angela Merkel and François Hollande shake hands in Berlin. Photograph: Imago/Barcroft Media

Germany and France have forged a pact to integrate the eurozone without reopening the EU’s treaties, in a blow to David Cameron’s referendum campaign.

Sidestepping Britain’s demands to renegotiate the Lisbon treaty and Britain’s place in the EU, the German chancellor, Angela Merkel, and the French president, François Hollande, have sealed an agreement aimed at fashioning a tighter political union among the single-currency countries while operating within the confines of the existing treaty.

David Cameron at the Eastern Partnership meeting in Riga.

David Cameron at the Eastern Partnership meeting in Riga. Photograph: Zuma/REX Shutterstock

The Franco-German proposals are to be put to an EU summit in Brussels next month, where Cameron is also to unveil his shopping list of changes needed if he is to win support for keeping Britain in the EU.

The Franco-German accord, disclosed by Le Monde newspaper, calls for eurozone reforms in four areas “developed in the framework of the current treaties in the years ahead”.

Cameron has persistently called for a reopening of the treaties to enable the eurozone to integrate more closely while providing the British with a chance to reshape the UK’s relations with the EU and repatriate powers from Brussels.

EU members and senior officials in Brussels have repeatedly voiced their reluctance to reopen the Lisbon treaty – the EU’s fundamental constitutional document. The Franco-German initiative, likely to be endorsed by the 25 June, 2015 summit, would definitively close the door on treaty renegotiation.

The move from Berlin and Paris came as the UK prime minister prepared to open his negotiations with the French and the Germans on Thursday and Friday.

Cameron faces a busy week on the referendum campaign. On Monday evening, he hosted the European commission president, Jean-Claude Juncker, at Chequers – kicking off a charm offensive in which he will visit five European leaders.

A Downing Street spokesperson said that Cameron gave Juncker a tour of the house and gardens before they dined on a spring salad, followed by pork belly and vegetables and a dessert of lime bavarois.

“The prime minister underlined that the British people are not happy with the status quo and believe that the EU needs to change in order to better address their concerns,” said the spokesperson.

Brexit – what would happen if Britain left the EU?

“Mr Juncker reiterated that he wanted to find a fair deal for the UK and would seek to help. They talked through the issue at some length in the spirit of finding solutions to these problems. They agreed that more discussion would be needed, including with other leaders, on the best way forward.”

The former prime minister of Luxembourg will play a subsidiary, if influential, role in the negotiations whose outcome will ultimately be decided by national government leaders.

On Thursday, a day after the state opening of parliament, Cameron will fly around Europe to meet the Danish prime minister, Helle Thorning-Schmidt, in Copenhagen, the Dutch prime minister, Mark Rutte, in the Hague and Hollande in Paris. The following day he will meet the Polish prime minister, Ewa Kopacz, in Warsaw before going to Berlin to see Merkel. He aims to speak to all other leaders of member states before the June summit.

The Franco-German pact, agreed as the Greek debt crisis comes to a head, was finalized last week on the fringes of the EU summit in Latvia and sent to Juncker at the weekend, Le Monde reported.

The summit in Riga last Friday was Cameron’s first opportunity since re-election to present his ideas to fellow EU leaders. But it appeared that Merkel and Hollande had bigger fish to fry.

Juncker is preparing policy options for the June summit on how to integrate the eurozone fiscally and politically as it struggles to emerge from more than five years of crisis.

The Franco-German proposals are likely to settle the direction of policy.

They talk of economic, fiscal and social convergence, combining German insistence on monetary stability with French demands for greater investment.

“Additional steps are necessary to examine the political and institutional framework, common instruments and the legal basis” (of the eurozone) by the end of next year, said the document, according to Le Monde.

The following year, 2017, Germany and France have general elections, narrowing the scope for negotiations with Britain.

The Franco-German policy proposal, said Le Monde, “shows that French and German leaders do not have much in common with David Cameron”.

Cameron and Juncker have not had an easy relationship. The UK prime minister opposed Juncker’s appointment as European commission president. After other EU leaders voted overwhelmingly in Juncker’s favour in June last year, Cameron described their decision as a “serious mistake” and a “backroom deal”.

The promise of an in/out referendum on Britain’s membership of the EU before the end of 2017 was a key element of the Conservative party’s general election manifesto. Cameron has promised to secure a better deal for the UK in the EU before campaigning for Britain’s continued membership.

The EU referendum bill, which will be announced after the Queen’s speech on Wednesday, will make clear that the people eligible to vote will be the same as in general elections, that is adults from the age of 18, Irish and Commonwealth citizens resident in the UK, and British citizens who have lived abroad for less than 15 years.

Downing Street said they did not comment on leaks, but pointed to a statement made by Cameron as he kicked off his timetable for renegotiation at the Eastern Partnership summit in Riga last Friday.

