| Pages in topic: < [1 2 3 4 5 6 7 8 9 10 11 12 13 14 15] > | Off topic: How do you think UK leaving EU would affect our profession? Thread poster: Balasubramaniam L.
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I'll defer to your knowledge Dan, because I certainly assume you are better-informed. The main basis of my thoughts was comparing the prices of German cars in the US and German back when the euro was extremely strong. However, that was a very different situation for a million reasons, including the fact that it was a long-term development in the exchange rate. And I may have misinterpreted the data to mean the manufacturers were (also) taking a hit when it was actually (or primarily) the retaile... See more I'll defer to your knowledge Dan, because I certainly assume you are better-informed. The main basis of my thoughts was comparing the prices of German cars in the US and German back when the euro was extremely strong. However, that was a very different situation for a million reasons, including the fact that it was a long-term development in the exchange rate. And I may have misinterpreted the data to mean the manufacturers were (also) taking a hit when it was actually (or primarily) the retailers.
I understand that the UK is now in the common market and presumably will be for close to two years even after invoking Article 50.
The UK and the EU naturally both want to find a strategically advantageous time to start negotiations. That's why the EU seems to be pressing to do things now and the UK seems determined to delay them at the moment. At the same time, unduly delaying negotiations, particularly as long as the UK keeps the non-Brexit option open, is probably damaging for everyone. The same is true of rushing negotiations before the UK has even had a chance to sort things out internallly.
I just hope that everyone will be pragmatic about this and be looking to cut their losses before everyone starts throwing threats around (Scotland and Northern Ireland, an anti-EU bloc in some form, refusing to renew or revoking existing UK exceptions, refusing to begin negotiations, etc.).
The main fear that I have is that the UK will ignore the referendum. Early this year I had a conversation about Brexit with someone and said that I couldn't imagine a majority of the general British population would ever vote to remain in the EU (although I would also have thought it wouldn't even be close) and that I couldn't imagine that the government of the UK would act on the results of the referendum. That was an uninformed and off-hand analysis (it was dumb luck). I just hope that dumb luck runs out now, because I truly believe a Brexit could help to unify the EU, but I think ignoring this referendum would be a thousand times more damaging than all the nonsense surrounding the Lisbon agreements.
Edited to add:
We were writing at the same time, Thomas.
Yes, not just the crazies: There are also millions of people who reject the euro and/or the EU for sound reasons. But I'm not worried about them, they might be right as far as I know, and they are going to react in normal ways to political developments that they don't like.
Maybe I am vastly exaggerating the currency issue, but as a German with a lot of international clients, the last thing I want is for the euro to be replaced by the mark. As a private person: Consumers may suffer from a weak currency, but I think they rarely benefit much from a strong one.
[Edited at 2016-06-29 10:49 GMT]
And if the UK is interested in something like the Norwegian or the Swiss model, with all their positive and negative aspects, that would be a great compromise that I would like to see the EU accept, but I haven't read anything in British newspapers to suggest that they would be satisfied with that.
[Edited at 2016-06-29 10:54 GMT] ▲ Collapse
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Michael Wetzel wrote:
I truly believe a Brexit could help to unify the EU, but I think ignoring this referendum would be a thousand times more damaging than all the nonsense surrounding the Lisbon agreements.
Which "nonsense"? Just curious what you refer to.
In which sense do you mean "unify"?
What the EU most of all needs right now are pragmatic solutions that actually work, and to forget about the federal pipe dreams.
| | | | Huw Watkins 
United Kingdom
Local time: 13:19
Member (2005)
Italian to English
+ ...
| This is very insightful I believe | Jun 29, 2016 |
Michael Wetzel wrote:
That was an uninformed and off-hand analysis (it was dumb luck). I just hope that dumb luck runs out now, because I truly believe a Brexit could help to unify the EU, but I think ignoring this referendum would be a thousand times more damaging than all the nonsense surrounding the Lisbon agreements.
