Euro collapse and possible outcomes

I didn't notice a thread about the EU and the euro and how it's going down. What is your take of the situation? What would you rather see come out of the apparently all but inevitable collapse of the common currency?

I would rather see two EUs, at least two economic zones: one centered in the north and one in the south. In a perfect world, the southern EU would turn into a Mediterranean Union and ask Egypt and Tunisia to join, it would be a great show of goodwill. Hey, a man can dream! I'm an INFP after all.

But what I think will happen is that after Greece and maybe Spain exit the euro all countries will agree that the euro was a bad idea and revert to their old currencies. Merkel said that ideally Germany would like to pursue a more federalised Europe, I have no idea how they might go about a goal such as this and on the other hand actively enforce the policies they are enforcing right now. Perhaps the real reason behind austerity and the economic collapse is for there to be the incentive for Brussels to override national sovereignty of the member states in favour of a central ministry of finances or an easier way for common policies to be adopted. I am NOT for something like that, by the way.

I'm in Europe right now. There are no black helicopters, riots, civil wars, UN aid camps, or anything set up. I'm just peeved that the banks around here close at 4 on Friday and don't reopen until 10 on Monday.

1) Europe comprises tens of countries. Only a handful are having really big problems right now and you're not actually living in any of them.
2) Just you wait...

@cubilone

The way I see it, there are a couple of solutions that could work:

- Let the Euro devalue so that countries would have time to build up their economies again
- The Eurobonds that Merkel doesn't want.
- Let the countries in trouble get out of the Euro and rebuild their economy OR let them devalue the Euro in those countries.
- 2 Speed Europe: North and South (as you pointed out)

However, our dear Merkel and her minions are pushing for a federal Europe (I smell Reich more and more...) that Germany controls (cough...) like a puppet through all those fancy economic and fiscal treaties that basically say: "Stop being a country and become just a province of Germany. Mwahahahaha!"

The way this is going, what I really see happening in the not so far future is a replay of the 30's and 40's and WW3.

I'd rather see Europe as an economical and military alliance and NOT POLITICAL UNION!!!

No idea what's going to happen to the EU economy but whatever they do to sort it out I hope it doesn't mean forcing individual European nations to surrender their national sovereignty to corrupt French and German politicians.

How can you bring all these unique diverse countries with different languages cultures and peoples together and combine it into one huge EU superstate, where laws in Brussels can overrule UK law, French law, Irish law etc etc.

I want the same as what UKIP MEP Nigel Farage proposes in this video a Europe where we are all independent sovereign nations but we can sit around a table together and cooperate on things and trade together.

what if Germany ever gets in trouble and has to get bailed out by Greece...

funny

The Euro currency zone was never optimal, it was implemented on the ideological idea that the rest of the eurozone will pick up the other countries by their boot straps leading to highly correlated economic activity though-out the region. Eg they hoped that it would become a self-fullfilling prophecy. But it never worked. The problem is that the monetary policy that might have been suitable for France/Belgium/Netherlands/Germany was not suitable for the rest of the states, leading to high inflation in boom times and longer recessions afterwards.

The best way forward is for those nations where it is optimal to remain and the rest to retain their own sovereign currency. With electronic banking, transaction costs between currencies are minimised and there is now less benefit for the Euro than there was in the past.

Originally Posted by Raain

I'd rather see Europe as an economical and military alliance and NOT POLITICAL UNION!!!

No idea what's going to happen to the EU economy but whatever they do to sort it out I hope it doesn't mean forcing individual European nations to surrender their national sovereignty to corrupt French and German politicians.

How can you bring all these unique diverse countries with different languages cultures and peoples together and combine it into one huge EU superstate, where laws in Brussels can overrule UK law, French law, Irish law etc etc.

I want the same as what UKIP MEP Nigel Farage proposes in this video a Europe where we are all independent sovereign nations but we can sit around a table together and cooperate on things and trade together.

I think Nigel Farage can take it a bit too far to the national level. I'm not sure where the political benefits might end and the economic start if we have an alliance and not a real political union. I guess we might end up at war again like @ilphithra is saying -- including civil wars. Things are very unstable. On the other hand, the way the EU has developed, I'd rather see it go away than expand its power over the member-states. Nothing good will happen from that, only more poverty, poorer outer states and richer central states. If we had a new European constitution, on the other hand...

From what I've been reading in the news regarding the latest Spain banking troubles is that they're in need of a rather large IMF bailout to stabilize the banking system, something on the order of 50B Euros now and maybe another 100B later. That's more than what the IMF had set aside for the troubled Spanish banks but I'm sure all parties involved could come to some kind of agreement.

As for Greece, from an outsider perspective, it seems rather foolish to leave the Eurozone now, after going through several austerity cuts and the hassle of renegotiating sovereign debt. I'm still optimistic that perhaps modeling the rest of Europe's economy after Germany's might not be too bad of an idea.

Originally Posted by MNiS

From what I've been reading in the news regarding the latest Spain banking troubles is that they're in need of a rather large IMF bailout to stabilize the banking system, something on the order of 50B Euros now and maybe another 100B later. That's more than what the IMF had set aside for the troubled Spanish banks but I'm sure all parties involved could come to some kind of agreement.

As for Greece, from an outsider perspective, it seems rather foolish to leave the Eurozone now, after going through several austerity cuts and the hassle of renegotiating sovereign debt. I'm still optimistic that perhaps modeling the rest of Europe's economy after Germany's might not be too bad of an idea.

The banks are in trouble, yet the country has to borrow money which the tax-payer has to pay off. This is sick. It didn't work in Greece and it won't work in Spain. In fact, it's obvious that these bailouts are made to not be effective; they're tieing the countries' hands behind their backs so they are forced to borrow even more money ad infinitum. End result: rich IMF and ECB, bankrupt countries which have to sell off all of their public wealth to meet the monstrous requirements of the lending. Why aren't the governments doing anything? Because they're bankers themselves and have vested interests in all this.