“There will be ups and downs – you’ll hear one day this is possible, the next day something else is impossible,” he said.

“But one thing throughout all of this will be constant and that is my determination to deliver for the British people a reform of the European Union so they get a proper choice in that referendum we hold: an in/out referendum before the end of 2017, that will be constant.”

Greece does not acknowledge rumors on possible Default
Greece denied on Monday – 04/13/2015 –  Financial Times’s report that it was preparing for a default if it does not reach an agreement with its creditors by the end of the month.

The Financial Times writes that Athens will defer 2.5 billion euros in refunds to the IMF in May and June 2015 if no agreement is signed with its creditors on reforms.

“Greece is preparing not to  to default and it is the same for its creditors. The negotiations are progressing rapidly towards a solution satisfactory to all,” explain the services of the Prime Minister Alexis Tsipras in a statement.

“What seems to cause some irritation is that the Greek government is committed to ending the policy of austerity.”

Follows The Telegraph‘s 04/14/2015 article: “Greeks quash snap election rumors as eurozone deadline looms”, which I will quote and comment.

My Comments

Greece’s new left radical populist Government has been  shamelessly trying to trick Eurozone’s government since it got elected with promises which it could not keep. In its usual non decisive manner Eurozone’s (non) Governance has allowed for sterile discussions with this irresponsible government.

ECB has published estimates of the direct cost to Eurozone countries of bolstering the financial sector from 2008 to 2013.

Ireland’s bank bailouts cost the equivalent of close to 40% of its annual economic output, a huge cost for taxpayers as most of the money was spent on bank recapitalisations and toxic assets, with GDP falling 25%.

Greece came second also spending the equivalent of 25% of its GDP on bailouts.

Across the Eurozone as a whole the rescue packages cost some 500 billion euros.

Time has finally come, after years of corrupt governments in Greece which have succeeded themselves and years of misguided Eurozone Commission (EC) and European Union ( EU) and their  “troika”(EC/ECB/IMF) arm misguided directives and timing which resulted in a 25% fall of Greece’s GDP over 4-5 years to end all this and exit Greece, which will be a wise decision both for the Greek population and the Eurozone.

Greece can get back on its feet by itself with an again renewed government, like Iceland did and does, with a devalued drachma and developing its number one  activity: tourism.

It cannot “afford” to continue being part of an area like the Eurozone where its erratic political and economic behavior and being tied to a common single currency like the euro is a too heavy burden.


This shameless Greek government keeps accusing Eurozone’s Governance without referring to all the mismanagement and blatant corruption of Greek governments over time, its own totally erratic proposals which they have already abandoned after some weeks, and now seeing that their “game playing” is close to being over gives lessons of “management” to the Eurozone and to Germany (sic).

This is the time to exit Greece from the Eurozone,since even if Greece” lists” all the EC desired reforms this populist government will not abide by them, following their predecessors.

Quotes – The Telegraph’s 04/14/2015 article

Athens denies reports it will hold an early election if creditors fail to rubber stamp bail-out extension.

Greece has been told it has until April 20 to satisfy creditor demands for cash.

Greece’s Leftist government has assuaged concerns it will hold a snap general election if the country’s latest reforms plans are rebuffed by eurozone creditors.

Denying reports that Prime Minister Alexis Tsipras was ready to spook creditors with a surprise vote, an Athens official said: “We continue to seek a mutually beneficial solution (with our lenders), respecting the people’s mandate.”

Germany’s Bild reported a Greek minister on Monday saying: “We have nothing to lose. If the EU remains hard, we must show that we stand firm. The Greek population is behind us.”

Anti-austerity Syriza were elected in a landslide victory in January (2015.

Mr Tsipras, who chose to go into coalition with the Right-wing Independent Greeks, has faced pressures from both wings in his ruling coalition over submitting to creditor demands.

Syriza’s Left Platform has protested against the planned spending cuts and tax rises being demanded by Greece’s lenders, as Athens has continued to fall short of demands to revamp its economy.

But Prime Minister Tsipras continues to enjoy healthy support among the Greek electorate. A poll carried out by Avgi found Mr Tsipras commanded a 78pc confidence score for his handling of the country’s debt crisis, compared to 63pc for Syriza as a whole.

A snap general election could well boost Syriza’s majority and act as a de factoreferendum on Greece’s continued membership of the eurozone.

Why 3% deficit and 60% public indebtedness as % of GDP are unmovable rules in the Eurozone?

Apparently – after non exhaustive but rather long research – there are no rational explanations / calculations as to the ratios chosen, limits were needed, as of 1974 …

Source of definitionsWikipedia:

The four Eurozone “Convergence” criteria are defined in Article 121 of the Maastricht Treaty establishing the European Community.

