The Krugginator - again, why the Euro is a doomed experiment. Quote:
...the broader story here is that we’re increasingly seeing that the problems of the euro extend well beyond the troubles of southern European debtors. Economic performance has also been very bad in several northern nations with good credit ratings and low borrowing costs — Finland, Denmark (which isn’t on the euro but shadows it), the Netherlands.
Again, the problems of Europe aren't caused caused by the laziness and corruption of the swarthy Mediterranean mud-races, despite what Bild would have you think. These problems are caused by the Euro currency union itself:
What’s going on? Well, in the case of Finland we’re seeing the classic problems of asymmetric shocks in a currency area that isn’t optimal. Finland’s two main export sectors, forest products and Nokia, have tanked; this creates the need for a sharp fall in relative wages to make up for the lost markets, but because Finland doesn’t have its own currency anymore this adjustment must take the form of a slow, grinding internal devaluation....
The problems of the euro, in other words, weren’t caused by an outbreak of fiscal irresponsibility that won’t recur if the Greeks can be brought to heel; they weren’t even, in a deep sense, the result of big capital flows that won’t come back again. The whole single currency project was flawed from the start, and will keep generating new crises even if Europe somehow gets through this one.
We have fiscal transfers in Canada to ensure, for example, that the formerly dirt-poor province of Saskatchewan didn't starve to death. And because we Ontarians aren't a hateful bunch of cunts, we were (when we had a booming export sector, i.e. before that cunt Harper) happy to send all our excess cash to Saskatchewan to keep their furnaces on all winter.
But Europe will never bring about fiscal transfers because there's still hatred between the nations. It's polite, it's quiet, but it's still hatred. Add that to their ignorant cartoonish Washington Consensus market fundamentalism and you've got an experiment doomed to failure by the sheer pig-ignorance of its own political leadership.
I eagerly await the IMF bailout of Finland.