One can't help but think that with Britain out of the picture and only the less influential Poland left to fly the Eurosceptic flag, they will now forge ahead with and achieve 'ever closer political union'. This will likely mean a centralised Treasury, with centralised taxation, spending and borrowing laws and so on. It will very likely go a long way to saving the Euro project and would create a de facto political super-power on UK's doorstep. The proverbial thorn in the side has been removed now, and the likes of Juncker must be delighted. My suspicion is that if Juncker had been allowed to vote in the Brexit referendum he would have voted leave, not with a cross but a smiley face.
I also think that he/they will be happy to trade with us seeing as we are net importers. As a translator, my only hope is that there is some form of Treaty change to keep English as one of the official languages.
[Edited at 2016-06-29 11:05 GMT]
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We're in agreement about what was nonsensical regarding Lisbon: holding referendums and then ignoring them completely or repeating them until the results suited the EU, not holding referendums in countries where they probably should have been held, and saying ahead of time "it has to be unanimous and it will be binding" and then going back on that.
However, I don't think that the Lisbon fiasco makes the EU illegitimate: Look at everything that went into making Germany or Italy into ... See more We're in agreement about what was nonsensical regarding Lisbon: holding referendums and then ignoring them completely or repeating them until the results suited the EU, not holding referendums in countries where they probably should have been held, and saying ahead of time "it has to be unanimous and it will be binding" and then going back on that.
However, I don't think that the Lisbon fiasco makes the EU illegitimate: Look at everything that went into making Germany or Italy into political units in the late-nineteenth century. It's annoying, but I don't find it troubling, and it's in the past.
I mean "unify" in the sense of "unify". I know that the question of political union is very central to you, but I don't really care about it one way or the other. The euro and the common market and the limited set of regulatory powers necessary to preserve them are important to me.
I also think that Greece should be permitted to leave the euro and stay in the EU if that looks like a genuinely viable solution for dealing with their massive problems. If leaving the euro really seemed to make sense for a whole number of southern and eastern European countries (and possibly Ireland), then that would be a different issue. ▲ Collapse
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| Federal madness | Jun 29, 2016 |
Huw Watkins wrote:
One can't help but think that with Britain out of the picture and only the less influential Poland left to fly the Eurosceptic flag, they will now forge ahead with and achieve 'ever closer political union'. This will likely mean a centralised Treasury, with centralised taxation, spending and borrowing laws and so on. It will very likely go a long way to saving the Euro project and would create a de facto political super-power on UK's doorstep. The proverbial thorn in the side has been removed now, and the likes of Juncker must be delighted.
You don't seem to be aware how much EU scepticism there is in the EU outside the UK. If the federal project is pushed much further, you may well see the Nordic countries break away first, only to be followed by countries such as the Czech Republic, Poland, Austria, the Netherlands and perhaps even France. Pushing the federal project may well be an excellent way of destroying the EU completely.
With a centralised treasury and taxation, well-run countries would have to start paying for less well-run countries, first of all Germany. It might save the euro but take away people's right to run their own countries, and it could massively backfire to alienate millions of people across the continent. I don't see how the German public are going to swallow that. It could make taxes and bureaucracy skyrocket. I've seen for 15 years how badly run France is, how difficult and complicated they make it to survive in business, and how tax and social charges of all sorts undermine the existence of many people who only want to be able to make ends meet. There is no way you'll get the French to accept the German way of doing things (they have already been rioting for several weeks over microscopic labour law changes), and there is no way Germans are going to accept the French high-tax, high-bureaucracy model. I don't intend to stay in the EU if they continue that way. There are attractive countries in the world that happily accept freelance translators, and I'll be happy to give them my tax revenue and spending if the EU continues down the path of utter destruction and contempt for their peoples and democracy. This could end in civil war, with separatist movements taking up arms to liberate the countries or regions they feel have been taken from them by a remote elite in Brussels. It is an extremely dangerous way to go. You badly underestimate the massive and widespread anger throughout the EU.
