YOU DON’T WANT TO BE EUROPE….
A colleague sent this to me. Apparently it’s making the rounds:
“Spain is not Greece.” Elena Salgado, Spanish Finance minister,
February, 2010.“Portugal is not Greece.” The Economist, April 2010.
“Greece is not Ireland.” George Papaconstantinou, Greek Finance
minister, November, 2010.“Spain is neither Ireland nor Portugal.” Elena Salgado, Spanish Finance
minister, November 2010.“Ireland is not in ‘Greek Territory.’”Irish Finance Minister Brian
Lenihan. November 2010.“Neither Spain nor Portugal is Ireland.” Angel Gurria, Secretary-general
OECD, November, 2010.“Italy is not Spain” – Ed Parker, Fitch MD, 12 June 2012
“Spain is not Uganda” Spanish PM Rajoy. June, 2012
“Uganda does not want to be Spain” (Ugandan foreign minister) June 13th
2012
I guess no one wants to be Europe. The bad news is Europe is Europe. So they’re all suffering from the same debilitating disease – being involved in an unworkable currency union. So this bantering about “we are not so and so” really misses the point. The sooner they start realizing they’re all Europeans the sooner they’ll likely resolve this mess.
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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24 Comments
That last one was hilarious… thanks Cullen!
By risk on do you believe equities can continue to ignore Europe blowing up bit by bit as hey have largely done for two years ex some quick, dramatic sell-offs or do you mean that crap is hitting the fan now what with Spanish yields reaching nose bleed territory?
Hey B Ferro – curious if any of us here at pragcap could get the password to your protected blog posts? They were a great resource, but I understand if you are keeping your cards close to you. Cheers, and thanks for bringing back at least some posts for the rest of us.
I appreciate the interest AI – only problem is there are people paying a lot of money for access to the password protected stuff so I can’t just freely give that content out anymore if it’s password protected.
so you are still writing, but it is a subscription service? or client only access?
The name-calling and attacks is getting a lot worse. France blaming Germany, Greece blaming France etc (and everyone blaming the ECB!)
I don’t like where this is headed – the window for constructive discussion and problem-solving is slamming shut. Cullen, I become increasingly skeptical towards them pulling all this together…
Agreed, things are going in the wrong direction and fast.
Expect more clashes, especially between France and Germany as fiscal policy diverges widely between those two.
For Germans to relent on debt pooling, EU wide deposit insurance etc they will need concessions on the fiscal front from everyone (or even a complete alignment of major fiscal policies at least). This in turn will exacerbate even further Eurozone members who will not want to give up their sovereignty. Maybe this is a bit generalized but I can tell you one thing though, socialist now RULE France (won absolute majority in Parliament), if tomorrow they actually decide to follow the German model (0% chance of happening), the politicians in power will all “lose their jobs” as French voters will never reelect them. Therefore they have no interest in doing so. In the end, despite the fact that it was France who always pushed for more Europe and Germany not as much, the opposite may now happen.
Maybe we will see a Frexit instead of a Gerexit. Greece stays in till the end, and the Euro eventually becomes a Drachma.
All Europe has to done is follow the American model and everything will be all right. You will then have two very large economic groups that will become allies (people in the same situation always tend to get on).
America and Europe can then say to the rest of the world (who will also be allies by then) “what are you going to do about it. Like our debt or shove it”.
Its that simple….
But America can self fund (as can Japan and UK – ever hear of any crisis in UK? Nope) and Europe as currently constructed cannot. It is hilarious that making one switch – the ability for a central authority to print euros at will – would “fix” 90% of the problem. (not the structural issues but all countries have structural issues – most are fixing it via “more currency into the system”)
The UK is also implementing austerity though.
People get used to bad news quickly. IIMHO, The view that things will turn out fine in Europe is mistaken. The blow from undoing the Euro mistake will be BIG and is yet to happen.
As I understand it, the power to issue Euro coins still lies with the national governments. Each 2 Euro coin weighs 8 grams, meaning a kilogram is about 240 Euros. What is to stop Greece from minting up one million tons of 2 Euro coins (about 240 billion Euros) and shipping them in train cars to Germany to pay off their debt? What is to stop France from doing the same?
No only EUROPE … please!
“The UK is Not Greece”
Trevor Greetham, direct of asset allocation at Fidelity, October 20, 2010
“California Is Not Greece”
Tom Dresslar, spokesman for California’s State Treasurer, May 12, 2010
“We’re Not Greece”
Barack Obama, President of USA, July 15, 2011
“The United States Is Not Spain”
Sean Hannity, Fox News, May 24, 2012
“The United States Is Not Italy”
Jeanne Sahadi, CNN, November 14, 2011
this post was hilarious… unfortunately there’s real tragedy behind this as well
What’s very revealing in all this, is that all the countries in this list have the same problem: too much debt!
And yes, Obama is right, the US in not Greece, we just happened to have the same problem: TOO MUCH DEBT!
So the next time you here a finance minister saying we are not Greece, what he is really saying is that his country has a debt problem.
Also funny to see that the worse of all those countries is actually the UK and nobody, really nobody is talking about it.
unless you separate out private sector debt from gov debt, and the gov debt of a currency user vs a currency issuer, your comment is totally meaningless. and you didn’t both to separate them out.
Does it really matter if a country has too much debt or just happens to have huge overleveraged banks? Looking back at recent history we can say NO since this private debt gets transferred to governments when those banks get bust. So it is all the same to at the end of the day.
Further, in the big scheme of things, it also doesn’t matter if you can issue your own currency unless you happen to have a major economy like the US (who plays the role of the world’s n-th currency) or Europe or Japan. The only benefit is that you have a quick fix for politicians because they can devalue the wealth of their constituents with the stroke of a pen, ignoring the underlying structural problems that lead them into that position in the first place.
I also like MMT, but contrary to you, I try not to blindly believe everything I read here. There is a difference between an issuer and a user of currency, but been able to print money doesn’t solve all your problems. If it was the case, Japan would be the richest country on earth by now.
We don’t do MMT here. It’s MMR. Big difference. http://pragcap.com/understand-the-modern-monetary-system/how-is-mmr-different-from-mmt
I am Greece
I also have not had my meds this morning.
I’m Hungary…what’s for dessert?
Chilie
“I hope we’re not Spain”.
Alan Greenspan (http://www.cnbc.com/id/47643118)
I’m a goofy goober, you’re a goofy goober, Europe’s a goofy goober too!