EMU går i graven.

Germany's trade surplus is a problem

Why is Germany’s trade surplus so large? Undoubtedly, Germany makes good products that foreigners want to buy. For that reason, many point to the trade surplus as a sign of economic success. But other countries make good products without running such large surpluses. There are two more important reasons for Germany’s trade surplus.

First, although the euro—the currency that Germany shares with 18 other countries—may (or may not) be at the right level for all 19 euro-zone countries as a group, it is too weak (given German wages and production costs) to be consistent with balanced German trade.

...I had the privilege of negotiating Britain’s opt-out from the then new European single currency in 1991. My abiding memory is how clear it was that the euro had nothing to do with economics and was a political project with a dubious rationale. Some representatives of other countries were openly sceptical, but their political masters were firmly in control.

...The creation of the euro has been an error of historic dimensions and done great harm to the EU, which in its first 40 years had brought economic prosperity to the citizens of the Continent.

...After the creation of the euro, however, economic growth slowed markedly. Poorer countries fared worse than the more prosperous countries, like Germany, which benefited from the new, weaker currency.

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EU proposes more euro zone integration as Greece totters

As Greece threatens new shocks for the euro zone, EU chief executive Jean-Claude Juncker laid out a vision on Monday for tighter joint control over the currency zone's economies, including, one day, a potential common euro zone treasury ...

Despite the crises of the past years, as governments unable to devalue national currencies have struggled to manage their finances amid global recession, the report began with the phrase: "The euro is a successful and stable currency" ...

European Council President Donald Tusk, who chairs this week's summit, stressed the need for rapid action, without waiting for the long and difficult process of changing treaties.

"A lot can and should be done in the short term within the current treaty framework," he said. "This message is even more important in the middle of the crisis with Greece" ...

(http://www.reuters.com/article/2015/06/22/us-eurozone-greece-reform-idUSKBN0P10WK20150622)

Our export surpluses were primarily no longer placed in savings. Instead, three-quarters of this money was paid with euros that other countries had borrowed from their own central banks. This borders on expropriation. If we had been able to save our export surpluses at 2007 interest rates, we would be €200 billion richer today.

'Call me Madame Frexit,' Front National leader Marine le Pen says

... The leader of the Front National (FN) declared that France will follow Britain and Greece in leaving the European Union unless it can end the free movement of people and leave the “failed” euro.

Mrs Le Pen praised David Cameron for pledging to hold a referendum on EU membership and forcing the European Commission to “cede to the demands” of Britain.

François Hollande’s government is deeply hostile to Mr Cameron’s plan to renegotiate British membership of the EU ahead of an in-out referendum – in part, because it has bolstered similar demands from the insurgent FN for a public poll.

Mrs Le Pen told Bloomberg Television: “I will be Madame Frexit if the European Union doesn’t give us back our monetary, legislative, territorial and budget sovereignty.

“I believe that sovereignty is the twin sister of democracy. If there's no sovereignty, there's no democracy. I'm a democrat, I will fight until the end to defend democracy and the will of the people.

“If I don’t manage to negotiate with the European Union, something I wish, then I will ask the French to leave the European Union. And then you'll be able to call me Madame Frexit.”

She warned that France would follow the fate of Greece unless it left the euro. “Greece and France are on the same staircase, they're not yet on the same floor. We'll catch up with them, because the logic of the economic model imposed by the European Union always produces the same effects.”

“Today is the Grexit, tomorrow is the Brexit, and the day after tomorrow it will be the Frexit. At one point or another, every country who is suffering from this currency will only want one thing: escape from it, or engage a battle with the European Commission ...

(http://www.telegraph.co.uk/news/worldnews/europe/france/11696466/Call-me-Madame-Frexit-Front-National-leader-Marine-le-Pen-says.html)

Greek deal or not, the euro is now a different beast

http://www.reuters.com/article/2015/06/24/us-investment-euro-risk-analysis-idUSKBN0P40EL20150624