The question is why so many are so obsessed with dreams about a federal union that so many others hate. Which useful result is it they hope to achieve that cannot be done with a simple internal market?
The turmoil this irresponsible federal project has caused already affects translators in many ways, and it is likely to cause increasingly chaotic conditions in the EU if it isn’t stopped and transformed into a more practical single market.
| | | | | Legitimate or not | Jun 29, 2016 |
Michael Wetzel wrote:
However, I don't think that the Lisbon fiasco makes the EU illegitimate: Look at everything that went into making Germany or Italy into political units in the late-nineteenth century. It's annoying, but I don't find it troubling, and it's in the past.
I agree with most of what you said (except that the euro is important; it's a proven disaster, which has impoverished southern Europe).
I do believe the Lisbon fiasco and all other EU Treaties ratified without referendums make the EU illegitimate. And it makes it illegitimate that there are EU citizens living in the EU but with no voting rights of importance. I consider it a totalitarian project not unlike the USSR, but without the walls and guns to keep people in. And I'm convinced it will end up collapsing, just like the USSR, if it isn't massively reformed into something there is popular consent for, and which does not impoverish its peoples, because such top-down models based on coercion (whether political or physical), as opposed to the will of the people, do not work.
You cannot compare a unified Europe with a unified Germany or Italy. In the latter cases, it is much the same cultures that are unified. Not so in the EU, where you have conflicting cultures in many areas. I don't think you understand the depth of these differences. Germany seems to have some idealistic fantasy that all of Europe's peoples somehow can be made to behave like Germans in a happy union, but it is not based on reality.
I moved to Germany because it's hopeless to get anywhere in France. But if Germany starts importing all the ills from southern Europe because we must all live under the same federal union, then I'm out of here, as there would be nothing left to stay for.
| | | | | Will it remain the 5th largest economy? | Jun 29, 2016 |
Dan Lucas wrote:
As has been repeatedly pointed out in this thread, the UK is a major global economy (in 5th place, slightly ahead of France) and it is simply not realistic in the short- or probably the even medium-term for countries that export large quantities to the UK to suddenly de-emphasise the UK and switch to different markets.
I ask myself, though, how much of the UK's economic growth has been helped out by the fact that it was the largest English-speaking country in the EU, making it an attractive base for international companies. I suppose it's a question we'll see answered sooner rather than later - I read an article (it was linked from the BBC Brexit update page) claiming something like 1 in 5 international companies based in London were considering moving their headquarters elsewhere to remain inside the EU. I don't know how representative the survey was, but it does raise the question of whether the UK will continue to be the 5th largest economy or whether some of that is in fact due to being in the EU and will be lost as companies relocate. Perhaps to Dublin? Or Edinburgh if IndyRef2 is held and supported?
| | | | Dan Lucas
United Kingdom
Local time: 13:19
Member (2014)
Japanese to English
| Strong currencies are not necessarily a good thing | Jun 29, 2016 |
Michael Wetzel wrote:
...as a German with a lot of international clients, the last thing I want is for the euro to be replaced by the mark. As a private person: Consumers may suffer from a weak currency, but I think they rarely benefit much from a strong one.
I agree. Strong currencies have their own problems. A currency union tends to dilute that effect and this is one way that Germany has benefited from the euro.
Let's say that demand for exported German goods and services, translation included, increasea due to the business cycle. In the Deutsche Mark days, that would have resulted in rising demand from the buyers of those goods and services for Deutsche Marks. They need the DMs to pay the sellers of those goods and services, right? You don't buy a machine tool from a company in Hamburg and pay in dollars. You pay in Deutsche Marks, and you need to buy those Deutsche Marks in the currency markets.
That demand eventually would have driven the price of Deutsche Marks higher against other currencies, making the DM stronger and making goods and services sold in DM more expensive and thus less competitive. That effect tends to lead to a natural deceleration in the economy, preventing bubbles.
