Is this the EU remainers still want to be a part of?

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Is this the EU remainers still want to be a part of?

Post by Poppy »

THE “protectionist” European Union is doomed to collapse because it has lost sight of its commitment to free trade and the beleaguered euro currency has “already failed”, a leading German economist said today.

By NICK GUTTERIDGE, BRUSSELS CORRESPONDENT
05:00, Fri, Aug 25, 2017 | UPDATED: 08:49, Fri, Aug 25
Professor Thorsten Polleit said the EU project had once been a “very wise concept” for fostering peace and cooperation but became far too politicised and is now heading in the “wrong direction” of pursuing ever greater centralisation.

In an interview with express.co.uk the eminent German academic and financier urged European leaders to “start decentralising” if they want to save the bloc from oblivion and warned their efforts to prop up the single currency are doomed to fail.

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Professor Polleit also predicted that Britain will emerge from Brexit in better shape than the EU, because it will be able to liberalise its economy to attract greater investment and pursue genuinely free trade across the globe.

In contrast, he painted the EU’s single market as an unnecessarily burdensome beast, saying it was stifling European innovation with red tape and driving up prices by putting up protectionist barriers to the rest of the world.
Professor Thorsten Polleit
He said: “The first signs are that the euro currency has failed and it’s only in place because the ECB has dropped interest rates to zero. Under normal conditions it would’ve collapsed already. It can’t compete - it’s a dead end policy.

“The bottom line is basically free trade is great for all parties involved, it brings greater material prosperity of everyone involved. At the same time for having free trade you don’t need this Single Market and all the bureaucracy that comes with it.

“People in Great Britain have realised that this [the EU] isn’t a concept that will bring prosperity for the current and future generations, so they got out and I think others will follow. It will take some time but the EU in its current form will fall.”

Professor Polleit warned that any attempt by European leaders to punish Britain for leaving the bloc will fail and is only likely to further demonstrate to ordinary voters how much the project has lost
The first signs are that the euro currency has failed
Professor Thorsten Polleit
He said: “It’s the wrong direction they are moving ahead along, there’s not even a kind of plan discernible at the moment. The right thing would be to start decentralising the process and giving back more sovereignty to the member states, but the opposite is happening and that’s a big concern.

“Originally the idea of forming the EU, they were trying to set up a community that would secure peace in Europe. It was a liberal or even a libertarian idea to have free trade, a free flow of capital and people across borders and that was a very wise concept.

“But over time the EU was no longer pursuing the route of a free trade area but it became increasingly politicised, and the idea was to set up a centralised power structure in Brussels to transfer national sovereignty rights on to the supranational decision making structure.

“Over time the EU has become a very different animal. Now the EU policy is about interventionism, they try to interfere in all sorts of economic and social fields to push through all kinds of political concepts and that’s a very dangerous idea.”

Why these nations could leave the Eurozone
Fri, February 24, 2017
Heavily indebted Greece has no acute shortage of money, but will need money again from the ongoing aid programme this summer. But Athens is not the only shaky candidate of the Eurozone. These are the other countries causing worries


GREECE: At present, there is a threat of a further escalation of the dispute between the creditors and Athens regarding additional aid. It is disputed whether Greece has implemented sufficient reforms
ITALY: Because of bad credit in the banking sector and the unstable political situation, Italy is perhaps the biggest worry within the eurozone
PORTUGAL: Despite reform efforts, the country continues to struggle with high debt and low economic growth
FRANCE: It's not the economy, but also the politics that turn the second-largest Euro economy into a shaky candidate
NETHERLANDS: The return on two-year Dutch national securities reached a record low recently. Wilders is unlikely to find coalition partners for a government formation
SPAIN: None of the former euro crisis countries has recovered economically as much as Spain. The economy is buzzing and growth is also overshadowing the dynamism of the German economy
The leading academic, whose criticism of the EU and single market goes against the grain in Germany, blamed groupthink amongst journalists and economists who want to “rub shoulders with Merkel” for a lack of real debate over its benefits and downsides.

His home country has however been a massive net beneficiary of the single currency, because it is valued much lower than an equivalent Deutsche Mark would be making German exports unnaturally competitive globally.

And there is a prevailing opinion amongst the elite in Berlin that the integrity of the project must be protected at all costs, even if it means forcing a no-deal scenario with Britain and suffering the economic costs that would entail.

Angela Merkel’s position on Brexit has been intractable despite the fact that Britain is the biggest export market for German goods in Europe, with the country selling us a massive £25 billion more in goods and services every year than we sell


EU SPLIT CROATIA ON MEMBERSHIP AS NATION STRUGGLES UNDER DEMANDS.



