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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (11204)	8/31/2004 11:03:43 AM
From: zonder	Respond to of 116555

The question is: why do they have it in the first place if they are not going to honor it or even have any good enforcement mechanisms. The answer is simple: They have it in order to hold the various countries within the Union more or less close together so that they can have the same currency and similar interest rates. And recently, they have not been adhering to it very strictly, because they have a more pressing problem - economic slowdown. Just like the US government has been spending itself silly with guns and tanks and all that lovely (and costly) stuff, EU governments are also trying to spend more than usual in this "soft patch" (ehem!). They seem to view this as a priority and not so much of a sin, especially among the more "developed" members of the Union, who, even when breaching the limit, are not breaching it by a lot. Empty talk is all it was and is. May as well do away with it When I hear such binary logic from people I respect on SI, I despair for our generation. Good and evil. Genius or imbecile. Love it or leave it. Stick to the number or do away with it. No, they cannot do away with it - these are numerous DIFFERENT countries with DIFFERENT economies who are trying to unite under a SINGLE currency. One day, they hope, the economy will be consistent across EU. That day is not now. And if they cannot stick to it for now, for fear of worsening economic conditions, that is not the end of the world. 3.7% is above 3% but it is not a level that will crack open the economic unity of the EU.