As an example, say that on January 1994, $1 = 1 Deutsche Mark. A company in the US has a choice between two translators, one in the US, one in Germany. The German translator submits a quote for 100 DM and the US translator submits a quote for $100.
In effect, because $1 = 1 DM, both translators quote the US company at $100 for the translation. The US company has a very slight preference for the German translator, so she gets the job.
A year later in January 1995, after strong exports, the DM has strengthened i.e. it has become more expensive to buy DM using dollars. Now you need $1.10 to buy 1 DM. The company asks for quotes for a job of identical size. Both translators submit quotes at the same rate they used before, so the US translator's quote is $100. However, the German translator's quote of 100 DM is now - in dollar terms - $110. The US company's preference the German translator is only slight. It decides to go with the cheaper quote and gives the US translator the job.
Now, imagine that phenomenon of switching away from expensive German goods being repeated across many sectors and millions of market participants. All other things being equal, it leads to a slowing economy for Germany, right? It's self-correcting, to an extent.
Within the euro, that effect is diluted because Germany despite its size is now only part of a much larger whole. So, surging German exports alone do not affect the euro as much. That is - and has been - very advantageous for an exporting power like Germany. Even if exports rise rapidly, the euro is not much affected, German products don't become expensive relative to products priced in other currencies and the German economy doesn't self-correct.
Conversely, if your economy is not doing so well, there will be less demand for that currency to pay sellers of goods and services, and that country's currency will tend to get cheaper, making goods and services in that country cheaper. In the case of Greece, those goods and services might include olive oil, tourism and, yes, translations.
If Greece still used drachma, you can bet it would very, very cheap to buy translations from Greek translators, and that those low prices would (tada!) stimulate demand. That recovery in demand would in turn tend to boost the economy. However, within the euro, especially for a smaller economy like Greece, that effect is so diluted that it might as well not exist.
Dan
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Dan Lucas
United Kingdom
Local time: 13:19
Member (2014)
Japanese to English
Kelly Neudorfer wrote:
I ask myself, though, how much of the UK's economic growth has been helped out by the fact that it was the largest English-speaking country in the EU, making it an attractive base for international companies.
That's an interesting question and the honest answer is that neither I nor anybody else knows, even the many, many people far cleverer than myself.
I think it's important to bear in mind that it's not just a matter of English and EU membership. Britain is a very easy place to do business for companies compared to, say, France. Lower taxes, less regulation, more positive attitude to making money.
The flip side is weaker rights for workers in the UK than in France, but that also explains France's far higher unemployment rate. Companies in France are reluctant to hire because they know that, once they've hired people, it's very difficult to cut them if the economy slows. The French labour market is living proof that there's no such thing as a free lunch.
There's also the issue of physical space. The City occupies a huge amount of office space both in its traditional heartland in the east of London and in the Docklands. No city in Europe has the spare office space to accommodate more than a small fraction of the people working in the City of London. (No, not Frankfurt and certainly not Paris.)
If you were a bank and you wanted to move to Europe, you would have to split parts of your operations between different European cities, which would mean reduced economies of scale and so on. And if you did move operations, the surge in demand would cause rents to shoot up, making it even more costly and thus less profitable, which in turn would affect your ability to get and retain staff.
Note also that this office space would need to consist of modern buildings. Financial companies use a ton of servers, so you need proper IT facilities (think service ducts, false ceilings) and chunky power infrastructure to power it all. No elegant old buildings with creakly lifts, tiny rooms and electric cables everywhere - that won't cut it.
Here's an anecdote. I once worked for an investment bank whose expansion plans were limited by the inability of the building in which it was located to supply sufficient electricity to power the thousands of computers used by the bank. It was literally that simple. The building was only built in the 1980s but it had already been rendered obsolete for larger companies because it was designed before the requirements for computing power were considered.
People trying to argue against Brexit tend to say "Oh, it's not that easy for the UK to disengage from Europe". It's not, I agree, but that cuts both ways. It's not easy for companies to disgengage from the UK either.
So I think there'll be plenty of translation-related work around for many years to come.