They impose the control of inflation, public debt and public deficit, the stability of the exchange rate and the convergence of interest rates.

The appreciation of non-compliance with these criteria was relaxed in March 2005 under pressure from Germany (engaged in the excessive deficit procedure) and France (close to being) , in the justification to hold account the economic situation and structural reforms. Exceeding “exceptional and temporary” is now autorized

The Eurozone convergence criteria stipulate an area not to exceed:

Price stability: inflation rate of a given Member State must not exceed by more than 1.5 points that of the three Member States with the best results in terms of price stability
Public finances:
public deficit (State + social security) Annual less than 3% of GDP
Public debt (all borrowing by the state and the general government, including social security bodies) less than 60% of GDP
Exchange rates: Devaluation excluded (obsolete measure for the countries of the euro area).
Rate of long-term interest: should not exceed more than 2% of those three Member States with the best results in terms of price stability.


– Eurozone:

Why 3% deficit  as a rule?

No real reason, a French (not German…) “invention” – dating back 40 years, no concrete explanations as to how it was calculated.

Why 60% limit to public indebtedness as a rule?

Ditto – Deficit…

– US, similar size than the Eurozone, has no preset rules…

The FED establishes “guidance”…, no “real” Ministry of Economy exists in the US, “only” – and formally, the Secretary of Finance, very related to the FED…

Sticking now to the Eurozone:

As is being widely discussed these last months, and exponentially increased since the new “Greek Crisis”, austerity should be abandoned – a big statement by most large and less large Eurozone countries except Germany, Finland, Austria (to some extent).

Austerity to be abandoned in a country like France, second biggest  economy  in the Eurozone, a country which never exercised “austerity”, but was and is champion in all kinds of  tax increases – is that any better?

France was the country which first “invited” the new Greek left radical and populist government to “visit” when the new Greek Government started their blitz European tour, and France was also the first Eurozone country who commented favorably on the so called “agreement” (sic), which is not one – please refer to my latest post (of a long daily “series”)  today – on Greece: “Greece will not be exited from EZ due to political and inertia reasons – my summary opinion”.

Austerity is not a “bad” word, it imposes itself when people or countries live above their means and need to remediate itself, most people cannot incur debt debt for ever to “remediate”, countries apparently can.

The US is 100% indebted as % of GDP, so will be the case with the Eurozone, who is at 95% plus currently (Greece at 175 / 180%, Italy at 135 / 140%).

The US is “doing well” apparently (except for too high underemployment), the Eurozone is doing badly (with close to  double total unemployment than the US), US’ GDP grew by 2.4% in 2014 , Eurozone by 0.8% – 3 times less.

Accordingly, to all these non austerity countries the fault of limited growth is “austerity”, and indebtedness will continue increasing thanks to ECB’s QE, which will allow (if implemented as they declared?) for more relaxation, since interest rates will be low and in case of need the ECB will “provide” with printed money, like the FED did in the US during the (not finished) crisis.

The problem  is with Eurozone’s Governance, which – mil repetita in this blog – is non existent.

Germany acted as “de facto” leader by default, and as repeatedly commented in my blog cannot direct, and should not continue doing so, the Eurozone, because its style is basically disciplinarian and constitutional, and  does not adapt to the “rest” of the Eurozone.

Both the European Commission / European Union – and Germany – did the fatal mistake of not differentiating sufficiently between “pure austerity” – i.e. tax increases, lowering of salaries and pensions, etc…, which is “bad” austerity, and social-economic structural reforms, which were only very partially implemented in some countries, but far from being sufficient, and not implemented in the two largest economies after Germany – France and Italy (the first making a great deal of “noise” with very fragmented reforms which are far from attacking the big and real reasons for lack of productivity of the country, the latter, with  Prime Minister Renzi  – one year in power only – at least trying, with great political difficulty, to start making “real” structural reforms).

Is the absence of structural reforms in most Eurozone countries the main reason for the difference in performance with the US, who is not exactly a “model” either, not  having made some very necessary structural reforms, but still has done far more than the Eurozone, and being “one country”, and not a “messy mosaic ” of 19 countries, can do more, even within a very divided political “home” situation.

The crux of the situation is that US corporations are far more innovative and start by being able to enter a huge “common” home market, which is not the case with the Eurozone, where there are no “Unions – be it financial, economic, political, the decision making process being not existent.

How to remediate?

By changing the whole approach of Eurozone Governance.

Please refer to my books – published by Amazon (e-book and paper version): mid-September 2014:“Why Macro Governance is Obsolete and killing the Economy”, and to be published in April 2015: “Growth through Structural Reforms”, books I wrote, because blogs’ posts become very repetitive if you are somewhat coherent and follow a “line”…