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Devil
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Re: Is this the EU remainers still want to be a part of?

Post by Devil »

Rubbish! (And that's being polite!)
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Re: Is this the EU remainers still want to be a part of?

Post by Devil »

Hudswell wrote: Fri Aug 25, 2017 1:02 pm Which I assume that applies to any article that actually gives an alternative view of those that would wish to remain in the EU?
I'm neither for nor against Brexit as it will have little effect on me (personally), either way. OTOH, I'm able to evaluate such articles for what they are worth, nothing.
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Re: Is this the EU remainers still want to be a part of?

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The first signs are that the euro currency has failed
For a failed currency it's doing awfully well at the moment!
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Re: Is this the EU remainers still want to be a part of?

Post by Poppy »

Keep up Dominic - it is all artificial as they are keeping the euro high.
Devil you cannot just say RUBBISH without providing some info on why you think so surely?
What about the problems he refers to in Greece.Netherlands,Croatia,Portugal and Italy. Are you saying the author is wrong? HE is a very eminent German academic but it seems you know more than he does?
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Re: Is this the EU remainers still want to be a part of?

Post by Dominic »

That's a year old.
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Re: Is this the EU remainers still want to be a part of?

Post by Poppy »

Interesting article Hudswell and thanks for posting. it matters not a jot that the article is a year old.
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Re: Is this the EU remainers still want to be a part of?

Post by Dominic »

...that is a year old. In that year, the euro hasn't exactly collapsed, has it?
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Re: Is this the EU remainers still want to be a part of?

Post by josef k »

Polleit is an extreme free market economist. His Wiki entry (translated from the German) describes his views as:

"Polleit is a follower of the Austrian School of the National Economy, especially in the form of the work of Ludwig von Mises , and sees the state as the
source of economic, social and political disturbances. He advocates a market economy social and economic order without such disturbances. He identifies the core cause of the international financial and economic crisis in the paper or Fiat money system . This is, from Polleith's point of view, a direct result of a social and economic order in which the state and the groups which it promotes strive to leave the distribution of income and assets not to the free market , but to political decisions. Polleit considers minimum wages to be harmful."

Note also that the report comes from the Express. Not known for liberal views.

The bottom line is that the EU is doing pretty well at the moment, as the reduction in my pension income will testify.
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Re: Is this the EU remainers still want to be a part of?

Post by ApusApus »

josef k wrote: Sat Aug 26, 2017 4:44 pm The bottom line is that the EU is doing pretty well at the moment, as the reduction in my pension income will testify.
Keep the faith, things will bounce back ............. despite HiC's best efforts! :lol:


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Re: Is this the EU remainers still want to be a part of?

Post by josef k »

Yes they inevitably will. Whether it will be in my lifetime remains to be seen.
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Re: Is this the EU remainers still want to be a part of?

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So Poland and the EU are fine and dandy then? I think not! Are not Italy threatening to default on paying back their loan too? Just keep burying your head in the sand HIC, the EU are doing just fine.
Last edited by Poppy on Tue Aug 29, 2017 9:24 am, edited 1 time in total.
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Re: Is this the EU remainers still want to be a part of?

Post by Royal »

Is this the EU the Remainers still want to be a part of?

Maybe this question should be directed at Greece, where the unemployment rate is 24% (youth unemployment is 46.6%), or Spain where unemployment is currently 17.8% (youth unemployment is 38.6%). What about Italy where unemployment is currently over 11% (youth unemployment is 37%) or Portugal where unemployment is 9.8% (youth unemployment is hovering at around 37.6%).

If these countries were in charge of their own currencies (Drachma, Peseta, Lira, Escudo etc) then they would be able to do something about this problem. They could, for example, control their own exchange rates by currency devaluation or increasing their interest rates to encourage inward investment. Even an increasing national inflation rate would reduce the relative debt they owe to other countries. But that is not the case - they are all subject to the policies of the European Central Bank (ECB) which is essentially controlled by Germany.

The ECB has no mandate to set policies which encourage employment, so they don't. Their mandate is to ensure low inflation, and that is their main focus. To understand why, you only need to look to Germany which, after suffering hyper inflation in the 1920s, has that as it's main aim. Consequently, an entire generation of Southern European youth have little or no prospect of a job or a decent future.

Of course, Germany and France are quite happy with the current situation which means that cheap labour from Eastern Europe are flooding in to suppress wages, their order books have been filled by lending Southern and Eastern European states money in order to buy their manufactured goods and their balance of trade is most favourable, thank you very much.