Dan
| | | | | Sensible debate | Jun 29, 2016 |
Michael Wetzel wrote:
Maybe I am vastly exaggerating the currency issue, but as a German with a lot of international clients, the last thing I want is for the euro to be replaced by the mark.
Yes. If you only look at your own advantages and not the consequences for others. I try to consider the EU questions from a larger perspective and not my narrow, personal interests. I would also be hit by a more expensive DM, as I live in Germany.
But I don't think it's fair or reasonable to demand the following for my own comfort:
EU youth unemployment:
http://www.statista.com/statistics/266228/youth-unemployment-rate-in-eu-countries/
Eurozone countries top the statistics of unemployment, while Germany has very little unemployment.
There is up to 50 % youth unemployment in Greece and dramatically high rates in many other Eurozone countries. If the euro is so good, why are the Eurozone countries in general faring worse than everybody else? Except for Germany, of course, which rakes in the entire jackpot. But the consequence is widespread misery. Doesn't that matter? Greek parents putting their children in orphanages because they can’t afford to feed them. Not important? Greek people being unable to pay for medicine. Not important? Those who commit suicide because they can no longer face the misery. Not important? A generation of young people thrown on the scrapheap. Not important? As long as Germans are not inconvenienced? Is that the sort of brutal and heartless EU you want? I'm not personally concerned by this misery, but I do care that others are.
It is beggar-thy-neighbour policy. And if you think further: Germany has all but recovered its reputation after the unfortunate events in the last century. But now Germany is impoverishing southern Europe and putting their people out of work so that German industry can profit. What do you think that does for Germany's popularity in these countries? You have presumably seen some Greek reactions to it. Some would claim that now Germany is again, for the third time in one hundred years, trying to dominate Europe and tell others what to do. I consider it disastrous for Germany's reputation, and as I live here, I'd rather that Germany didn't destroy its reputation with a brutal monetary policy.
Yes, it could have some financial cost if a new DM soared, but if the EU ends up blowing up because of the massive, unsolved problems and the social tension they have caused, it could be much worse in the end, for translators and everybody else.
| | | | | Why is the euro the cause? | Jun 30, 2016 |
Youth unemployment in the UK has followed a curve that is very similar to the one in Italy and Spain: http://www.statista.com/statistics/280305/youth-unemployment-rate-18-24-in-the-united-kingdom-uk-year-on-year/
The absolute numbers are lower in the UK, but the historical average for youth unemployment is also much highe... See more Youth unemployment in the UK has followed a curve that is very similar to the one in Italy and Spain: http://www.statista.com/statistics/280305/youth-unemployment-rate-18-24-in-the-united-kingdom-uk-year-on-year/
The absolute numbers are lower in the UK, but the historical average for youth unemployment is also much higher in Spain and Italy (including the period before the euro). The UK spike actually seems to be more dramatic relative to the long-term UK average.
The euro was clearly not the initial cause of the spike in youth and general unemployment. The developments of 2008 were the immediate cause of these developments. (The spike occured in 2008 and not 2002.) Germany is doing well now, but it had high unemployment and major economic problems in the period leading up to 2008, when everyone else was doing well. "Germany" is also a highly misleading term because of the East-West divide. Several of the federal states had general unemployment levels of over 20% in the period between 2000 and 2010, but other states bring down the national numbers.
Maybe several European countries could have combatted the after-effects of 2008 more effectively with their own currency, but maybe not, those were worldwide developments that very few countries were able to effectively ameliorate.
I think that Greece is a special case: It might be a rational decision for them to panic at this point and to try anything but what they are doing currently. Austerity sounded stupid from the outset and seems to obviously not be working.
I agree that a devalued currency probably would help to make several countries' exports more competitive and to draw job-creating investors looking for less expensive labor. However, those countries have been using the euro for 14 years, meaning that basically all of their debt would be in euros or foreign currencies, meaning that they would suddenly face gigantic fiscal problems at the state level. I assume that instability would more than counteract any attractiveness on account of a relatively weak currency. A weaker currency also only helps if everyone else isn't doing it. Leaving the euro seems like a bad option for the current winners and losers. Greece seems to me to be the only country where it might nonetheless be the lesser evil.
