Re: European Union
@ Foro: I'm under the impression that the whole "Euro" currency is flawed and cannot sustain itself, for the same reason is that welfare state is self-perpetuating. In Canada for example, our employment insurance (EI) incourages unemployment. The unemployment, of course, is increased during economic recessions, but even when the economy progresses and stabilizes, the unemployment is never as low is it was before the recession. This is true in Ontario, which is supposed to be the most productive province, one of the three "have" provinces. (Even though right now it certainly is not a "have" province). This trend has been noticed. Implicitly or not, intellectuals and politicians have noticed that people on EI have psychological changes. They either feel less inclined for work or the work is not worth the extra pay and thus stay stuck in this unemployed cycle. So the proposal to change this psychological problem was to simply change the stigma of the label. What used to be called unemployment insurance (UI) is now called employment insurance. See the neat trick?! That little word play changed every motivating factor within individuals. Right? Of course not. Before our current global recession, Canada's economy was actually experiencing labour shortages. Once this global recession stabilizes, our baby boomers will continue to retire in bigger numbers and we will have even more labour shortages.
What has this to do with EU? Europe in general and traditionally is much more socialist than either Canada or USA and when economies dip, they feel the blow more than North Americans. When governments promise all these welfare packages, they're counting on the economy working in perpetual improvements. They're hoping that future productive work will not only keep up with at the current level but keep improving. The problem with this is that incentive to work in lowered, when the govenment promises all these welfare packages. When the economy suffers, the government has two basic choices: default on the promises that they realistically could never deliver in the first place or increase taxes which led them to deep economic issues in the first place.
Given that the EU is comprised of so many self-governed states, that do not have the same internal rules of governing and that much of the wealth sharing is based on deep trust with no legal way to restitute abuse of trust, there will be temptations to abuse it. Much like there are temptations and actualities of abusing employment insurace.
The EU as a whole is stuck in a situation of damned if they do, damned if they don't. If they help the Greeks, it shows that trust can be misued and there will be no negative repercussions. If they don't help the Greeks, the Euro value will decrease as people will lose trust in the currency. Hence, even though I never read 'Focus', I have read that particular article and I understand the vehemence. I've also read reports that the Euro will have parity with the American dollar by the end of the year or close thereafter. Personally, I think this is just the beginning of the troubles for the European Union. The idea of a single currency among nations has never been tried before and too many things are taken on faith for it to be successful.
