Wednesday, August 28, 2013

Not just Greece...

Some statements stick in the craw, I rather suspect the one by Angela Merkel on Greece's admission to the Euro will have ruffled a few feathers as well as having been painful to admit.
Angela Merkel said that Greece should never have been allowed into the now struggling Eurozone.
The German Chancellor put the blame on her predecessor Gerhard Schroeder, calling his decision, “wrong”.
Ms Merkel said that Greece’s entry into the Euro was one of the starting points for the current crisis, reported The Daily Telegraph.
But it wasn't just Greece now was it who fudged their economics to fit into the convergence criteria for joining the Euro? The answer lies in some of the terms of the Maastricht Treaty
The Maastricht criteria consists of four parts: price stability (inflation rate not more than 1.5 percentage points above the rate of the three best performing member states), sound public finances (public deficit should not exceed 3% of GDP), sustainable public finances (government debt should not exceed 60% of GDP) Durability of convergence (long-term interest rate should not be more than 2 percentage points above the rate of the three best performing members in terms of price stability) and exchange rate stability (participation in ERM II for at least 2 years without severe tensions.
 Not one single European country now in the Euro matched those criteria, only three (Finland, Luxembourg and Estonia) even came close. The only one that matches them all now is Denmark all the rest of the Eurozone fail in some respect of the criteria. So when Merkel tells Greece that they shouldn't have been allowed in, well Greece has some news for the Germans, they shouldn't have been allowed in either, not if the rules were applied as they were supposed to be.
Not that I'd expect any Eurocrat or EUphile to admit that the entire Euro concept is flawed, even Merkel doesn't dare admit that...
Ms Merkel added: “That [a unified Euro area] is such a treasure, such a boon, that we can’t place it in doubt.
Even if it means fudging the terms of entry...

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