We can sit here and spin facts and half-facts to suit our purposes all day, but I don't think I could say anything to convince you that the EU isn't a totalitarian anti-state or that you could say anything to convince me that the EU's problems aren't anything special when compared to the divisions in the US (where I grew up in the 1980s) or in Germany. Maybe it's a shame that the East Germans sold out their future for the sake of their savings accounts, but it's what happened, and it might even have been for the best.
I don't mean to ignore your next post and it has been great talking about this with you, Dan, and Huw, but I have to get back to work (and stay there). ▲ Collapse
| | | | | Sounds awful | Jun 30, 2016 |
Huw Watkins wrote:
One can't help but think that with Britain out of the picture and only the less influential Poland left to fly the Eurosceptic flag, they will now forge ahead with and achieve 'ever closer political union'. This will likely mean a centralised Treasury, with centralised taxation, spending and borrowing laws and so on.
Honestly, it sounds terrible. If EU bureaucrats are entertaining such ideas, I might be in support of a "Spexit"... Overspending, overborrowing, and "over-money" are big issues brought about by the ECB its and cheap money policy.
More centralisation of the EU's economy would definitely mean more debt. Myself, my sons, and my still unborn grandchildren are already deeply in debt because of national debt caused by successive irresponsible governments over here in Spain. Are we still on time to avoid putting our grand-grandchildren in debt as well?
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| In or out, the legislation etc. will have to be translated | Jun 30, 2016 |
Norway is not a member of the EU, but as its closest neighbours are, (Denmark, Sweden and Finland). So Norway still has to know what is going in in the EU and comply with the legislation if it wants to trade with EU countries, which it does to a large extent.
Norwegians can read the Danish or Swedish versions of EU legislation if they want to, but they translate all their official websites into English among other things.
Brits can't get by in the same way with German o... See more Norway is not a member of the EU, but as its closest neighbours are, (Denmark, Sweden and Finland). So Norway still has to know what is going in in the EU and comply with the legislation if it wants to trade with EU countries, which it does to a large extent.
Norwegians can read the Danish or Swedish versions of EU legislation if they want to, but they translate all their official websites into English among other things.
Brits can't get by in the same way with German or French copies of the EU regulations, so they will have to get hold of translations from somewhere. The funding might not all come from the EU after Brexit is implemented, but someone will have to pay for translations.
That could be chaotic - if every user tries to get the sections it needs translated piecemeal, for instance. It would be far better to set up a joint agency to produce English translations, either tax-funded or jointly funded by users in some way.
Back to the real world, however - I suspect that for at least the next couple of decades, the EU cannot realistically do without English as a lingua franca, official or not, and a lot of the translation wil carry on as before.
And Poland is certainly not the only EU-sceptic. If a referendum were to be held in Denmark right now, there is no knowing what the result would be. There would be quite a strong vote to leave.
I hope the EU sceptics will now close ranks and get the EU back on course, and wish the Scots good luck if they want to stay in and help!
[Edited at 2016-06-30 09:03 GMT] ▲ Collapse
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Ukraine
English to Russian
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| Breakaway: almost anything for some Euro? | Jun 30, 2016 |
Dear colleagues.
I don't care much who’s allegedly losing or gaining benefits and gravitas, or whether the UK (both as a country and a EU founder/member) did right or wrong, or something.
Yet could anyone explain it to me, how one of the strongest world’s economics, which makes big biz (including translation) with many EU and non-EU countries, out of a blue sky supposed to go broke?
Any specific reason or just nagging?
TY
... See more Dear colleagues.
I don't care much who’s allegedly losing or gaining benefits and gravitas, or whether the UK (both as a country and a EU founder/member) did right or wrong, or something.
