Topic: An Economist Predicts The Downfall Of The Eurozone (Read 294 times)

A new blow for the EU and the eurozone comes from Germany, more precisely from the Constitutional Court of the Federal Republic of Germany which is "assessed that the European Central Bank (ECB) had violated its mandate and exceeded its authority with the government bond purchase program. Also, the judgment states, the ECB must prove the justification of the program, otherwise the Bundesbank cannot participate in it."

In other words, the German court has set itself above European laws and thus set a very dangerous precedent that could be used by some other countries in the future, especially Hungary and Poland, which often disobey various laws and instructions coming from Brussels. What is interesting is the fact that this verdict is the result of a 5-year dispute that was initiated in Germany in 2015 by a group of people (about 1750 of them), and the European Court of Justice ruled in favor of the ECB in 2018.

This decision of the German court resulted with the fall of the Euro against $ for 0.7%.


Additional source : JUDGMENT THAT SHOCKED EUROPE The German Constitutional Court has placed itself above European Union law, now what?

The idea with the euro was initially not very well thought out. Because in the eurozone, there are too many different countries. There are such locomotives of the economy as Germany and France, and there are countries that can get defaulted, this is Greece, and Italy is balancing on the brink.

Personally, I have never liked the idea of the euro as a common EU currency precisely because of the fact that only one member state that has major financial problems can seriously shake the entire EU financial market. Although national currencies have some weaknesses when it comes to trade between members, they (at least for me) represent one of the basic pillars of a country's sovereignty. The UK has long been a member of the EU, but has never given in to pressure to give up its national currency, which has proved to be the right move, especially in the case of Brexit.

Eurozone is on very shaky feet, but not only because of their own weaknesses, but also because some in the world do not like a strong and stable EU. The official US policy led by Trump is in principle against the EU as such, and they were one of the biggest advocates of the UK leaving the EU. This policy aims to weaken the EU and China as much as possible in order to maintain its dominant position in the world.


https://twitter.com/realDonaldTrump/status/1205368801438707713

USA is not united. There are 11 nations inside USA https://www.youtube.com/watch?v=N0YAR_vsQZ8   They have different culture, but that does not mean they cant have common army and space program.

It will be quite interesting to see if in the near future due to the combination of all current circumstances the Euro zone and the EU itself as a structure will fall apart back. And the first message of this collapse will be the revival of national consciousness of countries that are tired of eternal migrants, micro-Pakistanis and other charms of the modern multicultural world within the EU.
The only thing that is annoying is the possibility of the birth of "European separatism" on the part of migrants who will understand that no one else will feed them or even begin to evict them.

It was always obvious that euro zone would have gone down eventually, there are some nations who are awesome at what they do (like Germany and UK) whereas there are always ones who suck at economy (mainly Greece but Spain a bit too) and you are putting them all on the same pot, how could that ever work?

I never believed in it but something this big of course would take decades before it can fall, it has been only 20 years and it is already cracking, UK wants to get out and already out in a way, there will be other nations who will realize that they are carrying the eurozone who will want to get out as well, who could say anything if Germany wants to get out, they are doing much better than other nations so they have to help other nations in order to not lose value on their money, they must be sick of it. Maybe not today, maybe not in 10 years, but eventually this group will disband.

What if Europe was at war all the time because we just don't like each other and countries want more power? We still don't like each other but now countries fight about money and it's EU that gains more power. There's a lot of differences between countries within EU. Can you imagine the USA being united if they'd have 10 different official languages?

As long as the Eurozone is supported by such economies as France and Germany, it will remain stable. But this stability will cost the economies of these countries dearly after UK left the Eurozone. It is possible that the COVID-19 pandemic will be the main test of the sustainability of this alliance.

Yes and our competitors are in India, China and USA.  EU counties spend half the money USA spends for army but our strength is not even 30% of USA. Simply because every country develops own weapons. In USA Utah dont make own fighter jets and Florida their own. They focus resources in one place.

We need to understand Euroep was a continent of constant wars for 1000 years. Most countries was constantly in war. When they end one they started new. Only in last century after EU was formed that changed. We need patience and Europe will achieve great things. 




No it simply means that countries that dont use Euro cant be dragged by the weakness of Euro. They have their own currency and can manipulate it anyway they want.

A few things of note here though:
1) Introducing a common currency removed a lot of friction for exchanging goods and services within the Eurozone
2) The much hated normalization of product standards on EU level vs national level serves the same goal

And most importantly:
3) EU representatives are democratically elected by the citizens of its member states

I disagree with this view, competitions make countries specialized and become efficient. What you need is a free-market where goods and services can be traded with minimum restrictions. No need to create a government on top of legitimately elected governments, telling them to do stuff, etc.

Indeed (IMO) the European Union is a failed project and we should learn about this as a centralization vs decentralization case study.

