My feeling is that the decisions are being made to re-introduce 'face money' again. Without the capacity to deflate everyone is up a gum tree. Unless the initial thing will be to try to deflate the Euro? In truth the dollar needs to deflate as well I suppose, so this might just cancel out a 'deflation' for anyone.
It was clearly pointed out in the initial thoughts outlined on the link above that countries with less productivity would be disadvantaged by joining the Euro. The other problem the more productive countries have is the migration of often skilled and well educated people migrating to take jobs in their local economies, and migrants are often prepared to work for less money.
Pretty well all the problems have manifested themselves, and I think we can all see that this beaurocratic centralised system has actually brought about considerable problems. I don't know why but I think of a ring donut that has a hole in the middle. I like jammy ones myself.
I just can't see how a European union can continue unless it has a proper central government, and Europe just becomes one big country. I just don't think ordinary people would accept this somehow. We all like our nationalities and identities. I think the Euro was realy the first step in this direction, and probably designed to bring down the dollar! The fact that the Americans shot themselves in the foot with all those mortgages, and letting Lehman Brothers go to the wall just speeded up the process.
I think every country involved with the Euro is coming off badly. I can see that a high production country like Germany who had a very strong currency benefited initially, in that their exports became easier to 'sell'. Perhaps it would have been better simply to 'devalue' their exports. Or even better allow factories in other countries to produce goods for the local market under licence. Perhaps the Euro is a sledgehammer to crack a nut.
Surely it's better to have people working, and a genuine turnover in an economy. If I think of a comparison to my small business, exactly this happened all the time. A 'bright new service' is introduced, which has a good profit margin that makes it worth doing. This service gets popular, and other salons then copy the service. They undercut the price, as they assume the client is always looking for cheaper. The original salon has to start matching price as they lose business. The service then becomes unprofitable without modifying it, and making it a cheaper service to do. So either quality of product, or actual elements of the service have to be 'shaved'. Eventually the clients say, 'This is not a good service, it is not worth the money'. So they stop having the service. This is what happens in price wars!
I refused to devalue either my products or service. We became less busy, but we had good conscience that we offered the best service we could, with the best products. I didn't expect staff to 'cut corners' so didn't overbook them. Eventually this payed off, as although we did less work, we did higer value services and I assume because our clients came on a regular basis, they felt that although others were cheaper, they got value for money.
The whole point is we all want value for our money, not cheap rubbish products. Just because the German Miele cost between £100 to £150 more than the top of range in other washing machines, doesn't mean no one will buy them. I would replace with a Miele again, the thing is I don't often have to! I can get spare parts for them and get them fixed! Believe me a washing machine gets hammered in a hair salon, and the ones in use are 7 years old. They were just the household ones not the commercial. I find other stuff is just plasticky and breaky.
Frankly I think the Euro only benefited the manufacturing and producing members of the EU sell to poorer countries, it never worked well for poorer countries selling into richer countries. It kind of reminds me of the demise of the silk weaving trade in London from about the 1850s. Because the English government allowed silk and fabric imports from France in a trade deal it put a lot of good honest hard working people out of a job. They all ended up in poor houses. Yet to be a silk weaver was a well respected work. No one protected them.
It's all very well saying that commerce must have rights to sell their products in a country where they can't be made as cheaply in the home market, but in the end it just means those people out of work at home can't get other employment, then the home economy suffers with social issues of people out of work. This knocks on into the amount of taxes available for education, health care and all the other benefits a society can reasonably support from it's own budget. If a huge chunk is being eaten to offset GDP, and pay for unemployment benefits this doesn't make sense to me.
Obviously there has to be a range of quality and price goods, as not everyone would want to spend a shed load of money on a washing machine, (for instance). The thing is, I think that the products made in your own country should be competitive to stuff made abroad, and if this means price ajusting the imported goods with an impots tax, at least the public have a choice of buying local and supporting their own economy, or paying a bit more to get what they want if they can afford it, and want it that badly. I suppose this could be done with the Euro still in place, as the impots, is merely tax, not actual manufacturing costs.
The impots tax could be used to offset GDP for non manufacturing countries. I recon a split would work. If its a wealthy manufacturing country, they can get the consumer to pay say 80% of the tax. If it's a country like Greece, then the seller of the goods pays the 80% and the poorer consumer pays the 20%. this might sort of balance out the obvious disadvantages. Obviously the % would need to be negotiated by each country depending on what it's exports and imports are, and use it as a sort of 'Silk Weavers' protection scheme. I thought this might level the playing field for poorer countries in a sort of surcharge to get richer countries to subsidise the poorer non productive countries imbalance of GDP. (Probably too simple).
Think of how much of the manufacturing done abroad in the far east has crippled wesern indusry. I doubt those products are going to be good value for much longer. Besides, we all use far too much shampoo with soduim laurel sulphate in it. It is terrible for ecology as well as our skin and hair. Definately whack a bit of impots tax on non eco friendly stuff!
It just seems every government is having to run on a huge overdraft that will never get paid back. The cost of servicing the borrowing just escalates all the while there is no mechanism to devalue the money. I think this used to be done with escalating inflation, or devaluing the currency.
Whichever way it's always the people who work, depend on jobs, and every day household budgeting that suffer these beaurocratic manipulations. We working people throughout Europe can't be expected to keep propping up a system that is realy run by bankers and accountants, and a political agenda that the public never realy understands because so much 'pegging' gets done behind closed doors.
I think it is important to have a real European Union based on common humanitarian aims, rather than one that is simply a capitalist vehical that is too big to slow down. I think of a heavy truck going too fast, that is overloaded trying to break within safe distance, bearing down on a party of schoolkids crossing the road.
Lets hope the Lollypop lady doesn't just stand there expecting the truck to stop in time, and gets the kids safely out of the way.
Well I am actually adding this bit in this post a couple of days later. This is exactly what I was trying to describe. http://rt.com/usa/news/obama-solyndra-solar-energy/
Now this comes down to consumer choice. If you know that the Chinese have artificialy surpressed their money, and given very low interest rates on loans to their companies manufacturing a competitive product of your own countries production, I would say it is up to the consumer to take hold of the poltical game and not buy the imported product. This way you fuel your own economy, and keep your own people in work. Wait a year and buy the local product, or ask the company to set up a genuine (non inflated price for their product) interest fee loan to keep their cashflow going. Cash payers ought to get a 10% discount.
This is the reason everyone offers interest free loans and don't make it advantageous to the cash buyer. You do end up paying an inflated price for the product. It is fairer to say that this is the repayment for a spread payment including the interest, and giving the cash purchaser the option to negotiate. Try selling direct rather than through the fitter. and then employ local fitters on a cash basis so the wheels of commerce get turning. Doing everything on credit just means at least 2-5% gets lost in transaction surcharges. Bloody card/loan companies milk the vendor like cows! they can't avoid passingpas on those charges to customers.