There can be no denial of the fact that the Euro is doing extremely well at the moment and that both Sterling and the US Dollar are comparatively doing quite badly. However, there can also be no denying that the Euro is hugely overvalued at present (which will no doubt affect all Eurozone exports and Germany most of all). Similarly, both the US Dollar and Sterling are clearly undervalued at present which, although damaging for us Expats, is actually quite good for US and UK exports.

This situation will not last for very long - certainly not beyond March 2019, but probably well before then.

Don't forget that 85% of all world trade is conducted outside of the EU and that is the direction the U.K. Is heading.

Keep faith. The future is bright. The future is Brexit.
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Re: Is this the EU remainers still want to be a part of?

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Royal wrote: Tue Aug 29, 2017 8:08 pm But that is not the case - they are all subject to the policies of the European Central Bank (ECB) which is essentially controlled by Germany.
Nothing could be further from the truth! Draghi isn´t German after all and he has no regard for German interests. Which is why the German representative in the ECB council stepped back in protest against the QE program which forces the Bundesbank to finance other countries´s deficits. Until June this year the target-balance owed by other Euro-countries to the Bundesbank stood already at 857 trillion - thanks to Draghi lent at zero interest and with no right to demand repayment. How would a private business account for a loan with no set repayment period and an interest rate of zero? The Bundesbank values it at € 857 trillion in it´s books! Please explain how this is indicative of German dominance?
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Re: Is this the EU remainers still want to be a part of?

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Hudswell wrote: Wed Aug 30, 2017 12:00 am Jeba, if Germany wanted to, it could close down the euro tomorrow...you know this...the world knows this...it's not a conspiracy, it's fact...it is no disrespect to Germany, they are the most powerful country in the EU...they have the most to gain from its success..and probably the most to lose...indeed they are propping up several failing countries..and I think the "Folk" are beginning to realise this. I have the utmost respect for the German people having lived the country for several years and have many German friends...well they are mainly from Bavaria...and many of them do not support the policies of the Chancellor or her party.
Maybe Germany could "close down" the Euro, just like France and others could. But firstly the damage would be huge because the e. g. Bundesbank would have to write down those TARGET balances ( https://en.wikipedia.org/wiki/TARGET2 ) and secondly chances are it will be Italy which closes the Euro down at the next election. But that has nothing to do with my point. The ECB is definitely not controlled by Germany. Germany has one vote in the ECB council just like Cyprus even though it´s share of ownership is 27%. And the ECB is acting against Germany´s interests. Or why do you think the German representative in the ECB council stepped down in protest of Draghi´s decisions? You haven´t answered my question how this is indicative of German dominance. Claiming it is means adding hurt to injury from a German viewpoint.
If the German electorate understood how the Euro functions there would be blood in the streets. Nobody explained that to them when the Euro was introduced.
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Re: Is this the EU remainers still want to be a part of?

Post by Royal »

jeba wrote: Wed Aug 30, 2017 7:29 am
The ECB is definitely not controlled by Germany.
Jeba,

I accept that the ECB is not ‘controlled’ by Germany, although they certainly have dominance in the Governing Council. Also the simple fact that Germany is the powerhouse of Europe economically, politically and financially means that their views are given more weight than any other country in the EU - including the wannabe leader, France.
jeba wrote: Wed Aug 30, 2017 7:29 am
Or why do you think the German representative in the ECB council stepped down in protest of Draghi´s decisions?
This presumably refers to Jürgen Stark who resigned 6 years ago? If so, he stepped down ostensibly for ‘personal reasons’ but it was widely thought to be in protest at the ECB policy of buying Italian and Spanish bonds to keep those countries from going the same way as Greece. It seems that if Germany had her way, most of the Southern European countries would be kicked out of the Eurozone. He was replaced…by another German.
jeba wrote: Wed Aug 30, 2017 7:29 am
Germany has one vote in the ECB council just like Cyprus even though it´s share of ownership is 27%.
That's not quite true, Jeba, is it?

Please correct me if I am wrong, but the ECB’s Governing Council does not have a system of one member one vote.

The ECB Governing Council consists of 6 Executive Board members who each have permanent voting rights and the 19 Governors of each of the Eurozone’s 19 National Central Banks who have rotating voting rights on a monthly basis. However, 2 of the 6 Executive Board members (with permanent voting rights) are German. Along with the vote of the Governor of the Bundesbank, it seems to me that Germany has 3 votes to Cyprus 1 (when it's Cyprus’ ‘turn’ to have a vote).
jeba wrote: Wed Aug 30, 2017 7:29 am
If the German electorate understood how the Euro functions there would be blood in the streets. Nobody explained that to them when the Euro was introduced.
Nobody explained much to any electorate in any country about anything EU. Maybe if the German electorate knew, rather than blood on the streets, there would be a Gerexit. :D
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Re: Is this the EU remainers still want to be a part of?

