Last night we noted an interesting paragraph in an Ambrose Evans-Pritchard piece on the Telegraph, which cited an article in the major German newspaper Frankfurter Algemeine Zeitung, which described a future euro currency of strong nations that didn’t even include france.Thanks to a Greek reader, we’ve found the article here and thanks to Google translate we can read it.
The article is written as a history of Europe post Greek bailout written from the year 2013.
It’s a fantasy, but none of it sounds implausible, including this description of what’s going to happen next to Greece:
In 2010 all these promises were just waste paper. With the 110-billion-euro package over three years for Greece only have time for the indebted state was purchased. 2009, the Hellenic state deficit had amounted to 13.6 per cent of gross domestic product (GDP), the debt ratio had increased to 115 per cent. With a brutal budget rate, which had been the International Monetary Fund (IMF) designed with, the government promised to reduce the deficit in large increments of up to 4 percentage points a year. The plans were unrealistic, as was soon evident. Even the IMF had estimated the chances of success in internal analysis to be low. The Hellenic economy went completely to its knees after the government expenditure had been reduced sharply and choking off the VAT increase and rising unemployment, consumer spending.
Greece falls from recession into depression
In 2010, GDP shrank by more than 5 per cent (the government had predicted 4.5 per cent decrease), in the following year by another 5 per cent (instead of the predicted decline to “only” 2.5 per cent).”The Greeks are coming from a recession into a depression,” some economists had said earlier. They warned: “The medicine can be worse than the disease.” Thus the Greek patient was killed.As early as 2010 50.000 small and medium-sized companies were insolvent. And the bloated civil service jobs quarried masses, the unemployment rate doubled to 20 per cent.
In 2011, Greek Finance Minister George Papaconstantino resigns.
By this point, the ECB goes into full-on inflation mode to save the banks that are left with worthless Greek paper.
By 2012, IMF chief Dominique Strauss-Kahn has wone the Presidency of France.
Ultimately, Europe splits in two:
Germany, Austria, the Benelux countries and Finland decided to form a domestic union. In support of its monetary policy Avantgarde, Berlin has relied on the concept of “two-speed Europe”: a centralized unit for money too different economies have caused too much tension.
The two-speed Europe went better. The new arrangement allowed more flexibility. The Hartwährungsunion on depreciated, from soft-evaluated. This made it easier to adapt to different levels of competition, imbalances in the current account balances declined. In no case was the end of the Euro, the end of Europe. Integration. On the contrary: increasing cross-border trade, free movement of capital and people led to another, from the bottom of growing integration. That’s how it could.
Hartwährungsunion = Hard currency union. Learn that word.
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