The EU wants to get to a point of peace with Russia because they know that America is not going to continue to bankroll this war, and they can't afford it.

Unfortunately for them, Russia has them bent over a barrel, so their demands are gonna be rich.

The US is tapped out, so no help to come from that hemisphere.

The only hope for the EU is that China will come in with some kind of a bailout program because they don't want to see Russia conquer Europe and then be able to form a Eurasian hegemony that will then proceed to roll China...

But bailout without restructuring is just extending the bad practices, and Europe needs to cut spending. Unfortunately "stop spending money you don't have" is never a vote-winner, so herein lies a challenge.

But in that regard, Europe has a really surprising opportunity because the EU and ECB are kind of autocratic, so if China will underwrite the Euro, they can be given partial control over monetary policy, so that the failures will be the bad banks rather than the entire currency.

But the problem that remains is the individual countries. The French and Italians don't understand financial markets, they understand that you vote for presidents who do or don't give you nice stuff. The reality is more like "Vote for whoever you want, but if they are not financially sound, you get flogged by the bond market".

It's like the scene in Indiana Jones: Voters decide which cup to drink from, and the bond market says whether they chose wisely, or not.

RT: https://merovingian.club/users/vexo/statuses/117140832217206212

@cjd
Realistically, I see the best play of for Europe is to have a crisis, for instance, French bonds go beserk so they decide, along with the Italians, to get out of the EU - this mean they go bakc to their old currencies and they tell all their creditors to go fuck themselves.

With this new development, several countries go to Russia and China to make trade deals with them as they also want to get out of the EU, applying to BRICS without the danger of a NATO intervention in their country.

Also, if the French bonds go berserk, going back to their old currency doesn't make those bonds go away. Telling the creditors to pound sand is a strategy, but then nobody will lend them anything at all. Any European country that talks about going back to their old currency, is PROBABLY going to print money and dump it on their populous, in order to get EUR, or USD, or whatever is the currency their actual bonds are denominated in, and pay them.

That every full on hyperinflation scenario in the past century has been exactly that dynamic.

So in this regard, EUR is protecting the people from themselves. It'd be better if it was XAU but that's a digression...

The other problem with exiting the EU is then each state is gonna get treated like some South American joke country by Russia, China, etc. And nobody wants to end up negotiating like that.

There's five things a country can do:

1. Stay in the Euro, keep paying creditors, keep borrowing and pretending (status quo)

2. Stay in the Euro, keep paying creditors, stop irrational spending (the "diet and exercise" answer because it works the best but nobody ever does it)

3. Stay in the Euro, default on debts, irrational spending stops by force because nobody will lend you any more money. Government is fucked, but the country keeps functioning.

4. Leave the Euro, keep paying creditors, keep borrowing and pretending (hyperinflation 💀 )

5. Leave the Euro, keep paying creditors, stop irrational spending (haha nobody gonna do that shit, nice try)

6. Leave the Euro, default on debts... Become financially very isolated, hard to convince anyone to accept your money on foreign exchange markets, imports become challenging, foreign investment scared, probably 💀

@cjd
95% it will simply be option 1 until collapse.

Option 6 could work if countries work trade deals with other countries to be effective AFTER they leave the euro. Big countries like France, Italy and Spain are able to pull this off.
They will have a competitive advantage of the new depreciating currency where their economy become cheaper. It won't be an easy transition at all but it's an effective way of taking the diet and exercise pill but with the benefit of having more independence.

That "depreciating currency" stuff is Keynsian nonsense.

Depreciating currency is just another way of saying you're more competitive when your people are poorer. You can also accomplish the same goal by importing millions of low wage workers to bid down salaries.

And in the end, there's no reason to actually leave the Euro, unless, you want to print a fuckton of money and hyper-inflate. The Euro isn't doing anything that's really actually bad.

@cjd
Yes! Because these country are poorer in reality. The euro is way too appreciated/expensive for economies like these 3 I mentioned. The weaker currency means the producers have to raise their productivity, which today is too overinflated due to the euro.
It's a painful pill, but it's lot more honest - despite using the euro, spain for example has NO chance to compete against netherlands. It's a crime they share currency.

As Raison said above, importing immigrats have the inverse effect.

What precisely prevents Spanish producers from just ... charging less Euros ?

If you make a new Spanish currency which is 0.75% of 1 Euro, why are the Spanish producers not going to just ... charge 25% more?

And, if you have some way to make the Spanish producers NOT charge 25% more, why can't you use that right now, to make them charge 25% less Euros?

Just face it, there's no explanation, and the only reason anyone actually wants a new currency is so they can convert Grandma's savings account into it and then inflate away 25% of her savings.

It's thievery and everyone involved needs to face the wall over it.