Late on Saturday night, when the markets are closed, Goldman Sachs spokesman plants an anti-eu story designed to move markets and make money for Goldman Sachs on Monday morning. This is US, anti-eu capitalism in the raw and at its most naked. Goldman Sachs anti-eu story serves no socially useful purpose. It’s just another get rich quick scheme for GS employees at everyone else’s expense.
The chairman of Goldman Sachs Asset Management has said that the need for a German-led fiscal integration in the eurozone would make it increasingly unattractive for all the countries who joined to stay in the single currency.
Jim O’Neill, whose division manages more than $800bn (£500bn) of assets, said that countries as diverse as Portugal, Ireland, Finland and Greece could pull out of the single currency rather than have to operate under a single eurozone treasury.
Yesterday, Angela Merkel, the German chancellor, said the market turmoil could last for a decade and there was still “a chunk of work” to do.
“The Germans want more fiscal unity and much tougher central observation – with the idea of a finance ministry,”
Mr O’Neill said in an interview with The Sunday Telegraph. “That will emerge for those that want to stay in this damn thing, or can stay in.
“With that caveat, it is tough to see all countries that joined wanting to live with that –including the one that is so troubled here [Greece]. If you wind the clock back, it was pretty obvious that economically probably only Germany, France and Benelux of the original joiners were the ones that were ideal for a monetary union.
“For [them] it is not a bad idea – these countries have always had some kind of tight fixing of exchange rates and are very intertwined. For all the rest that originally joined – Spain, Italy, Portugal, Ireland, Finland – it is actually questionable.”
Mr O’Neill said that because Finland and Ireland were adjacent to non-eurozone countries – the UK and Sweden – they might prefer to quit the euro. He said the single currency might be stronger as a result.
Turning to the Brussels bail-out deal, he said that, although some steps had been taken in the right direction, it did not “solve the issue” and that the European Central Bank needed “eagerly” to buy bonds.
“The dilemma is how is this going to be implemented and is everyone fully signed up and, of course, we find in a few days that the key participant hasn’t signed up [Greece],” he said.
The ECB last night disclosed that it has discussed the possibility of ending the purchase of Italian bonds if it concludes Italy is not adopting promised reforms.
Also last night, the chairman of the supervisory board of China Investment Corporation, the country’s sovereign wealth fund, put further distance between China and the eurozone bail-out, saying that Europe’s bloated welfare state meant that people did not work hard enough.
“I think if you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of their worn out welfare societies,” Jin Liqun said in an interview with Al Jazeera television. “I think the labour laws are outdated – the labour laws induce sloth, indolence rather than hard working. The incentive system is totally out of whack.”
Eurozone leaders had been hoping that China would use some of its trade surplus to back the bail-out fund.
The Euro was destined to fail precisely because EU members who joined have such different levels of productivity and motivation. This is obvious from history of other currency unions. But EU political elites and their bloated EU-cratocracy chose to ignore this because socialism rools OK.
WE are now paying the price of THEIR socialist dreams.
The ONLY solution for the Euro to continue are two points:
1. ongoing financial transfers from rich to poor members (ie socialist redistribution of wealth) and
2. a common Eurozone treasury/finance ministry to control budgets/spending of all members.
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