Post by jeba »

Royal wrote: Wed Aug 30, 2017 10:14 am
jeba wrote: Wed Aug 30, 2017 7:29 am
Or why do you think the German representative in the ECB council stepped down in protest of Draghi´s decisions?
This presumably refers to Jürgen Stark who resigned 6 years ago? If so, he stepped down ostensibly for ‘personal reasons’ but it was widely thought to be in protest at the ECB policy of buying Italian and Spanish bonds to keep those countries from going the same way as Greece. It seems that if Germany had her way, most of the Southern European countries would be kicked out of the Eurozone. He was replaced…by another German.
No, I wasn´t referring to Jürgen Stark who indeed gave personal reasons but to Axel Weber who made it clear that he stepped down in protest of Draghi´s policies. Does that sound like Germany is dominating the ECB? And it´s hardly surprising that a successor to a German representative is another German, is it?
Royal wrote: Wed Aug 30, 2017 10:14 am Please correct me if I am wrong, but the ECB’s Governing Council does not have a system of one member one vote.

The ECB Governing Council consists of 6 Executive Board members who each have permanent voting rights and the 19 Governors of each of the Eurozone’s 19 National Central Banks who have rotating voting rights on a monthly basis. However, 2 of the 6 Executive Board members (with permanent voting rights) are German. Along with the vote of the Governor of the Bundesbank, it seems to me that Germany has 3 votes to Cyprus 1 (when it's Cyprus’ ‘turn’ to have a vote).
I stand corrected. I was only thinking of the governors of the respective national central banks, neglecting the 6 permanent members. But still, including these Germany has only 3 out of 25 votes. Hardly indicative of dominance, is it?
Royal wrote: Wed Aug 30, 2017 10:14 am Nobody explained much to any electorate in any country about anything EU. Maybe if the German electorate knew, rather than blood on the streets, there would be a Gerexit. :D
Of course, I was using a figure of speech only. After all, it would be illegal to shed blood on streets so Germans won´t do that. But the AfD (Merkel right-wing opponents whose reason for being was their rejection of the Euro in the first place) might well get a majority (if they could show that this was the lesser evil).
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Re: Is this the EU remainers still want to be a part of?

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jeba wrote: Wed Aug 30, 2017 3:21 pm
No, I wasn´t referring to Jürgen Stark who indeed gave personal reasons but to Axel Weber who made it clear that he stepped down in protest of Draghi´s policies. Does that sound like Germany is dominating the ECB? And it´s hardly surprising that a successor to a German representative is another German, is it?
Ah! Maybe a pattern emerging then of German representatives resigning when they don't agree with the way policies designed (rightly or wrongly - I have no particular views) to solve the Euro crisis goes against their views. The ECB is modelled on the Bundesbank and consequently have inflation as their main focus. Not employment. This single focus on controlling inflation seems to dominate the German psyche. Like Jürgen Stark, Axel Weber was a hawk who maybe would rather have seen Southern EU countries ejected from the Eurozone and consequently the EU rather than support policies to secure the future of the new emerging generation. Correct me if I'm wrong again, but didn't he resign from being Governor of the Bundesbank in April 2011 and thus withdrew from his nomination to take over as President of the ECB? If so, he wasn't stepping down in protest against Draghi’s policies as Mario Draghi was only appointed to the post in November 2011 which had been left wide open by Weber’s withdrawal as a candidate. Just as well I suppose. That would have meant 4 German votes on the ECB Governing Council - all clearly anti-bailout of Southern EU countries!
jeba wrote: Wed Aug 30, 2017 3:21 pm
I stand corrected. I was only thinking of the governors of the respective national central banks, neglecting the 6 permanent members. But still, including these Germany has only 3 out of 25 votes. Hardly indicative of dominance, is it?
Actually 3 out of a total of 21 votes due to the rotating voting rights. No other country has 3 votes on the Governing Council. I would call that dominance (supremacy, superiority, sway, leverage, influence). I have already conceded that it's not control, but 3 representatives of the most powerful and richest country in Europe vs the Governors of the Central Banks of the likes of Malta, Cyprus, Slovenia, Slovakia etc seems pretty much like dominance to me.
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Re: Is this the EU remainers still want to be a part of?

