Comment by nickik | Hacker News Reader

Comment by nickik | Hacker News Reader

Parent Full thread

This is really about a institutional setup. If Greece is allowed to make debt common to the hole EU, it will set a president.

The marekt thought that debt was held in common and bond yields were the same for everybody, now they have to make it clear to markets that this is not the case. Because if it was the case, then ALL the debt is held by everybody.

https://2.bp.blogspot.com/-lDRRJhgiFTE/T9tShSNsaII/AAAAAAAAA...

It does not need a PhD in Game Theory to see what the likly outcome of such a system is.

Greece is in the unfortinate situation of beeing the case were this choice has to be made. Its not all their fault, but its also not their fault.

This is just on of the problems of the EU and the Eurozone.

Its my beliefe that if debt should be assumed commonly, it will break up the EU because no voters in any country would agree to this.

It is really sad, and if you want to blame somebody, its the eurocrats who have steamrolled over many economists and many others who have point out the idiocy of their plans.

<< Its my beliefe that if debt should be assumed commonly, it will break up the EU because no voters in any country would agree to this. >>

But that's exactly what happened in the early days of the founding of the US, when Alexander Hamilton negotiated the Funding Act of 1790: "The Funding Act authorized the federal government to receive certificates of state war-incurred debts and to issue federal securities in exchange." https://en.wikipedia.org/wiki/Funding_Act_of_1790

Without the Funding Act, the state governments would've defaulted on their Revolutionary War debt. By assuming the debt of the states, the US greatly strengthened their collective borrowing ability and also brought the states closer together into the union.

If you WANT a "United State of Europe" then yes, common debt makes sence. But in that case all nations lose their sovereignty and absolutly no nation in the EU has voted on this, and not a single one would agree to this.

I, for one, am against a United States of Europe and theirfore Im against common debt.

If we want to attempted such a project we should start by democratically asking people if they want it, not just imposing it. That EU doing this now would essentially be taking away sovereignty in a undemocratic way, and theirfore it would be tyranny.

Reply on news.ycombinator.com