Does that mean that countries which did not accept EUR are not really a part of the EU? If it's so, there's a lot more countries like that within the EU.
I begun to expect the fall of the EU when countries that were supposed to accept the common currency did not do it. Later, we've witnessed a big clash within the EU when Germany and France wanted to open their borders for migrants, but Hungary and Poland opposed them. Italy and Greece initially followed the plan but then changed their minds as the migrants flooded the gates.
IMO they should have stopped at Schengen and keep the open borders without trying to establish a central government and a common currency.

UK never used Euro. UK uses GBP. They were never really part of EU. It was the last time for them to decide if they want to be in or out. Being a bit in and a bit out was dragging EU back for decade.



Strong EU federation is the only hope Europe have. Every single country is nothing alone compared to strong India, USA and China. Together can compete. EU need to develop space and military program together. All hi tech technology. No use that every country research its own battle tank or fighter jet. No use if every European country send a spaceship to mars. Together we can!

^ It is not only Eurozone that has this dilemma since the economic recession started many countries experience a downfall on their currency but if it will be an advantage to end the euro then it must be done with a careful study since some of the countries in the eurozone may demise their economy. If TFEU is also the reason why other countries can't progress more especially in this time of pandemic might as well eurozone must end earlier for each of the members who have a stabilized economy may still help others once they are able to recover quickly from this pandemic and economic crisis. Nevertheless, I probably not conclude that by ending Euro will be for the betterment of all the Eurozone members since I have no idea what was agreed in TFEU.

Undoubtedly, today the European Union has faced an unprecedented economic downturn, the scale of which reaches almost 10%. According to the statement of the European Central Bank, Eurozone GDP may already be reduced from 5 to 12% in 2020. Nevertheless, today, which countries like France, Germany and others, are trying by any means to support their people, allocating social assistance for people and businesses. thus, in a certain sense, they support business, but they also throw all their strength in the first place to saving their people, by any means preventing the virus from spreading. Thus, after the virus is defeated, people will be ready to work, and the business, which was supported by the state, will also be able to continue to work. Therefore, countries that have a strong financial base and have strict quarantine will most likely survive the coronavirus pandaria and rebuild their economies. I believe that in Europe the situation will be much better than in the United States of America, since it is the liberal system of government that can be harmful in this situation.

And in that case, Brexit can be proven to be working well for Britain as the country will not anymore be dragged by the weakness of Euro and member-countries of the Eurozone. I am seeing many bad developments within this big block of countries, and I am seeing a slow but sure strong dominance of Germany (seen as an important financial savior by eurozone countries) politically and economically.

Counterargument: The Eurozone will likely recover faster than the US due to earlier and stronger measures combined with overall more stable healthcare systems. This will enable Eurozone countries to reboot their economies safer and faster than the US.



Yeah, an European Federation would be bad news but I doubt it will ever come to that anytime soon. The EU is going through too divisive times for such measures.

Having grown up in a smallish EU country with both national currencies and the Euro, I absolutely don't want to lose the latter. There's just too much friction when hopping borders or doing business when every little country has their own little currency and the banks take their own little cuts whenever money moves to and fro. No thank you.

A agree that maintaining the euro is impossible without a European federation,which means more political and financial centralization,which on the other hand,is something the majority of the Europeans don't want.
Anyway,the rumors about the collapse of the Eurozone are highly exaggerated.Most of the country leaders there realize that a possible collapse of the euro would lead to a bigger collapse in their national economies.
So maintaining the euro would bring more benefits for them.
It seems to me that the article author is kinda trying to say "euro is rotten but the US dollar is just fine" between the lines.Something that simply isn't true.

The European Union was originally formed to distribute welfare between member countries. This welfare distribution is carried out through strong economic cooperation between member countries and market freedom and individual freedom are paramount. However, the reality of the current crisis experienced by the European Union is that it shows that there is an imbalance of welfare among EU member states.

Basically the essence of liberalism is a moderate control of the actors involved through compromise and peace. By being willing to reduce each other's demands for the sake of creating a peaceful and calm condition. Conflict can be avoided through the creation of a common interest in trade and economic cooperation. Capitalism, which initially had a good impact, namely uniting postwar European countries, showed the existence of liberalism which was able to unite the differences of each country. But on the other hand, liberalism has a negative impact on the existence of the EU itself. When the market is too free and uncontrolled, it can cause current conditions.

The economic crisis in the Eurozone region which was triggered by the magnitude of government debt actually began to take root since 2000, where the debt ratio of governments in European countries increased significantly. Increased state debt due to ongoing budget deficits. This condition clearly contradicts the Maastricht Treaty rules, which stated in this rule that the state debt must not be more than 60% of GDP and a maximum deficit of 3% of GDP. In theory, if it passes that number, it will create regional economic instability.

European Zone must also implement a joint fiscal policy such as a joint monetary surplus. There must be an institution that has the authority to be able to regulate fiscal policy throughout the eurozone and has the authority to regulate government spending, increase the amount of state revenue through taxes, and make laws and regulations. This means that each country must surrender its sovereignty to a superpower institution to make fiscal policy.

Yes, and you will need to remain civil when Germans invade. But look on the bright side: plundering and pillaging will be so much easier because looted cash will be usable in the invading country without any currency conversion trouble.