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Royal wrote: Wed Aug 30, 2017 6:42 pm
Ah! Maybe a pattern emerging then of German representatives resigning when they don't agree with the way policies designed (rightly or wrongly - I have no particular views) to solve the Euro crisis goes against their views.
Even if there was such a pattern - how would that be compatible with your claim that the ECB is dominated by Germany?
Royal wrote: Wed Aug 30, 2017 6:42 pm Correct me if I'm wrong again, but didn't he resign from being Governor of the Bundesbank in April 2011 and thus withdrew from his nomination to take over as President of the ECB? If so, he wasn't stepping down in protest against Draghi’s policies as Mario Draghi was only appointed to the post in November 2011 which had been left wide open by Weber’s withdrawal as a candidate.
You are correct. He resigned in April 2011 without giving a clear reason at that time. Only in 2013 he said in an interview that he had stepped down because of the ECB´s decision to buy Southern European bond loans - a policy started under Trichet´s presidency and continued by Draghi. Of course, he wasn´t stepping down because of Draghi as a person, but because of policies Draghi favoured and continued to apply (and intensify "...whatever it takes...").
Royal wrote: Wed Aug 30, 2017 6:42 pm
That would have meant 4 German votes on the ECB Governing Council - all clearly anti-bailout of Southern EU countries!
Would have - but it didn´t happen (and even if it had happened that would still have been a far cry from domination). And of course, they were against bailouts - after all, the contract of Maastricht explicitely rules out bailouts (and it was promised to the German electorate that there would be no bailouts when the Euro was created)! Btw: Christine Lagarde, the head of the IMF and then French minister of finance conceded that those policies were in contravention of the Maastricht treaty and justified it by saying that it had been necessary to save the Euro.
Royal wrote: Wed Aug 30, 2017 6:42 pm Actually 3 out of a total of 21 votes due to the rotating voting rights. No other country has 3 votes on the Governing Council. I would call that dominance (supremacy, superiority, sway, leverage, influence). I have already conceded that it's not control, but 3 representatives of the most powerful and richest country in Europe vs the Governors of the Central Banks of the likes of Malta, Cyprus, Slovenia, Slovakia etc seems pretty much like dominance to me.
Do you really think that the ECB would follow those bailout policies forcing the Bundesbank to run up a 857 billion target balance (up from 700 billion last year) at an interest rate of zero and without the right to make it due for repayment if Germany was in a dominating position? Do you believe that money will ever be repaid?
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Re: Is this the EU remainers still want to be a part of?

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jeba wrote: Thu Aug 31, 2017 8:04 am
Do you really think that the ECB would follow those bailout policies forcing the Bundesbank to run up a 857 billion target balance (up from 700 billion last year) at an interest rate of zero and without the right to make it due for repayment if Germany was in a dominating position? Do you believe that money will ever be repaid?
Jeba,

We’ll have to agree to disagree on whether a system of governance which gives some countries no vote (depending upon which month of the year it is) whilst one country - Germany - has 3 votes is domination or not. It's semantics really, and I already tried to explain that the meaning of dominance in my book is supremacy, superiority, sway, leverage, influence. You disagree. Fine.

As far as whether the Bundesbank will ever be repaid or not - I see no reason for it not to happen. After all, the ECB, which controls Euro money supply has been effectively creating new money to support its QE programme (which may or may not have worked). Like many others, I am highly sceptical about the long term future of the Euro, and I am thankful that the UK didn't go for it. A currency and subsequent ECB policy which tries to cover the interests of the prosperous Northern Eurozone and the poor Southern Eurozone at the same time without fiscal unity seems doomed to fail. Zero interest rates, a single focus on inflation to the detriment of unemployment rates, a colossal QE programme of around €1Trillion and Mario Draghi saying that the ECB will do “whatever it takes” to prop up the euro seems to have worked…for now.

The Euro has become something which seems to be “too big to fail” (I wonder where I've heard those words before…). George Soros and all the financiers in the world could not muster sufficient funds to short the Euro. However, it still has fundamental problems and the ECB/EU are unlikely to be giving the world a true picture of the state of the Eurozone economy. Growth is nowhere near the levels it needs to be, the sovereign debt crisis has not gone away and yet some countries are getting richer (Germany, France) whilst some countries are getting poorer (Spain, Portugal, Italy, Greece etc). Surely, the Euro was meant to ensure that all countries would converge and grow? Not so. Greece is knocking the ECBs doors again, Italy has fundamental banking problems, as does Deutsche Bank and Brexit will fundamentally alter the balance of EU funding. Add to this mix the social unrest which very high unemployment rates in the Southern Eurozone will create and the growing nationalism in countries like France, Spain, Portugal and the Netherlands and you will see why people like Alan Greenspan predict that the Euro will ultimately fail.
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