Merkel wants option of excluding members from euro zone

[ang]

The 16-nation eurozone must have the option of removing one of its members from the club if a country persistently breaks its fiscal rules, German Chancellor Angela Merkel said Wednesday.

The option, which would be used only "as a last resort", should apply to countries which "again and again do not fulfil the conditions" to which euro area members are bound, she said in a speech to parliament.

Seems like Angela has had enough of countries like Greece. Stay in line or get out?

France24 - Merkel wants option of excluding members from euro zone

[Toland]

Seems like Angela has had enough of countries like Greece. Stay in line or get out?

France24 - Merkel wants option of excluding members from euro zone

Seems reasonable enough.

[wombat]

Seems reasonable enough.

Until it becomes Italy or Spain's turn - If speculators decide that the euro can be chipped away, they could start to target it.

[rockofcashel]

Why don't people face the inevitable question regarding the euro and how countries within the eurozone will be obliged to operate ?

That is,

Either create a full fiscal union

or

Get out


I am completely dismayed by the lack of economic knowledge shown by so many posters here, who seem to continue to labour under the belief that it will be possible for 16 (or more) different and separate economies to continue to act indpendently, without some kind of formal fiscal union. The only reason that we are not contemplating it at the moment, is because the "Lisbon" fight has only just recently been completed, and EU chiefs don't have the stomach yet for another battle, where they will have to explain to citizens in the Eurozone that some level of Federalisation will have to take place to stabilise the Eurozone into the future.

Maybe it'll take 2-3% (or more) on ECB interest rates for Irish people to realise it... you can't have 16 economies using the one currency independently people

[Clanrickard]

Seems like Angela has had enough of countries like Greece. Stay in line or get out?

France24 - Merkel wants option of excluding members from euro zone

When the French broke the rules there wasn't a peep out of anyone. Granted they weren't as egregious as the Greeks but who gets to decide who is in and who is out. The Germans are acting more and more like bullies. If they don't want to bail out the Greeks let them say so explicitly so we all know where we stand.

[Clanrickard]

Maybe it'll take 2-3% (or more) on ECB interest rates for Irish people to realise it... you can't have 16 economies using the one currency independently people

It would be the economic death knell for this country. The rules imposed would be common tax rules used by France and Germany. If all things are equal foreign investors will invest in the biggest market in the EU. There will be no single economic government because that would mean the United States of Europe which nobody wants.

[rockofcashel]

It would be the economic death knell for this country. The rules imposed would be common tax rules used by France and Germany. If all things are equal foreign investors will invest in the biggest market in the EU. There will be no single economic government because that would mean the United States of Europe which nobody wants.

If I knew we'd both be around to see the bet through Clanrickard, I'd throw a monkey on it happening within twenty years.

A common currency which is vital to external trade, while maintaining vastly different internal trade provisions simply cannot work in the long run. I can quite easily see a situation where we will have a "federal" tax system in place. In fact, given that we already pay a portion of our VAT take to the EU for the running of the Union, one could argue that a low level federal tax system is already in place.

As you say, a 2-3% increase in ECB rates would be the economic death knell for the country. What you don't say though, is what would we do if it happens. Perhaps.. what will we do when it does ?

[DCon]

Seems like Angela has had enough of countries like Greece. Stay in line or get out?

countries like Greece and Ireland you mean.

The NAMA bailout cash has to come from somewhere.

[Clanrickard]

A common currency which is vital to external trade,

We would be better off with a punt which we could manipulate via the Central Bank.

I can quite easily see a situation where we will have a "federal" tax system in place. In fact, given that we already pay a portion of our VAT take to the EU for the running of the Union, one could argue that a low level federal tax system is already in place.

Maybe so but that is vastly different for the one economic government proposed by the euroloonies in Paris and Berlin where is micromanagement and a one size fits all approach.

As you say, a 2-3% increase in ECB rates would be the economic death knell for the country. What you don't say though, is what would we do if it happens. Perhaps.. what will we do when it does ?

I would suggest leaving the Euro. Other than that we'll just have to batten down the hatches.

[Clanrickard]

countries like Greece and Ireland you mean.

The NAMA bailout cash has to come from somewhere.

The cash comes from the ECB which is independent from governments or the commission so nothing to do with Merkel. If anyhting would threaten the Euro it would be the perception that national politicians are dictating the agenda.