Yet could anyone explain it to me, how one of the strongest world’s economics, which makes big biz (including translation) with many EU and non-EU countries, out of a blue sky supposed to go broke?
Any specific reason or just nagging?
TY
P.S. When I asked our British business partner what he thought, he just sent me a link to Youtube ‘Requiem for a Dream’; not relevant, perhaps)
[Edited at 2016-06-30 14:46 GMT] ▲ Collapse
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Michael Wetzel wrote:
The euro was clearly not the initial cause of the spike in youth and general unemployment. The developments of 2008 were the immediate cause of these developments. (The spike occured in 2008 and not 2002.)
basically all of their debt would be in euros or foreign currencies, meaning that they would suddenly face gigantic fiscal problems at the state level. I assume that instability would more than counteract any attractiveness on account of a relatively weak currency.
You are right we may not convince each other. But we can at least listen.
We all took a hit in 2008, but countries outside the Eurozone have largely recovered. The weaker Eurozone members found themselves unable to adjust their currencies when the crisis came, and that is a major reason they remain in crisis. We are talking about 'tax-and-spend' economies, quite the opposite of the northern 'work-and-save' economies, to simplify the contrast. The euro is built for the latter, so only that sort of economy can thrive in the euro. It's not to demean those countries. It's just a fact that they run their economies in another way than Germany, so it was a predictable disaster to lock themselves to the German currency. And it was predicted, but the euro was a political, megalomaniacal project, so no technical reservations such as “can never work because it is structurally flawed” were allowed to get in its way. Critics were silenced.
If you want a common currency, you need one common government to manage it, and you need internal fiscal transfers from strong regions to weak regions, just as the German west has paid for renovating the German east. So in a 'real' common currency (the euro is not one), German taxpayers would permanently support taxpayers in weaker regions throughout the Eurozone. But Germany is taking the good parts without the bad, so the whole thing has become terribly imbalanced.
It is all explained in detail in this book: The Rotten Heart of Europe by Bernard Connolly as I have previously mentioned.
It is right that a country leaving the euro will be faced with a serious debt problem. Detailed scenarios for leaving the euro have been suggested by independent economists. Some of the scenarios involve a national decree that all sovereign debt denominated in euro be converted into the nation's new national currency at a 1:1 exchange rate. Investors would scream and shout but could do nothing about it. That would not deal with private and foreign currency debt, and it would not deal with the huge internal Target 2 imbalances in Germany's favour, not officially classified as debt, but if a country were to leave, that imbalance would suddenly become debt. Creditors, including German taxpayers, might well take a loss when the imbalances built up under the covers suddenly blew up in their faces when successive governments had promised them no fiscal transfers would take place. There is so much debt in the system that it’s unlikely it’ll ever be repaid – not unlike the subprime crisis in 2008. So what you save today with a favourable exchange rate could come back and hit you even worse when the whole thing comes crashing down.
So there would be a significant shock if a euro member left. There would be initial instability, but things would stabilise. Instead, we have perpetual crisis and perpetual unemployment in the south. At least leaving the euro would give them hope of a better future. Staying in the euro does not, as it locks them into an (for them) overvalued currency – something you yourself want to avoid, but most of the Eurozone is already locked into that problem.
A full political union would bring about the missing government that is a prerequisite for running a common currency, but there is not much political or public will for that, so we're stuck between a rock and a hard place until something gives. And when it does, it’s likely to get much worse with a disorderly breakup of the euro than if orderly exits had been planned. The latter is also in translators’ interests, as turmoil is unlikely to hit evenly but could put some out of business. Staying in it is not unlike peeing in your pants for warmth. It’s important to be aware that the euro’s structural problems have not in any way been solved, and that they cannot be solved in the present structure.
Germans may dream about a federal Europe, but in a federal Europe, Germans would be outvoted by the tax-and-spend south, and the result is likely to be something like French-style taxes, spending and debts. Germans should be careful what they wish for. They might get it.
[Edited at 2016-06-30 10:40 GMT]
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