November 9th, 2010 10:22 EST
The Future of the Euro
FROM JEROME CORSI`S RED ALERT
By Dr. Jerome Corsi
(c) 2010 RedAlert.WND.com
Top investment expert predicts Greece will default by 2013
The future of the euro remains in doubt as economic woes in Greece continue to risk destabilizing the European Union.
An internationally recognized investment officer predicted last week that Greece is likely to default in the next three years, by 2013.
It is in Greece`s interest to default "as long as you can contain the contagion to other countries and it is done through an orderly restructuring and repricing to retain competitiveness," Pacific Investment Management Co. chief economic officer Mohamed A. El-Erain told a conference sponsored by the Economist magazine in New York last week.
In May, the EU and the International Monetary Fund approved a 110 billion euro ($153 billion) aid package, in exchange for Greece agreeing to engage in an austerity program that involved cutting public-sector wages.
Also last week, Greece`s finance minister George Papaconstantinou warned that Greece`s economy will decline by 3 percent in 2011, worse than previously forecast, the International Business Times reported.
Greece has targeted to reduce its deficit from 14 percent of GDP to 3 percent by 2014.
Meanwhile, the yield, or interest rate, on the Greek 10-year sovereign debt surged more than 10 percent Wednesday as investors worried that Greece`s Socialist Prime Minister George Papandreou might be forced to face elections early.
Will the euro survive?
Last week, at a meeting in Brussels of the 27-nation EU bloc, the EU approved plans to tighten the rules governing the euro, the New York Times reported.
The moves designed to withdraw EU voting rights from spendthrift nations would put even tighter EU control over the national budgets of the participating EU-bloc members.
Tabled was a motion by Germany to call for a significant amendment to the Lisbon Treaty to implement mechanisms for denying EU voting rights to EU member nations that fail to accept EU dictates regarding national budget discipline, including the implementation of required austerity programs.
Behind the change was German Chancellor Angela Merkel.
The reason for the change was that continuing budget deficits and social welfare spending in EU states including Greece, Spain and Ireland have placed Germany in the uncomfortable position of having to finance what amount to EU bailouts, arranged through expensive IMF-backed loan packages.
Understandably, the idea of bring a revised Lisbon Treaty before the EU nations for another referendum vote scared EU leaders who have just emerged from the difficult eight-year process required before the Lisbon Treaty went into force.
Last week at the John F. Kennedy School at Harvard University Lionel Barber, the editor of the Financial Times, gave a speech entitled "Can the euro survive?"
He summed up the problem as follows: "The EU is institutionally blocked, insular, and incapable of effective crisis management."
Lieber compared the low growth rate in Europe to the rising powers of China, India, Brazil and other emerging market economies.
"Europe is like a museum with splendid antique relics - to the left, the French room devoted to social solidarity; to the right, the German room devoted to metal bashing and mass manufacturing; and out in front, the Swedish room devoted to social democracy," Lieber said. "In short, Europe looks politically and structurally incapable of adapting to the challenges of today, let alone tomorrow."
To a large extent, the survival of the euro and consequently the EU itself now depends on the patience of Germany to continue financing the elaborate social welfare states and budget deficits of profligate neighbors such as Greece and Spain.
Columnist Quentin Pell reminded Financial Times readers on Friday that Germany "gave up the mighty deutschemark, but only with a guarantee that the new money would be as sound as the old. That is Merkel`s bottom line."
EU as a `great deception`
The duplicity behind the formation of the EU was revealed in a blatantly honest editorial that columnist Gideon Rachman published last May in the Financial Times.
"The EU has always proceeded by creating economic `facts on the ground,` which were intended to trigger political events," Rachman wrote. "Ever since the 1950s this has worked admirably, as a modest coal and steel community turned into a Union of 27 nations, with its own parliament, supreme court and foreign policy."
This is startling for those who recall Christopher Booker and Richard North`s important book, "The Great Deception: The Secret History of the European Union," in which the authors argued that lying was an important strategy used by the globalists behind the formation of the EU.
For decades, globalists such as Jean Monnet, a key architect of the EU, argued that economic integration did not necessitate political integration or loss of nation-state sovereignty for the European countries participating.
"Jacques Delors, the European Commission president who presided over the creation of a single market in the 1980s, said frankly: `We`re not here just to make a single market - that doesn`t interest me - but to make a political union,`" Rachman noted. "The creation of a single market involved a huge expansion of European law and therefore deep erosions of national sovereignty."
Why would a commentator such as Rachman suddenly be so open about the duplicity that is behind the move to create regional government through apparently innocuous "free-trade" agreements?
What has happened is that globalist pundits - in their determination to use the current EU debt crisis as an excuse for more globalism - have begun to blame the failure of the EU on the drive to create a common currency in the euro before the EU political mechanism had complete control over the nation-state economies of the participating countries.
"So what has gone wrong?" Rachman asked. "The problem is that the `economics first, politics later` method is almost Marxist in its assumption that economics will inevitably dictate a particular political response. But democratic politics involve choice."
So now that the method is exposed, the question remains: Will the euro survive the debt crisis?
This is an important question.
If the euro does not survive, the EU will almost certainly break apart.
ABOUT THE AUTHOR: Jerome R. Corsi received a Ph.D. from Harvard University in political science in 1972. He is the author of the #1 New York Times bestselling books THE OBAMA NATION: LEFTIST POLITICS AND THE CULT OF PERSONALITY and the co-author of UNFIT FOR COMMAND: SWIFT BOAT VETERANS SPEAK OUT AGAINST JOHN KERRY. He is also the author of AMERICA FOR SALE, THE LATE GREAT U.S.A., and WHY ISRAEL CAN`T WAIT. Currently, Dr. Corsi is a Senior Managing Director in the Financial Services Group at Gilford Securities as well as a senior staff writer for WorldNetDaily.com.
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ABOUT RED ALERT: Jerome Corsi`s RED ALERT is your weekly, global financial strategies newsletter. Designed to be your guide to economic trends in the best of times and the worst of times, it is edited by New York Times best-selling author Jerome Corsi, Senior Managing Director of the Financial Services Group at Gilford Securities as well as a WND senior staff writer and columnist. For 25 years, Corsi worked with banks throughout the U.S. and the world developing financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. Corsi developed three third-party financial services marketing firms that reached annual gross sales levels of $1 billion in annuities and equal volume in mutual funds. Corsi received his Ph.D. in political science from Harvard University in 1972.